3 Things You Need to Know about the Lean Start up method
The Lean Start Up (LSU) was popularised by Eric Reis in his book of the same name. It has had a radical impact on various industries, including government, health care, and even the economy. For example, just this month, The Long Term Stock Exchange was approved, which is a new Silicon Valley based stock exchange and brainchild of Eric Reis.
At Inventium, we love the LSU method for lots of reasons, most of all because it uses a scientific approach to de-risk and maximise the chance of launching a successful innovation. This method is not just for start-ups though, it can also be used by big business’s to outrun the ever present risk of being disrupted and becoming obsolete. To paraphrase ex-CEO of General Electric, Jack Welch, you want to take the soul of a start up and put it into the muscle of a big corporate.
The LSU method is all about thinking more clearly and critically about your innovative ideas by using a rigorous scientific approach. Here are three principles to get you started!
- Get out of the building!
This one is attributed to Steve Blank, the godfather of the LSU method, and Eric Reis’s mentor. Steve noticed that a lot of companies get stuck behind the 4 walls of their building – And this is problematic for a variety of reasons: 1) they begin to lose touch with their customers, 2) companies start deciding what their customers want without actually asking them, and, 3) being stuck in the same building every day with the same people results in sameness of ideas and reduces diverse thinking.
TIP: Get out of the building!! Both literally (talk to your customers, spend time on the ground) and figuratively (start to think outside of your building through being curious about innovations in other industries, expose yourself to new and diverse information for example listen to a podcast in a topic you’d usually never pick).
2. The only way to win is to learn faster than anyone else
This relates back to that ol’ first mover advantage myth: which is, if you are first to market you have a distinct advantage over anyone else that comes to that same market after you. But the problem with this is that if you aren’t learning faster than your competitors who enter the market after you, than you will quickly be overtaken! So remember = Fast is the new first!
TIP: A great way to learn faster is to use the LSU to get validated learnings, in other words, understanding cause and effect to then improve your innovation. This means testing just one hypothesis at a time, and getting rid of any extraneous variables when you experiment so that you can know exactly why X caused Y to happen. For example, if your pot plant at home is dying, don’t throw everything you’ve got at it, because you’ll never know what really worked. Change things one at a time so you can observe a clear cause and effect!
3. Success is not building a new feature. Success is learning how to solve a customer’s problem.
We can easily get caught up in “new widget syndrome” where we get distracted by which new features we can add on to a product with the assumption that this will increase customers value and show how much work we’ve put into the product. But this is a trap! This belief leads to unnecessarily complicated products, with features that people don’t end up using (Ammirati, 2003) or even feeling negative feelings towards (Mick & Fournier, 1998). For example, who actually uses all the features on a digital SLR camera (apart from professional photographers)? Who uses all the buttons on their TV remote control? Surprisingly, it can take more effort to design an elegantly simple product, but it is well worth putting your customer back into the heart of your innovation process.
TIP: Make sure you focus your experiments on uncovering the best way to solve your customer’s problem, not on the array of features you could add to your idea. Remember Theodore Levitt’s quote: “customers aren’t buying a quarter inch drill, they’re buying a quarter inch hole”. One way of truly understanding what customers want is to measure behaviour and not intention. Research shows that when we intend to do something, we only follow through 28% of the time. So ditch the old market research which only gauges intention, and instead test your MVP with a handful of potential customers to observe how they actually engage with it.