The 80/20 of Lean Startup

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80% of results from 20% of the resources

Remember the 80/20 rule?

You get 80% of the results from 20% of the inputs. Well, 80% of the results from using Lean Startup come from running experiments, in my opinion. Meticulously.

  1. First, focus around the product; prove your value hypotheses.
  2. Then, focus on growth; prove your growth hypotheses.

If you aren’t running experiments, you’re not learning. You’re doing what Ashley Aitken from Australia calls “Faux Lean Startup”. For example, think back to how tech startups launched in the dotcom days.

Old Traditional Way Faux Lean Startup
Business Plan Lean Canvas
Market Research Validate solution
Waterfall Project Management “Agile”
Alpha -> Beta -> v1.0 Alpha -> MVP -> v1.0
Private Beta testing Early Adopters
Launch Product Launch Product
Get market feedback Get market feedback

Faux Lean Startup means you replaced some of the dotcom era tools with “lean approved” tools. If so, you’re missing the point of lean startup. Lean Startup isn’t only about customer development, personas, and interviewing customers. UXers have been doing that for decades before Lean Startup existed.

Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

In my mind, the classic example of this is using “MVP” as a synonym for beta product. Beta software means that you still expect to have missed some bugs in the software. Your unknowns are technical. An MVP is completely different animal than a beta product. It’s created to test initially one business assumption. With MVPs, you test unknowns on the business side—not technical ones.

80% of the results from using Lean Startup come from running experiments. Click To Tweet

It’s easy to fall back into the old pattern of avoiding what you don’t want to hear. It’s only human. You need to be deliberate about learning, in order to really get valuable feedback. A true lean startup implementation requires you to be running a long series of experiments (at least 1 per week). Minimize your own biases. Maximize learning when you know the least. See things how they are, based on data you gather from the market.

That’s the 80/20 of Lean Startup.

 

How Early Can You Launch?

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launch calendar launch tomorrowThe main thing about launches that I’ve realized is that people put way too much emphasis on them. They end up focussing too much on a one-off event, rather than on building a successful business. Sometimes, they end up paying a price for suboptimal trade-offs they make.

The goal of a traditional launch is to work towards a specific date. Your customers will expect to see the product on that day. You product development team has to get the product in a presentable shape. Launching works well as a tool to build anticipation.

But a launch is also a planning tool. The thing is, you commit to plans based on your assumptions. And if you are creating a new product, or entering a new market, there are bound to be some wrong assumptions.

For example, I’ve run or participated in a few Lean Startup Machine weekends in the past. Of the teams that are formed at the beginning, I’d say about 10-20% are still working on roughly the same product at the end.

This means 90% of early stage founders generated significant learning by speaking to their customers. If any of those 90% of ideas were launched without any customer engagement, there would have been a lot of back-pedalling to do. After speaking to many prospects over the weekend, most have an epiphany or two.

Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

Engage with your market as early as you can. Here’s why you should do so in your startup:

  1. If you earn (or are already earning) revenue, you are proving the commercial viability of your idea with your chosen niche
  2. If you eventually do a traditional launch, you can start testing your marketing and positioning now. This typically involves getting your message in front of different traffic sources. Seeing what speaks to each niche. Optimize your growth. Improve your message market fit. Avoid low-ball price wars as a commoditized product or service.
  3. If you have revenue (ideally cash flow) then you can finance further growth. You can create internal positive feedback loops within your company. Self-finance your roll-out to different audiences.

If you are concerned you’ll be losing out on the marketing effect of “launch anticipation”, run a limited small scale test. Try giving your product away for free to a handful of ideal clients. Confirm that they actually spend the time to engage with it. Listen to their feedback. If it’s good, you can include the reviews as testimonials. If you need to improve, then at least you find out before you do an entire media blitz.

Or sell the product using paid advertising. Make 30 sales. Use those numbers to figure out all of the critical factors in your marketing. Quantify market size, customer acquisition cost, and conversion rate at different price points. Then you have a legitimate baseline for planning further investment in the product, or to reject it as a bad idea.

Once you do that a few time, you will be ready to start building anticipation. Do all of the usual “launch stuff”:

  • schedule media appearances
  • get in touch with your PR contacts and influencers,
  • try to get TechCrunch coverage…

Whatever is relevant for you and your product.

So there’s definitely a place for a traditional launch. It’s just after completing a lot of experiments–including marketing ones.

About to start a greenfield project?

Have Launch Tomorrow run an in-house "riskiest assumption workshop". Remote delivery options also available. Discover where to prioritize your validation efforts, to get to market fast.

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[image: dave cholet]