02/02/2022, 13:52 Your Lean Startup

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Table of Contents
What’s ‘Lean Startup’?
When is Lean Startup important?
How do you get started?
01 Developing High Quality, Testable Ideas
02 Creating Testable Hypotheses
03 Designing Effective Experiments
04 Experimentation
05 Pivot or Persevere?
06.a Pivot!
06.b Persevere!
7 Minimum Viable Product (MVP) Case Studies
Is Lean Startup just for startups?
Is Lean Startup the answer?
Lean Startup’s Top 7 Failure Modes and How to Avoid Them
Criticism & Context
How Do I Get Started?
Example 1: Initiating Lean Startup at a … Startup
Example 2: Initiating Lean Startup in an Enterprise Project

  
Views: 52,853
What did you do today to guide your venture (or project) to the outcome you
want?

How will you know if it worked?

Does your team have a visible plan that easily allows them to prioritize completing
task A vs. task B, C, or D?
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Do they understand the overall significance of what they’re trying to accomplish?

Lean Startup is about delivering quality answers to these questions, questions we

should all be asking ourselves. After reading this tutorial and engaging in the
recommended practice (see section How Do I Get Started?) you will be able to:

1. Explain when & where Lean Startup is applicable and why it’s useful
2. Take your ideas and structure them into testable hypotheses
3. Design and run effective Lean Startup experiments to test ideas with a
minimum of waste
4. Instrument observation into your project’s key outcomes so you and your team
can objectively decide what’s working and what isn’t

What’s ‘Lean Startup’?

The Lean Startup book and movement grew out of Eric
Ries‘ work on applying the principals from the lean
manufacturing movement to the creation of startups.
The goal of lean manufacturing is to eliminate waste,
‘muda’ in Japanese. In this context, a startup is any
venture that hasn’t yet validated a ‘product/market fit’,
meaning they have a proposition they can reliably sell
to a particular type of customer.

The focal point of Lean Startup is the Build-Measure-Lean loop. It looks like it’s
supposed to start with Build, but actually you’re supposed to start with Learn so
you have high quality ideas that you’re testing.

When is Lean Startup important?

The particular importance of all this to any innovative company (which is pretty
much any growth company) is non-obvious and also breakthrough. Pretty much
everything you currently learn about ‘business’ was creating for operating a
factory that produces commodity widgets. For such a business, 5 year plans are
great, the assumption of perfect information is relatively valid, and your
conventional MBA will serve you well. For any innovation-based business, these
techniques are grossly inadequate and will generate massive waste.

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How do you get started?

Two core practices underlie lean: 1) use of the

scientific method and 2) use of small batches.
Science has brought us many wonderful
things. I personally prefer to expand the Build-
Measure-Learn loop into the classic view of
the scientific method because I find it’s more
robust. You can see that process to the right,
and we’ll step through the components in the
balance of this section.

The use of small batches is critical. It gives

you more shots at a successful outcome, particularly valuable when you’re in a
high risk, high uncertainty environment. A great example from Eric Ries’ book is
the envelope folding experiment: If you had to stuff 100 envelopes with letters,
how would you do it? Would you fold all the sheets of paper and then stuff the
envelopes? Or would you fold one sheet of paper, stuff one envelope? It turns out
that doing them one by one is vastly more efficient, and that’s just on an
operational basis.If you don’t actually know if the envelopes will fit or whether
anyone wants them (more analogous to a startup), you’re obviously much better
off with the one-by-one approach.

So, how do you do it? In 6 simple (in principal) steps!

1. Start with a strong idea, one where you’ve gone out an done customer strong
discovery which is packaged into testable personas and problem scenarios. If
you’re familiar with design thinking, it’s very much about doing good work in
this area.
2. Structure your idea(s) in a testable format (as hypotheses).
3. Figure out how you’ll prove or disprove these hypotheses with a minimum of
time and effort. Much of the time, you can do this without building any actual
product. Just to give you a sense of proportion, some of the best ever Lean
Startup experiments were run in under a week.
4. Get focused on testing your hypotheses and collecting whatever metrics you’ll
use to make a conclusion. Don’t worry about anything else- none of that will
likely matter unless you have an idea that proves to be valuable to your
customer (or user).
5. Conclude and decide; did you prove out this idea and is it time to throw more
resources at it? Or do you need to reformulate and re-test? There’s no shame in
the second outcome- the core virtue of Lean Startup is the recognition that

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startup’s are high risk and it makes sense to avoid waste so you get multiple
shots at a winner.
6. Revise or scale/persevere. If you’re pivoting and revising, they key is to make
sure you have a strong foundation in customer discovery (see #1) so you can
pivot in smart way based on your understanding of the customer/user.

The six sections below describe these steps in more detail. While the focus is on
lean and Eric Ries’ work on Lean Startup, a few other techniques (like design
thinking and customer personification) are important complements and I’ll
reference those as well.

01 Developing High Quality, Testable Ideas

This is the creation story that sells about the
founding of new ventures: Young founders dream
up brilliant idea, code it, and the next morning are
acquired for 1 billion dollars! There’s nothing wrong
with a little harmless fantasy, but the reality is that
few startups (even successful ones) actually take
this course. For most, it’s a marathon of trying
things and seeing what works. Did you know Rovio
was on the verge of bankruptcy when they
released Angry Birds? And that they paid the bills
by making games for other companies? I’m not
saying doing a startup isn’t fun. It is. I can’t imagine anything better than working
with a great team on learning how to build something that matters. But following a
fake, media-generated script will probably lead to stress and disappointment and
that’s not fun. Let’s talk about how to create strong, actionable ideas.

Your fundamental job is to build empathy for your customer (users and buyers). If
you could correlate ‘customer empathy acquired’ against venture success I bet
you’d see a very tight correlation. Applying empathy to directed creativity is what
the popular rubric of ‘design thinking’ is about. You can learn how to do all this in
the customer discovery and personas tutorials.

A good way to make sure you have your bases covered with personas is the
Think-See-Feel-Do checklist: What do your persona think, see, feel, do in your
area of interest? (Again, more on that in the tutorial above). Following that, you’ll
want to frame the value propositions you plan to deliver to the customer in terms
of problem scenarios and alternatives. Most of us start with the spark of an idea,
‘Hey wouldn’t it be cool if …’, and that’s fine. But your understanding of the

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customer will be much more relevant/accurate,

actionable, and testable if you can relate the
propositions to customer problem scenarios and
current alternatives.

02 Creating Testable Hypotheses

If you organize your
customer discovery
and resulting ideas
as we reviewed
above, it
summarizes
naturally into what I
call a ‘venture
hypothesis’.

VENTURE HYPOTHESIS

‘A certain [Persona(s)] exists…

…and they have certain [Problem Scenario(s)].

Currently, they’re [using certain Alternatives], but…

…if we [offer our target Value Proposition], then…

…we’ll observe [success through Pivotal Metrics- acquisition, onboarding,

engagement, retention, etc.] .‘

Here’s an example from Enable Quiz, an example company-

There are HR Managers in charge of recruiting technical talent, 

and they need to screen recruits for the specific technical skills in a job
description. 

Currently, they do their best by checking references and asking a few

questions, but 

if we offer a way to automate quizzing for a specific job description, then

we’ll observe HR Managers creating and using quizzes and standardizing on

use of the platform for new hires.

Most students and advisees I work with find this is a useful jumping off point to
formulating hypotheses since it helps to keep their work on personas and

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problem scenarios linked to their ideas about value and experiments on buyer
motivation. The table below organizes key hypotheses areas into into five chunks.
(They’re in the form of questions not hypotheses since I think that’s an easier
starting point.)

Area NOTES

Persona Does this persona exist?

Hypothesis Can you name or find 5-10 examples?

Can you identify them out in the real world?

Do you understand them really well?

Do you understand how they relate to your area of

interest? Think? See? Feel? Do?

Problem Do the problems you’re solving really exist?

Hypothesis  Is it more of a ‘job to be done’ or a need, desire?

How important is the problem or problems?

How is the customer solving them now? With what

alternatives?

