Hello
In this session,
we're going to talk about the method
Think about method
But don't get me wrong
This is not the method for your scientific assignment
This is the method about your businesses
It is kind of a guideline for you about
where to start your businesses
and how to start your businesses
So, in this session,
we will cover three well-known methods
Such as Lean Startup Method,
Design Thinking, and Scamper Method
Let's start with Lean Startup Methods
It is so popular
So you should be very familiar with this concept
Let's say,
you start your own e-commerce company
Then, you have to pick up your own items
and you should build up your website
and you purchase your materials or items or the others
and so on
Also, you have to create an advertisement
and decide where to advertise
and be ready to hit your consumers
So, my question is, how much will it cost?
If you do everything
Of course, probably, you will save your money
But it still cost a lot
Let's say you spent $15,000 on it
You worked really hard on it
But when you launch your business,
what if you don't have any consumers?
What if you don't get any attention at all?
What if no one is looking for your website?
You still keep spending your money,
and you already purchased your stuff
And let's say you've got two employees
Then, you're going to pay them
a month, two months, or three months
Can you be sustainable?
What do you think?
It is really hard, right?
This is not a joke
Think about it
This is how most businesses fail
When you start,
if everything is different from what you expected
but you already have spent
tons of money and effort and energy on it
Then, probably, you'll be under tremendous stress,
and you end up ruined
This is kind of a whole story
But we need to prepare our businesses
more reasonable and smarter
We're not going to go to this process
We want to avoid this stress
So, the Lean Startup is
how we avoid this kind of stress
Lean Startup is a story about how to do it
Do you understand that?
So, you now know why Lean Startup is important
Let's look at this picture
This picture is about cooking
He or she is working on getting fat out of pork
Do you know how we call the fat removed meat?
We say it is "lean meat"
This is what Lean Startup means
When you start your businesses,
we should remove all the fat out of pork
Because the fat is not necessary in this case
So, Lean Startup is about getting rid of redundancies
when you start your businesses
Trimming the fat from meat
Then, we make a lean meat
Same thing happen to the businesses
Lean Startup concept came from this best selling book,
which is "The Lean Startup" written by Eric Ries
Again, the Lean Startup refers to well-drained method
for startup development
Let's define the concept of the Lean Startup
We already mentioned that
The Lean Startup concept is about
startup development methodology
with minimal resources
Basically, we want to avoid wasting resources
on your bad, terrible or wrong idea
If your idea is good,
if your business fit very well in the situation,
then, it's perfectly fine
But many times, your idea,
it's not good, your idea is wrong,
and your idea not perfectly match with your situation
and you don't have consumers
And consumers think different
But your expectation is totally different from the real situation
Then, in this case, we don't want to waste
our valuable resources on this wrong situation
How to avoid wasting your resources?
Lean Startup is the answer
Second, therefore, we need to validate your ideas
and we need to learn from your consumers
before we actually start your businesses
Before we actually start our businesses full scale,
we need to check everything
This is the logic of Lean Startup
Let's look at the principle of Lean Startup
The first step is,
you formulate your own hypotheses ike a scientist
You develop your own hypotheses
about your idea and consumer's reaction
You conduct a business model canvas
Then, later, you need to listen to consumer's feedback
You should go out and just ask them
and try to get the feedback from your consumers
This is a good way to
quickly validate and revise your hypotheses
Once you receive the feedback from consumers,
then, you revise your hypotheses
If there's something wrong,
then you change your hypotheses
and apply this newly developed hypotheses to the situation
and ask the consumers again and again
This process is called as Pivot
We will talk about what Pivot is
Third, you need to develop with fast iteration
Go back and forth
You propose your minimum viable product,
which is very important concept
This is MVP
Let's look at the picture
First, you need to develop your hypothesis,
then you prepare something
This is a Build process
Then later,
you show your hypothesis and product
to the consumers
To just introduce your service to consumers
Through the MVP, minimum viable product
You don't have to prepare full scale service
You don't have to prepare full scale product
Just you provide and introduce
minimum viable product
Minimum viable product to consumers
Then, you can see the consumer's reaction
or consumer's feedback
You receive the consumer's reaction and feedback
and you measure their reactions, satisfaction, something like that
Then you understand and identify
what's wrong in your hypothesis
This is analysis process
Then, you will learn from your consumers
Then, what happen?
