September 9, 2014
Thank you to Lean Startup Machine Miami for being a Tech Cocktail Community Partner
Lean Startup methodology represents the order of operations touted by most startup mentors today, so it’s always beneficial to review the tenets.
Ideas are easy. Implementation is hard, Guy Kawasaki said it, but any founder can attest that this statement is true.
For startups, implementation has everything to do with a successful business plan. The old formula of success included: you write a business plan, pitch it to investors, assemble a team, introduce a product, and start selling as much as you can. Along the way you’ll probably have setback, some definite.
Deploying that old formula results in a high likelihood that you will fall under the predicted equation: 75% of all start-ups fail, according to new research by Harvard Business School’s Shikhar Ghosh. So what do you do when you know that you need to grow your business quickly with limited resources? Go the traditional route and die…or go lean?
The Lean Startup is a method proposed by Eric Ries for developing businesses and products, where startups focus on building products or services to meet the needs of early customers, so they can reduce the market risks. This will keep cost low or lean.
The Lean Startup Machine offers a series of workshops to entrepreneurs on the methodology. One of the principles taught is the “build-measure-learn” a process used to accelerate the feedback process. We asked founders to share lean lessons learned that helped them be successful:
- I have used it [lean approach] in every product I have ever built! In our current company, Fuelzee, we are a very lean company. We build things in an Minimum Viable Product (MVP) phase and then test it as much as possible. We go so far to the extent of MVP that it usually has not been touched by a developer. Many founders I advise get hung up on we need to go raise money and build this huge product. I tell them they are wrong and need to hack together and MVP and test first. Most of the time they don’t think they can build an MVP on their own since they are not a developer, which they are wrong. There are a lot of tools out there that let you build hacky products for testing,” Dan McGaw Founder of Fuelzee.
- We started the company at a Startup Weekend in Orlando. Startup Weekend is all about the LSM – develop a Minimum Viable Product (MVP) and validate, validate, validate. Obviously, there are pie-in-the-sky ideas for what we would like to add to our product but our main focus right now is getting something out there that our customers will enjoy. We will be exhibiting at an Inventor’s showcase at a large industry trade show this weekend (ABC Kids Expo). My business partner and I both had previous startups where the mindset was develop, develop, develop and then see if there is a market for it. Both of those failed. Lean Startup seems like a much better approach. Jeremy Scheinberg, co-founder of Here Comes TROBO.
- “When it came time to start expanding, I inquired about building a bespoke system. It would cost $60K. But, I used my will to reassure myself that this was not the right approach… 3 weeks later, we changed the model entirely. Odds are, we’ll probably change the model (or tweak) twice more. As such, we refuse to spend cash on dev, when we can hack it together ourself just to prove the concept” Greg Muender, Founder of SpareSquare
- “We view our culture and tools as an ongoing experiment and are rigorous in our application of MVP and analytics to accelerate, measure, and optimize their performance. This has been so successful that we have recently launched Sensei Labs, a new venture to bring the same belief and operating systems to other companies.,” Jay Goldman, Founder of Klick Health.
- “This came in handy when I founded my start up, DataSetGo, a Business Intelligence and Analytics start up based in Arlington VA. We initially started doing strictly BI and Analytics work but clients started asking us if we did quantitative marketing and Google Analytics reporting. At first we were averse to this because the margins weren’t as high but the market was sending a clear signal that there was consistent demand for this service. So we incorporated it into our service offerings and saw our monthly revenue almost double. Our hypothesis was that all our clients cared about was BI and Analytical modeling and we were wrong. ” Carl Forrest co-founder of Data Set Go.
- “The biggest take aways I had from the entire lean startup book and methodology was the importance of validating and continuous testing. Prior to my exposure to lean, I did most of my startup related activities by gut feel alone which often led to wasted money and time,” Brian Breslin founder of InfiniMedia.
- “The build-measure-learn process reduces anxiety about the product. The build-measure-learn process is good to use as a value proposition. I like to put myself in the shoes of the customer.Instead of just going out and spending the marketing dollars, internal time and effort, etc it would take to create the offering we have been reaching out to customers to see if they were interested in such a service. We were told by customers that they were interested in some of them and not in some others. We have turned our focus on creating the ones they were interested in and shelving the rest. We will save a lot of time, money, and potential frustration as a result.” Kevin Barnicle of Controle, LLC.
- “I found the ‘minimum viable product’ strategy to be the most helpful. Before ordering product, we set up the webpage to see if people were even interested in something like this. After we launched with a basic version of the website (concierge model for ordering) which was the minimum viable product, we tested different ordering packages and pricing packages to arrive at what we are using now. As it’s grown we are making changes to the model and website and will soon add the ability to take credit cards and schedule delivery pickup using the website, without human interaction.” Peter Sanchez, Founder of Elf Boxes
- “We’ve treated our business just like a lean startup would treat their product. That has meant constant re-evaluations, tweaks, and iterations. Our body of policies, service offerings, and best practices have gone through rounds of improvements and growth that we’ve even applied numbers to!” Ryan Matzner, Director of Fueled.
- “We tested our first assumption which was that parents need to search for special need providers (there is nothing like this out there). So our initial MVP was just a database. Once we got feedback from our users we added a review component, added the ability for providers to add their listings or claim them, got feedback about types of categories were needed, and so on and so forth. We even used the lean startup method in our build strategy.” Sara Gershfeld, Founder of Love My Provider
- “The build-measure-learn mantra has shaped my entire approach to starting and building Lab42. Even before the lean startup movement became more widespread, I always though in terms of ‘test-tweak-pivot’. Knowing that most startups fail, I approached the building of the business in a way that I knew would minimize the risk of failure as much as possible.Before we go full steam ahead on any type of new development, we always first create a working prototype that we can use in-house. After each iteration, we circle back with both our internal team and the clients that have been testing it to obtain more feedback and learn what else we can to improve or change the product” Jonathan Pirc Co-founder of Lab42
- “It has become the DNA of our company. We constantly use the phrase “numbers don’t lie” internally and it has helped us work smarter, not harder. It has also lead us to develop tools that give our sellers the same philosophy, allowing them to test out certain strategies based on data.” Farbod
Shoraka, CEO & Co-Founder of BloomNation.com
- “Build-Measure-Learn has become a core ideology, not just a philosophy. I should actually add to that ideology by calling it Break-Build-Measure-Learn. Often times when realizing we need to pivot in an area, it requires abandoning a project or strategy, or removing a current implementation. Essentially breaking our product. Through that, our product gets better, and we have never lost focus on the mindset that we need to analyze our development to continue the evolutionary process. Our product and message have evolved tremendously throughout this process, and we’ve pivoted our model multiple times, but have also learned that our core concept is viable with the proper evolutionary process.” Seth Knapp Chief Experience Officer of GetChitter
- “The Lean Startup methodology made it clear what we should focus on and when. As a proven process for business success, the method gave SORC’D a clearer focus, validated our idea, and the steps needed to make a sustainable business.” Bob Girolamo & Jeff Cloud Co-founders of SORC’D
- “The first lesson of Lean Startup is that founders have to be builders, because you can’t outsource the work and succeed. It costs too much money and time, and decreases the quality otherwise.” Bo Lu and Jon Xu Co-founders of Future Advisors.
Do you have a lean lesson to share? Interested in learning about Lean Startup Machine, find a workshop in your in city and get a 30% Tech Cocktail discount using code: techcocktail.
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