In recent years lean start-up approach gained recognition and has been widely used by entrepreneurs and start-ups offering products and services that have not yet been tested on the market.
So what lean start-up approach is about?
According to H. Love, author of The Start-Up J Curve, ideas represent only 5% of the total value of a new enterprise. What counts more than the original concept of the product are iterations and customer feedback, which is worth more than customer sales. Therefore key idea of lean start-up approach is to expose early version of your product to potential customers, to gather feedback, and to implement rapid and possibly waste-free adjustments of your initial proposition to create something that is closer to what the customer really wants.
According to lean start-up approach the first step to create initial customer demand is to establish your Unique Value Proposal (UVP). UVP is nothing else than a list of problems that your product will solve for your customers, or the difference it will bring to the way customers problems are solved right now, and answer to the question why people should pay you for it. Once you create such a list you can interview your future customers.
To understand deeper what concrete aspects of your product will satisfy your customers, you can use simple questionnaire or a Kano model, which provides structured framework for analysis of importance or each of your product’s attributes. Results of analyses based on Kano model determine which attributes of the product are responsible for “wow” factor, and which of them could be the source of frustration if not tackled properly.
Another approach often used in marketing of new products is conjoint analysis, which enables to holistically measure importance of your product attributes. Results of conjoint analysis will determine how important is each attribute and what trade-offs you can afford.
Once you establish your UVP you are ready to create Minimum Viable Product (MVP) that, according to lean start-up approach, is the first visualization of your UVP. In other words MVP is the first prototype, or even a mock-up consisting of schemes, pictures, slides and videos you can use in further interviewing and gathering feedback from your future customers.
Ash Maurya, author of Running Lean, Iterate from Plan A to a Plan That Works recommends lean start-up practitioners to work with future customers from the very beginning. In terms of minimum number of interviews with your future customers Ash Maurya recommends to meet with at least 10 prospective customers to talk about UVP—problems and challenges you plan to solve and planned features of the solution—and then, with another 10 once you revise your first UVP. After that, you should be pretty well equipped to create your first MVP, which you also need to demonstrate to at least 10 prospected customers to gather their feedback enabling you to revise your first MVP.
After these meetings you should revise your UVP according to feedback received, incl. adding, eliminating, or modifying certain features. In lean start-up approach you open up and talk to customers as much as possible to observe how they interact with your MVP so you can polish it before market launch.
Lean start-up approach can be useful in wide tapestry of businesses. Ash Maurya applied it to write his book. Once, approached by readers of his blog who suggested that he should turn his
posts into a book, he contacted some of them and interviewed them on problems that the book should solve, and the blog did not. He created UVP by organizing workshops to gather feedback of more blog readers, who were potential customers. Then he wrote book in stages—first chapters of the book were his MVP. They have been released at early stage of final product creation, so he gathered feedback and reworked the chapters before final publishing of the book.
There is plenty of resources you can use while practicing lean start-up approach.
To find prospected customers and get into interaction with them you can use, for example, LinkedIn, Ask Your Targeted Market. D. Olsen, author of The Lean Product Playbook How to Innovate with Minimum Viable Products and Rapid Customer Feedback recommends to use Mechanical Turk or TaskRabbit, which enable you to effectively outsource part of task related with iterations around MVP.
Once UVP and MVP are tested, and your product iterated, improved, and released you can derive from other lean start-up methods to grow your business. Ash Maurya advises to track and fix the barriers your first customers encounter as soon as possible, and to ask them for referrals, endorsements, and testimonials of your product. The last two can be published on your website to build greater credibility and traction of your business.