LEAP LEAN ENTREPRENEUR ACCELERATOR PROGRAM Welcome Topics: Lean Startup Overview Make Your Idea Tangible Lean Experiments Decisions – The Art of the Pivot Copyright © 2013 Moves the Needle LLC All Rights Reserved Agenda Day 1 8:00 – 8:30 8:30 – 9:00 9:00 – 9:30 9:30 – 11:00 11:00 – 11:30 11:30 – 2:30 2:30 – 3:00 3:00 – 3:30 3:30 – 5:00 5:00 + needed) Breakfast – Let’s Eat! Intro to Lean Startup Enterprise Innovation Spectrum Doing it – LEAP Loop #1 Exercise Create Your Experiment Get Outside – run your experiment! Close the Loop Building Your Case LEAP Loop #2 Optional work time (we’ll stay as late as Copyright © 2013 Moves the Needle LLC All Rights Reserved What is LEAP? Goal: Learn and apply lean startup principles by doing, so you never go back to the old way. What to expect: - Get outside your comfort zone - The need for speed – we’ll go fast! - We’re here to help, don’t hesitate to ask - Have fun! Copyright © 2013 Moves the Needle LLC All Rights Reserved How will you do it? Copyright © 2013 Moves the Needle LLC All Rights Reserved Ready to LEAP in? Copyright © 2013 Moves the Needle LLC All Rights Reserved What is “Lean”? Elimination of waste in the production and delivery of value to the customer… Copyright © 2013 Moves the Needle LLC All Rights Reserved What is a Startup? “A startup is an temporary organization formed to search for a repeatable and scalable business model.” – Steve Blank “A human institution designed to create new products and services under conditions of extreme uncertainty.” – Eric Ries Copyright © 2013 Moves the Needle LLC All Rights Reserved What is “Lean Startup”? Elimination of waste in searching for a scalable business model, or significant business impact. Goal for lean startups: Learning! Lean Startup Myths • Lean = cheap or poor quality • Only for high tech (hint: it works in large orgs too) • Replaces vision with customer demands Copyright © 2013 Moves the Needle LLC All Rights Reserved Innovation Spectrum Copyright © 2013 Moves the Needle LLC All Rights Reserved How do we search? Begin with an educated guess - OK to begin without the answers, you’re probably wrong anyway. Change guesses into facts using experiments - Measure behavior, test hypotheses, capture surprises - Make decisions based on the results of your experiments Move through the loop quickly - Build the absolute minimum required to test your assumptions - Build your case one experiment at a time - Get moving – NOW! (rinse and repeat forever) Copyright © 2013 Moves the Needle LLC All Rights Reserved Source: Eric Ries, The Lean Startup Lean Experimentation Rigor Inspiration Rapid Experimentation Continuum No Experience (unknown) Search High Risk - many unknowns Breakthrough Innovations Sustaining Innovations (disruptive) Optimize Low Risk - few unknowns Experienced (known) Measure Focus on the key metrics that matter – ignore vanity metrics. - Measure important customer behavior Willingness to exchange “currency” (time, attention, $$$) What activities must we do to deliver customer value Something else unique to your idea? Use metrics to eliminate gap between “say vs. do”, focus on metrics involving “do”. Copyright © 2013 Moves the Needle LLC All Rights Reserved Lie Witness News Why don’t we just ask customers if they will use our product? http://www.youtube.com/watch?v=Vp4SnmOxP0U Copyright © 2013 Moves the Needle LLC All Rights Reserved Learn and Decide The output from lean experimentation is new knowledge and insights about your customer or business model. • • • • • Build a case over time, using multiple experiments Experiments to learn, not just validate. Savor the surprises! Is your confidence increasing or decreasing? Why, why, why? Copyright © 2013 Moves the Needle LLC All Rights Reserved Let’s Get Loopy! The Lean Startup Loop Exercise – Run the Loop 0:05 – Review and post your idea (customer + problem + solution) 0:15 - Brainstorm your riskiest assumptions 0:10 – Narrow to your top 3 assumptions 0:05 – Document your Leap of Faith Assumption 0:10 – Brainstorm hypotheses 0:05 – Document a single hypothesis 0:15 - Brainstorm experiments to test hypothesis 