The art or way (Tao) of practicing lean methods can be likened to learning a martial art. You can read lots of books and understand the principles but you will not get it right until you truly understand its application. You can only really begin to learn by doing.
‘Zen is concerned with doing the right thing, at the right time, in the right way’ — Nathan J. Johnson, Barefoot Zen
The Shaolin monks of the 16/17th century knew that there was no possible way for them to truly capture the essence of Zen in word form. Instead they created wordless gestures that have later become known as kata. These kata are the strange solo forms that you see martial artists performing that often bear little or no resemblance to actual street fighting as we know it.
After the fall of the Ming dynasty and the burning of the Shaolin temple in the mid-17th century many of the key practitioners of the art were killed and so the its teachings and lessons were all but lost. In the early 18th century various different forms of the art had been adapted and changed over time until it eventually became the different types of Karate and Kung Fu that we see in the world today.
However, when we look back to the true origins of the art, it turns out that these forms (kata) have been significantly misinterpreted from their original intentions over time and were not actually intended for fighting but are in fact instructions on how to achieve a Zen state whilst working with a partner and living truly in the moment.
It seems that to achieve this Zen state each partner must be in contact and therefore be able to respond to each other’s movements via the simple use of touch reflexes. The instant feedback obtained through the sense of touch allows the martial artist to respond “without thinking” and react at the right time. It is, however, only through dedicated practice and continuous improvement that the martial artist is able to respond with the “right action in the right way”.
“Right action, right time” is one of the key principles of running lean. Since time is our scarcest resource because we cannot claim it back, it is imperative that we are able to make the right decisions to ensure we continuously improve without wasting time. The question then becomes how can we do this?
A martial artist must find a way to receive instant feedback (by making contact with their partner) in order to respond and react in “the right way”. Lean practitioners must also find ways of getting equivalent feedback for each action we take.
In the same way that the kata codifies the process of actions performed within a martial art, so the concept of Build, Measure, Learn captures the fundamental idea behind Lean Startup.
However, as was seen with the misinterpreted Karate kata, neither the kata nor the Build, Measure, Learn loop provide an explanation of the actual application of the principles. It is at this point that we must look to others (masters or mentors) to “show us the way”.
Building on top of the ideas and concepts defined in the Lean Startup by Eric Ries, Ash Maurya’s Running Lean begins to explore the actual application of Lean methods. By starting with the Lean Canvas as the vision of our business model we can begin to de-risk each part of that model by building something that can provide us with feedback i.e. a problem interview, a solution interview, a landing page, a metrics dashboard, a customer survey etc we can collect the necessary information to make decisions about what to do next.
If a martial artist is not in physical contact with their partner then they must rely on the less efficient feedback loop of sight based reflexes. Once the first contact is made however, they must change to rely on the touch reflex skills they have learned — anything less would just be in-effective.
As a lean practitioner if you do not have a feedback loop from your customer then it is equivalent to fighting with your eyes shut with no form of feedback, you will end up flailing around in the vein hope you may hit a target!
After you have obtained the feedback the trick is knowing how to interpret it. Different methods of capturing user feedback are applicable depending on the current stage of your business model. If you are in the early stages of testing an idea then more qualitative feedback mechanisms such as customer interviews would apply however as you get more customer throughput it may become more relevant to begin capturing more metric based feedback mechanisms. Knowing what and when to apply these different types of feedback are the skills you must continually improve upon in order to master the art.
One of the more important forms of feedback that we rely upon almost on a daily basis is a customer factory. This is a metaphor that re-interprets Dave McClure’s original pirate metrics: Acquisition, Activation, Retention, Revenue and Referral (why are they called pirate metrics? Because they AARRR!).
After defining our Lean Canvas we can begin to identify what the key touch points with the customer will be within each of these areas:
- How do we acquire new customers? — Acquisition
- When does the customer first receive value? — Activation
- What will keep the customer coming back? — Retention
- How do we generate revenue from the customer? — Revenue
- How can the customer refer us to others? — Referral
Once we have answered these questions and identified ways of measuring progress in each of these areas we can begin to track it. Using systems thinking and the theory of constraints (that there is only ever one weak link in a chain) we can immediately see where to focus our attention next.
So for example, if we were to start from scratch we may have an initial acquisition problem since we do not know where to get customers from or the idea is not compelling enough to pull customers in. In this case we may create a problem interview and begin to test whether our idea will generate enough interest.
Once we have acquired some potential customers we may produce a solution interview to test whether what we are offering will satisfy the customer needs. If we find that they are not realising the benefit or the value that our product has to offer we have an activation problem.
If the potential customer sees the value but does not come back for more then we have a retention problem.
If the potential customer keeps coming back but never finally subscribes or we are unable to generate some other form or revenue (advertising etc) from that person using the product then we have a revenue problem.
Finally, if the customer is using the product but does not feel compelled to tell their friends or they have no way to easily refer the product to others then we have a referral problem.
When we are dealing with low numbers of customer throughout we may initially only need to capture our results in a simple form but as the business model and product begins to take shape there may be a need for a more complete metrics gathering solution such as rolling your own or using an off the shelf product. The key thing being to ensure that your definition of pirate metrics can be visualised and seen by the whole team on a regular basis.
By measuring each of these metrics in a series of cohorts we are able to identify the impact of changes in our approach over time and adjust accordingly. When it comes to planning, what do next becomes obvious and the key metric that requires attention is highlighted. This then determines where our core focus should be.
A martial artist must be in contact with their partner to truly respond in the right way, so too must a lean practitioner be in contact with their customer in order to visualise the customer factory.
Don’t fight in the dark, understand the different ways you can be in contact with your customers and then utilise them to perform the right action at the right time!
We are starting a new user group in Bournemouth, UK called the GoLean Workshop where we will be helping others to learn by doing. Why not come and check it out, it would be great to see you there.