The Lean Startup Montage

“The best way to have a good idea, is to have lots of ideas” -- Linus Pauling

But how do you prove an idea?

Last week, I went to listen to Eric Ries talk about lean startups to a packed Mermaid Theatre, (a great event, thanks BLN). He began by asking the audience if anyone had ever seen a movie about a startup; all hands up, for sure, we’d all seen “The Social Network”. But - says Eric - don’t forget that other truly great startup movie: Ghostbusters. Then he asked: what do both films have in common?

Both films have the same structure: introduce the characters, show the struggles of the nascent business as they count down to their last dollar, before finally hitting the big time and connecting up/saving the world. And somewhere in between comes the bit where the company actually gets built, but that’s not as interesting, so it gets condensed into a montage with a catchy soundtrack.

Of course, in a startup, the building bit is the difficult bit, and product design meetings make poor cinema. But products shouldn’t take so long to build that they have to be squeezed into a montage. In a nutshell, the lean startup approach urges entrepreneurs to get a minimum viable product out as quickly as possible, rather than worrying about perfecting it. Then once in customers’ hands, the product can be scientifically tested and tweaked to fit the market’s demands.

Steve Blank defines a startup as: “a temporary organization designed to search for a repeatable and scalable business model”.

In other words, startups attempt to monetise opportunities, rather than exploit certainties.

It is this extreme uncertainty that makes the scientific method of forming hypotheses, collecting data and testing your assumptions so useful to early stage startups. If you’re being innovative, or seeking to win a new market niche, there’s no blueprint, no-one to imitate, and no guarantees anyone even wants your product. You’ve got to run the experiment.

And the key word here is experiment. The lean startup approach is encapsulated in 3 words: Build. Measure. Learn.

Build means launching as early and cheaply as possible. Using an agile approach to code and deploy quickly, using open source to avoid reinventing the wheel, and the Cloud to minimise capex. Scaling is done just-in-time, as it’s needed; there’s no sense delaying your launch until you’re convinced you can support thousands of users when you don’t know if you’ll attract ANY users.

Measure means determining what users think about your product. The data is collected by tools like real-time analytics, split testing and surveys - the principle here being: better to have bad news that's true, than good news that you’ve just made up.

Learn means deriving insights from what you’ve measured - to better understand your product’s performance and the needs of your market. This will generate new ideas to tune your startup’s engine to perform even better.

If you're building the wrong product, there are no possible optimisations. But better to discover that now, rather than 5 man-years into development.

This field-testing seeks to avoid wasting time solving a problem that no-one is having, or a technical solution that just doesn't work, or a product that users don't like. The insights you derive can help distinguish between user indifference and disapproval, and allow you to adjust your approach accordingly.

The lean startup philosophy is about testing and continual improvement, with decisions based on solid data rather than the whims and egos of entrepreneurs. It’s about realising an idea, but not being so wedded to it that you can’t improvise and adapt it into something even better.

As Pablo Picasso once said: “You have to have an idea of what you’re going to do, but it should be a vague idea...”

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