At J. Schall Consulting, we advise our clients in the sports nutrition, fitness, health, and sports industries to look outside their niches to find learning opportunities and inspiration. A great deal of the “common practices” or “that’s how things are” comments we hear from clients are just industry restricted views of how a business is to operate to be successful. These restricted views create clone after clone of brands that really have no competitive advantages.
One of the learning opportunities we have advised clients to seek out is the book written by Eric Ries called “The Lean Startup.” The Lean Startup “provides a scientific approach to creating and managing [businesses] and get a desired product to customers’ hands faster. The Lean Startup method teaches you how to drive a [business]; how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.”
That fact is that most businesses go about product development in the completely wrong way. Too many businesses begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to meet sales expectations, it is often because they never spoke to prospective customers and determined whether or not the product was desirable. Sound familiar?
We advise anyone reading this article to read the whole book but here are some of the key takeaways that can help you in your business today:
- “Lean” methodology is not always about cutting costs or waste. Though the statement “fail fast, fail cheaply” holds true, lean is about putting a process in place for product development and management. It helps create order, not chaos by providing tools to test a vision continuously.
- Accounting in a “startup” or growth business should be done much differently. This should be done by holding entrepreneurs accountable, through measurement of progress, milestones, and prioritization of work and not necessarily in pure black/red. “Innovation accounting,” as the book calls it, effectively helps businesses to define, measure, and communicate progress.
- Creating a minimum viable product (MVP) begins the process of learning as quickly as possible. Once the MVP is established, a businesses can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect question. This is the basis of the “build-measure-learn feedback loop” that is so rarely used outside of the technology industry.
- Asking “5-Whys” might sound absurd but it is the basis of smart product development. The primary goal of the technique is to determine the root cause of a problem by repeating the question “Why?” five times. When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot and test a new fundamental hypothesis about the product, strategy and engine of growth.
- Making corrections (or pivots) to the MVP should not considered a failure in product development. It should be viewed as a way to dramatically improve your odds of success. Pivots come in many different forms, each designed to test the viability of a different hypothesis about the product, business model, and engine of growth. One example is the zoom-in pivot. In this case, what previously was considered a single feature in a product becomes the whole product.