The LEAN Start up Method

The two Tenants of the LEAN Startup Method are:

The Business Model Canvas and The Build, Measure, Learn Cycle.

Before I begin outlining those two tenants let me first explain what the LEAN Start Up Method is.

Lean startup is a methodology for developing businesses and products that aims to shorten product development cycles and rapidly discover if a proposed business model is viable; this is achieved by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.

The Business Model Canvas:

Essentially this is a diagram of how a company creates value for itself and its customers.

  • Key Partners: Whom do you rely on? Who relies on you?
  • Customer Relationships: What type of relationships do you need to build with each segment?
  • Value Propositions: What are you offering? Do people care?
  • Key Activities: What do you actually need to do?
  • Channels: How are you going to reach people?
  • Revenue Steams: What are people really willing to pay for? How much are they willing to pay?
  • Cost Structure: What factors influence your costs?
  • Key Resources: What assets do you have available to deploy?

The Build, Measure, Learn Cycle

Build First: The MVP

Most Viable Product -The best way to begin testing your assumptions it to launch a product.

There are at least Four steps on the journey to producing a viable product:

  • Theoretical Prototype - This is an idea that’s developed enough that you can describe it in detail to prospective customers.
  • Virtual Prototype - This answers the question, “If I had to sell the product today, how could I fake it in a way that feels realistic”?
  • Minimum Viable Product - This is a product That has the bare minimum feature set necessary to solve the problem you’re trying to address.
  • Minimum Awesome Product - This is “something that customers cannot resist, something that customers love, something awesome.”

You can run all sorts of tests against these various prototypes to gather information:

  • Smoke Tests
  • Cold-Call Test
  • Vote Test
  • Proof Test
  • Wow Test
  • Ethnography Test
  • NPS Test
  • Payment Test

Measure Second

The Lean Method asks people to start measuring their productivity differently. People often accidentally create products nobody wants, it doesn’t matter much if they do it on time and on budget. The goal should be to figure out the right thing to build- the thing customers want and will pay for-as quickly as possible. Lean is a new way of looking at the development of innovative new products that emphasizes fast iteration and customer insight.

Your business canvas model is your hypothesis. You’ve identified a problem that you think is worth solving, and you have a hypothesis about what might fix it. But a hypothesis alone is not enough:

You need to design experiments that will allow you to affirm your hypothesis of dismiss it.

This should sound familiar, because what we’re describing is the scientific method.

Determining the business model your idea is based on as a way to start. They identify the following options:

  • Transactional
  • Collaborative
  • SaaS (Software as a Service)
  • Media
  • Game
  • App

Here are some things that help make for a good metric:

  • It’s a rate or ratio. New users per day is better than total users.
  • It allows for comparison over time. Percentage of change from last week is better than overall percentage.
  • It’s simple. People can’t remember or use metrics that are too complicated.
  • It makes your predictions more accurate, which means you have to track what happens over time.
  • It allows you to change your behavior based on the results you see. That is, it allows you to learn and then act on what you.

Third Learn: The Pivot “The more money, time, and creative energy that has been sunk into an idea, the harder it is to pivot.”

Ries identifies many possible pivots, of which the following seem most applicable to associations:

  • Zoom In: in which one feature becomes the entire product.
  • Zoom Out: the reverse, in which the whole product becomes a feature of a new product.
  • Customer Segment: in which you’ve identified a real solution to a real problem for a different audience than you originally thought.
  • Customer Need: in which you’ve chosen a problem that’s not important enough to merit solving but that has illuminated other problems that might be.
  • Business Architecture: in which you shift from high margin and low volume to low margin and high volume, or vice versa (though the latter option is not available to all associations, as some serve communities that are too niche to be high volume).
  • Technology: in which you deliver the same program, product, or service through a new (and generally vastly improved) technological platform.

“Pivoting is a powerful and liberating idea. It’s liberating to recognize that no human being can guess correctly when you face uncertainty, and that part of the process is making changes to adjust to these inevitable errors.”


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