Lean Start-up

1. LEAN START-UP Transforming the Way We Do Business © Operational Excellence Consulting. All rights reserved.

2. NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg LEARNING OBJECTIVES Understand the key concepts, principles and mindset of Lean Start-up Understand the Lean Start-up practices and the steps for implementation Understand the challenges and best practices for implementing Lean Start-up methodology

3. CONTENTS 02 03 04 01 INTRODUCTION AND KEY CONCEPTS OF LEAN START-UP PRINCIPLES AND MINDSETS OF LEAN START-UP PRACTICES OF LEAN START-UP IMPLEMENTING THE LEAN START-UP METHODOLOGY

4. KEY ISSUES AND CHALLENGES FACING TRADITIONAL BUSINESSES Lack of Collaboration Lack of Customer Focus Slow Decision-making Lack of Agility High Risk of Failure Resistance to Change Inefficient Use of Resources

5. THE MINDSET OF A TRADITIONAL BUSINESS THINKER “Better safe than sorry.” “Let’s not rock the boat.” “Our product is the best, no matter what the customer thinks.” “We’ve always done it this way.” “I don't care about other departments.” “The customer doesn’t know what they want.”

6. LEAN START-UP METHODOLOGY WAS DEVELOPED BY ERIC RIES • Most startups fail; but many of those failures are preventable • The Lean Startup is a new approach being adopted across the globe, changing the way companies are built and new products are launched • The concept applies Lean manufacturing practices to startups

7. WHAT IS LEAN START-UP? ? ? Only for tech companies? Just another buzzword? Only for start-ups? A focus on cost cutting?

8. IS LEAN START-UP ALL ABOUT CUTTING COSTS? While Lean Start-up does focus on being efficient, it’s not just about cutting costs. It’s about maximizing value and minimizing waste.

9. IS LEAN START-UP JUST A BUZZWORD? This is a common misconception as Lean Start-up is a proven methodology that has been successfully applied to many businesses.

10. IS LEAN START-UP ONLY FOR START-UPS? While the methodology was originally developed for startups, it can also be applied to established businesses that are looking to innovate and stay competitive.

11. LEAN START-UP IN A NUTSHELL: MINIMIZING THE TIME LINE FROM IDEA TO INNOVATION TIME LINE Minimize by focusing on fast experimentation, customer feedback and continuous improvement. IDEA INNOVATION

12. “ The Lean Start-up method is not about cost, it is about speed.” ERIC RIES AUTHOR OF “THE LEAN STARTUP”

13. WHAT IS UNIQUE ABOUT LEAN START-UP? Emphasis on rapid experimentation and customer feedback Testing of assumptions about the market and the product as quickly and cheaply as possible Learning from failures and make necessary adjustments before investing too much time and money

14. WHY LEAN START-UP IS IMPORTANT IN TODAY’S BUSINESS LANDSCAPE Increased competition Customer-centricity Innovation Cost efficiency Reduced risk

15. SUCCESSFUL COMPANIES THAT HAVE APPLIED THE PRINCIPLES OF LEAN START-UP Airbnb’s founders started by renting out their own apartment to test the concept. They then collected feedback from their first customers and iterated the product. They continued to use customer feedback to improve the product and expand their business. Uber started as a minimal viable product that allowed users to hail a ride through a mobile app. The founders used customer feedback to iterate and improve the product, and they continued to expand and innovate their business model. Dropbox started as a minimal viable product, and the founders collected customer feedback to iterate and improve the product. This helped them create a product that truly met the needs of their customers. Stripe used a customer-centric approach to build a payment processing platform that is easy to use and integrates well with other platforms. They focused on solving real customer pain points and used customer feedback to iterate and improve their product. Zappos started by testing the concept of selling shoes online, and they collected customer feedback to improve the product and create a strong brand. They focused on providing exceptional customer service, and this helped them become a leader in the e-commerce industry.

16. THE STAGES OF BUSINESS GROWTH AND EXPANSION Lean Start-up is a methodology that helps startups and established companies to develop and launch products quickly and with minimal resources. Problem Solution Develop business Management Lean Management is a management philosophy that emphasizes continuous improvement, waste reduction, and a focus on customer value. Design Thinking is a problem-solving approach that focuses on understanding customer needs and developing creative solutions to meet those needs. Business Growth & Scaling is the process of expanding a business and increasing its revenue, market share, and customer base. Source: Adapted from Lewrick et al.

17. THE VALUE PROPOSITION SHOULD OPTIMALLY HARMONIZE THE THREE ELEMENTS OF PROBLEM, USERS/CUSTOMERS, AND SOLUTION Users/ customers Problem/ customer fit User/ solution fit Value proposition Solution idea Problems Problem/ solution fit Source: Adapted from Lewrick et al.