Value (Motivation) How much better than the best alternative is your product
Hypothesis  at delivering on the problem?
How obvious is that to the customer?

How will you test that without just asking ‘do you want
this?’? (because that doesn’t work)

The areas above are progressive, meaning that you should generally move
through them sequentially and that if you’re stuck on one you’ll probably have
trouble downstream.

Once you have a working view of where you are and what’s important in those
areas, you’ll want to start breaking down them down into individual, testable
hypotheses. Let’s pause a minute: This may feel like a lot of stuff, a lot of work,
but, remember, this is a systematic way to work through basically everything
about your venture. Back to those hypotheses, I like the following format:

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FORM OF A HYPOTHESIS 

If we [do something] for [persona], they will [respond in a certain way]. 

That format anchors to the key elements of your work and establishes causality.
You’ll also want to consider which, in fact, need proving and how you’ll do that.
The only exception to this is that sometimes the Persona and Problem hypotheses
may be formulated a little differently- as statements about who the customer is
and how well you understand them.

For example purposes let’s use the example of a startup that’s exploring the idea
of a talking bicycle compass- it might be a device or just an app on a smartphone.
They’ve gone out an interviewed serious cyclists that cycle at least twice per
month. They found that the job of finding interesting new routes is complicated by
the difficulty of navigating while on a bike. The following table has some examples
of how a few of the key hypotheses might look:

Priority Hypothesis Needs Proving? Experimentation

0 PROBLEM: If we ask non- Yes. Sure, the ?

leading questions about how problem probably
cycling might be even better for exists to some
regular cyclists, we’ll degree- but how
consistently hear that they wish important is it,
they could more confidently, really? What are
more easily try out new routes. they doing now?

0 VALUE: If we offer avid cyclists a Yes, definitely. ?

way to choose new routes and
receive verbal guidance while
riding, they’ll buy our [app or
device], use it at least once a
month, and recommend it to
their friend on social media.

CLICK HERE FOR HYPOTHESES SECTION OF VENTURE DESIGN TEMPLATE

Next you should determine which hypotheses to test and how to pair them with
effective experiments.

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03 Designing Effective Experiments

Experimentation is where the rubber hits the road
with the practice of Lean Startup. The keys to
success are 1) keeping the experiments focused
on obtaining a true/false result for one or more of
your key hypotheses and 2) being creative about
how you can design the fastest, cheapest
experiment which delivers on #1.

Not all experiments have a quantitative output-

this isn’t physics and it’s valid to review a set of
qualitative outputs (like customer discovery interviews) and make a judgement
call on how/whether the results prove or disprove a hypothesis. Also, not all
product tests should require building product. We’ll go through some quick
examples below and more in the MVP Case Studies section, but many of the best
Lean Startup success stories didn’t require a single line of code.

Persona Hypotheses
If you don’t know your customer well, it’s time to get to know them (not to mention
validate that they exist). When I’m considering an idea, I
brainstorm a list of the key personas and then I make sure I can
think of 5-10 real world examples. Then you want to make sure
you understand them well- What kind of shoes would they wear?
Your primary vehicle for validating these hypotheses is
customer discovery interviews.

You also want to make sure you understand how

they think about your area of interest (using think-
see-feel-do). You’re passionate about your idea,
but be sure that doesn’t blind or bias you from
seeing these people as they really are. Particularly
at this early stage, it’s important to be focused on
discovering what’s really important to this
customer.

For example, even if our team with the talking

bicycle compass has some early evidence that this
navigation problem exists, it’s probably worth
investing a few days to interview more subjects
and get more depth and specifics for the personas and problem scenarios. For
example, what are the triggers for when they want to explore new routes? Is there
a social/multi-rider angle that’s important? Of all the potential cyclists, is there a
specific early market that really needs this where they can maximize their odds of
getting some early wins?
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When I teach Venture Design classes, I usually have students try to write up their
personas as a first step- I always find it’s a good way to find out how little I really
understand. For your persona hypothesis, this takes the place of the type of
hypothesis table you saw above.  You’re looking to create characters for your
narrative at this point, not collect statistically significant data, so I recommend
against questionnaire. That said, I do recommend prepping an interview guide for
focus, consistency, and as a kind of checklist. Quality learning in this area will not
only help you stay on the mark, but if you later pivot, it will help you make vastly
smarter pivots, steered by the empathy and understanding you have for your
customer.

OUTPUT

Interview guide
Quality interviews with relevant persons
Validated personas, including think-see-feel-do

Note: From a process perspective, I would group this item and the next item on
problem scenarios, approaching the same set of subjects with a single interview
guide. I’ve just divided them up for conceptual clarify (I hope!).

Problem Hypotheses
Here you’re looking for opportunities-
problems/jobs/desires/habits that are important to the persona
and where you think you may be able to produce something
better than the alternative. There are no new tasks in the
enterprise; there are no new consumer behaviors. Do we do
things differently than we did 20, 50 years ago? Yes. That said,
everything ultimately ties back to an existing need or behavior. Your job is to
identify the problems where you have an opportunity to over deliver against
current alternatives. This one’s also executed primarily by way of customer
discovery interviews.

For example, our bicycle compass team wants to learn more about the
jobs/habits/desires around cycling outdoors. They’ve identified the following two
problem scenarios:

1: Finding new routes to explore that are a fit with the individuals current interests,
location, difficulty, and time available

2: Following said routes

3: Sharing said routes with friends (who also have an affinity for cycling)

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But they’re not presupposing they’re right about all (or any) of this- otherwise
what’s the point of doing these interviews?. Their job is to get the cyclists to speak
freely about what it’s like to go cycling and what, if anything, they wish was better
relative to the specific alternatives they use today. A good practice during
interviews is to start with questions like:

1. ‘Tell me about the last time you [went cycling].”

2. “What’s hard about [figuring out where you’ll cycle]?”
3. “What are the top 3 things you wish were better about [cycling outings]?”

Don’t lead the witness. These questions are sequenced very purposefully: they
progress towards an increasing degree of prompting. They would not want to ask
a question like ‘Is it hard to find great find new routes?’, at least not until the very
end because even a ‘yes’ provides very little validation. And in many cases you
may actually hear ‘no’ for one reason or another where if they really thought
about the whole problem, you might get a more useful or actionable answer. What
provides a lot of validation is if they ask the first two questions above and
consistently hear things like:

– it was nice but I’m getting a little bored of doing the same route

– I tend to stick to the routes I know because I’m worried I won’t get home in time

– It was great- except I got lost!

If they consistently hear responses like that, they can conclude that, yes, they’re
on to something. If they don’t, it’s time for caution. This may not be the right job to
do, problem to solve.

Once you have a good sense of a few focal problem scenarios, work to
understand the customer’s alternatives, how they’re solving the problem, doing
the job today. This is an important counterweight to our next area, the value
hypothesis.  For the talking bicycle folks, that might be things like: a printed map
they marked up, a site they currently use, or a search they did on Google Maps.

Strong presentation of a problem scenario is blood in the water for you- if the
current alternatives were really good it’s much less likely you’ll see a strong
presentation of the applicable problem scenario. But some problems are just
really hard and you need to make sure you understand what a superior (enough)
delivery looks like.

Also, you need to make sure the problem/need happens enough. I met a serial
entrepreneur who had written a beautiful, functional app for finding movie times.
Users loved it. But it didn’t add up commercially because pretty much no one

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watches enough movies to use or care about the app enough to add up to a good
business.

OUTPUT

(interview guide prep. and interviews per above)

Validated problem scenarios, including a description of current alternatives

Value Hypotheses
Armed with real personas and validated problems, now you have
to validate whether or not what you’d create is better enough
than the alternative to make a sale. Sadly, the way to do this is
definitely not asking the customer whether or not they would
hypothetically buy your product in the future.

This information is less than worthless because it creates a creates a false

validation that we desperately crave for our idea. When it times to actually go out
and sell the thing, you may encounter an echoing silence. I say likely because just
about everyone will say ‘yes’ to a hypothetical sale- they don’t want you to feel
bad and even more so they don’t want to argue with you. See the Yellow
Walkman Story for a great example.

