Introduction

BlueLabel has one main goal: to help our clients succeed in building great products. That is why we care deeply about perfecting the process of transforming our client’s product vision and business goals into apps people will use and love.

To make this happen, we leverage the Lean Startup Methodology. Lean Startup Methodology is a set of product planning and development principles that help entrepreneurs meet business goals and deliver value to users while minimizing risk and waste. By folding Lean into our Discovery, UX/Design and Agile Development, we are able to produce better outcomes for our clients and their customers at a faster speed than traditional methods.

The Lean Startup Methodology has seen a surge in adoption by product development teams and businesses over the last 7 years, and is proving to be the recipe for success for break-out startups like Uber, Dropbox and AirBnB as well as for enterprise initiatives within Proctor & Gamble, General Electric, and Intuit. Lean Startup methodology is now part of the curriculum at the world’s top business schools, including Harvard, Stanford, and Columbia.

The Origin of Lean Startup

Too many failed startups and initiatives

In the 90s internet boom startups implemented the traditional approach to entrepreneurship and product development. The traditional approach looks like this:

• Write a great sounding business plan and pitch deck.
• Support those artifacts with market research.
• Build a product based on top-down requirements using waterfall software development.
• Launch, and pour money into marketing the product like crazy.

This approach was the norm for the baby boomer generation, and having a business plan was enough to secure millions in funding from VC firms. What investors and entrepreneurs discovered over time was that if there was no market fit, all the money and marketing in the world could not get people to actually use the product they were selling. The traditional business plan approach proved to lead startups to fail 75% of the time.

The traditional approach looks at assumptions and numbers, it does not investigate what real people need, nor does it require validation of the assumptions before a product is built. The vast amount of money, human capital, and time it takes to ship and maintain products with no market fit is staggering. For a glimpse of some of the largest losses, have a look a this collection of defunct startups that each raised over $100M.

Lean Manufacturing

To help businesses guardrail against risk when bringing a new product to market, serial entrepreneur Eric Reis’ outlined a new approach to building products in his book The Lean Startup, in 2011. Reis explains that he was inspired by the Lean Manufacturing principles of Toyota’s Taiichi Ohno. Under Taiichi Ohno, Toyota started making small batches of cars “just in time” to eliminate wasted inventory and improve quality. Toyota also encouraged both a continuous improvement mindset and the necessity of “seeing for yourself” what works and what doesn’t, the equivalent of UX contextual user studies. Reis admired Toyota’s methods of achieving value for their customers while eliminating wasteful action. He started applying the core Lean Manufacturing principles to building products at his companies, calling the approach Lean Startup. It is a set of measures an entrepreneur can take to minimize the risk of building products that fail.

The Principles of Lean Startup

Build, Measure and Learn

At the core of the Lean Startup Methodology is the BUILD-MEASURE-LEARN rapid feedback loop. Rather than designing an entire product based on unvalidated assumptions (the traditional method), product teams build small increcremental aspects of a product based on a hypothesis of benefit to a user that is put forth to test. Once the increment of product is tested by real users, it is possible to measure people’s reaction to it. If what they put forth holds no value for users, the team can quickly create a new hypothesis to test based on the feedback they receive. Just like Lean Manufacturing, Lean Startup involves shipping in smaller increments, obtaining quick learnings from real people, and the ability to make continuous improvements.

Validated Learning

It is critical to stress-test all aspects of a product vision. When one spends months or years building off an unvalidated assumption, as was the norm with the traditional method of bringing a new product to market, the chances of failing are too great. To minimize the risk of poor to no market fit, it is essential that early validations are made. Being open to quickly testing initial hypotheses is the key to rapid learning and creating a product strategy that wins.

The MVP

Essential to gaining early validation on vision is the Minimum Viable Product.

To shorten the time between having an assumption and learning whether it’s viable, Lean Startup requires that the first product output from a business only contain what is necessary to learn something. Rather than cautiously waiting to ship a polished and feature rich product to the public, Lean Startup requires one ship an MVP. This MVP is a testable increment of a product vision that aims to put forward the riskiest assumptions for validation. The MVP will likely be bare-boned, but it will serve as a vehicle to understanding whether the product being built delivers value to real users.

Should the MVP not provide the hypothesized benefits, pivoting on strategy and fine tuning the product vision is far less costly when done early on, instead of after months or years of code has been written.

Measuring Outcomes

In order to measure progress a business needs to carefully set Key Performance Indicators and Project Milestones in order to see if the product strategy being executed is effective. The business and product teams need to collectively guardrail against falling victim to vanity metrics, and instead gain a transparent view of the efficacy of all experimentation.