Minimize The Amount Of Wasteful Work Using Lean Methodologies
The time has come. Your hands are shaking with excitement; adrenaline is rushing through your veins, making you pace with electrified energy back and forth across your living room; blood is pumping in your veins with accelerated pace; your mind is racing with ideas, possibilities, action items for the next foreseeable future, charting the course towards world domination.
You just had an epiphany — a startup idea that will change the world — and you can’t wait to launch, to tell the world about it, and set out on a journey to make this thing work. Where do you start ?
What follows is a timeless classic of a startup world: visionary founder, with the weight of better future bestowed upon him, rolls up his sleeves and gets to work, building the product, day and night, fueled by nothing except Red Bull and the insatiable desire to change the world, burning midnight oil, and pushing the boundaries of human hygiene.
I would be a hypocrite if I neglected to mention that for the longest time I was following the same recipe to what seemed to be the only legitimate way of building startups. At coSquare — an Enterprise SaaS tool for Real Estate — we spent months building the platform before it occurred to us to test our value proposition hypothesis by talking to potential customers. Some founders I know had to discard entire code-bases in the face of unexpected customer feedback. How embarrassing.
Lean Startup to rescue
Back in 2011, Eric Ries published his iconic guide to validating business ideas called “Lean Startup”. In it Eric outlined how to reduce wasteful work through shorter feedback loops and customer-driven development.
This methodology for software development was inspired by lean manufacturing practices of Japanese car-maker Toyota, and introduced a series of practices for modern-day entrepreneurs, mainly:
Formulate the hypothesis
Instead of engaging in a long-term planning exercise, embrace the uncertainty and formulate assumptions surrounding your business. What value are you providing? Why would customers use your product? Start with a series of untested hypotheses — or business guesstimates — and methodically validate each of them. New assumptions will arise, and some of them will never validate. Lean Startup advocates keeping track of your learnings in a framework called “business model canvas” — a diagram of value-creation for shareholders and customers — instead of writing a comprehensive business plan on day one.
Test with real customers
Most entrepreneurs — when trying to validate their assumptions — will resort to brainstorming and team discussions to find answers. Don’t. Rather, get out of the building and engage with potential customers to find your answers. Instead of assuming product features, pricing, and branding for your startup, ask some of your early adopters to provide you with feedback and their point of view. Put emphasis on minimizing the amount of guessing, and maximizing learnings from each customer interaction. Lean startups run through a series of iterative hypothesis-testing exercises until they gain enough clarity to commit to a product.
Build MVP fast
In a software world, taking on year-long development projects and building large, multi-functional apps from day one is a big taboo. Not only are you expending more effort and resources to get to the market, you’re running an outsized risk of building something that nobody needs. Enter Agile development — software development methodology that works hand-in-hand with customer development. It advocates for breaking apps into facets, or layers of features, and adding more functionality only when previous layer has been fully validated. Agile allows startups to build minimum viable products incrementally and iteratively, relying on customer feedback for prioritization and testing.
So next time you have a business or a product idea, recognize that solution lies outside the office, in conversation with real, paying customers, not within the walls of a boardroom and endless brainstorming sessions.
Accept the fact that most “entrepreneurial visions” are just dreams, unless properly validated. The most important thing you can do as a startup founder, is to stress-test those hypotheses swiftly and ruthlessly, against real-world feedback.
Approximately 50% of startups fail within first years in existence, roughly 42% of that being attributed to the lack of real market need for product or service.
I’d like us to see less startups operate in a dreamy land of assumptions, and more startups reach product-market fit. They don’t show this in movies, but Product-Market Fit is the single most important factor that keeps entrepreneurial dreams alive.