#004

Eric Ho ·

ON LEAN START-UP

“The Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers' hands faster. The Lean Startup method teaches you how to drive a startup how to steer, when to turn, and when to persevere and grow a business with maximum acceleration. It is a principled approach to new product development.”


While Lean Start-up approaches are conceived for start-up companies, it very well applies to any businesses looking for a way to truly learn from customers with a validated approach. 


4 key components of lean start-up approach:


1. ELIMINATE UNCERTAINTY
2. WORK SMARTER AND NOT HARDER
3. DEVELOP AN MVP
4. VALIDATED LEARNING

Similar to prototyping, the lean start-up approach is to eliminate risk and uncertainty with a new product or service. How can we systematically test hypotheses and assumptions through action? The main questions to ask are "Do people need this product?" and "Is there a sustainable market for it"? Assuming that you can make and produce the product or service, the more important question is if people want and would buy it. 

An MVP (Minimal Viable Product) is the vehicle to start the discovery and learning journey of your customers, continually iterating your MVP allows you to ask questions to continue to learn about your customers. For lean start-up, progress is validated learning about your customers, and not the revenue that you earn from them at this early stage. By allowing the time to learn the most from your customer, you avoid building a product that nobody wants. 


What is an MVP?


"A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort."

Some key factors that you need to figure out before even building an MVP include: who are you building the product for? You should be analyzing in details all the assumptions about this target audience. If you are building a consumer product, who is going to buy this? What is their income level? What is their demographics? How do they spend their time? Where to they spend their time? The more observations and insights you have about your audience, the better questions you can ask and test with your MVP. Once you have some good assumptions that you can start to validate, you can apply a lot of the prototyping methods in our last blog.


How to make an MVP for the retail environment? 


You may ask, how does an MVP manifest in the retail environment to learn about your potential customers? We have a step-by-step guide here, depending on where you are with your product, you can skip ahead:



Before you have your product / service: 


1. Start a Facebook Ad and Test Demographics

Use social media and resources such as Facebook to start testing your products' target audience. Try the same description of your description of your product to 3 - 5 different demographics and track their relative engagement. You would be able get insights right away. 


2. Analyze Google Adwords & Run Adwords Campaigns

Use SEO resources to test and discover what people are searching that test keywords that describes your products and services. Through this process, you should be able to discover what are best ways to describe your products and also what people actually are looking for.


3. Start a landing page of your product or service and gather emails

Start a simple landing page that describes your products & services, and use the number of emails that you gather as a traction and validation of people interested in your products and services. This is usually best when combined with Facebook Ads or Google Adwords. Some companies that are good resources for this include: 

Leadpages.net - Landing Page

Squarespace.com - Landing Page

Quickmvp.com - Landing Page + Google Adwords


4. Bring a prototype of your product or service and talk to strangers that don't know you - "GET OUT OF THE BUILDING"

Steve Blank has coined the term "GET OUT OF THE BUILDING", referring to the process of listening to your customers' need by getting out of the building and talking to them. Listening is key, and the process of finding "WHO" to talk to is also an art. Try to talk to people that are your target customers, and also extreme users that seem like are not your target users. The process will help you define who are really the audience that you are creating a product or service to solve.

http://www.inc.com/steve-blank/key-to-success-getting-out-of-building.html


5. Observe potential competitors & talk to their customers

Every product or service has their competitors. And most of the time, there are already similar competitors that are already in the market. Use the service, buy their products, learn from them, and talk to their customers. Your competitors' strength and weakness are real live examples of what is working and what is not. Learn from it and draw insights from it. Even better, talk to the customers that use their products or services and see if there are painpoints that you can solve.


Once you have a first version of your product or service:


6. Crowd-fund your product or service for pre-purchase

Once you have honed in on what your product is, who the target customer is, and confident that there is demand for it. You can validate them by running a crowdfunding campaign to fund your product before you go into making it for real. Many crowdfunding platforms are available now to allow for customers to pre-purchase your product, so that you can both VALIDATE your assumptions that people want it (i.e. buying it with money), and de-risk you of investing anything ahead of time and not having the cashflow to make the product. 


7. Attend a weekend market to talk to customers and get their feedback

If your product or service requires an experience (i.e. people tasting your food, or wearing your garments), weekend markets are great ways to test people's respond to your product, and gathering insights of what they would like and want. Be careful to treat these as learnings, and less focus on sales. Try to gather input about your product, pricing, and also gather emails for continual testing with these early adopters.


8. Run a pop-up shop to deliver your brand experience and get feedback

Pop-up shops are ideal MVPs for testing a few things about your brand, a few key learning aspects you should be aware of are:

- Storytelling and Brand Positioning

- Validating Target Audience

- Validating Value Proposition

- Feedback on Product Features & Pricepoint

- Quantitative metrics on performance (revenue generated, number people visited, press generated)

Make sure you have ways to measure and validate on each of those. A number of national brands are started with pop-ups (Warby Parker, Bucketfeet).  

 

TO SUMMARIZE KEY POINTS OF THIS SERIES:

  1. Test ideas often and don't be afraid to be creative  

  2. Identify your audience and be rigorous of learning from them

  3. Use prototypes as questions embedded for your audience

  4. Build digital and physical MVPs to validate learnings

  5. Use both quantitative and qualitative metrics to get feedback about your customers and continually to learn from them. 

I hope you have some amazing ideas and thoughts on how to move forward now with your ideas and good luck with your new retail idea! Now DO IT!