If you can’t ask customers, then what are you supposed to do? Just build
something and hope for the best?

No! There is a better way: the Minimum Viable Product (MVP). The naming is kind
of unfortunate because the point of an MVP is to avoid building an actual product.
The idea with the MVP is that it’s the minimum ‘thing’ you can use to test your
value hypothesis. Ideally, it’s a fake product of some sort or ‘product proxy’, as I
like to call it.

Why? Well, as I mentioned in the introduction, the whole point of lean is to avoid
waste. Building something that no one wants (which happens all the time), is
exactly the kind of waste Lean Startup seeks to avoid.

An MVP is not the same thing as the 1.0/first version of your product. In fact, this is
one question I pose at the beginning of workshops: What’s the difference
between an MVP and a 1.0? The basic difference is that the MVP is a vehicle to
test your value hypothesis and the 1.0 is a vehicle to execute on and scale a
validated (positively tested) value hypothesis.

A lot of the actual practice of Lean Startup revolves around designing

experiments (including MVP’s) that are a good fit with your hypothesis and current
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understanding and then running those experiments to a definitive conclusion (and

often iterating through that a few times). The sections below describe a few
common patterns or archetypes for these experiments.

The Concierge MVP

The basic idea with a concierge MVP is that you hand create the experience you
want the customer/user to have, and see what happens. I mention this one first
because it delivers the high quality, deepest observations, and that’s useful when
you’re in the early stages of a new concept.

In our talking bicycle compass example, a concierge MVP might be to attach a

smartphone to an interested subject’s bicycle, turn on GPS tracking, call them and
give them verbal guidance to help them follow a route they’ve selected. A
scrappy entrepreneur could, for example, solicit subjects in front of a bicycle store
located near a popular cycling location (we have several such venues in the Bay
Area where I live).

Lean Startup is very focused on observability and metrics (as is its foundation,
science). While the Concierge MVP is more about qualitative observations, there
are some specifics you can focus on, even recording them into discrete variables
in some cases. This is mostly about observing customer participation and
focus/involvement in various steps or branches in the process. For example, with
the bicycle example, you might be interested in how they select a route with you
or whether they already know their route. You might be specifically interested in
whether they follow the route they originally selected. You might also be
interested in the social aspect- whether they’re the navigator for a group of
friends.

This MVP probably has the lowest value in terms of a definitive result on demand
for your proposition, the Sales MVP (see below) being the best. That said, as long
as you create the right kind of separation, there’s no reason you can’t add another
test to the end of your concierge process. For example, at the end of your
concierge MVP you could give cyclists a flyer to sign up for a free beta of your
upcoming product and see if they opt in once they leave your presence.

For anything that’s business-to-business (B2B), consulting is often a terrific

concierge vehicle- solve the customer’s problem by hand and then identify what
can be standardized and automated and build software for it. I love this pattern so
much I did a talked for the Lean Startup Circle about it: ‘B2B Hacks- Getting From
Consulting to Scalable Products‘.

The Wizard of Oz MVP

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The basic idea with a Wizard of Oz (WoO) MVP is to test a target user experience
without real working software- there’s a (wo)man behind the curtain making things
happen, hence the mention of Oz’s wizard.

Robotics is one space where the fake back end WoO pattern is popular. I was just
interviewing a product manager from iRobot for The Interdisciplinarian. They
make the (awesome) robot vacuum ‘Roomba’ and often test new feature ideas by
having users interact with their robots while a human operator executes the
interaction they’d implement in code if the feature looks like a winner.

A WoO test for our cycling example might employ a chatbot and then a filtered
voice for navigation- all with real humans actually operating them. A user would
download the app and then use the chatbot to evaluate and decide on a route (or
just supply it). The nice thing about a WoO is that you can see how a user would
actually use a given interface without detailing it out- for example, does the user
type responses to the chatbot or draw on a map and post the image back to the
chatbot? The balance of the experience would be similar to the Concierge MVP
except that now we’re trying to make it seem like the voice responses are
programmed (filtering and changing the real person’s voice) instead of just
presenting them as coming from a human. Our user is likely to respond somewhat
differently in this case- or maybe not, but that’s what testing is about.

Metrics-wise, we might be interested both in the usability of the ‘fake’ software

(are they able to/willing to complete a given task) as well as their affinity to
interact with it.

The Sales MVP

The basic idea with a Sales MVP (or Smoke Test MVP, as it’s sometimes called) is
to see if you can sell something before you actually have it. For example, I would
characterize a Kickstarter campaign as a Sales MVP. Running a series of Google
AdWords campaigns for your hypothetical product and measuring CTR (click-
through rate) is a Lean Startup classic. At the next step in your funnel, bringing
visitors to a landing page with a proposition and a call-to-action for an email
signup is another classic. In a B2B context, asking for a deposit or funding for a
specific development is something that can serve as a Sales MVP.

All of the B2C (business to consumer) options are, of course, possibilities in the
bicycle example. The team could test a few pairings of Google AdWord ads and
landing page designs/propositions and look at sign-up. Metrics-wise, they’d just
be looking at performance along their funnel- click through rates, conversions to
email sign-up for visitors to the landing page, etc.

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Why not just go straight to the Sales MVP if it’s so good at validating hypotheses?
The main reason is that it doesn’t offer much depth of observation. Frequently,
teams will observe very low CTR’s and then not be sure where to go next. The
right place to go is probably an MVP with more observational depth- the
concierge or the Wizard of Oz, for example.

Summary of MVP Archetypes

MVP Metrics Observational Hypothesis

Archetype Depth Validation

Concierge Mostly qualitative- sometimes discrete High Low

observations on subject
participation/interest in different
steps/branches of the experience

Wizard of Subject progress through interface Medium Medium

Oz (like a usability test) and affinity for
experience

Sales General growth metrics- click through Low High

rate, sign up, open and response rate
on emails

CLICK HERE FOR EXPERIMENTS SECTION OF VENTURE DESIGN TEMPLATE

Customer Creation Hypotheses

Once you’ve got an identifiable customer that reliably/repeatable
buys into your proposition, you have the nucleus of your
‘product/market fit’. The last frontier is to make sure you can
multiply that product/market fit on an economical, repeatable
basis. There are certainly dozens of products out there that I’d
buy if I was fully informed about them. But that’s never going to
happen. We live in a world of imperfect information and rising
above the noise floor is a real challenge.

You’ll want to break that hypothesis down into more manageable pieces,
otherwise you risk freaking out and just asking ‘Where the #@$# are all my
customers!?’ For this, I like the ‘AIDA(OR)’ framework- Attention, Interest, Desire,
Action. Since this framework is over 100 years old, I added Onboarding and
Retention, important additional steps for the kind of products we sell today.

In practice, this application of Lean Startup is about running a lot of small growth
experiments with a focus on metrics. That said, it’s easy to get lose in those

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details and I think a shared, qualitative/descriptive view of what you’ve learned

about the customer journey is a critical focal point.

I really like storyboarding as a way to walk through the AIDAOR breakdown and
keep it connected to your work on customer discovery:

Here’s an example (totally made up by me!) for Home Depot (hardware store):

Here’s the post it came from if you’re interested in the detail: Storyboarding
Customer Acquisition.

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Now you can start thinking about this journey as the backdrop to your customer
funnel:

The contours of your funnel may differ, of course, but the basic idea with this area
is to isolate and focus on one area of your funnel at a time. The table below
provides focal notes across the AIDAOR breakdown. Note- some of these
hypotheses and items will bleed across AIDAOR some. It’s not a hard science. The
important thing is to make sure you have a clear, testable view of the customer
journey that dovetails (and/or updates) your work on customer discovery and
personas.

Step Sample Hypotheses Notes

Attention On AdWords we can This is where you start, obviously. How

achieve click does the customer find out you even exist?
through rates of [x] How do you get them to click through to
at a cost of [y]. your site? To sit down with one of your
We can achieve a representatives? I hear ‘someone will tell
viral coefficient of [x] them about it’ and that’s OK but you should
on emails. have a clear, measurable view of how that
word of mouth happens. Generally
Our salespeople speaking, your job is to communicate with
can call on [x] the customer persona in a way that’s
qualified relevant to them and present them their
customers/day. problem scenario in a compelling way,
connecting with their understanding of it.

