Phil Dillard, Black Ant, @PhilD0210 The objective of the Lean Startup 101 training is to introduce the concepts, terminology and approaches — and, to help organizations overcome resistance accepting the new approach so that exploration and learning can begin. This practical, interactive session will provide a solid foundation for advanced sessions, including the Lean Startup 201 & 301. This training is designed for practitioners in both the enterprise and in startups who are relatively new to the Lean Startup approach or who are seeking a quick refresher. Lean Startup 101 is a perfect way to kick off your week of Lean Startup! Thanks to Lean Startup Co.’s law firm, Orrick, for being the sponsor for this track.

1. Lean Startup 101
Phil Dillard
November 16 th
, 2015
2015 Lean Startup Conference
Sponsored by:

2. Agenda
1. Who is in the room?
2. How will this be valuable?
3. What is the Lean Startup & where did it
come from?
4. How and why does it work?
5. What should I do next?

3. Who is in the room?
You
• Founders
• 1st
Time Entrepreneurs
• Serial Entrepreneurs
• Employees
• Designers
• Developers
• Newbies
• Book Readers
Lean Startup
Company

4. How will this be valuable?
This Session Is
• Practical
• Clear
• Direct
• Simple
• Introductory
• Wisdom sharing

5. How will this be valuable?
This Session Is
• Practical
• Clear
• Direct
• Simple
• Introductory
• Wisdom sharing
• Hands-on
This Session Is Not
• Book review
• Brainstorming
session
• Workshop
• Full of jargon

6. How will this be valuable?
Addressing the Main Questions
• What is it?
• Why does it work?
• How does it work?
• Why does it matter?
• How can I get started?

7. What is the Lean Startup?

8. What’s a startup?
“A human institution designed to create a
new product or service under conditions of
extreme uncertainty. “
- Eric Ries
author, The Lean Startup

9. What is Lean Startup?
A method to systematically address
uncertainty through rapid iteration and
market learning

10. What is the Lean Startup?
Helps us Answer Two Critical Questions
1. Should we build this new product or
service?
2. How can we increase our odds of
success?

11. Introductory Example
Webvan vs. InstaCart
1. Should we build this new product or
service?
2. How can we increase our odds of
success?

12. Lean Startup is Everywhere
Enterprises
• New opportunities for innovation and productivity
• Starved for organic growth
• Technology has changed the game
Startups
• Seek to disrupt enterprises
Customers / Consumers
• Trained to remove friction

13. Why are we here?
We share a common purpose:
- A shared vision for the kind of company we want
to create
Which leads to
- A company that continuously creates new sources
of growth
And requires
- A new growth operating system for modern
management practices

14. What is the Lean Startup?
Three Key Areas to Discuss
1. History
2. Terminology / Definitions
3. Application / Applicability

15. What is the Lean Startup?
History
• Robert Deming
• Toyota Lean Manufacturing
• Agile Software Development
• Lean Startup
• Steve Blank
• Eric Ries
• Alexander Osterwalder
• Lean Startup Community

16. Exercise
1. What is your organization about?
2. What do you hope to get from the
organization by applying the Lean
Startup approach?

17. What is the Lean Startup?
Three Key Areas to Discuss
1. History
2. Terminology / Definitions
3. Application / Applicability

18. What is The Lean Startup?
Terminology / Definitions
• Entrepreneurs
• Startups
• Uncertainty (Product / Market / Model)
• Assumptions
• Hypotheses
• Validated Learning
• Experiments
• Minimum Viable Product
• Customer Development
• Pivots

19. Exercise
1. What is an entrepreneur (or
intrapraneur)?

20. What’s a startup?
“A human institution designed to create a
new product or service under conditions of
extreme uncertainty. “
- Eric Ries
author, The Lean Startup

21. What kinds of uncertainty?
Technical / product risk
Can we build this?
Customer / market risk
If we build this, will people use/buy it?
Business model risk
Once we build this, can we find a way to make money from it?

22. What is an assumption?
Starts with “I believe that” statements
Clarifies your current understanding of what
you don’t know with certainty
Some are more important than others
Identify and isolate critical assumptions

23. Assumptions Example
Early Assumption
“In a city where space
is extremely limited,
people will pay a
small amount of
money, for a small
amount of space...
they don’t need a
hotel.”