If there's something wrong, you revise your hypothesis
and rebuild your MVP
and introduce your rebuild MVP to the consumers again
and you receive the consumer's feedback again
You learn again, you revise your hypothesis again
This is a whole process
Let's look at Lean Startup term
There are two very important concepts
inside the Lean Startup
First one, MVP,
which is Minimum Viable Product
Minimum viable product means,
it is a product that functions at minimum level,
not full scale
Just a minimum
Second, Pivot
Pivot means, you change your directions
This term came from basketball
If you play the basketball,
then you quickly turn the direction
When you turn the direction,
then one of your foot is on the floor,
but the other foot has changed
So, this is Pivot
In the business area, if we say pivot,
it's a strategy or change of your direction
About your idea or your product
So, when you start your business,
if you think you should change your services or hypothesis,
then we simply say, "Let's pivot"
For the MVP,
there are many different types of MVP
I want to introduce briefly
Look at the first one
It's Video Explanation
Video Explanation means,
you don't provide full scale product or services
Instead, you just take a picture or film
You film the video about your service and product
Then you just simply explain
how your product works,
how your service works
You make a video or short video clip, upload this clip
and let others understand
concept of your service and product
The best example of video explanation is the Dropbox
Drew Houston had an idea about online file sharing
Before he actually got into the business,
he made a short video clip
and uploaded this video clip to very famous export website
Then, so many programmers watched the concept
and then they were impressed about the Dropbox idea
So, Drew Houston could get
long waiting list for the services
Before he actually didn't make the services
Second one
It's Landing Page types of MVP
Landing Page type of MVP is,
you don't have any product of services
But you just create a landing page like a one page website
Why?
Because you just explain the concept through the landing page
Then you prepare for sign up link,
then you get the potential consumers
Best example of Landing Page is More Labs
We will talk about More Labs later
More Labs is very similar to
hangover drink in Korea
CEO of the More Labs is immigrant
He visited Korea
and he was impressed with
hangover drink in Korea
Back in America, he wanted to make his own hangover drink,
but he didn't know the market needs in America
Because the situation is different from Korean and America
So, that's why, instead of making his own drink,
he made a landing page first
In the landing page,
he explained hangover drink
and function of hangover drink
Suddenly, he got a lot of waiting list of consumers
This is landing page
Third, Crowdfunding
You know the crowdfunding, right?
There are many crowdfunding websites
such as Kickstarter or Indiegogo
If you go there and upload your concept of the product service,
then, you can sell your product and service very quickly
Also, we can expect the viral
The best example of crowdfunding is Oculus
Devices for AR
Next one is Single Feature
Single feature means,
although you have many functions in your services or product,
when you introduce your service for the first time,
you just focus only one feature of the function
The best example of single feature is Instagram
Instagram initially had many functions,
such as location based,
login, and photosharing
When CEO of the Instagram
introduced this service for the first time in the market,
he just ignored the other features
and just focused on photosharing functions
It was perfectly worth
Let's move on
Piecemeal
Piecemeal means,
you approach the market step by step
This is Piecemeal
So, the Groupon adopt the Piecemeal approach
We will talk about how Groupon approached the market step by step
Next one is Concierge
Concierge means, service men in hotel
If you go to the hotel, there are many service people
This is concierge service
Then you do manually
and this type of MVP
is good for high-touch service delivery area
Next one is Wizard of Oz
You know the Wizard of Oz is
the best selling book, best selling story
There is a magician back then
But in front, there's a different story
You provide some service
and consumers feel that
this is fully automated service
But actually, in the back then,
there are workers
Workers manually do the job
Consumers didn't know what happened in the back then
There's two different side
Back-end side and front-end side
If we make a fully automated service,
you should spend a lot of money and effort
But we don't have time
We don't have money
Also, we don't want to waste time and money on your wrong idea
That's why, in order to test whether your idea is good,
we need to prepare
apparently automated service, but actually it's not
If your business is hardware, physical product,
then, you can make a physical prototype
through the 3D printing
This is 3D Model
So, now you understand
what are different types of MVP
Let's move on
I want to give you real startups case
about Lean Startup
How they use the Lean Startup method
What was the first item ever sold on eBay?
You know the eBay, right?
Which one is the first item?
First one is Polaroid camera
Second one is
Switzerland knife
We say it's MacGyver knife
Third one is laser point
But this laser point is broken
Guess which one
is the first item ever sold on eBay
Polaroid camera, knife,
or broken laser point?
The answer was surprisingly, broken laser point
He is Pierre Omidyar,
founder of eBay
He said that
A broken laser pointer was a great way to test Auction web
So, he uploaded this broken laser point
on purpose to validate his idea
His initial idea was auction web
You know the auction
What is auction?