Interest If we can achieve a They took a look what what you showed
bounce rate of [x] on them- are you connecting with a relevant

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our landing page, problem scenario? Credibly?

then we can achieve Do you have a value proposition that they
a success rate on think will deliver on that problem scenario?
scheduled meetings There are a few tricks for getting attention,
from cold calls of [y]. but this is where your work on customer
discovery will really bear dividends- the
best messaging is crafted around an
intimate understanding of the customer.
Many great items are also arrived at by
iteration so just like everything else here,
this is very much a place to A/B/..N test
different versions of your proposition,
different channels, etc. and learn what
works. 

Desire Customers will Remember the ‘Feel’ part of think-see-feel-

share out our do in the persona from step 01? This is
messages at a rate where that becomes important. Most of us
of [x].We’ll see do a lot of what we do for reasons that are
comments and ultimately emotional. And you’re competing
feedback that we’re with a lot of other demands and distractions
really connecting on your customer’s time. How are you
with what the connecting with them?
customer wanted to
solve their problem.

Action If we get [customer This is whatever the customer has to do to

segment or buy your product. Make sure to keep it as
persona] to a simple as possible. Many companies make
landing page with a the mistake of creating great product and
demo, [x]% will sign promotion and then having a crummy sign-
up for [our email up process or onerous contracts. How will
product you know if you’re doing well here?
announcements, a
free trial].

Onboarding If [customer This is whatever’s required for the customer

segment or to a) start really using your product and b)
persona] signs up make it a habit (consumer) or integral to
for a free trial, at their processes (business). How do you

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least [x]% will review and ensure customer success? This

[complete some is the last place you want to be
kind of action on the
app].

Retention [x] portion of How well are you doing on renewals? Up-
customers will sells? Word of mouth from existing
renew/re-purchase. customers? It’s much easier to work with
the customers you already have.

Usability Hypotheses

This area has to do with

testing interface patterns
for maximum usability.
Referencing the Fogg
Curve above, this is the
Ability/Usability dimension on the x-axis
whereas the Value Hypothesis dealt with
motivation on the y-axis.

In practice, success here has a lot to do

with bringing your validating learning
forward for development in the form of user stories.  If you’re not familiar, these
are basically a way to be specific and detail oriented about the experience you
want the user to have with out prescribing the implementation.

This is important for the practice of lean/Lean UX because it frees you

(conceptually) to prototype and test several different approaches. For more on
how to do this, see the Customer Discovery Handbook- the section on usability.
Key to doing this successfully is getting your crucial assumptions on the board
early and making them a focal point for your subsequent exploration and testing.

For example, let’s say you’re considering a web-based drag and drop interface
and some on the team think users wont’ get it and others are certain it’s the best
option. Get an assumption on the board like ‘If we present a drag and drop
interface to [deliver on whatever user story you’re working], 95% of users will
engage with this affordance to accomplish their goal’. Then test. With Lean
Startup, it’s all about testing!

04 Experimentation
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If everything’s in order up to this point, this should

be easy! Stay focused on the experiments, get
them done, and then move on to a decision about
whether to revise or move forward.

That said, nothing ever goes perfectly and

distractions arise. The top determinant of
successful experimentation (in new ventures) is
focus. Creating output makes us feel good- do the
work, cross it off the list, call it done. But that’s not
how to assure your best possible outcome under uncertainty. With Lean Startup,
you have to be ready to cross something off the list and then likely put it back on
the last several times before you get it right. Emotionally, it’s daunting.

Here are 3 tips to stay on track:

1. For everything you’re doing on step 03 (designing the experiments), make sure
you’ve visualized the moment where you interpret the results and make a
decision. If you can’t visualize that moment, you probably need to tighten up
your experimentation/discovery plan.
2. If you’re thinking that an experiment isn’t going to deliver a definitive result,
odds are you’re right. Stop it, fix it, repeat it.
3. Everyday, ask ‘What did I accomplish yesterday? What will I do today? How did
those things tie to the outcome I’m pursuing?’ Here’s a post on a related
technique: The Daily Do

The first bit of experimentation deals with customer discovery and validating your
idea. I’ve found that’s somewhat unfamiliar territory for a lot of folks, so I put
together the checklists below to help you step through that process. These
checklists describe a few key items you should verify within the persona and
problem hypotheses.

Checklist: Persona Hypothesis

  Hypothesis Experiment

✔︎ This persona exists (in non-trivial Can you think of 5-10 examples?

numbers) and you can identify Can you set up discovery interviews
them. with them?

Can you connect with them in the

market at large?

✔︎ You understand this persona well. What kind of shoes do they wear?

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Are you hearing, seeing the same

things across your discovery
interviews?

✔︎ Do you understand what they Think What do you they mention as

in your area of interest? important? Difficult? Rewarding?

Do they see the work (or habit) as you

do?

What would they like to do better? To

be better?

✔︎ Do you understand what they See Where do they get their information?
in your area of interest? Peers? Publications?

How do they decide what’s OK?

What’s aspirational

✔︎ How do they Feel about your area What are their triggers for this area?
of interest? Motivations?

What rewards do they seek? How do

they view past actions?

✔︎ Do you understand what they Do in What do you actually observe them

your area of interest? doing?

How can you directly or indirectly

validate that’s what they do?

Checklist: Problem Hypothesis

  Hypothesis Experiment

✔︎ You’ve identified at least Can you describe it in a sentence? Do others

one discrete problem get it?

(habit/need) Can you identify current alternatives?

✔︎ The problem (habit/need) is Do subjects mention it unprompted in

important discovery interviews?

Do they respond to solicitation (see also value

and customer creation hypotheses)?

✔︎ You understand current Have you seen them in action?

alternatives Do you have ‘artifacts’ (spreadsheets, photos,

posts, notes, whiteboard scribbles, screen
shots)?

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Hopefully those help you focus your thinking and progress on validating those
early hypotheses.

Checklist: Value Hypothesis

Every experiment for a Value Hypothesis should have the basics you see in the
checklist below. For some examples, see Example 1.

  Item Notes

✔︎ Explicit Which hypothesis are you testing?

Hypothesis

✔︎ Test How is the test going to work? Try to really think through the
Design details and (more importantly) test your experiment as soon as
you possibly can and leave yourself time for revision between
iterations. It’s not important to collect statistically significant
data for most of these so feel free to tweak the experiment if
you need.

✔︎ Pivotal What specific metrics will you collect as the experiment runs?
Metrics Do you have the right observation instrumented into the test
design to get these?

✔︎ Invalidation At what value will you consider the result a positive (validation)
Threshold vs. a negative (invalidation)? Even if you’re not certain, in
practice it turns out that putting a line in the sand here is super
important. Otherwise, you may never get to a place where you
really are metrics driven (or you’ll get there too late). It sounds
weird, but even if you think you might revise them later, I’d start
with an explicit threshold in mind.

✔︎ Next Steps What are you going to do if it’s a positive vs. a negative result?
This is really important because the point of all this is to drive
toward a good outcome for the venture. If the results of your
experiment aren’t moving you forward, the experiment may be
a waste.

✔︎ Time & Beyond the obvious purposes of budgeting, it’s good to

Money estimate this early since in many situations you’ll have to make
a choice on which experiments you actually run.

✔︎ Iteration How long will it take to get results. This is important for the
Time same reasons as Time and Money.

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05 Pivot or Persevere?
I recommend settings goals for your experiments
and time-boxing them in agile-type sprints
(iterations) of 2-6 weeks. This will help keep
everyone on track. If the experiments are running
well, you should arrive at a ‘pivot or persevere
moment’ where you have the learning to decide
whether to proceed or revise and re-test. Or you
may find you need to tighten up your experiments
and repeat them- that happens.

