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The Lean Startup: Test [Lean Startup
Posted on February 22, 2017 @ 04:02:00 AM by Paul Meagher

In Lean Thinking the notion of quality is often used to define the type of product an established organization is trying to deliver to the customer. It doesn't work so well for an innovative startup that doesn't yet know what quality is or exactly who their customers are. In such cases, you have to be less concerned about quality and more concerned about learning. Startup products and services are designed to maximize learning, not quality.

That is the main idea in the chapter Test in Eric Reis' seminal book The Lean Startup (2011). Here he advocates developing low cost facsimiles of the product and/or service you envision that the customer will want or agree to use. A mental roadblock we might encounter is that the facsimile is too cheap in appearance and quality or too much of a kludge to want to expose a customer to it. We have to resist this urge so that we can test the assumptions, or leaps of faith, that your startup vision implies.

It is in this chapter that Eric discusses the idea of developing a Minimum Viable Product (MVP) as a means of testing your core value proposition and to acquire useful customer feedback. Think up the simplest version of your product or service that might work to test your idea and gather user/customer feedback. Don't let the notion of "quality" hinder you in this effort because you goal is not to deliver a quality product, it is to try to test your main leaps of faith as early as you can with users/customer so you can maximize learning.

In the case of web-based startups, developing a minimum viable product is often easier to do because you can create a demo that offers the minimum number of features that solves the customer problem and release that to a potential user/customer for their feedback. You can then quickly iterate on that demo adding new features based on customer feedback and your vision. When setting up a bricks and mortar business creating a minimum viable product is more difficult but possible. In farming, before you scale up to being a market gardener, you might create a smaller version of your garden that replicates essential elements of your growing system and the types of plants you intend to grow. You might even take the produce from that garden and agree to supply a neighbor or two with a veggie box over a period of time. Each growing season offers an opportunity to test your growing capacity and value proposition and you might learn that you cannot reliably grow certain vegetables, that you need to plant more of this or less of that, that some piece of equipment might make your life alot easier, that your initial customers are asking for more of this and less of that, etc... Only after you have verified that you have a viable and potentially scalable market gardening business model should you start to invest in alot of the equipment, land, seeds, fertility and labor that would be required to be a commercial market gardener. This is the type of progression that Eric is advocating in the Test chapter - verify then scale.

It takes creativity to create the simplest and smallest version of a product or service that tests your value proposition. E.F. Shumacher observed that "any intelligent fool can make things bigger, and more complex. It takes a touch of genius - and a lot of courage to move in the opposite direction". Some of the most important work a startup will ever do will be done early on at a small scale, searching for, refining, and verifying the business model that you will scale with.

After you read the "Test" chapter, two books that you might want to browse to dig deeper on this topic are:

Value Proposition Design is worth checking out because of the authors involved (check out Alexander Osterwalder's blogging) and because it uses a unique Info Graphics presentation format to express concepts. It offers visual tools and leap testing strategies you might want to use in the early stages of validating your startup vision.

The Startup Owner's Manual is also worth checking out because of the authors involved and the useful startup ideas and techniques discussed. Entrepreneur, educator and author Steve Blank invested in Eric's successful startup company IMVU on the condition that the co-founders attend his Stanford startup class where he applied Steve's ideas about Customer Development to his own company and to the book the Lean Startup. This book is a good resource for learning about customer development and many other ideas that a startup might want to be familiar with in the early stages of their venture.

It is important to recognize that what lean thinking looks like can vary quite significantly depending on context. In the case of early stage startups, lean thinking requires that a higher priority be assigned to learning than quality during the "search" phase of the business (but not the "execution" phase where quality becomes more important). What is produced by the startup in the early stages are products and/or services that are cheap, easy to assemble, and which can be used to test some important aspect of the business model. Startups that are too focused on launching a high quality product may end up releasing a high quality dud into the market place. If you wait to long to engage in the Build-Test-Learn feedback loop, you can end up building something of high quality that no one wants. That is the fatal danger a startup might avoid by engaging in early testing of assumptions via minimal viable products and customer validation techniques. In the early stages of a startup concerns about product or service quality have to take a back seat to concerns about learning. You need to setup a build-test-learn feedback loop as soon as you can to maximize validated learning.

I'll conclude this blog with the observation that Lean Thinking is often associated with the notion of quality but that quality can be sacrificed in certain contexts such as the early stages of releasing your product or service so that you can maximize learning. Ian Flemming in his book Lean Logic (2016) toys with the notion of sacrificing efficiency under certain circumstances. He believes that a lean economy should allow for and encourage a certain amount of slack so that other values beyond minimum prices/maximum productivity are operative. Creativity often occurs when a certain amount of slack time is given to employees to play around with ideas. Just as we need to resist the urge to maximize quality early on a startup, perhaps we should also resist the urge to maximize efficiency because learning and creativity are not necessarily or prototypically efficient activities. In addition to not worrying about quality as much, perhaps we also need to slack off a bit so that we are in the proper frame of mind to begin testing our business model. I don't think Eric would necessarily agree with me that a lean startup should be slack as the lean startup seems to be about being hyper efficient at honing in on a validated business model. Can that be accomplished, however, without introducing the ping pong tables, recreational outings, flex time and other elements of slack required to ensure a certain level of creativity happens?

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