24. Exercise
1. Write a list of assumptions for your
product / business innovation?

25. How to prioritize assumptions
Once you list assumptions, prioritize
them using a grid like this:
Impact
Time horizon
Will kill
Won’t kill
OR

26. 1. Identify your most important
assumptions using the simple
prioritization from the previous page?
Exercise

27. What is a hypothesis?
“If then” statement that helps design tests for
an assumption
Clarifies your current understanding of what
uncertainty you seek to resolve
Is specific in the action, timing and value /
amount of impact
Helps to design and build an MVP

28. For your most important assumption,
write some hypotheses you might want
to test?
Exercise

29. Critical Hypothesis Example
Critical Hypothesis
“Professional
photographed listings
get 2-3 times more
business (and host
don’t turn down free
professional
photography.”

30. A scientific procedure undertaken to make a
discovery, test a hypothesis, or demonstrate a
known fact
Or
A scientific test in which you perform a series
of actions and carefully observe their effects in
order to learn about something
What is an Experiment?

31. Minimum Viable Product (MVP)
Experiment that helps you validate (or
invalidate) hypotheses about the value or
growth potential for a new product
An MVP helps you answer a specific question
about one of your assumptions
Building an MVP is not a 1-time event

32. For the key assumption / hypothesis,
design the most simple MVP you can
think.
Exercise
“Perfection is not when there is nothing left to add but
nothing left to take away”

33. Minimum Viable Product
Translate your critical assumptions into an experiment:
1. Isolate critical assumptions for testing
2. Draft your hypothesis to be tested
3. Build an experiment
4. Measure the results
5. Collect the data and learning in a systematic
Validated Learning

34. Customer Development
= Talking to people
“Get out of the building”
Qualitative interviews to learn more about
customer needs and behaviors
May start with the first test you run after you
build an MVP

35. Fears
• Change in direction without a change in
vision
• OR
• Persevere: A team’s decision to test the
next most important hypothesis
Pivot

36. How does it work?
Three Key Areas to Discuss
1. History
2. Terminology / Definitions
3. Application / Applicability

37. What is the Lean Startup?
3. Application / Applicability
A. Experimentation
B. Testing
C. Measure Results

38. A. Experimentation
• Process of rapidly learning what customers
want and will pay for
• Test assumptions so that you don’t waste
time and money building the wrong thing

39. B. Testing process
Build-Measure-Learn loop
• Identify your assumptions
• Prioritize assumptions
• Focus on assumption with biggest risk
• Figure out how to test assumption quickly
• Figure out your hypothesis about that test
• Run experiment
• Review results
• Iterate

40. Build, Measure, Learn Loop

42. Culture of Testing
1. Experiment design is important
2. But, recording and evaluating the learning is more
important
3. Establish an organization that learns together
4. Step up the sophistication of the experiment when
you are ready to do so as a team
5. Team learning is the most important outcome

43. C. Measure Results
What knowledge are you looking to gain?
“The What”
What you are going to do with the knowledge
when you get it?
“The So What”

44. What if every hypothesis is
invalidated?
Pivot.

45. Top 10 types of pivots
1. Zoom-in pivot
2. Zoom-out pivot
3. Customer segment pivot
4. Customer need pivot
5. Platform pivot
6. Business architecture pivot
7. Value capture pivot
8. Engine of growth pivot
9. Channel pivot
10. Technology pivot

46. Path to Success

47. Why does it work?
Likely Explanations
1. Experience, analysis, evolution
2. Basis in Scientific Method
3. Reality – Who cares?! It works!

48. Recap - How do you win?
Build products more quickly by:
Recognize your assumptions
Test assumptions early and often
Don’t spend time and money building the
wrong things

49. How do you get into trouble?
Go off assuming that you know things that
you actually don’t know

50. Recap
1. Who is in the room?
2. How will this be valuable?
3. What is the Lean Startup & where did it
come from?
4. How and why does it work?
5. What should I do next?

51. Call to Action
• Engage Community
• LS 201 - Focus on assumptions
• LS 301 – Focus on experiments
• Mentoring, Coaching, Additional Training –
Explore with the Lean Startup Co
What should I do next?

52. Questions?
Phil Dillard
Lean Startup Trainer
415-894-5297
Phil@LeanStartup.co
Heather McGough
Co-Founder, Lean Startup Company
(415) 830-2479
Heather@LeanStartup.co