The hypothesis areas above were organized roughly in sequence and the table
below describes common results from these experiments and ideas on how to
interpret them and make decisions about what to do next.

Concluding on Your Persona Hypotheses

It’s OK to enter one without set hypotheses. Let’s say you’re generally
interested in problem scenarios around 3D printing in the consumer
durables vertical. That’s a perfectly OK starting point for some
customer discovery, driving to explicit written hypotheses as you learn
more.

That said, you’re looking to drive to a relatively conclusive understanding of your

key personas before you move too far ahead- otherwise you’ll likely be operating
on a weak foundation. Here are a few notes on sample conclusions in this area:

Conclusion Notes

‘Everyone is Ultimately, this may be true but it’s important to identify an early
my market where you’ll focus and establish a beachhead.
customer!’

‘There are a Take your best guess and choose, but run your experiments
few against a focal early market. Pick the one that has the most
customers compelling problem scenario.
to focus on-
I’m not sure
which one’.

‘I can’t find Then I would step back. This almost certainly means you’ll have
anyone to trouble with the next steps as well.

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interview’

‘I think I get Getting down a solid think-see-feel-do for each key persona will
this not solve all your problems. But not having a solid understanding
persona, but of your customer is likely to generate waste downstream,
I’m not sure decrease your chances at success, and make pivots less well
about the informed and purposeful. I’d check out this tutorial and increase
whole think- your comfort level with your personas: Tutorial- Personas &
see-feel-do Problem Scenarios.
thing.’

Concluding on Your Problem Hypotheses

While it’s often practical to combine the field work on customer
discovery in this area with your persona hypothesis, it is important to
have a strong footing with your personas before you finalize your
problem hypothesis. This is important because ultimately you’re going
to need to sell something to these people and you’ll need to be able
to identify them. Also, some problems are so spread out among customer
segments/personas and occasional that they’re not a strong fit for a new
venture. Here are a few notes on sample conclusions in this area:

Conclusion Notes

‘During customer Excellent! That’s a good preliminary validation you’re on the

discovery right track.
interviews, the
subjects
consistently
mentioned our
problem scenario’

‘We did a I’d be very cautious about that result- it sounds like you’re
questionnaire and leading the subjects. I’d like a lot of things to be better but
>80% of subjects there are only a small fraction of those that I’d actually
said they wish dedicate my time and money to improving. I’d try face-to-
[our problem face or at least phone interviews.
area] was better.’

‘I am in this While there are many fabled successes where founders

business/I am build products for themselves, it’s not the most reliable way
one of these to succeed with a new venture. Your expertise/experience
personas and I may blind you to doing good customer discovery with others
know I have this like you- which is, of course, your actual market. By all
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problem- and I’m means, play to your strengths and use your expertise but be
sure it exists for sure to approach the customer discovery work with a fresh
most others like and unbiased perspective.
me.’

‘Our product  First, words are faulty instruments- on a business-to-

doesn’t really consumer product, this is just as likely to be a ‘need’ or
address a ‘habit’. And fundamentally there are no new habits and there
problem, exactly, are no new jobs in the workplace. Be very sure you
so this isn’t understand the problem(s) or need(s) you’re connecting with
relevant for us.’ before progressing.

‘Our product is so  See above- there’s a lot less novelty in the world than we
fundamentally think, particularly those of us that come from the technology
novel that there world. Make sure you have a clear view of how your
are no current customer’s fulfilling their needs today or you won’t have a
alternatives.’ good counterweight to determine if and how your value
proposition is relevant.

‘We’ve mapped  Excellent! You’re ready to synthesize, tune and test your
out the value proposition!
alternative and
observed or key
personas in
action with them.’

Concluding on Your Value Hypotheses

This is where it all starts to come together (or possibly apart!) for a new venture- Is
your value proposition better enough than the persona’s alternatives to generate
revenue? Here are a few notes on sample conclusions in this area:

Conclusion Notes

‘Over 80% of They’re probably not being entirely truthful, or, let’s say
the people we ‘accurately predicting their future behavior’. I’d disregard that
asked said result. See- The Yellow Walkman Story for more explanation on
they’d buy our why.
product!’
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 ‘We did a Excellent! You’re on the fast track of iterating to a successful

concierge test outcome. Time to look at the contours of an actual MVP.
and [got paid,
got asked by
the customer
when they
could buy our
product].’

 ‘We finished  Now that you understand the problem area and concierge
our concierge execution better, do you think you could get paid for the next
test. They liked one? That’s a good follow-on test. You can also try some of the
it but as a options below. If you continue to see a lukewarm response, go
result it was a forward to pivot.
long way to
conclusive.’

‘We made a  It’s OK that they’re non-binding. As long as you made the
bunch of pre- agreement with a real decision maker (someone who could
release sales, buy it for real in the future), you’ve got a reasonably good
but they’re validation of value hypothesis.
non-binding.’

 ‘We couldn’t Why not? Were they not that interested? Or wanted to see real
make any pre- product first? If so, how real? If they’re not interested, try some
release sales.’ other experiments but that’s a sign that maybe you should
pivot. If they wanted to see real product, did you push them to
something that was too-binding? Were they ready to sign up
for any kind of follow up? If so, good sign; if not, they may not
be interested and were just using ‘no real product’ as an
excuse. That’s a call you’ll have to make based on your
experience with the individuals.

 ‘We found a  Excellent! That’s a good validation of your value hypothesis

few AdWord- and you’re gotten a jump start on your Customer Creation
landing page Hypotheses.
combinations
that had better
than expected
click through
and conversion

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rates to email
sign-up’s.’

 ‘We tried a few What happens when you try the same thing out in the real
things with world? You may just need to learn about your personas,
AdWords and problem scenarios and how to pitch your value proposition.
landing pages, These tests are good for connecting with existing demand but
but the results not for fundamentally understanding it. Try spending some
weren’t great.’ time with real prospective customers.

 Concluding on Your Customer Creation Hypotheses

These results are generally easy to interpret- you convert your
prospect through the funnel, or you don’t. And then you try something
else. If the preceding items are in good shape, this should just be a
matter of finding the right channel and tuning your approach. If you’re
struggling here, make sure you’ve kept your work on personas,
problem scenarios and the nature of your value proposition tightly integrated with
your work here (messaging, etc.) and don’t be afraid to loop back to those if you
suspect a more fundamental flaw is dampening your conversions.

06.a Pivot!
Pivots vary widely in size and number. Pivots in the area of customer creation and
business model are just about  inevitable. The section above described a few
common conclusions about experimental results and the possible implication of a
pivot. The worst thing you can do is limp along- organizing your experiments into
iterations where you set a goal about conclusion will help you avoid that. Strong
customer discovery and encapsulation of those outputs in personas and problem
scenarios, which we discussed in step 01, is critical as a rudder for your pivots. A
strong understanding of the customer will help you pivot much smarter.

06.b Persevere!
You have the core spark of a successful startup!
Congratulations. Now it’s time to scale up and
steadily improve the recipe you’ve found. I
recommend the material here on business model
generation and using agile to tie the items we
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reviewed here to your actual product

implementation.

With creativity and focus, it’s not hard to achieve

substantial validation and with that the confidence
to persevere. The next section, ‘MVP Case
Studies’, summarizes a few of my favorite
examples.

7 Minimum Viable Product (MVP) Case Studies

Validating your idea doesn’t necessarily require a lot of money or even a lot of
time. It does require focus and the design of substantial, relevant contact with
prospective customers. The examples that follow range from household names to
little known and run the gamut of product categories. My intention with this
section is that you’ll be able to find at least one pattern that’s relevant to your
situation, sparking ideas on a creative MVP.

Case Study #1: Sprig

I first heard Sprig’s story from the founders at a Lean Startup
Circle event. From Sprig you can order a healthy $12USD meal
delivered with a few taps on their mobile app. It’s kind of like the
Whole Foods deli meets Uber, or, in their words “dinner on
demand … prep time is 3 taps … delectable prices’.

It’s run by an experienced Silicon Valley team and wanting to go to approach VC’s
with more than a great time and a great idea, they ran a successful validation
experiment within a week of pulling together they founding team.