0:10 – Narrow to a single experiment 0:05 - Document your experiment – Build and run your experiment outside with real customers 0:15 – Learn as a team – close the loop Copyright © 2013 Moves the Needle LLC All Rights Reserved Exercise 1 Make Your Idea Tangible Document Your Idea (:05) Tangible, measurable solution to a specific customer problem or pain – be specific! Task: Post 3 sticky notes on your poster Customer: Who is experiencing the problem. Problem: What is the customer’s problem Solution: Your proposed solution to the problem Copyright © 2013 Moves the Needle LLC All Rights Reserved What are Assumptions? “Something taken for granted or accepted as true without proof” Opinions vs. Facts (Hint: What you think is fact, is likely an assumption) Copyright © 2013 Moves the Needle LLC All Rights Reserved Exercise 2 Leap of Faith Assumption Brainstorm Assumptions (:10) • What customer behaviors must take place for your solution to be adopted? • What assumptions are you taking for granted as fact? • What keeps you up at night? Task: Write down as many assumptions as possible as a team, one assumption per sticky note. Copyright © 2013 Moves the Needle LLC All Rights Reserved Narrow Assumptions (:10) • What is the biggest assumption that if false, will cause you product to fail? • What is most unknown, where do gaps exist? • Focus on customer behavior related assumptions (ex: Sports cars lovers will drive an electric car) Task: Narrow your assumptions using the LEAN Loop poster 2x2 grid. Copyright © 2013 Moves the Needle LLC All Rights Reserved Post Your Leap of Faith (:05) This is the riskiest assumption for your business idea. “If this is not true, we’re out of business” (ex: Sports cars lovers want an electric car) Task: Place a single sticky note of your riskiest, LOF assumption on your poster. Copyright © 2013 Moves the Needle LLC All Rights Reserved Exercise 3 Hypothesis If we do X, Y% of people will behave in way Z X= Your solution (the carrot) Y% = Your target metric (the number) Z = The customers’ behavior (the hoop) Create Hypothesis (:05) If we do X, Y% of people will behave in way Z Task: Write down your hypothesis on a sticky note, and place on your poster. Copyright © 2013 Moves the Needle LLC All Rights Reserved Pitch (:01) Customer + Problem + Solution + LOF Copyright © 2013 Moves the Needle LLC All Rights Reserved Exercise 4 Lean Experiments Why Lean Experiments? Reduce the risk associated with resource investment, move faster with more certainty. • Change opinions into facts • Inform our decisions with data and customer insights • Separate customer words from behavior – say vs. do! Output = Insights + Data (what did I learn from the customer + what behavior did I measure) Copyright © 2013 Moves the Needle LLC All Rights Reserved Brainstorm Experiments (:15) • • • • Will his experiment will test your hypotheses? Measure real behavior (or as close to it as possible) Can you get an answer quickly! Capture surprises as well as data Important: Use behavior + “currency exchange” to eliminate say vs. do – NO SURVEYS – KEEP IT HUMAN (currency = time, money, attention, personal info, usage) Task: Brainstorm at least 3 different experiment methods listed your survival guide. Copyright © 2013 Moves the Needle LLC All Rights Reserved Choose 1 Experiment (:10) • Can you get your answers quickly? • How will you measure behavior? • How will you interact in person with your target customer? Did we mention: NO SURVEYS + KEEP IT HUMAN Task: Select the best experiment to run first (use 2x2 for help) Copyright © 2013 Moves the Needle LLC All Rights Reserved Document Experiment (:05) Task: On your poster, complete a sticky note for each of the following: - Describe the experiment - What specific behavior will you measure? - What currency will you collect? - Minimum success criteria (ex: 50% sign-up) NO SURVEYS! KEEP IT HUMAN! Copyright © 2013 Moves the Needle LLC All Rights Reserved Go! (2:45) Run your experiment in the wild - Don’t tell people this is an experiment - Collect contact info so you can follow-up later - Ask why or why not – look for surprises! - Stay