How to make the Lean Start-up Methodology work for you: The Atrium story
“I know I’m supposed to do Lean, but why is it so hard?”asked Carolyn, a client, after she launched her business, The Atrium. She understood the basics of the Lean Start-up Methodology, but struggled to implement it consistently. She felt she didn’t experiment enough, and her first release of her website was far from a Minimal Viable Product.
The premise behind the Lean Start-up Methodology is that you can reduce the risk of building a solution the market doesn’t want, by constantly experimenting. Even when you don’t reach an expected result in your experiment (traditionally seen as a failure), it is seen as successfully discovering a way that doesn’t work. Every outcome of an experiment is something learned which gets applied to the next experiments.
You need to build your business on a strong, unbiased foundation. Untested assumptions can sink a business.
I think the Lean methodology is a powerful mental model of always identifying and testing assumptions.
But why do entrepreneurs struggle to implement the Lean Start-up Methodology?
The truth is… Lean feels awkward. Lean feels counter-intuitive. We naturally push back against Lean, because in school we learned that getting it wrong is bad, and we need to do it the right way. It is hard because:
- It makes you uncomfortable: You often have to put yourself out there and speak to strangers
- It makes you vulnerable: You open yourself up and expose flawed logic and thinking to the world.
- It scares you: You are afraid that if you start experimenting it might fail, and you are already too attached to the idea
- Don’t have the skill-set: Interviewing people is an art, which most of us aren’t comfortable or skilled at. Asking good questions to get honest, unbiased answers is key.
- Admitting that you don’t know everything and that you are making assumptions.
Planting the seeds of Lean: A case study
Carolyn started a business in 2018. While studying Landscape Design, she had the realisation that as we move into smaller places, and start families later, people need something to care for and nurture. Some people get pets, but often they aren’t allowed in small spaces. People are starting to transfer the nurturing element onto plants and are actively selecting interesting plants for their homes. This is a trend that has already picked up in the USA and Europe.
When Carolyn first had the idea, she spent a lot of time thinking about it obsessively. Then, once she had ideated the basics of her business, we completed the initial business model canvas, generated the Value Proposition, and identified which customers in SA would be her first target. At this point Carolyn slightly deviated from the traditional Lean process: Once she had the first stake in the ground (her business model canvas), she put her head down and started building the business, with no experiment in sight.
Even though she knew she had to be Lean, and experiment, she struggled. She just wanted to get it done and then see what happens. She wanted everything to be perfect, and didn’t want to release something below her standards. And she invested money before she had tested if her assumptions were right. She took the next step.
Why did she invest money in something she hadn’t properly tested according to Lean? Carolyn believed that her typical customers expected a luxury experience, because a standard has been set for e-commerce stores and how they operate. Customers not only expect pretty and functional, but a little something extra like brilliant content, beautiful imagery and educational advice, or else they think the store isn’t professional and is a scam. Carolyn created something called the Minimum Awesome Product (MAP), she couldn’t just develop a Minimum Viable Product (MVP) — it needed to be awesome.
“Not only do we have to search for the minimum viable product, it is necessary to look for the best product experience possible with the resources that we have.” Carlos Benyeto
Her first steps were setting up the website, identifying suppliers and buying prototype stock, and setting up an Instagram and Facebook account, investing in photography equipment to get the right photos.
Where she wasn’t Lean (she could have saved money, and tested her concept earlier):
- Customer interviews: She didn’t spend enough time interviewing potential customers and observing them.
- Napkin Financials: She didn’t do napkin financials — that is the initial basic financial calculation to see how many products you need to sell before you will make a decent living.
- Capital Expenditure: She bought the camera equipment before she knew if it was going to work. She should have initially used a phone or rented the equipment (Carolyn will say that she needed excellent quality, and that she would use the equipment again in some other project — life investment)
- Full-blown website: She could have designed an initial ‘lite’ version of her website, without all the bells and whistles, but it might have put potential customers off, who have expectations about what the standard for e-commerce websites must be. Carolyn thought that the website had to be awesome so that people can take it seriously. She also later admitted that she really enjoyed setting up the website. It was fun and creative. See below:
“When polished products can easily be put together and released quickly, you shouldn’t ship half-baked products because customers judge them on the quality and user experience.”~Maitrik Kataria
In hindsight and after a long discussion Carolyn noted, “I think I know why Lean was so hard for me. It was the fear that this big dream I had, could be wrong. And I didn’t want to kill it before it had a chance…You know Lean takes a lot of courage.” She was so passionate about this idea, that she didn’t want to be wrong.
Once Carolyn’s website was launched, and she had basic stock in place, she was ready to start experimenting. This is where Carolyn was following the Lean Methodology again. She had a product she could launch and test. She could start testing her assumptions, understanding:
- If she identified the right initial target customers
- If these customers are interested in plants she has identified
- If they will buy plants online
- Geographic location of potential customers
- Is her end market actually B2C? Or B2B?
The first week of her launch, she asked 10 friends and family to buy a plant online, to test the flow of the website, and the whole delivery experience. This was a huge blessing, because she identified some inefficiencies and moments of bad customer experience. What she learned from her friends and family was:
- Online customer behaviour: She made an initial assumption that people will read up on the plants in the ‘About’ section, but realised that they don’t, so she created a beautiful card with all the details of the plant that the buyer received.
- Presentation is key: This is an experience, her customers are getting a new family member, and she can’t have ugly foam in her box. Her sister in law pointed this out. It needs to be a magical experience when unwrapping the plant-pet.
- Plant Power: Her husband bought a weird looking plant for his office, and it stands in his desk and people come in and ask about the plant, there was excitement in the office when the plant was delivered.
- Customer Education: She made assumptions that people would know that the little packets in the box were fertilisers. An ex-colleague asked what they were for. Carolyn realised that she must educate her customer more.
- Online customer behaviour: She made an initial assumption that people will read up on the plants in the ‘About’ section, but realised that they don’t, so she created a beautiful card with all the details of the plant that the buyer received.
- Box Details: When she sent her first box out, she didn’t stick the details on the box carefully enough and they arrived all dog eared.
After that initial first week, Carolyn wasn’t scared of feedback and she made a point of asking new customers for it, and if she could, observing and interpreting. She is now learning non-stop. She is not attached to the form of the business, and she knows it will still change a lot.
“I went from being afraid, to feeling comfortable with feedback and welcoming it, even if it’s negative. I also found that my first few customers were actually so understanding of the imperfections. They wanted to help me get it right! I felt like I just needed to get something as awesome as I could out there. It was like a purge of my creativity and dreams, and then I was like, ok now I’m going to test the awesomeness potential.” ~Carolyn
In Conclusion
Even though there were times when Carolyn wasn’t being 100% Lean, experimenting every decision, she did adopt the general methodology. Those moments when she wasn’t Lean, she was intentional, and she made a deliberate decision to not be fully Lean. This is what makes for a potential great business, an entrepreneur that can think critically and know when to apply what thinking and tools at what stage of their business.
There is no one way to implement Lean, and the most important part is to understand the principles of Lean.