18. THE MINDSETS OF LEAN START-UP Experimentation Iteration Customer focus Agility Collaboration Data-driven decision making Continuous learning These mindsets are critical to the success of Lean Start-up, as they drive the behaviors and actions necessary to effectively implement the methodology.

19. GENERAL PRINCIPLES OF LEAN START-UP Pivot and persevere Customer-centricity Rapid experimentation Minimum viable product (MVP) • Focuses on identifying and understanding the needs and wants of customers. • Involves testing assumptions and ideas quickly and at a low cost. • Involves creating a basic version of the product or service that includes only the essential features needed to solve the customer problem. • Involves being open to changing course if necessary based on customer feedback and market insights. These principles are designed to help entrepreneurs create products and services that are more likely to meet the needs of customers, and to do so in a way that is efficient, cost-effective, and adaptable to changing circumstances.

20. “ Don’t worry about failure; you only have to be right once.” DREW HOUSTON FOUNDER & CEO OF DROPBOX

21. THE FOUR MAIN PRACTICES OF LEAN START-UP Lean Analytics Business Model Canvas Agile Development Customer Development

22. THERE ARE SEVERAL TOOLS AND TECHNIQUES THAT CAN BE USED FOR CUSTOMER DEVELOPMENT Customer Development Interviews Conducting one-on-one interviews with potential customers to understand their needs, pain points, and behavior. Landing Pages Creating landing pages to test customer interest in a product or service before investing time and resources in development. A/B Testing Testing different versions of a product or service to determine which is more successful with customers. User Testing Observing and gathering feedback from customers using a product or service in a controlled environment. Surveys Creating surveys to gather quantitative data on customer preferences, behaviors, and demographics. A/B

23. DESIGNING WITHOUT EMPATHY: GOOGLE GLASS Customer Development • Google launched its first wearable product, the Google Glass in 2013 • The commercial failure of Google Glass can be traced to Google’s lack of empathy towards users: voice-activated actions are socially awkward, the camera creates a privacy concern for people around the Glass user, and the device doesn’t seem to solve any specific user needs © Operational Excellence Consulting. All rights reserved.

24. THE SCRUM FRAMEWORK IS A POPULAR AGILE DEVELOPMENT METHODOLOGY FOR DEVELOPING AND DELIVERING PRODUCTS Agile Development Daily Scrum SCRUM TEAM 24 hours Product Owner Scrum Master Development Team Sprint Retrospective 1 – 4 weeks Sprint Review Sprint Planning Sprint Backlog Increment Product Backlog Sprint

25. THE BUILD-MEASURE-LEARN PROCESS IS ITERATIVE AND CYCLICAL Build-Measure-Learn 3 The process is iterative and cyclical, with each cycle representing a new iteration of the product development process. The Build phase of Lean Start-up involves the creation of a Minimum Viable Product (MVP) that can be used to test assumptions and gather feedback from potential customers. Learn Build LEAN START-UP FEEDBACK LOOP 1 In the Learn phase of the Lean Start-up process, the focus is on using data and feedback to gain insights into the effectiveness of the previous two phases and to inform future iterations. 2 The Measure phase of Lean Start-up involves measuring and analyzing the data gathered in the "Build" phase to gain insights and make data-driven decisions. Measure

26. LEAN CANVAS PROBLEM Describe the 1-3 biggest problems of your customers. SOLUTION Describe a solution for every problem. UNIQUE VALUE PROPOSITION Single, clear, compelling message that states why you are different and worth paying attention. UNFAIR ADVANTAGE Something that makes it difficult for the others to copy the solution. CUSTOMER SEGMENTS List the target and user groups. KEY METRICS What measurable figures show whether the solution works? CHANNELS Through which channels do your customer segments want to be reached? COST STRUCTURE List the fixed and variable costs. REVENUE STREAMS List the sources of income. Source: Adapted from Ash Maurya

27. START-UPS HAVE A TRUE NORTH • Start-ups have a true north or vision • To achieve that vision, start-ups employ a strategy, which includes a business model, a product roadmap, a point of view about partners and competitors, and ideas about who the customer will be • The productis the end result of this strategy PRODUCT STRATEGY VISION Source: Based on Eric Ries

28. APPLYING LEAN START-UP METHODOLOGY TO LAUNCH A BUSINESS OR PRODUCT/SERVICE Identify the problem or need Continuous learning Develop a hypothesis THE SEVEN STEPS OF LEAN START-UP Scale up Create an MVP Pivot or persevere Test your MVP

29. BEST PRACTICES FOR IMPLEMNTING LEAN START-UP Embrace a customer-centric approach Build a strong team Start small Use data to drive decision-making Maintain a culture of experimentation Be adaptable Foster a culture of continuous learning Seek mentorship and guidance

30. ABOUT OPERATIONAL EXCELLENCE CONSULTING Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg