登录查看更多内容

#9 - The Lean Startup by Eric Ries

Eli Lipshatz

Unlocking Profitability Through Offshoring & Systemization

发布日期: 2021年1月14日

The Lean Startup is a quintessential component of the starter pack for any aspiring entrepreneur, falling somewhere between a non-fiction book and a generational movement. Much of the current entrepreneurial lingo is derived from Ries’ ideas, and his methodologies are almost a prerequisite to any conversation with a founder. The Lean Startup model takes its name from the Toyota manufacturing revolution, which transformed the Japanese company into the global automotive giant that it is today.

The book teaches entrepreneurs how to navigate extreme uncertainties by testing business hypotheses with a minimum viable product (MVP). While startups can often be characterized as an undefined science, The Lean Startup suggests that there is a process to entrepreneurship that can be learned, and implemented. Instead of creating elaborate business plans, the book offers a framework for startups to test, learn, and adjust their strategy through a cycle of continuous improvement.

I read this book during the transition between my previous job and co-founding MultiplyMii/Escala. With so much uncertainty and uneasiness, the Lean Startup instills a lot of confidence that if your vision is truly solving a problem, you can methodically fine-tune your service offering into a sustainable, value-adding business.

My Most Important Lesson from this Book?

Validated Learning - The statement “if you cannot fail, you cannot learn” would sound far more appropriate in a Tony Robbins self-help book rather than in Ries’ practical handbook. But don’t be deceived - the Lean Startup delves solely into actionable methodologies.

The quote indicates that when running an experiment, such as an MVP, you will not be able to learn if you don’t define what is success and what is failure. Too often, young businesses go for the ‘Just Do It’ approach, launching a solution without identifying the hypothesis on trial, and the ‘Leap of Faith’ assumptions that fuel that hypothesis.

Validated learning is the process of identifying a hypothesis that you want to prove, designing a simulation to test this hypothesis, and defining the actionable metrics you will use to judge. It is essentially a hyper-focused approach to learning, in which any action that does not contribute to learning about what creates values for customers is a form of waste.

How we’ve used this lesson in our company?

Escala is a team of process improvement consultants, specializing in Amazon & e-commerce businesses

In April 2020, we recognized that many of our Amazon/e-commerce clients had the correct intentions when onboarding their ‘multipliers’, but lacked the internal processes to support them. This opportunity sparked the emergence of Escala, a management consulting service focused on improving internal processes for Amazon sellers - the first of it’s kind.

Needless to say, throughout the first few months as we developed our solutions, it was challenging to present the true benefits of our services to potential clients. We onboarded a team of experienced consultants from the Big 4 in the Philippines, but after completing projects with our early adopters, communicating our value proposition to new clients was proving challenging.

At this stage, through the recommendation of one of our early clients, an opportunity arose to work on a consulting project with a physiotherapy business in Australia. We were eager to build momentum in Escala, and while this was not an Amazon client, this would still be a digital, work-from-home, process improvement project, with great financial reward.

We strongly considered all angles, recognizing the counter-intuitiveness of rejecting a real opportunity in front of our eyes, in pursuit of a few warm eCommerce/Amazon leads that we were having trouble converting. But at the same time, we had committed to developing a solution for Amazon/eCommerce sellers, and truly believed in our vision.

In the end, we fell back on the Lean Startup philosophy: that any action that does not contribute to learning about what creates value for your customers is a form of waste. Working with a physiotherapy chain may have increased our revenue, but it would have significantly delayed our validated learning cycle. This is a decision we would have never had the courage to make without the intellectual support of The Lean Startup.

Since that moment, we have worked with over 25 of the best Amazon sellers globally, and have developed streamlined solutions to significantly improve their internal processes.

Additional Nuggets of Gold

Build-Measure-Learn - while most startups create an MVP before they launch, they tend to abandon the agile approach to improving once they have stabilized. The Lean Startup method is to continuously create short feedback loops to achieve a shorter path to success, instead of creating complex implementation plans.
The 3 A’s of Metrics:

Actionable: clear cause and effect between experiment and metric

Accessible: simple, clear reports that are easy to understand

Auditable: easy to validate by hand

Learning from customers - The ability to learn faster from customers is the essential competitive advantage that startups must possess. Ries warns against placing too much emphasis on customer feedback, but rather on customer actions and metrics. It is not the customer that we are learning from, but the hypothesis about the customer, that leads to actionable insights.