A few days ago I enjoyed a high energy weekend mentoring at the Lean Startup Machine workshop in Sydney. Around 65 participants formed 12 teams to explore their startup business ideas and make sure they were properly focused on delivering value. Not surprisingly there were quite a few discoveries and changes of direction. The final outcome was impressive with some well-crafted pitches delivered in style and validated in a variety of ways including that all-important cash commitment. Startups aside, I believe the underlying ideas have an important part to play in any innovative endeavour regardless of scale.
The key problem being addressed is that of potentially wasting time, energy and resources developing an unwanted or inappropriate solution. The elimination of waste is the primary idea behind Lean Manufacturing. This idea now has a significant following in the Startup world and for good reason. Why invest heavily in something before you have reduced the risk of low adoption?
There are lots of things to consider and most of them are covered by several canvas-based approaches to business modelling. Regardless of the method adopted, the initial focus should be that of validating a customer-problem hypothesis. Who is this product and/or service for and what problem do they really need solved? In many contexts the notion of a problem can be substituted by a consideration of ‘Jobs To Be Done’ [JTBD, Christensen]. This perspective possibly aligns better with the notion of continuous improvement in the enterprise. For a startup, the focus is on identifying early adopters to enable traction and establish social proof. For an enterprise, the focus is likely to be more constrained but the question remains nonetheless. Having established a hypothesis about this customer-problem relationship, it is essential to confirm the underlying assumptions starting with the riskiest ones that are core to the viability of the proposal. The need to validate against objective and measurable success criteria is inescapable. The results of these tests provide the learning and metrics that inform decisions about the next refinement and iteration. This is the age-old scientific method in action. Only once the customer and problem have been confirmed should the proposed solution enter the equation. This too needs validation of course. The Lean Startup approach champions several validation methods that begin with a series of explorative interviews to nail both the customer segment and a problem worth solving. This is followed by a pre-sell of the (yet-to-be developed) solution prior to a manually delivered (concierge) provision of that solution to the very first early adopters. Full solution development is postponed until the user behaviour and expectations are properly understood and, importantly, the characteristics of adoption are known. The idea must be viable in addition to being desirable. Even then a responsive approach needs to be maintained to cater for the inevitable changes that will emerge from continued exposure and on-going learning.
One way or another we all have customers and we add value by helping them solve problems and realise opportunities. The benefit of adopting a learning mindset and evolutionary approach is that time, energy and resources can be focused where they will deliver results that matter rather than to simply tick boxes or inflate vanity metrics.
Like many things, the principle is quite straightforward but putting it into practice demands an active, participatory approach and a resilient nature. For the delegates at the weekend workshop it was tough – they were worked hard, it was a weekend, it was raining heavily and Sunday was father’s day. Even so, they ‘hit the streets’ and interviewed, pitched and sold their way to a better place. That was time, effort and resources well spent. You can do it too (and you should).
Hypothesise. Test. Learn. Adapt.
“We must learn what customers really want, not what they say they want or what we think they should want.” – Eric Ries