A lot of what Ries says has been applied by The Directors’ Centre to our clients over the years. However, it is important to emphasise that this model is Silicon Valley-centric and then he tries to apply the model from high growth start-ups outwards.
We started from the opposite end of the spectrum, working with existing growing businesses with potential. But so many of the principles are similar.
For the sake of this article I will focus on Ries’ work rather than our own.
In his blog and book, Ries uses specific terminology relating to the core lean startup principles. I will emphasise them in bold.
Minimum Viable Product
A Minimum Viable Product (MVP) is the “version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” The goal of an MVP is to test fundamental business hypotheses (or leap-of-faith assumptions) and to help entrepreneurs begin the learning process as quickly as possible.
Continuous deployment is a process “whereby all code that is written for an application is immediately deployed into production,” which results in a reduction of cycle times.
A split test or A/B test is an experiment in which “different versions of a product are offered to customers at the same time.” The goal of a split test is to observe changes in behaviour between the two groups and to measure the impact of each version on an actionable metric.
The work that looks so similar to ours is on the decision: “pivot or persevere?”
Innovation accounting helps startups build some discipline into managing questions associated with pivoting or persevering. It works against vanity metrics in favour of truly actionable metrics that answer very specific questions about each experiment in learning.
Pivots are the point where you decide to continue or re-jig the offer (but keep some core fundamentals) include:
Customer Segment Pivot
Customer Need Pivot
Business Architecture Pivot
Value Capture Pivot
Engine of Growth Pivot
You do need to see the book to get the real value but for me the pivot or persevere question is worth its weight in gold. Especially in recessionary times where so many businesses plod on regardless, waiting for things to change… when maybe they need to change themselves!