u can try out on potential customers; measure its acceptability and value to its intended audience and learn from what you’ve measured
Build a Minimum Viable Product
Build something that’s good enough to try on customers, no frills, probably not much error recovery. Build it quick and fast; get it out to early adopters; think big; start small
Conduct an Experiment and Collect Relevant Metrics
Create a hypothesis about the product or market; create experiment(s) to try out your hypothesis; measure the experiment’s outcome to validate or disprove hypothesis.
A key part of this measurement is what the method calls Innovation Accounting, which focuses on how entrepreneurs can maintain accountability and maximize outcomes by measuring progress, planning milestones, and prioritizing. This is different from traditional accounting.
Another key part is Validated Learning. This is defined as a process in which one learns by trying out an initial idea and then measuring it to validate its effect. Each test of an idea is a single iteration in a larger process of many iterations whereby something is learnt and then applied to succeeding tests.
Persevere or Pivot
Find the sweet spot of your product. Your metrics will tell you if you should keep going with your original idea or “pivot” and turn in a different direction.
Build – Measure – Learn
Below is an illustration of the Build-Measure-Learn iterative feedback loop
Build-Measure-Learn is the core part of the lean startup methodology that explains what we should do between the phases of Idea -> Build -> Code -> Measure -> Data -> Learn. In other words, it is a loop process of turning ideas into products, measuring customers’ reactions and behaviors against built products, and then learning whether to persevere with or pivot the idea; this process repeats over and over again. If you pivot to a new idea, you create a new baseline and start the iteration process from there.
It’s worth remembering, an MVP does not have to be a physical product or a software offering. Zappos is an American online shoe and clothing retailer. Their hypothesis, back in 1999, was that people were ready to buy shoes online. Nick Swinmurn, the founder, took pictures of the inventory in local shoe stores and posted the pictures online on Shoesite.com. If a customer wanted a shoe, he bought it from store and sent it to the customer. In this way, he validated his hypothesis, then built the business. Zappos was acquired Amazon in 2009 for $1.2bn.
Dropbox allows you to synchronize your files between PCs, laptops, mobile phones etc. Drew Houston thought it would be too hard and time consuming to build a prototype in order to convince potential investors, so he and his co-founder made a 3 minute video.
Steve Blank’s Customer Development Process
The next thing that lean startup practitioners do is what Steve Blank calls, in this Harvard Business Review article, “Get out of the Building” or what Toyota call “genchi gembutsu” – “go and see for yourself”. Steve had documented what he called a Customer Development Process, embodying Lean Startup principles:
- Customer Discovery – translate ideas into business model hypotheses, test assumptions, create a Minimum Viable Product
- Customer Validation – continue to test all other hypotheses and try to validate customer interest through early orders or product usage; if no interest, startup can “pivot” by changing one or more hypotheses
- Customer Creation – product has been iterated enough so that it is refined enough to sell; ramp up marketing and sales
- Company Building – transition from startup mode into an established company
The third enabler of the Lean Startup model is agile development, which has its origins in agile software development. This is a group of software development methods in which requirements and solutions evolve through collaboration between self-organizing, cross-functional teams, and has become the predominant way of developing software. Agile promotes adaptive planning, evolutionary development in small increments, early delivery, continuous improve