Lean Start-up, minimum viable product and pivoting

The Old Model of Start-up  Write an exhaustive business plan including –Analysis of every element of the market –Market research on customers –SWOT, Pestle, Porter 5 Forces –3-5 year forecast including P&L and cashflow  Raise funding from investors  Build the product/service  Launch

It has just one drawback… It simply doesn’t work.

It has just one drawback… It simply doesn’t work.

Why?  Your business plan is wrong. It cannot be exhaustive as there are too many variables  You will spend lots of time to raise funding from investors. Time that could be spent starting  Spend lots of money to build the product/service before speaking to customers and then discover they don’t like it

The New Model  “Lean start-up” –Eric Ries –Flexibility, contact with customers, iteration – changes-everything  Minimum Viable Product –Starting with what you have or can build easily to test your model with real customers  Traction

Minimum Viable Product The minimum you need to build to test the important features of your product with customers –Steel Thread - the very core of what you will offer –Flintstoning - hand made before automation –Shop-front – see if they will buy

What do the results mean  The minimum needs to be higher  The price is wrong  Need to pivot  Customers just don’t want it …so move on

What do the results mean  The minimum needs to be higher  The price is wrong  Need to pivot  Customers just don’t want it …so move on

What is ‘Traction’  Any proof that this is not just an idea but someone might actually buy it  Real customers  Non-executive advisors  Business partners  Prototype product built (if it is uncertain if it can be built)  Customer research

Example - Big Wide World  Bank balance £0  Staff – 0  Customers - 0  Pages of content – 0  App built - 0

Traction  Pilot universities agreed  Pilot employer – Army  CTO identified  Advisory Board – Linked In, Careers England, National Careers Service  Logo designed and website being built

Pivoting You vs reality Reality wins You don’t give up

Pivoting “Change in strategy without change in vision” Examples:  Charge users no advertising > free to users with ads  Service to buyers > service to sellers in same marketplace  Offline > online  B2C > B2B  Drop most of your offering for the one thing users like

Pivoting