Validating Learning Vs Wastage
Once a vision is defined for a startup, a strategy must be put in place to achieve the goals setup by the vision.
A startup is a deliberate act of an institutional building which leads the entrepreneur to reach to the vision in extreme uncertain conditions.
With a set of practical research/analysis on certain visible problems, the society is facing, a high level idea can be extracted that can be used to resolves a real problem at an affordable price for the customers, which can generate a sustainable business around it. This becomes the seed to the strategy and accordingly a comprehensive organization and management is required to add more details to it.
The statistics of Startups around the globe are not very encouraging as most of the startups fail due to the reason that they do not follow a scientific approach in resolving customer problems and hence they end up in becoming a history.
The author of the famous book The Lean Startup Mr. Eric Ries started a movement to help provide a scientific approach to entrepreneurs around the globe in an effort to reduce this great loss of resources caused by the huge number of startup failures.
Ruling out an absolute wastage
Since startup is a resultant of a desire of innovation, an entrepreneur is a scientist whose main job is to identify the customers’ needs. He does multiple experiments by engaging with the customers and offer products/services. Subsequently by analyzing the reaction of customers, improve the products/services to add value to the customers for which they are happy to pay.
Although the vision and initial strategy of many of the startups are impressive, most of them fail. What goes wrong, is usually that the team thinks big but do not start small. Hence they try to cook their product as much as possible and applies enormous amount of energy before they launch it for the first time to the customers.
Now imagine, after having applied all of the precious efforts, if the customers provide their feedbacks by mere inaction or did not find any value to pay for!
Of course this would be very much disappointing for the whole team and even for the investors because, the resources that would have been consumed until then, would be simply considered as wasted, as they did not help customers at all!
The solution to this problem is to release a Minimum Viable Product and get an early feedback from the customers. The objective of this, is to learn the real customers’ needs, by getting to know, if they like what is offered to them and that they are ready to pay for it, or to know as to which changes would please them to pay for?
This learning then is applied to make the appropriate changes in the next upcoming releases to take the product closer to customers’ needs in accordance with the vision. This type of improvement, using learning from customers’ reactions to the deliberate experiments is called validated learning.
Any effort applied by the team that does not help customer is nothing but a complete waste.
Validated learning: mitigation of waste
Feedback loop of Build-Measure-Learn is a yard stick that determines two critical values of the strategy:
· Which part of the strategy is correct
· Which part of the strategy is crazy
Hence one can easily steer the strategy to eliminate the crazy part of it that would result in reducing the risk of wasted effort.
This is pretty much obvious that feedback loop needs to be continued in a periodic fashion, failing to which would increase the risk of wasted effort.
Conclusion
How do you know beforehand what will be validated learning and wastage?
Not getting early feedback by releasing a Minimum Viable Product is almost a guarantee that most part of the final product would be a wastage.
However following the feedback loop of Build-Measure-Learn to reach out to customers’ real need and adjust the product accordingly is a proven scientific method that tells you beforehand that it would be a validated learning.