SPRIG SUMMARY

Item Notes

Persona* Paula the Professional- health conscious, short on time, moderate

to high income, already uses similar services like Uber.

Problem I want to have a nice, healthy dinner with no hassle and at a price I
Scenario can afford (like $12).

Alternatives Going to the store or an expensive, take-out, or a slow delivery

service (>20 minutes).

Value Get a healthy meal like you would order a cab (on Uber): “Dinner
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Proposition on Demand … Prep Time is 3 Taps … Delectable Prices” (Sprig

Home Page)

* This is me interpolating/guessing on an item; not part of the Sprig team’s

explanation.

SPRIG MVP & EXPERIMENTATION

Item Notes

Key People like Paula exist and rather than prepping their own meals,
Hypothesis ordering takeout, or eating out, they’d prefer to easily order a
healthy 12 meal that’s delivered in 20 minutes.
If Sprig offers Paula a healthy meal like you would order a cab (on
Uber), then she would use and reuse the service.

Experiment Prep. such a meal and delivery ad hoc for one night; post the offer
for delivery on Eventbrite; email friends and acquaintances

Validation Does a workable portion of the emailed population respond? Do

Criteria they like the experience?

Result Strong preliminary validation- good uptake and good customer

experiences

Like a lot of the examples that follow, Sprig’s first MVP required no (new/custom)
software, little time and little money.

Case Study #2: Dropbox

I’ll assume you know about Dropbox. But you may not have heard the terrific story
about how Drew Houston validated the concept in the face of a
crowded, confused market and a difficult technical execution.

When Dropbox was in its infancy, many file sharing services

existed- they just weren’t all that good and so few people used
them. The Dropbox proposition was that a well executed
product would achieve large scale market success. Here’s the tricky part: to do
this well across even the very big platforms like OSX, Windows, iOS, etc. was a
big job and they needed to raise money. VC’s were reluctant to place such a bet
on a space with existing competitors that were struggling.

So the Dropbox team did something very creative to validate their proposition-
see below.

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DROPBOX SUMMARY

Item Notes

Persona Tom the Techie- early adopter who works on projects that require
swapping a lot of files between a shifting network of collaborators.

Problem It’s difficult to share files between a fluid network of collaborators,

Scenario particularly if they’re: big or numerous or change a lot.

Alternatives Many existing products, but none of them super compelling and
widely adopted. Also, custom setup’s which work but are
cumbersome to set up and maintain.

Value A file sharing service that truly feels transparent to the user across
Proposition all major platforms- OSX, iOS, Windows, etc.

DROPBOX MVP & EXPERIMENTATION

Item Notes

Key People like Tom (and others in the later market) exist and if there
Hypothesis was a really nice, easy file sharing service, they’d adopt it.
If Dropbox created a file sharing service that truly felt transparent
to the user across all major platforms- OSX, iOS, Windows, etc.,
then a mass market of users would prefer it over the alternatives,
subscribe to it and use it over time.

Experiment Hand craft a demo (without actual working, releasable software);

post it; orient the messaging to the early market; promote it and
see what happens

Validation Substantial traffic on the video and sign-up’s for product

Criteria information

Result Strong preliminary validation

One additional thing that’s notable about Dropbox is that the persona I
(questionably) described ‘Tom the Techie’ was what they identified as they early
market, the first few folks who felt the problem scenario most acutely and would
be most reachable with the value proposition. While their video demo wasn’t
exclusively tailored for that market, they added inside references for that market.

Case Study #3: Photo-Social Startup

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I advised this company through a program at Stanford. They are still in ‘stealth
mode’ so rather than going into the details about their product,
let’s take a look at the general pattern for photo-social products,
products like Instagram that somehow make the photos we take
more interesting on social media.

The user has or takes photos. Rather than just posting them to social media
(Facebook, Twitter, etc.) they want to do something with them to make them more
interesting- tell a story, enhance them visually, something like that. Then they post
them and the whole point is the reward of social acclaim, your social network
registering their approval with likes, shares, and comments:

When I
first
started

working with this team they had an idea of this type and were in starting software
development. We put that on pause and used Lean Startup techniques (as well as
design thinking and personification) to spend less time and money and still
validate (or invalidate) their concept:

STEALTH PHOTO-SOCIAL STARTUP SUMMARY

Item Notes

Persona Existing poster of photos. Personas: Martha the Mom, Pat the Party
Planner, Teresa the Teen Social Butterfly

Problem [I want to do something interesting with my photos so that my

Scenario social graph rewards me with interest and acclaim]

Alternatives Manually enhance photos, use alternative enhancers/amplifiers

like Instagram

Value [This is something users can do with photos that will generate
Proposition engaging content for their social graph]

STEALTH PHOTO-SOCIAL STARTUP MVP & EXPERIMENTATION

Item Notes

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Key People like the personas above would like to enhance their photos
Hypothesis using our process and if they do this they’ll be rewarded with
approval and interest from their social network.
If we offers Facebook users a way to [do something novel] with
their photos, they will try the service and convert to a paid version
of the app.

Experiment Manually create output of the type the hypothetical app would
produce

Validation Posts created in this way create strong interested demonstrated by

Criteria like’s, comments, and shares

Result An echoing silence- nobody cared. Time to pivot!

The result was a big, echoing silence- no interest. But the team was much better
off for having found that out sooner vs. later and now they’re working on a much
more promising iteration of their idea.

Case Study #4: Leonid Systems

I started Leonid Systems in 2007 to explore new ideas for back
office IT in the hosted communications space. Leonid’s
customers are mostly large infrastructure providers, companies
like Verizon and Comcast. But Leonid needed to start small, and
do it on a bootstrapped basis. So we started out doing
consulting, and we used that as a ‘concierge’ vehicle to isolate,
learn about, and validate important problem scenarios for our customers.

The specific problem scenarios require industry-specific explanations, so I’ll skip

that for now and instead reference this talk I did for the Lean Startup Circle in San
Francisco:

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Essentially, Leonid went through a series of MVP’s, starting with consulting, to

make sure that we were doing things that were relevant for our customer base.  

Case Study #5: Rapid MVP Testing with Paul Howe & Associates
I heard Paul Howe’s story at the Lean Startup Circle (SF). He an a
couple of other veterans had a funded startup to explore
business-to-consumer (B2C) concepts in search of a winner.

Their approach was very heavy on Lean Startup- get in, test, and then scale it or
get out (vs. doing more customer discovery in a given area). While personally I
tend to pick a problem area and spend more time learning about it, I think their
approach is probably great if you have a lot of different ideas you want to try and
you’re good (or make yourself good) at this type of experimentation.

The concept I specifically remember was a service to tell you how much all your
‘stuff’ is worth by looking at your emails and bank/credit card statements. Instead
of diving into this fascinating ‘big data’ problem, they did a concierge MVP where
they did the searches by hand for a few test customers. Paul Howe sat down and
just manually searched their email and bank records to compile a statement of
what they had an how much it was worth. The result? An echoing silence, and
they moved on to their next idea (with relatively little time & money spent).

PAUL HOWE & CO STARTUP SUMMARY

Item Notes

Persona (not sure; their emphasis was heavily weighted toward testing vs.

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customer discovery)

Problem I have a lot of stuff around that I might want to sell and/or I’m just
Scenario generally curious about how much it’s worth, how much I’ve
spent.*

Alternatives Manually going through credit card statements or receipts.

Value It’s interesting and possibly useful to know how much stuff you
Proposition have.*

* This is me interpolating/guessing on an item; not part of the team’s explanation.

PAUL HOWE & CO MVP & EXPERIMENTATION

Item Notes

Key There are certain personas who would like to know how much their
Hypothesis stuff is worth.
If Paul Howe & Co. offered a service where you could quickly,
automatically know how much your stuff is worth, users would
engage with such a service in large numbers.

Experiment Manually create such a ‘statement of your stuff’ and see if the user
cares

Validation Users demonstrate an interest in the service (not sure how they
Criteria specifically structured the validation)

Result An echoing silence- nobody cared. Time to pivot!

