Eric Ries started it and now everyone is doing it. It wasn’t that long ago that Eric Ries starting writing about the “lean startup”, evangelising a culture of continuous improvement within startups. Ash Maurya has also written a book on this subject called “Running Lean”. Published earlier this year, “Running Lean” offers a lot of practical tips on how to develop products the ‘lean’ way.
What I found most useful about “Running Lean” is the way in which the book focuses on risk. Maurya, founder of a number of startups himself, explains in this book that ‘lean’ is all about eliminating risk. In the book, Maurya highlights that “the way you quantify risk in your business model is by quantifying the associated loss if you’re wrong.” He then goes on to tackle this issue of assessing and prioritising risk from a few different angles:
- Thinking about the stage your business is at – Maurya identifies 3 stages of a startup’s existence: (1) ‘problem/solution’ fit – do I have a problem worth solving? Can the problem be solved? And is that solution something that customers want and are willing to pay for? (2) ‘product/market’ fit – have I built something that people want? and (3) Scale – how do I accelerate growth? Answers to these questions can really help one in validating a business model and prioritising product features.
- What’s your “unique value proposition”? – It’s easy to get excited about an idea or a feature whilst losing sight of what differentiates your product from existing solutions already on the market. Maurya therefore hones in on the “unique value proposition” (UVP). Ask yourself the question why your product is different and why it’s worth getting attention and buying. The UVP forms a key part of Maurya’s “lean canvas” (see Fig. 1 below) which is a variation on the “business model canvas” by Alexander Osterwalder.
- Assess the risk type – One of the things I found most helpful in “Running Lean” is the way in which Maurya distinguishes between three types of risk: (1) product risk – getting the product right (2) customer risk – building a path to customers and (3) market risk – building a viable business. In my experience, determining and addressing such risk types upfront really helps a company in focusing on the key desired outcomes. It also helps to determine the main product hypotheses to test with customers in real-time.
- Tackling these risks through experiments – Like Eric Ries, Maurya is a strong believer in addressing risks through experiments. This means that you come up with an assumption or hypothesis and test it in real-time through a “minimum viable product” (MVP). You can feed your findings from such an experiment back into a “lessons learned report”, outlining (1) your original assumptions (‘what we thought’) (2) what you learned (‘insights’) and (3) your next steps (‘what’s next’).
- Features must be pulled, not pushed – Another way to tackle risk is by avoiding bombarding customers with features (that they didn’t ask for in the first place). Rather than continuously pushing out new features, Maurya makes a strong case for a simple MVP and only adding new features based on customer feedback or testing insights.
Main learning point: even if you’ve already read Eric Ries’ book on “The Lean Startup” inside out, I still think you’ll find “Running Lean” a very useful book. Ash Maurya provides lot of helpful, practical pointers on how to best reduce the risks related to launching a new product. The idea of ‘learning experiments’ – launching a new product incrementally – is a good way for startups and established business alike to test the market and to get customer feedback. “Running Lean” should thus help businesses in developing their products in an iterative manner, learning and improving along the way.
Fig. 1 – Ash Maurya’s “Lean Canvas”
Related links for further learning: