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 SecondThe 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.