They encountered an echoing silence but were imminently ready to move on to

their next concept.

Case Study #6: Zappos

Since they got started in 1999, you can say Zappos a pioneer in
the current era of lean startups. Their story is wonderful and
simple.

Nick Swinmurn had the idea that choosy shoppers wanted better price and
selection than they were getting at their local mall. What he did next was a pure
Lean Startup: he photographed a whole bunch of shoes and put them for sale
online to see if anyone would buy them. They did and the rest is history.

ZAPPOS STARTUP SUMMARY

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Item Notes

Persona Sam the shoe-hound- knows what he wants but not where to get
it.

Problem Sam is unable to find the shoe he wants at local retailers, wasting
Scenario time and getting frustrated.

Alternatives Possibly mail order or wait until he’s in a bigger market to go to the
store.

Value Make the shoe Sam wants accessible online and make sure he
Proposition has a great experience so he’ll come back and not have to think
about where to find the shoe he wants anymore.

ZAPPOS MVP & EXPERIMENTATION

Item Notes

Key Sam the shoehound exists and rather than shopping locally or
Hypothesis compromising on what he wants he’ll find and want to buy the
shoe he really wants online. If we offer him a wide selection of
shoes online, he’ll buy them from us.

Experiment Photograph a bunch of shoes and put them on a simple website.

Promote a little and see what happens.

Validation Do they come and buy?

Criteria

Result Yes, they did.

Is Lean Startup just for startups?

No, not in the sense you probably mean. Eric Ries defines a ‘startup’ as any
business (or line of business) that hasn’t yet found a ‘product/market fit’, meaning
that it can reliably sell a known proposition to a known customer. If you have a
new line of business or product within an established company, Lean Startup’s
probably a great fit for you.

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Is Lean Startup the answer?

Not to be coy, but it does depend on the question. If your question is ‘How do I
manage this venture systematically to a good outcome in the face of uncertainty?’,
then yes, Lean Startup will help you get there. As a planning  technique for
innovation, I don’t know of anything better.

That said, most innovative ventures have other questions as well, like:

Who is my customer really, and how do I make sure I’m relevant to them? For this I
recommend the work around design thinking.

How do I take a holistic look at the business without toiling over a business plan
that no one will read? For this, the business model canvas is handy.

How do I think about a new venture start to finish and understand where we are?
For this, I like Steve Blank’s work around customer development.

How do I develop great products quickly, and bridge the gap between ‘business’
and ‘engineering’? For this, agile is tried and true.

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Lean Startup’s Top 7 Failure Modes and How to Avoid Them

Lean isn’t a passing fad: it’s fundamentally better suited to innovation than most of
the prevailing classical/traditional techniques. That said, it’s widespread use in the
innovation/startup context is relatively recent and best practices are emerging
and sometimes the hype diverges from the reality of what’s practical. I compiled
the list below based on my experience advising startup’s and individuals on the
use of lean/Lean Startup:

1. No Pivotal Hypotheses

Subscribing to the general idea isn’t enough to make Lean Startup perform for
your venture. You have to actually articulate them, prioritize the few that are truly
pivotal, write them down, and use them as your focal point. The sections above,

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starting with ‘01 Developing High Quality, Testable Ideas‘, lay out a systematic
approach to doing this.

2. No Focal Point

Once you’ve identified and prioritized your pivotal hypotheses, it’s important that
you use that as your focal point and litmus test for everything you do. Output is
not the same as driving outcomes in a startup. Crossing things off our list makes
us feel good, but is it really driving to that ‘pivot or persevere’ moment? Subject all
your activities to that litmus test.

Make sure your hypotheses stays up to date and is highly visible. Google Doc’s
isn’t a bad solution. Here’s a Hypothesis Template you can use as a starting point.

3. Remaining Inside the Building

This is a riff on Steve Blank’s famous directive ‘get outside the building!’. Validated
learning is the one and only propulsion for driving to decisions and outcomes with
Lean Startup. Without meaningful learning and experimentation with real
prospective customers, your Lean Startup will be running in place.

For more on how to do this, see section 03 on designing experiments and section
04 on experimenting.

4. Confusing Usability for Motivation

I see so, so many teams over-investing in excellent usability for a product that it
later turns out no one is motivated to buy or use. Usability matters, but I would say
motivation matters more at the early stages of a project. My favorite tool for
thinking about the difference while considering the relationship between the two
is the Fogg Curve- see below. On the y-axis is Motivation: how much does the
user/buyer want this? On the y-axis is ability/usability- how easy is it for them to
buy it/use it?

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If you consider a point on the upper-left of this curve, that’s a product that the user
is very motivated to use and will use even if their ability is low (the usability is low).
If you consider a point on the bottom-right of the curve, that’s a product that the
user is not very motivated to use but would use if it’s super-duper easy.

You need to execute well on both, but with a new project nailing motivation is key.
Even thought it doesn’t give you a lot of observation, the Sales MVP is the
simplest way to test that.

5. Aimless Pivots

Lean Startup helps you make sure you’re not wasting time on an idea that’s not
ready to for success. It doesn’t deal directly with how you determine which ideas
are highest quality. For this, I highly recommend the use of design thinking
techniques, specifically personas, problem scenarios, and value propositions. This
material has the added benefit of making sure that if you do have to pivot, you’re
doing it with an increasingly better understanding of the target customer. This
increases the odds you’ll arrive at a pivot that hits.

The practice of design thinking is tightly integrated into this tutorial. For more on
personas, etc. see: Tutorial on Personas, Problem Scenarios.

6. Lack of Purpose & Goals

The world’s a noisy place. Distractions will walk in the door every day. Many
teams with good intent and an understanding of Lean Startup fail to make steady,
reliable progress towards a pivot or persevere moment.

It’s important to work in time-boxed (time-constrained) iterations, each of which

have discrete goals. That’s what the material on Startup Sprints is about, though

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there are many ways to implement the concept. The Daily Do is another
technique you can use to make sure you and your team are on track day to day.

7. Too Big an MVP

We love to build things, it’s in our nature. Subordinating your love for the product
your building to the learning mission at the core of a Lean Startup is difficult (at
least, I’ve never found it easy). Doing so requires discipline focus, and clear check
points to make sure you’re on track.

The MVP case studies here are a useful test point or you to step through whether
or not you’re building too much product.

Please Note: This list presupposes you want to and should use lean to solve your
problem at hand. For a view on where lean’s a good fit, see the section above ‘Is
Lean Startup the answer?’.

Criticism & Context

In practice, lean isn’t always the right method- a statement you could make about
pretty much any method. That said, as a pure idea, it’s pretty durable and
coherent. Every method should be subjected to scrutiny and, of course, rigorous
validation is itself part of the method. Below are a few summarized criticisms of
lean and Lean Startup along with notes.

You can’t skimp your way to greatness.

While this observation may often be true, its application to Lean Startup is mostly
the result of misunderstanding. You pair the words ‘lean’ and ‘startup’ and the idea
of avoiding waste and it’s not shocking that on a quick look you come away with
the idea that it’s about making sure your startup/venture doesn’t spend much
money. Keeping your spend down may be an outcome you get with Lean Startup,
but the method itself about waste avoidance not cost avoidance.

Earlier, we looked at the Minimum Viable Product (MVP) concept. That fits into a
process where you create a tightly defined value proposition, then conceive the
most quickest, least expensive way to test it (the balance between cost and
speed being mostly a function of your particular priorities). You may reach a point
where a relatively long, expensive creating of something is the best way to do
that.

Lean Startup wouldn’t say that’s wrong. It would just say that you should exhaust
the quicker, cheaper alternatives to testing the proposition so you don’t go
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through a long, expensive creation cycle and then encounter an echoing silence
where customers aren’t interested in what you created.

It doesn’t work in [medical, industrial equipment, other areas with long design
cycles].
Sure, there may not be any shortcuts to getting a regulatory approval for a new
drug or device. Yes, it may take a long time to get a new model of bulldozer
functional. These aren’t good reasons to discard the method.

