LEAN ENTREPRENEUR ACCELERATOR PROGRAM

LEAN ENTREPRENEUR ACCELERATOR PROGRAM
LEAP LEAN ENTREPRENEUR ACCELERATOR PROGRAM

Copyright © 2013 Moves the Needle LLC All Rights Reserved
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 Breakfast – Let’s Eat! 8:30 – 9:00 Intro to Lean Startup 9:00 – 9:30 Enterprise Innovation Spectrum 9:30 – 11:00 Doing it – LEAP Loop #1 Exercise 11:00 – 11:30 Create Your Experiment 11:30 – 2:30 Get Outside – run your experiment! 2:30 – 3:00 Close the Loop 3:00 – 3:30 Building Your Case 3:30 – 5:00 LEAP Loop #2 5:00 + Optional work time (we’ll stay as late as needed) 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

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

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 is an approach that resolves that tension. Rapid experimentation is really about getting to new learnings through a systematic approach. Rigor Inspiration

Search Optimize Rapid Experimentation Continuum No Experience
(unknown) Search High Risk - many unknowns Sustaining Innovations Breakthrough 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

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
Be sure to make clear “answer” not “correct”

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 Be sure to make clear “answer” not “correct”

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) Did we mention: NO SURVEYS + KEEP IT HUMAN
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 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

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

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, entrepreneurial-minded 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

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

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 1 1 2

Start with Customer, then Business Use learning from customers to inform how to create business
5 3 4 1 1 BUSINESS CUSTOMER 5 3 You’ll be testing many hypothesis, but the “exchange of currency” 6 2

Vision: Create Intrepreneurs…
IDEA: 48 hour startup competition for corporate intrepreneurs Corporations Conferences Lean Startup community (Eric) Conduct events Follow-up coaching Jumpstart your idea quickly…. Lean lean startup principles… Find out if customers like your idea… Have fun! Event + follow-up support from the community. Intrepreneurs Product Teams Academies (GMs, pipeline owners, shareholders) LEAP Mentors LEAP Content Word of Mouth 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 Jumpstart your idea quickly…. Lean lean startup principles… Find out if customers like your idea… Have fun! Event + follow-up support from the community. Intrepreneurs Product Teams Academies (GMs, pipeline owners, shareholders) LEAP Mentors LEAP Content Word of Mouth 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!

LEAN ENTREPRENEUR ACCELERATOR PROGRAM

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