If they come, then build it

Our typical way of thinking is “if you build it, they will come.” The whispering ghosts from Field of Dreams continue to tell Ray Kinsella (played by Kevin Costner) this “truth.” For those of you who haven’t experienced Costner at his best (relative term!), here’s the IMDB summary:

Iowa farmer Ray Kinsella hears a voice in his corn field tell him, “If you build it, he will come.” He interprets this message as an instruction to build a baseball field on his farm, upon which appear the ghosts of Shoeless Joe Jackson and the other seven Chicago White Sox players banned from the game for throwing the 1919 World Series. When the voices continue, Ray seeks out a reclusive author to help him understand the meaning of the messages and the purpose for his field.

While Kinsella’s bold action provided him the chance to see the ghosts of the White Sox (including the ghost of his father), I have a feeling that Eric Ries would not approve! In The Lean Startup, Ries advocates an approach of testing a hypothesis to see if “they will come”, then start building. Or said another way, “build as little as possible, then see if they will come.”

Before we divine into the lean mentality, think about how this might look in the context of your life…say you want to start cycling. Do you

  1. Go to the bike store, purchase a $2000 road bike, get all the gear, watches, etc. or,
  2. Buy a $50 bike on craigslist. Purchase used gear. Wait to see if you actually enjoy riding then buy a nicer bike.

Sadly, my approach is typically to jump right in and buy the “nice bike” (NOTE: I don’t ride, I run). This approach is also taken by many in business.

Here’s a headline from Business Insider… “21-Year-Old Raises Largest Seed Round In Silicon Valley History — $25 Million — For Mysterious Payments App

To summarize, a 21 yr old Stanford grad just raised an enormous amount of funding with little more than an idea and a well paid team of advisers. There are no customers, no revenues and he’s entering a crowded space. That said, he has signed up some of the smartest VCs in the valley, and the people who run these firms are extremely smart, so I am not doubting the potential of Clinkle, just the approach.

Continuing on the Lean Startup theme, I wanted to share a different approach than the one taken by Kevin Costner and the start-up Clinkle. As mentioned above this approach is all about building as little as possible, and then testing and learning to see if “they will come.” One of the key terms in the lean lexicon is “minimum viable product” (MVP). In fact just using the term “MVP” will make seem a lot smarter and hip than you really are!

The MVP

The diagram above should help to explain what a minimum viable product is. Below is the definition from Ries:

the minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.

The thinking from the lean startup is that any effort put in above what is minimally viable is waste. Remember from “Getting credit for learning“, the goal of a startup is to learn. Additional features that don’t help us test a hypothesis are not necessary.

So what if you’re not in a startup, but rather an established company, the government, a not-for-profit? You too can also apply the concept of MVP.

Here’s an example of how we used the concept of MVP to test the impact of new space. I wanted to try and answer the question, can we effectively use space to facilitate collaboration? I know this sounds like a silly question (isn’t the answer yes!), but in a 107 year old insurance company with lots of cubicles, I wanted to test before a large build out.

So our MVP was created by moving a few cubicle walls and having a portion of my team sit together. We decided to eliminate our staff meeting as a test to see if information flowed more freely in the open space. After several months of testing, it’s clear that our configuration is highly effective. New hires learn at a quicker rate. Relationships are deeper on the team. Moral is high. Productivity has increased. Communication is better…I could keep going. What’s even better, is our MVP has shown other groups what is possible by reconfiguring space. When thinking about MVP don’t constrain yourself to true “product”.

The Zappos MVP

The story of the Zappos MVP is so amazing, I wasn’t sure how I had not heard it before. Nick Swinmurn, the founder of Zappos, wanted to start an online shoe company. He believed the most important hypothesis to test was “is there already sufficient demand for a superior online shopping experience for shoes?”

Rather than building out a slick website, buying warehouses, creating an integrated distribution model, Swinmurn went to a local shoe seller and asked if he could take pictures of the shoes and post them on his website. If customers decided to buy the shoes, Swinmurn agreed to go back to the shoe store and buy the shoes at full price.

This kind of MVP is often called a “Wizard of Oz” prototype because you don’t have to set up all the infrastructure. The man behind the curtain can create the effects.

Through Swinmurn’s MVP he was able to learn to take payments, answer customers questions, accept returns, all without setting up a warehouse and buying inventory. He was also able to test his hypothesis and learn that there was demand for an online shoe buying experience.

Hopefully these examples show how you can create MVPs no matter what industry you are in. Apply some creativity and think through what hypothesis you need to test and what MVP you can create to run the test. The process is iterative, so getting to your MVP quickly and beginning to learn is crucial.

Begin pushing yourself to MVP anything and everything. And please share your successes and failures!

Getting credit for learning

I sat in a colleague’s office several months ago and we actually googled “getting credit for learning.” We were in the middle of a difficult period in which we were making many changes. The two of us knew that the last six months had taught us many lessons that would prove beneficial going forward, but learning doesn’t lift ROIs, increase sales or improve margins. The CFO can’t spend what we had learned. So how do we get credit for learning?

Sadly, google failed me and I didn’t walk away with a good answer. It wasn’t until I read The Lean Startup that I found my answer.

…if the fundamental goal of entrepreneurship is to engage in organization building under conditions of extreme uncertainty, it’s most vital function is learning

 

In the Lean Startup model, we are rehabilitating learning with a concept I call validated learning. Validated learning is not after-the-fact rationalization or a good story designed to hide failure. It is a rigorous method for demonstrating progress when on is embedded in the soil of extreme uncertainty…

 

We were deep in the soil of uncertainty, so using validated learning would have aided us in showing progress. The key to Ries’s methodology is in it’s rigor. The Lean Startup method relies on a Build, Measure, and Learn cycle.

photo credit: http://e7systems.com/

My main take away from build, measure, learn is that you start work in reverse. Here’s how to use the framework:

  • What is it you want to learn? ex Do our customers prefer a new product feature?
  • How can you measure this? ex We will measure sales on a A/B basis. Group A gets the new feature, group B doesn’t
  • What do you need to build? ex We build the systems capable of issuing products with both features.

But the process can also work with process or something personal. Here’s an example of building a new process:

  • What is it you want to learn? Is the new product development process viable?
  • How can you measure this? How long in months does it take to develop a product in the new process?
  • What do you need to build? We take two similar products down two alternative tracks.

On of the reasons I am so attracted to the Lean Startup is that it borrows many of the principals of design thinking.

In other words, we need the scientific method. In the Lean Startup model, every product, every feature, every marketing campaign – everything a startup does – is understood to be an experiment designed to achieve validated learning. This experimental approach works across industries and sectors…

 

Source: static.ddmcdn.com

These decisions are experiments set up by design, for a specific purpose. An work done that doesn’t result in us learning something about a customer (or process) is waste. Also, it should be clear that iteration is an important part of the process.

In design thinking, the process is moving us towards prototyping and testing. It’s a given that your first idea will not be our best idea and we use prototyping as a way to gain empathy – so it would be wasteful to spend an extra 2 months on the prototype because what we’re really after are the empathy and insights.

In the Lean Startup method, we are trying to get to “learn” as quickly as possible and then the cycle starts again.

Do you (like me) want to get credit for learning? If so, please check out Ries’s book and become a student of the scientific method. Be clear ahead of time which hypothesis you are trying to test (what are you trying to learn?) and how you are going to measure success. Think of yourself as a scientist running a lab of experiments.

Please share if you have experience with lean methods. I’ve love how this book has helped me to re-frame work issues. Read the Lean Startup if you want to be stretched and waste less time on features, process, steps and don’t help create learning.