First, you may be able to test the demand for your proposition without a product.
Let’s say you hold a webinar, conference about a particular problem area for
medical clinicians- Do a lot of them show up for problem A vs. problem B?

Additionally, there are a lot of elements to a successful customer experience that

surround a core product. How do clinicians identify when and how they should
use this new product? Buy it? Store it? Take it out of the box and administer it?
These are areas where small batch experimentation may be perfectly viable.

For a set of actual examples of how this works, here’s an article about the
application of Lean Startup at GE: HBR Article on Lean Startup at GE.

It hasn’t been statistically validated that Lean Startup actually makes

companies more successful.  
This is true but not necessarily that relevant for two reasons. First, it’s difficult and
rare for social science to reliably draw these kind of conclusions. Success factors
for products and ventures vary across a lot of dimensions which change over time
with their operating environment. Second, Lean Startup has only been around
since 2011- there just isn’t a lot of data available.

I don’t want to oversell lean or Lean Startup, but I do think the criticisms above are
mostly the result of misunderstanding or inappropriate context. In practice, I think
the biggest issues with it mostly have to do with a) not actually grinding through
the details of its rigorous implementation and b) wanting it to be the one silver
bullet for every problem and situation (which is natural- who doesn’t want that),
when in practice it’s a portfolio of methods that lean to successful innovation.

How Do I Get Started?

In my teaching and advising, I find that these seven steps are an effective way to
initiate your practice of Lean Startup:

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1. Draft a positioning statement so you have a clear working definition of the

project
2. Charter the project with a core value hypothesis
3. Draft three ideas on MVP’s to test your core value hypothesis
4. Storyboard the customer journey with AIDAOR
5. Unpack your hypotheses in more detail
6. Choose what experiment you want to run and complete a working version 
7. Start experimenting!

The first six steps will probably take you 60-90 minutes and they will get you
rolling.

1. Drafting a Positioning Statement

We all think our idea is perfectly clear, but we’re often wrong. I really like the
standard positioning statement a way to make sure I’ve identified the basics of
what the project is about. Here’s the format I use:

For (target customer) who (statement of the need or opportunity), the (product
name) is a (product category) that (statement of key benefit – that is, compelling
reason to buy). Unlike (primary competitive alternative), our product (statement of
primary differentiation).

You can find an example in the sections below (Example 1, etc.) and if you’re using
the Venture Design template (Google Doc), you can add it here: Positioning
Statement in the Venture Design Template.

2. Chartering the Project with a Core Value Hypothesis

Like the positioning statement, this kind of addresses the ‘dumb question’ of
whether there’s a clear, actionable view of what the project should do. This has
the same form as a ‘regular’ hypothesis:

If we [do something] for [persona], they will [respond in a certain way].

The only difference is that it’s a kind of summary of what the venture hopes will
happen. For example, for the startup Enable Quiz that wants to sell a SaaS
quizzing solution to companies, it might be something like this:

‘If Enable Quiz offers an easy, affordable, lightweight technical quizzing solution,

we can acquire, retain, and monetize customers.’

Simple right? Even though it sounds simple, I recommend doing this to anchor
and communicate your core objective.

3. Drafting Three MVP Ideas

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I wouldn’t say Lean Startup has no value if you don’t run experiments (I think it’s
still good for general focus), but it is mostly about running experiments. Given
that, I recommended looping back to experimentation a lot. After you have a core
value hypothesis, I’d sketch out what the three MVP patterns might look like to
test it:

1. Concierge MVP. How could you create the experience & outcome you want the
customer to have with a minimum of up-front work? Remember,
practicality/scalability does not matter! You’re only trying to do this a few times.

2. Wizard of Oz MVP. How can you fake the product experience itself? What are
you looking for (in terms of motivation)? Very frequently these are paired with a
Sales MVP in a ‘show them the Wizard of Oz MVP and have a call to action with
the Sales MVP’. If so, it’s OK to reference the Sales MVP for most of your outcome
observations and metrics.

3. Sales MVP. How would you find your target customer and pitch them? What’s
the pitch?

4. Storyboarding the Customer Journey

You’ve got the big stuff in order- what about the specifics of what might make this
experience a go vs. a no-go for the user? For this I really like to storyboard a take
on the customer journey: attention, interest, desire, action, onboarding and
retention. For more on this see the tutorial on storyboarding (the part on user
acquisition) and the example below.

Take your core/summary value hypothesis and decompose it into a more detailed
set of at least five ‘child’ hypotheses to test. Move through the AIDAOR process
and write down all the assumptions that present themselves to you, using the
same formula (but for your more detailed/specific hypotheses): If we [do
something] for [persona], they will [respond a certain way]. using the template
(attached).

5. Unpacking Your Hypotheses

The Core Value Hypothesis is great for overall focus, but for actual testing and
execution you’ll probably want more detail. The good news is that the AIDAOR
storyboard you did will probably help a lot for driving to specifics. See below for
an example.

Example 1: Initiating Lean Startup at a … Startup

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This page presents a set of example hypotheses based on a fictional company,

‘Enable Quiz’. Enable Quiz is rolling out a lightweight technical quizzing solution;
for companies that hire engineers, it will allows them to better screen job
candidates and assess their internal talent for skills development: Example
Practice of Lean Startup at Enable Quiz (Startup).

If you’re doing the case study ‘An MVP, Not a 1.0‘, don’t visit that page until
after you’ve engaged in the applicable class session.

Example 2: Initiating Lean Startup in an Enterprise Project

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Mohammed Naseer • 3 years ago

I'm a newbie and just started reading and wanted to ask you if you could elaborate what you meant when you said to
think of 5-10 real world examples
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02/02/2022, 13:52 Your Lean Startup
think of 5-10 real world examples.

When I’m considering an idea, I brainstorm a list of the key personas and then I make sure I can think of 5-10 real
world examples. Then you want to make sure you understand them well- What kind of shoes would they wear?
2△ ▽ • Reply • Share ›

Alex Cowan Mod > Mohammed Naseer • 3 years ago

Hiya Mohammed- Great question. The basic idea is to quickly test this assumption:
This persona exists (in non-trivial numbers) and you can identify them.

Let me give you a more specific example. I see lots of product ideas that are for 'small business owners'. That's
probably too broad a segment for a startup. You'd probably want a more specific view of which particular small
businesses are good candidates for your initial market. And then you'd want to make sure you've gone out and
really observed those small businesses.

How is that?
2△ ▽ • Reply • Share ›

Ndiangui • 7 years ago

Me too just started ...it is excellent !
2△ ▽ • Reply • Share ›

Alex Cowan Mod > Ndiangui • 7 years ago

HI Peter- thanks! I hope you find it helpful.

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Daan Gorter • 5 years ago

HOLY MOLY That is jam packed with incredible information, examples and just lots of goodness!!

Very thankful!!! You are a legend bro. I'm digging through this and will start with the frist steps but mostly refer back
many times to this blog
1△ ▽ • Reply • Share ›

Alex Cowan Mod > Daan Gorter • 5 years ago

Hi Daan- Thanks! I'm so glad you like it.

I just try to keep it up to date with what I've learned from practicing Lean Startup and observing the practice of
others.
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Alex Frakking • 7 years ago

Only 2 comments?? Everyone else must be stunned speechless by this excellent summary :) Thanks for sharing it Alex
1△ ▽ • Reply • Share ›

Alex Cowan Mod > Alex Frakking • 7 years ago • edited

Yes, that must be the reason!!

Thanks for commenting, Alex, and thanks for adding color.

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Tibor Zahorecz • 7 years ago

Just started to read the whole material, but excellent!!!! But need time to go through:-)
1△ ▽ • Reply • Share ›

Alex Cowan Mod > Tibor Zahorecz • 7 years ago

Hi Tibor- Great, I'm so glad you like it!

△ ▽ • Reply • Share ›

Rada Hrout • 2 years ago

Hello Alex, im working on my start up and i came across your website and book, and i wanted to thank you for the
amazing work you've done, putting everything any entrepreneur needs in one place, in a clear, organized and easy to
follow way.
Thank you.
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