This post was originally written for the Ministry Incubators blog.
You have an idea that you feel in your bones is a great one. Maybe it will change the world or maybe it will simply change the world for 5 people. The problem is that while you know it is a great idea, you don’t actually know that it is a great idea. And, even if you did actually know that it is a great idea, you don’t have any clue how to get started.
If this scenario describes you right now or if it is one that you can easily see yourself in, there is good news! There are plenty of tools available that can help you get from this nascent state to a point where you can answer these big question – is my idea viable and how can I get started?
Almost a decade ago, lean methodology was popularized by Eric Ries’ book, The Lean Startup. Since that time it has proven to be incredibly effective in helping founders of both business ventures and non-profits get started without wasting a ton of time or money upfront.
The secret to this approach to getting an idea off the ground is that it flips the traditional way we think about starting a business or a non-profit venture. Traditionally, we are supposed to focus primarily on the idea – we spend countless hours writing up a business plan and developing the product. We think, “If we can just get the vision and execution right, people will love it”
What Ries and others found is that in startups and unproven ventures, this traditional approach leads to a tremendous amount of waste. Almost without fail, people’s actual needs are different than we anticipate. People end up using our products in ways that we never imagined. The feature or offering that we banked on being so popular was a flop. So all that upfront work perfecting the business plan and perfecting the product has to start all over again.
Lean methodology tries to turn this process on its head – instead of starting with countless hours spent in the planning phase, lean methodology suggests that founders spend most of their time with actual and prospective customers.
Phase 1 – Build
While it may seem strange to start with building your product or offering instead of planning – have you ever heard the phrase, “measure twice, cut once?” – lean methodology suggests that you begin here so that you can start getting customer feedback as soon as possible. In this phase you want to build out what is called a minimum viable product. This product or offering will not embody your entire vision or idea – it won’t be perfect. Instead, it needs to be just good enough that you can start testing and validating your idea with actual and prospective customers. Reid Hoffman, founder of LinkedIn and one of the most successful Silicon Valley venture capitalists is famous for saying, “If you are not embarrassed by the first version of your product, you launched too late.” While this does not mean that you should put out a bad product or service, it does mean that you should try to get to Phase 2 as soon as is reasonably possible.
Phase 2 – Measure
If it isn’t clear yet, the true purpose of Phase 1 is to get you to Phase 2 as soon as possible. In this phase, you want to start testing your product in the real world. This phase is where you start validating your idea and its underlying hypotheses.
Blake Mycoskie, the founder of TOMS shoes, didn’t try to figure out how he could produce or sell thousands of shoes before he started selling them. Instead, he had a handful of shoes produced that he tried to sell to a group of his friends. When he started selling the shoes, he didn’t even tell his friends the philanthropic aspect of the idea – he wanted to test whether people would buy the shoes on their own accord. When they bought the shoes anyway, he told them about the philanthropic part of the business and they bought twice as many! (Interview with Blake Mycoski on the Tim Ferriss Podcast, https://tim.blog/2017/06/28/blake-mycoskie/)
In this TOMS shoes example, Blake did something that is absolutely vital in Phase 2 – he broke up his idea into a set of underlying hypotheses that he could test – 1) would people buy the shoes on their own accord, 2) would people pay X for a pair of shoes – notice that he did not give them away and 3) would the philanthropic aspect encourage people to buy more shoes. By breaking up his idea into a set of testable hypotheses and testing them in a real world setting, Blake was able to know that his idea was viable before pouring tons of money and time into mass production.
Phase 3 – Learn (and pivot)
In the last decade, it seems that the term “pivot” is always in the news. Some technology company or app is “pivoting” from its original vision and business model to something new. YouTube used to be a video dating service. Twitter used to be a podcasting service. Flickr used to be an online role-playing game. Each of these companies tested an idea, learned that it didn’t quite work and pivoted to a different vision. Lean methodology does not necessarily suggest that you pivot to a completely new vision (unless that becomes necessary), but it does suggest that you carry out a series of micro-pivots.
After testing your idea and its underlying hypothesis, you need to apply what you learned to your idea and reformulate any hypotheses that were proven incorrect. If Blake found out in his tests that people were not be willing to pay enough money for a single pair of shoes to produce a second pair, he would have had to go back to his idea and tweak his hypotheses about the shoes, pricing or philanthropic vision.
Phase 1 – Build
Once you complete this process and have formulated new hypotheses about your idea, you cycle back to Phase 1 and build out your idea according to the new hypotheses.
The Never-ending Cycle
As you can tell, lean methodology does not end once you launch your product or offering – in fact, you have already launched once you get to Phase 2! It provides a way to continuously innovate throughout the life of your business or non-profit venture.
Of course, lean methodology is only one tool that you can use to help get your big or small idea off the ground. There are many other tools that you can and should consider as you take on the challenge of starting something new.
If you are interested in learning more about lean methodology, here are a few resources that can help you dig in deeper and figure out if it can be helpful for you (also, checkout any YouTube videos by any of these authors):
Eric Ries, The Lean Startup
Steve Blank, The Four Steps to the Epiphany and The Startup Owner’s Manual
Alexander Osterwalder and Yves Pigneu, Business Model Generation
Michel Gelobter, Lean Startups for Social Change