Building a lean startup from scratch: week one
A week ago, I set out to build Ahaoho.io. I had a domain name, an idea of the product I wanted to build, and that was pretty much it.
So where do you start when you’re creating a startup from scratch? Build a landing page? Write an email to your first prospective client? Start coding? So many things that I could get engulfed into. How could I be sure I wouldn’t just be doing busywork and wasting my time?
Eric Ries’ Lean Startup brings a good framework for answering this question. All business ideas are based on what he calls leap-of-faith assumptions. These assumptions are the theoretical foundation of your business : if they don’t hold true, no matter how dazzling your landing page, how clever your emails, or how fast your app, your product just won’t fit its market.
Testing these assumptions seems like a good place to start. If they’re right, it’s time to start building the product and test more fine grained hypotheses. If they’re not, well, it’s time to pivot.
So what are my leap-of-faith assumptions for Ahaoho? In a nutshell, Ahaoho searches through your app’s usage data to find which of your users’ action correlates the best with them paying for your product. That action is the Aha moment, the point where they realize the value your product is bringing them.
Once that action has been identified, you can adjust your user onboarding, lifecycle emails, and product UI to get more users to that Aha moment. As more users experience your service’s Aha moment, more of them see the value in your product, and your conversion rate increases. Hurray!
For this idea to turn into a profitable business, a couple of things need to hold true:
- I need to be able to identify a product’s Aha moment in an automated way. That includes both gathering the data, and analyzing it.
- The perspective of a higher conversion rate should outweigh the process of handing me the data, modifying the user experience, and paying for my service.
Once these assumptions are identified, they can be tested by measuring potential clients’ response to a minimum viable product (MVP).
So that was the first thing I did. Figure out what that MVP might look like, and define what I would expect for that MVP to be a first validation of my assumptions.
Among the different flavors of MVP, I’m going for the concierge MVP: offering a handcrafted version of the product to my clients. They grant me access to their Google Analytics data through a barebones web app, and a week later I send them a report of what actions are the most likely to be their Aha moment.
This has two advantages. First, I get to offer a service pretty similar to the one I’m planning on building, but for just a fraction of the work since I don’t have to automate anything. This allows me to avoid wasting time on building something I’m not sure would sell. Second, since I have a week to crunch the numbers, I get to experiment with various models to find out how best to find a reliable Aha moment for each data set.
I initially reached out to a couple of friends from various Parisian startups to see if they would be interested in this MVP. Now I have sufficient validation to open up this first version to anyone who would be interested. If you want in, sign up here and we’ll be in touch soon.
Interestingly, working on this MVP and selling it has lead me to do all the things I’ve mentioned at the top of this article: emailing potential clients, setting up a basic landing page so that their colleagues can find out more, and writing just enough code to allow my first testers to give me access to their data safely and easily. However, the framework of the lean startup has given me the confidence that these haven’t been a waste of time.
In the weeks to come, I’ll be able to have some real numbers as to how well this MVP is performing. This will give me some indications as to how well my leap-of-faith assumptions hold up. In the meantime, feel free to come join the experiment and sign up for Ahaoho!