Lean methods & approaches to running a Startup – part 3

by Jeffrey Walker | Jan 20, 2014

The drawback to traditional approaches to starting a new business venture is that budding entrepreneurs tend to sink a lot of time and money into developing a product without any idea if the customer will really adopt it. The Lean Startup strategy takes a more efficient, customer-driven, and intuitive approach by first building out a Minimum Viable Product. This is a simple, scaled-down version of your idea minus all the bells and whistles. It could be a landing page or a mobile app mockup. Importantly, it’s not meant to be elaborate but rather serves to just get your idea “out there.”

Once you’ve identified and built out your MVP, the next step is to introduce it into the market as quickly as possible. This boils down to “Getting out of the building” and testing your ideas with real customers, to understand their pain points, and to find ways to provide them with the value they’re looking for; this is the most important lesson for a Lean Startup.

“Getting Out of the Building”

The idea here derives from Steve Blank’s famous Customer Development process, which is outlined in his book, co-written with Bob Dorf, The Startup Owner’s Manual. The essence of “getting out of the building” is to get away from the desk and go gather massive amounts of customer and marketplace feedback by talking with customers, finding out what their pain points are, and listening to their stories. Once you’ve gathered this feedback you can then use it to iterate and develop your business idea further based on the real, not imaginary, needs of the customer.

There are a number of tools and techniques for “getting out of the building” to find customers and validate your assumptions. Trevor Owens, in his very helpful blog on this topic, conveniently lists 3 major approaches to validating assumptions:

• Exploration: with this approach you want to find as much information as you can about the problems the customers are experiencing; this can be done by observing the problem happening, reenacting that problem, and then interviewing the customer to hear their story.

• Pitch Method: is about asking your prospective customers to offer you some kind of “currency” before your product is built, which can take the form of email addresses, pay with a tweet, letter of intent, or offering to build something into your API. The pitch can be made through a landing page, an email, a cold call, an ad, or through a Kickstarter campaign.

• Concierge Method: this involves delivering your product through a physical service such as an email, open source software, or cellphone, and in the process getting a small base of early adopters excited about the proposed product before building and marketing it to a broader audience.

A great new tool for helping guide you in tracking your progress as you define, test, and validate your business idea is the Validation Board. The dashboard can be downloaded free in return for a Tweet to advertise it on Twitter, or it can be printed as a 2×3 foot wall poster for $4.

In addition to the methods outlined above, there are additional ways to test how customers are responding to your MVP website. Adopt a tool like CrazyEgg, which uses heatmaps innovatively to optimize the process of seeing how visitors are following your website. Using colored coded highlights, a heatmap reports show where the majority of traffic resides, allowing you to make rapid changes to your site to increase conversion rates.

Building something of value can be as simple as an email or a landing page, or even a few lines of code. The point is that it does not need to be elaborate. By using feedback you gained from “getting out of the building” you’ll be well-positioned to test your hypothesis and validate your assumptions. As a result, you’ll offer them your product that they’ll be excited to use and that meets real needs.

So what happens after you’ve gathered feedback about your MVP product and have started to validate some findings? In the next part of this series we’ll take the Lean Startup discussion a step further as we explore the all-important question of whether to “pivot” or persevere.