out of jail… Return by 2:15pm Copyright © 2013 Moves the Needle LLC All Rights Reserved Learn and Decide Closing the Loop What are you looking for? A strong behavioral response from your target customer, confirming or denying your hypothesis. - Did your numeric hypothesis pass or fail? - Do you know why or why not? - What surprised you? Ex: 50% of small business signed up for our online beta program, providing their email and contact info. Copyright © 2013 Moves the Needle LLC All Rights Reserved Output = Learning What insights did you encounter which change the way you think about your customer..? How painful is the problem? Does it exist at all? - Vitamin > Medicine > Addictive Drug Are they trying to solve it today? - What process, if any, are they taking to solve their problem What were your biggest surprises? Copyright © 2013 Moves the Needle LLC All Rights Reserved The Art of the Pivot A significant change in direction based on new customer insights, where the vision remains the same. Idea: App to help diabetics maintain healthy eating habits. Insight: “Diabetic caregivers often care more than patients about maintaining healthy habits” Pivot to: App for diabetic caregivers instead of diabetics Copyright © 2013 Moves the Needle LLC All Rights Reserved Close the Loop (:15) Based on what you learned, Is your Leap of Faith true or false..? Why or why not? If true – Persevere! - Move on to next leap of faith, repeat loop process - Push to be more aggressive for next experiment If false – Pivot! - Change one or more components of your Idea, Repeat loop process - Important: leverage insights gathered during your experiment! Document updates on your poster and canvas - Create new sticky notes and place them on top of existing notes Copyright © 2013 Moves the Needle LLC All Rights Reserved Pitch 2 (:03) Customer + Problem + Solution + LOF + Experiment + Decision Copyright © 2013 Moves the Needle LLC All Rights Reserved Let’s Get Loopy Again! Rinse and Repeat – Forever! Loop to the Start, Begin Again • • • • Review/update your vision and idea Pick your next Leap of Faith assumption to test Create a new hypothesis for next experiment Create the next experiment to test your next hypothesis • Run your next experiment with real customers! Task: As a team, run through the steps of your poster, asking for mentor help if needed. Copyright © 2013 Moves the Needle LLC All Rights Reserved Digital Experiments Run a digital experiment overnight • Unbounce.com • Bit.ly • Wufoo.com • MailChimp.com • Godaddy.com • Craigslist.com • Facebook Ads • Google AdWords Copyright © 2013 Moves the Needle LLC All Rights Reserved Congrats! You Survived Day 1 Agenda Day 2 8:00 – 8:30 Welcome back check-in 9:30 – 10:00 Breaking frame 10:00 – 10:30 Pitch Updates (tell your story) ~11:00 – 2:00 Go outside! Experiment #1 2:00 – 3:00 Closing the loop 3:00 – 4:00 Breaking frame 4:00 – 4:30 Experiment plan #2 4:30 – 5:00 Operationalize LEAP (now what?) Copyright © 2013 Moves the Needle LLC All Rights Reserved Day 1 - Reflections What did you feel and observe? How is this process different than your current way of working? Are we uncovering game-changing ideas for our customers? Copyright © 2013 Moves the Needle LLC All Rights Reserved Judge the Search… Teams are just as important as ideas - Teams must demonstrate the ability to “search”, in addition to their idea’s viability. No team gets it right the first time. Real customer behavior trumps opinion - Teams must demonstrate the ability to generate data from customers using behavioral experiments. Evidence builds in small increments over time - Teams must move through multiple experiments loops in small increments, in order to increase confidence over time. Judge the Business Model Identify a specific customer - Teams must demonstrate understanding of their specific customer segment, and insights related to the customer’s desired outcomes. Deliver value to the customer - Teams must demonstrate their proposed solution is delivering value to their target customer, via currency exchange (time, attention, dollars) Generate positive business impact - Teams must demonstrate Intuit can extract value for shareholders (and employees as well) Before we Begin, Review… • • • • • Review/update your vision and idea Pick your next Leap of Faith assumption to test Create a new hypothesis for next experiment Create experiment(s) to test your next hypothesis Run your next experiment with real customers! Task: As a team, run through the steps of your poster, asking for mentor help if needed. Copyright © 2013 Moves the Needle LLC All Rights Reserved Pitch – (:03) Tell Your Story Vision + Customer + Problem + Solution + LOF + Experiment 1 Copyright © 2013 Moves the Needle LLC All Rights Reserved What are you looking for? A strong behavioral response from your target customer, confirming or denying your hypothesis. - Do you know why or why not? How painful is the problem? Does it exist at all? - Vitamin > Medicine > Addictive Drug Are they trying to solve it today? - What process, if any, are they taking to solve their problem Copyright © 2013 Moves the Needle LLC All Rights Reserved Example – LEAP • Vision: Create entrepreneurs inside corporations • Idea: A 2-day “lean competition” for entrepreneurs at big companies – – – – Customer Segment: Internal entrepreneurs at corporations Customer Problem: I don’t know how to move my new idea forward Value Proposition: Jumpstart your idea while learning lean startup principles Revenue Model: Fee to attend • Leap of Faith: If we conduct a startup competition, entrepreneurialminded employees will attend and make rapid progress on their ideas • Hypothesis: At least 3 teams will attend an event, and at least 1 team will validate their business idea with real customers. • Experiment: Conduct a LEAP competition in San Diego • Metrics/Currency: Number of entrepreneurs who attend, idea success, currency is willingness to spend time spent away from day job. Copyright © 2013 Moves the Needle LLC All Rights Reserved Let’s get Loopy - Again! Repeat until your business is validated (or not) Copyright © 2013 Moves the Needle LLC All Rights Reserved Final Loop Did you get a strong behavioral response from your target customers? - Did your numeric hypothesis pass or fail? - Do you know why or why not? - What surprised you? What is your decision as of right now? - How confident are you in this decision? Copyright © 2013 Moves the Needle LLC All Rights Reserved Pitch 3 – Final (:05) Tell Your Story Vision + Customer + Problem + Solution + LOF + Experiment 1, 2, 3 + Final Decision Copyright © 2013 Moves the Needle LLC All Rights Reserved Next Steps • Try it – Don’t wait for permission to run experiments • Start small, think big • Set aside specific time for experiments • Help each other – you’re in the club • Include leaders in the process Copyright © 2013 Moves the Needle LLC All Rights Reserved Business Model Canvas Business Model Canvas Start with Customer, then Business Use learning from customers to inform how to create business Vision: Create Intrepreneurs… IDEA: 48 hour startup competition for corporate intrepreneurs Corporations Conferences Conduct events Follow-up coaching Lean Startup community (Eric) LEAP Mentors LEAP Content Jumpstart your idea quickly…. Event + follow-up support from the community. Intrepreneurs Product Teams Lean lean startup principles… Academies Find out if customers like your idea… (GMs, pipeline owners, shareholders) Word of Mouth Have fun! Per-event: Facilities, facilitators (~$6,000 est.) Fees to attend % of New ideas in market Copyright © 2013 Moves the Needle LLC All Rights Reserved Vision: Create Entrepreneurs… IDEA: 48 hour startup competition for internal entrepreneurs BUs Lean Startup community (Eric) Conduct events Follow-up coaching LEAP Mentors LEAP Content Jumpstart your idea quickly…. Event + follow-up support from the community. Intrepreneurs Product Teams Lean lean startup principles… Academies Find out if customers like your idea… (GMs, pipeline owners, shareholders) Word of Mouth Have fun! Per-event model (~$6,000) + employee time Fees to attend % of New ideas in market Copyright © 2013 Moves the Needle LLC All Rights Reserved Thanks! Now go do it!