STRATEGIC MANAGEMENT

PRESENTATION

The Lean Startup

How Todays Entrepreneurs Use Continuous Innovation to
Create Radically Successful Businesses
by Eric Ries

Book Review

By
Jayant Kar
1502080
PGDIM 22 Sec A

What is a Lean Startup?

LEAN STARTUPisanapproachtobusinessdevelopmentthatisbased
ontheapplicationofLEAN PRODUCTIONtoinnovation.
GuidetohowdriveaStart-up,buildandmaintainproducts.
Lean startupis a methodology for faster, more targeted product and
businessdevelopment

Using the Lean Startup approach, companies can create order not
chaosbyprovidingtoolstotestavisioncontinuously

The Lean Pyramid

VisionWhereyouthrivetoreachonceyoubegin
StrategyBusinessmodel,pointofviewetc.
ProductEndresultofthestrategy
Example
Imagineyouacceptedanewjobacrosstown.
Thevisionrepresentsyourdestinationornewplaceofwork.
Thestrategyrepresentsallthepossiblemeansofgettingtherebike,takea
bus,drive,etc
Theproductisarepeatableroadmapforgettingtowork.

Roadmap - repeatable
Means of transport

Destination

Product
Strategy
Vision

A Startups Vision
DestinationinmindCreatingathrivingbusiness.
TheFirstQuestionShouldthisproductbebuild?
Measureprogress
Evaluateperformancelocally
Alwaysdriveanewprojectandavoidcomplexplans
Breakdownthelargervisionandstartwithsmallexperimentstogather

customerresponses

Experimetation
AnEXPERIMENTisthefirstproduct
HowtoExperiment?
DefineaclearhypothesisusingtheLeapoffaithassumptions(Value
Hypothesisorgrowthhypothesis)
UseGenchiGenbutsuapproachforbetterunderstanding(Goandlook
outforyourself,earlycontactwithpotentialcustomers)
LookforAntilogsandAnalogs
StartbybuildinganMVP
Identifyandeliminatewaste

Build Measure Learn

The feedback loop at the core of the lean startup model

Validated learning

Learn
Build
Measure

Validate strategic
assumptions
Learn what customers
really find valuable (pull)
Accelerate this feedback
loop
Small quick cycles not
major gambles

Build: Turn ideas into

products
Minimum viable product

(MVP)

Version of product that enables a full

turn of the Build Measure Learn loop
with a minimum amount of effort and the
least amount of development time.

Learn
Build
Measure

Hascorefeatureswhichallowtheproducttobe
deployed.
Quick product releases/variations/tests
Helps in avoiding building a product that
the customers do not want.

Our first pass through the cycle

Can be deployed to Early Adopters that

are thought to be more likely to provide
feedback.

Measure: See how customers

respond

A systematic approach to figuring

out if youre making progress and
actually achieving validated learning

Learn
Build
Measure

How do customers react compared to

goal?

Good design is one that changes

customer behavior for the better

Split-test to find cause and effect

Metrics: Actionable; Accessible; &

Auditable

Innovation

Accounting
A Technique of measurement

To evaluate and improve outcomes, focus on how to measure progress, how to set up
milestones and prioritize work.

Innovation Accounting defines a set of macro metrics that can be used to model the
customer lifecycle.
The power of these macro metrics is that they provide leading indicators to revenue before
revenue is actually realized
Example
Daily Standup communicating progress on individual tasks and blocking issues
Weekly Standup communicating progress on current experiments and defining new
experiments
Monthly Standup communicating progress on the overall business.

Learn: Pivot or persevere

What activities are waste?

Find and fix root causes

Pivot: a structured course correction

designed to test a new fundamental
hypothesis about the product, strategy and
engine of growth.
Zoom-in pivot
Zoom-out pivot

Learn
Build
Measure

Customer segment pivot

Customer need pivot
Platform pivot
Business architecture pivot
Value capture pivot
Engine growth pivot
Channel pivot

Build-Measure-Learn Loop
Experiment is a cycle
around the validated
learning loop
Idea

Build Faster

Learn Faster
LEARN

Split Tests
Customer
Development
Five Whys
Customer Advisory
Board
Falsifiable Hypotheses
Product Owner

Data

BUILD

Minimize
TOTAL
time
through
the loop

Usability Tests
Continuous Integration
Incremental
Deployment
Free & Open-Source

Product

Cross-functional Teams

Smoke Tests

Cloud Computing
Cluster Immune
System

Accountability
Semi-autonomous
Teams

Unit Tests

Measure Faster

MEASUR Measure Faster

E

Split Tests
Continuous Deployment
Usability Tests
Real-time Monitoring & Alerting
Customer Liaison

Funnel Analysis

Cohort Analysis
Net Promoter Score
Search Engine
Marketing
Predictive Monitoring

Just-in-time Scalability
Refactoring
Developer Sandbox
Minimum Viable
Product

THANK YOU