Rapidly Testing out Assumptions of a new Business:Lean Startupand Other ApproachesAnil BahumanTiE Business BuilderGulmohar, IIT Bombay

Profile

Education – NIT-Karnataka & University of GA

Citibank, Boeing, MIT Media Lab and IIT Bombay

Startup Experience 3 years – US at GA Tech Incubator 7 years – Cofounder, CEO, Managing Director

Vice-President, Ecosystem Development at Reliance Jio Infocomm

Outline

What Lean Start-up Does not cover Example of a fictitious Lean Startup What is the Lean Start-up Approach and what

are the advantages? Lean Startup Lingo What are the Limitations? What are the Alternatives?

Customer Development Assumption-based Planning Do your own

Business PlanBusiness Plan Canvas by Alexander Osterwalder

ProcessesEntrepreneur Operating System by Gino Wickman The V/TO – Vision/Traction Organizer The EOS Model™ and Scorecard - Track 6 Major Areas and a

Scorecard The Eight Cash-Flow Drivers™ Rocks - Three to seven most important priorities that must get

done every 90 days. The 5-5-5™ - 5 values-5 roles-5 rocks/Quarter The Meeting Pulse™ and The Level 10 Meeting™ – Templates

for Meetings The Issues Solving Track™ – Template to help solve issues The Five Leadership Abilities™ – Five Leadership Abilities Clarity Break – Managing frustration. Delegate and Elevate™ and The Assistance Track™ – Identify

your sweet spot and follow five ways to help you delegate. LMA – Leadership-Management-Accountability Questionnaire The People Analyzer™– Identifying strengths of each individual in

a team The Trust Builders™ – 10 ways to keep trust levels high

NetworkingTiE-IQ Bootcamp – Peer learning environment

What to expect Refine and finish the minimal viable

product (MVP) into a ready to buy product Market your product Get the first few customers Pitch to your first group of investors

Example

Tactics

Hypothesis

10 or more people will spend ` 500for my productover next week.

What is the Lean Start-up Approach?

A new trend among Silicon Valley and Bangalore tech startups

Learn about customer behaviour at lowest possible cost

What is the Lean Start-up Approach? Origins

2008 Meltdown “The Lean Startup” by Eric Ries Steve Blank (“Four Steps to the Epiphany”) “Lean Mgmt” techniques of Japanese auto-

makers….applied to the Tech industry “Discovery-driven Planning” introduced by Rita

McGrath & Ian MacMillan in a 1995 HBR .com businesses – Engineering bias – “Customer Development”

Source:Giff Constable

Customer Development

Get Out of the Building

Lingo

Source: Eric Ries

Minimum Viable Product

Products: MVP Services: Concierge

Source: Spotify

Continuous Development Frequency:

Accept incremental improvements?

Split Testing Try out 2 versions – with and without a

feature

Actionable Metrics Metrics that show traction Vs. metrics that make you look good

Innovation Accounting

Source: Dave McClure500 Startups

Pivot Major change in business model

Build-Measure-Learn MVP-Test Traction-Revise-Iterate

Limitations

Serious Limitations

“Research stage” Annoy prospective customers Annoy prospective investors Annoy key employees Speculative activity? Akin to learning the Stock Market “Engineering” solution to Customer Development Not applicable to physical-products Exploiting Adwords does not create new Demand Hype, Bubble Not a strategy – its Tactics.

Harm Discipline Misinterpretation – Shortcut Underestimate Commitment Little knowledge Expect instant results Get carried away by over-enthusiastic

early-adopters seeking instant-gratification

100 code improvements per day

AlternativesTo Lean Approach

Source: Steve Blank

Assumption-based Planning

Source: Wikipedia

Do your ownGiff Constable

I believe that my customers have a need to______________ (Keep it Concise)

This need can be solved with ________

My intial customers will be __________

The #1 value a client wants to get out of my service is: __________

The client can also get these additional benefits: __________ and __________

I will acquire the majority of my users/customers through __________ and __________

I will make money by __________

My primary competition will be __________ and __________

We will beat them in the market due to __________ and __________

Source: Giff Constable

My biggest product risk is __________ We will solve this through __________

What assumptions does my business make, that if proven wrong could cause failure?

1. __________ 2. __________ 3. __________ 4. __________ 5. __________

Source: Giff Constable

Should you be a lean startup?1. When most of your competition are not

lean startups, Be a lean startup2. When most of your competition are

lean startups, Do Not Be a lean startup3. When half your competition is lean and

half is not, it does not matter what you choose.

4. When you have no competition as of yet, Be a lean startup and adapt later

Thanks

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