Lean Methodology in a Nutshell

The Lean methodology is something being explored in both the startup and corporate worlds. It focuses on experimentation, agility and validating hypotheses. Crucially, it’s about holding off on building a product until you have some validation around delivering value to customers.

This article will walk through the high-level concepts of being lean and starting to find product market fit. I am joined in writing this by lean expert, Davide Turi, cofounder at Studio Zao and an ambassador for the Lean Startup Company: Davide was an integral character in the early stages of ApTap and is helping entrepreneurial talent to launch innovative, game-changing propositions.

Davide works with a range of clients, such as Sony Music Entertainment, EY, Institute of Cancer Research, Imperial College London, Pentland Brands (Speedo, Ellesse, Berghaus), Aptar (global manufacturing for L’Oreal), the NHS, University College London and the London School of Economics. Studio Zao also runs the London Lean Startup network and the Corporate Entrepreneurs London community, with a combined total base of 5,500 members. 

You can read more on the premise and details of the methodology in the start-up space in Eric Ries’ The Lean Startup. For the sake of this article, we’ll do a high level run through of what it means to be lean.

Add value to the customer. The majority of start-ups that fail will do so because there isn’t a market need or customer demand for what they have built. We often say a successful business it’s not about a great idea, but is about discovering solutions to problems customers are suffering from today. The definition of a problem might be so simple as “I struggle to find a great coffee that energises me before I get to work” or “I struggle to find a great outfit at a reasonable price for the upcoming family gathering”, all the way to “I struggle to diagnose cancer cells in patients bowels”.

Simply put, without a problem there is no business, so the recommendation is as soon as you have an idea, you should automatically start thinking at which problem is that idea going to solve, and for whom. If you can’t answer this question, you should probably hold off.

Test – measure – learn. This is the fundamental feedback loop of the lean methodology to gather evidence from the market about the validity of your idea. While Lean Startup traditionally mentions “build” at the start of the feedback loop, we wanted to be even leaner, and take out build as a first option. The reason is that one of the most common mistakes first time entrepreneurs do is to “jump into the build mode”. They have an idea, and since they have some technical knowledge, some savings, or some time, they immediately start building it.

“I have a great idea for an app, I’ll start developing with my software developer friend”, or “I have a great idea for a bakery, I’ll look for a commercial property to rent”. Wait!

The whole point of being an entrepreneur is not to necessarily build something, but to find a problem worth being solved, and define a clever and profitable solution to solve it. So at the beginning of the test - measure - learn, ask yourself “what is the most crucial thing I don’t know about my business idea?”, and devise a way to test it in the cheapest and quickest possible way.

It turns out that the most common “riskiest assumptions” are the ones related to customer needs: will my customers have the problems I want to solve? How big is their pain? How badly are my competitors solving them? In order to validate these assumptions, we turn to customer discovery interviews: start talking to your customers not about your idea, but about their problems. You can find a few tips here.

You can user test before you have a product! I recommend a book called The Mom Test. In a nutshell this is all about getting into people’s pain points without swaying their answers. Do personal interviews with people from a range of backgrounds; get scientific and diversify your focus groups to see if there’s even a problem worth solving and who suffers from those problems. In starting ApTap, we walked down busy high streets and just started asking people a set of questions about how they manage their bills and subscriptions.

Essentially you have to keep an ear to the ground as to how to solve your customer’s problem; again, this isn’t about delivering features.

You might now be thinking “okay, I’ve validated that there is a problem, now can I build?” No...

Once you are done with this essential step, you will want to test the product in the market, to get some real data about market demand, or traction. Once again, there is not necessarily a need to build something. In fact we listed 13 different experiments you could do to quickly and cheaply to test your product on the market.

Build a product on paper that might solve these pain points. At ApTap, we literally drew up some screens and then made them on PowerPoint (as we levelled up we started using proto.io then Figma). You now have a list of problems and a hypothesis on how you are going to solve them. Go back to your target market with the problems you uncovered and see how your ‘product’ fairs. Get them to rank how useful your features are versus the pain points they’re suffering from. We found that people didn’t care that much about splitting bills but being able to see cheaper deals and switch was huge. 

Use a lean canvas (more on how to use it here). This is a brilliant tool that walks you through nine key pillars of the business. This will force you to focus on the value proposition for the stakeholders, not just features you’d like to have. This is something we are constantly revisiting at ApTap and sometimes it can feel quite brutal cutting out something you wanted to see but the market didn’t really care for. You may have found a problem, and a way to solve it, but the canvas will help you discover whether or not your idea could be a viable business.

 Example lean canvas courtesy of Studio Zao.

At this point you have a decent understanding of what problems people are facing and how you might be able to address them while building a business. Till now, I have been talking about determining your target customer and problem-product fit. Time to get your hands dirty… “Finally! But how?” you say...

Test the market with a basic prototype. This could even be as simple as putting up a landing page that summarizes the value proposition and collects email addresses. Think about how much commitment you can get from a potential user before you need to commit resources to servicing them. Be cheeky…if you can get a customer all the way through to check out and say you’ve run out of stock (when in reality, there is no stock) you’re in a good place. Eric Ries talks to “Wizard of Oz Testing” – where customers believe they are interacting with the product, but it’s actually taken care of manually behind the scenes.

A/B (C/D/E…) testing - never stop measuring. Throughout this process and beyond, make sure you’re measuring and testing as you build or develop further. Facing hard truths won’t be comfortable but it will be better for your business. If you can make your metrics actionable (learn from cause and effect), accessible (clear and easy to understand) and auditable (credible) you’re in a very good place.

What if it isn’t going to plan? Don’t be afraid to pivot, and don’t hold out if you think it’s the right thing to do. Can you repurpose what you have already built? If, when fine-tuning based on the metrics that define your market, you find that you’re not driving value for users or could do so better elsewhere, then a pivot might be right for you. Test your pivot in the same ways as before and you’ll quickly figure out which angle of the business is going to be more productive.

There are a number of ways in which you could pivot your business: zooming in or out from a single feature to a wider product or vice versa, changing based on customer needs or segments, trying different marketing or acquisition channels or even trying out different technology.

In summary: Never stop adapting! The moral of the story here is to be aware of the basic customer problems and how you solve them, and as you progress, to focus on serving actual customer needs. At the end of the day this is all about finding out what resonates with users then making your funnel as smooth as possible to maximize the likelihood of them taking the action you want them to take, and in turn build a sustainable business.

Remember as a startup founder it is okay to ask for help! Check out my first article on Founder’s Mental Health for more info.

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Don’t want to read a whole book on this but want some more info? Have a go on this:

https://www.kimhartman.se/wp-content/uploads/2013/10/the-lean-startup-summary.pdf

More here on the Mom test as well:

https://medium.com/@feelinspired/things-i-learnt-the-mom-test-by-rob-fitzpatrick-9d9d58ce8098