Auction is usually the process of
selling or buying the product
When you sell and buy the product,
so many people participate in this process
and they bid the prices
Then the product
can be sold at the highest price bidders
This is auction
He made this auction process through the online
This is the first idea of eBay
Then he wanted to test
whether this online auction web work or not
He wanted to test
He founded auction web in 1995
At that time, he was working at the company
After the work,
he created this auction web and managed it
at night like his personal hobby
He uploaded broken laser pointer
to test his website
How much? At $30
Then, he mentioned that this laser pointer is broken
It's a broken laser pointer
It's useless item
In first week,
nobody wanted and anyone did not bid
But what happened later?
After going into competition,
there were some participated in the bidding
and competition occurred
Finally, it sells at $14.83
Anyway, it's sold
His idea was perfectly proven
Even broken laser pointer
was sold through the online website
Online auction website
Then, he felt confident
and consumers reacted to this website
very positively
At that time, when consumers used the auction web,
they should pay for commission
There is no online payment system
because it's not real website
So consumers should write check
and send this check to his house
One day, he said that
There are a lot of check mails out there
So I should hire a part-timer
to deal with these checks
Later, what happened?
He quit his job
and engaged this company seriously
This is starting of eBay
This is another example of Lean Startup methodology
Which is Groupon case
Have you heard about Groupon?
Groupon is
social e-commerce, such as group purchase
Andrew Mason thought about this idea
while he was reading a book of tipping point
Tipping point means
if you reach out certain point,
then you can do much better
This is basic idea of tipping point
He was impressed with this idea
So, he started a business about the point
He put the company name, The Point
His initial idea was this
If we have a lot of consumers,
then we have bargain power
Then, we can ask some discount
to the prices from the service providers
It is also good for service providers
Because service providers can be exposured
to lots of consumers
at a short period of time
It is kind of marketing
from the service provider's point of view
In this case, it's win-win situation
It's really good idea
So, he wanted to start this idea
But, he didn't do this business full scale
Instead, he started this business with his own blog
Also, he did everything manually
Manually means
he printed out his own coupon
and sent this coupon through emails
There's no such system
He used a blog
Then, he conducted an experiment with the pizza house
on the first floor of his office
He went down to pizza house
and explained the concept
to owner of the pizza house
Owner of the pizza house agreed to do it
Then he started his business
This is the starting point of Groupon
Later, what happened?
Groupon became a very successful company
Let's move on to another case
This is Cardoc
Have you heard about Cardoc?
This is Korean company
Cardoc was founded by Lee Jun-no
He graduated from Hanyang University majoring engineering
He used to work at Daum Communication
as team leader before he started this company
Over there,
he thought about the business idea
Actually, he was worried about
restoring the appearance of cars
At that time, he was leading
an online foreign car clubs as his hobby
He was very interested in foreign cars
Foreign cars are expensive in Korea
They were really worried about appearance
But the problem was,
there were not too many specialized repair shop
for the foreign cars
This was his idea
He came up with very simple solution
His solution was
It is nice to compare the cost of repair
before people visit to repair shop
Because we don't know the quality of repair shops
Before we go to the repair shop,
if we have a chance to compare the price and quality,
then it is really good for the consumers
Especially, the car owners of
foreign cars
So, he made a mobile application
Then, this mobile application allowed
end users to upload 3 photos
when they get into accident
Photos of damaged parts
After uploading these three photos,
consumers can get estimate, quote,
from some nearby repair shops
Get detail of the quote from nearby repair shops
What do you think?
From the consumer's point of view,
that is really convenient
and they thought that it is automatically working
But it's not
Because automatic system cost a lot
But Lee Jun-no, CEO at that time
didn't know how it will work
So, instead of developing full scale service,
he just developed
front-end service
And there were no automatic system, back-end
What happened in the company?
Inside company, end users upload three photos,
then, in the company
received the consumer's order
Then, picked up the phone
and just called the nearby repair shops
If it's Hanyang repair shop,
Hey, Hanyang repair shop, we got a consumer call
Please prepare for your quote
I will send three photos to you through the email
Just open up the email and look at the damaged area,
and estimate the quote
Send me a quote,
and we will give this to consumers
through the mobile application
And consumers feel that it is automatically working
But it is not
It is a Wizard of Oz type of MVP
What do you think?
Through this process,
Lee Jun-no, CEO, can save tons of money
Also later,
this process worked
He proved that this process worked
Then, he invested a lot of money and effort
to create fully automated services
Again, everything was done by hand
in the company
Users believe that
the entire estimate process is automated
But it is not
So, what do you think?
This is the whole idea about the Lean Startup Method
Again, when you start your businesses,
do not start the businesses full-scale
Instead, you should validate and you should test your idea
before you do full-scale businesses
This is what Lean Startup Methodology gave us