Hey guys, we're really looking forward to LSM Toronto, coming up in 4 days. To help get you started, this post documents some basic ideas on how to get the most out of the event.
What's Lean Startup Machine all about?
"Lean" doesn't refer to money. It refers to shortest time to
learn.
The point of Lean Startup is to maximize learning and
validation/invalidation of your business model in the shortest amount of
time. The goal of Lean Startup Machine is to have paying customers for an MVP in a weekend.
How do I start?
Write one sentence answers to each of the following questions: Who is my customer? What is their problem? What is my solution? Record your answers in Unassumer.
My customer is "small retail businesses". Is that a good answer?
Use a persona. It helps to be concrete. For example, instead of "small retail
businesses", you might come up with the persona, "Mary owns a small
successful fashion store. She's 29, single, has a degree in Business.
Mary has 3 employees. 30% of revenue comes from online international
sales."
Personas are great because they allow you to quickly evaluate
any idea by asking, "Would Mary want this?" Personas help you focus to identify your MVP at the start, but don't spend too much time refining your persona. You'll be changing, or even tossing your persona, once you start talking with real customers, and you'll want to talk to real customers as soon as possible.
What's next?
You want to validate/invalidate your problem.
How do I do that?
Call up people, or hit the street and find people, that are similar to
your target customer, and start pitching the problem. Don't mention your
solution. Also, don't mention your problem. Start with an open-ended
"As a small retail business owner, what is your biggest problem?" People
will start talking about nothing that you're interested in.
So why is that useful?
The value
of starting with this question is that if 3 people mention the same
problem, and it's a problem you can solve, and make money off of, then
you abandon your original problem.
Okay, after you get an answer to that
question, then you pitch the problem. Say, "We've been hearing that
lack of online advertising is a problem for small retail businesses?"
Then be quiet and listen.
Only interview a handful of people. Don't interview 20 people before iterating.
If
the problem is invalidated, then pivot, and repeat. If the problem is
validated, go to the next step, which is to validate/invalidate the solution?
How do I validate/invalidate the solution?
Sell it. Call people up, and sell it. Get a credit card number.
What?! I don't even have the service yet.
So, the point of collecting the credit card number is not to make
money. You don't do anything with the number. You tear it up and toss
it. The point of collecting the credit card number is to collect data.
It's very different if a potential customer says, "Yeah, I'm interested.
Send me a link to your website." than "I'm buying. Here's my credit
card number."
Okay, I've validated the solution. What's next?
Build a landing page, put a way for people to pay online and start selling. Use Unbounce.
What?! But my product doesn't even exist yet.
Remember, what we're doing here is collecting data. Paying customers is hard data.
If you find out that there's very little interest in buying the
product, then you simply return the money. If you collect $60k over the
weekend, then you build the product before you have to return the money.
Any last words of advice?
Lean Startup is not about practices. It's about achieving validated learning. You don't get any points for filling out a Business Model Canvas. The only thing that counts is validating your business model against reality (i.e. paying customers).