To find the solution, focus on the problem

It′s been almost two years since I worked on a Lean Startup project to help a company identify industry challenges and capture new business opportunities in the Norwegian real estate market. The project has now become a technology startup of its own. Alva uses machine learning to create efficiency in the real estate industry. Alva is often referred to as the company challenging status quo and impacting the future of the industry.

Lean Startup is a wonderful methodology providing a structure one can follow to gain maximum insight in minimum time. However, real life is more complex and messy than the clear cut theory. Here are some of the reflections I′ve made through running a successful Lean Startup project.

Get problem oriented. Most of us are good at generating ideas for solutions, often to problems that do not exist. That leads to a ton of products getting launched with zero traction. If you believe there is a certain problem your target group experiences, write it down as one of your hypothesis and try to confirm that it actually exists in their world. Remember to set up a contemplated threshold for your hypothesis to be accepted or rejected. You want at least 80% of your target audience to aknowledge the problem you identified. So, if few recognize the problem, it is time to move on and redefine the problem or reconsider the target group. Remember, the goal is to try to kill your ideas before you build them.

“We must learn what customers really want, not what they say they want or what we think they should want.” ― Eric Ries, The Lean Startup

Script your interviews to make notes comparable. Lean Startup encourages to focus less on documenting and more on doing. However, planning your interviews well and taking detailed notes is critical to drive your project in the right direction. We ran 30 minute interviews and split them in 4 parts: pitch, demographics, insight, sentiment.

Start with setting the stage by telling you are not there to sell, but with a sole interest to learn. This creates a safe environment for people to share their thoughts. Then move on to demographics as it might help you identify your center point clients by finding the characteristics they share. Collect the demographics you believe might be defining for whether or not one would experience the problems you captured in your hypothesis. This should not take more than 5 minutes.

Now, move on to the main part of the inteview: insight. Spend at least 20 minutes on this part. Write down the hypothesis as problem statements and ask your interviewees to rank them from 1 — being a major problem to 3 — not being a problem at all. After, ask them to reflect upon their answers. This is where you need to sit back and let the interviewee share their knowledge. Ask follow up questions to understand their underlying thoughts and motivations. You might often experience that people re-rank the problems after they had a minute to reflect upon them. This is because few of us question status quo before we are “forced” to do so.

In the end of the interview, remember to ask the following:

1. Can we speak again once our team is closer to a solution to the problems you confirmed?
2. Can you introduce me to someone I should interview?

The answers to these questions will tell you about the sentiment of the person you just interviewed. Someone who responded to the problems you identified will be willing to continue the dialog with a hope that they can contribute to solving the problem. Asking to keep in touch will also help you build a pipeline of interviewees for the later phase of the project.

Visualize your learning. The process of interviewing is intense and the amount of documentation you collect will grow quickly. After interviewing 40 people we collected more than 120 pages of learning. Analyzing and making sense out of that amount of text can be complex. It can be crucial for the course of your project to quantify and visualize the learning you collect. Let′s say you presented your interviewees with 3 problems that you asked them to rank from “significant” (red) to “not-a-problem” (green). You can vizualize their responses by plotting them in a color-coded table like the one below:

Such representation clearly shows that Problem 1 is experienced by most of the interviewees and most of them consider it a major problem. This is a strong signal to keep analyzing the problem and try to solve it. You would then review the interview notes to decide whether to continue investigating Problem 2 and reject the hypothesis for Problem 3.

Start building CRM from day one. Treat every single person you contact as a potential customer. Relationships you build in the beginning can prove to be valuable and help you create awareness around your project. Make a simple contact list of everyone you approach, record their contact information, role, sentiment, last contact date, outcome and anything else that can be useful to remember in the future. By the time we completed our project we had a database of over 300 contacts. Many of them became our pilot users and customers later on.

‘No business model will survive first contact with its customers’ - Steve Blank

Do not give up if noone wants to pay for your MVP. The thing about Minimum Viable Products is that while you decide what’s Minimum, the customer determines if it is Viable. Even though Lean Startup encourages to create a simple version of your product and try to charge money for it, I believe that the focus in this phase should be on learning, not scaling something you do not yet know the market wants. Especially if you are working on a B2B product, the willingness to pay might be high , but only once you achieve a certain standard. If people are not yet willing to pay money to access your product, try to commit their time. In our project, the willingness to pay for the MVP was low. However, we found a pilot customer who committed 10 resources for four months to help us develop a product that was just right. They were available for testing and shared their insights whenever we needed it. This pilot customer is today a paying customer. My advice is to NOT rush to get paid. Focus on making an awesome product and the money will follow.

Productify your insight. The knowledge you acquire during the Lean Startup project can be valuable to many companies looking to gain insight in the domain you analyzed. Package it in a digestible form and re-sell your insight once keeping it secret becomes insignificant to your success. In fact, sharing the insights you gained with others can help you position your company as an expert in the field.

To sum up, my advice is to question Lean Startup and not follow it blindly. Every project is different and there is no universal recipe for success. Focus on learning all you can within the related domain and aggregate your insights to be able to adjust the direction. Build relationships with people you meet and let them guide you to the solution of a problem worth solving.