Recently, several articles have implied that the Lean Startup approach – is simply “throwing incomplete products out of the building to see if they work.” Unfortunately, the Build, Measure, Learn diagram is the cause of this confusion. At a first glance, it seems like a fire-ready-aim process.

The Build, Measure, Learn build-measure-learn loop is essential to product development. The first step is to build a product, get it out into the real world, and then measure customer reactions and behaviours. You next take what you’ve learned and use it to make changes or improvements in your product.

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The goal of Build-Measure-Learn is to maximize learning through incremental and iterative engineering. The Build step refers to building a minimal viable product (an MVP). It’s critical to understand that an MVP is not a product with fewer features. Rather it is the simplest thing that you can show to customers to get the most learning at that point in time.

For many startups, an MVP could simply be a PowerPoint slide, wireframe, clay model, sample data set, etc. Each time you build an MVP you also define what you are trying to test/measure. Later, as more is learned, the MVP’s go from low-fidelity to higher fidelity, but the goal continues to be to maximize learning not to build a beta/fully featured prototype of the product.

Startups and new ideas in existing companies don’t start with “ideas.” They start with hypotheses—educated guesses that validate or invalidate through experimentation and data.

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That the Lean Startup begins with acknowledging that your idea is simply a series of untested hypotheses is a big idea. It’s a really big idea because what you build needs to match the hypothesis you want to test.

The minimum viable product you’ll need to build to find the right customers is different from the minimum viable product you need for testing pricing, which is different from an MVP you would build to test specific product features. And all of these hypotheses (and minimal viable products) change over time as you learn more. So instead of Build-Measure-Learn, the diagram for building minimal viable products in a Lean Startup looks like Hypotheses – Experiments – Tests – Insights.

Using this new hypothesis – Experiments – Tests – Insights diagram the question then becomes, “What hypotheses should I test?” Luckily Alexander Osterwalder’s business model canvas presents a visual overview of the nine components of a business on one page. They are:

  • value proposition, product/service the company offers (along with its benefits to customers)
  • customer segments, such as users and payers or moms or teens
  • distribution channels to reach customers and offer them the value proposition
  • customer relationships to create demand
  • revenue streams generated by the value proposition(s)
  • activities necessary to implement the business model
  • resources needed to make the activities possible
  • partners 3rd parties needed to make the activities possible
  • cost structure resulting from the business model

Once you’ve filled out the Business Model Canvas, you can run experiments to validate or invalidate your hypotheses.

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The Customer Development process is a methodology for taking new venture hypotheses out of the building to test them. The most important part of the process is customer discovery, which helps turn your vision into a series of business hypotheses. Then it develops a series of experiments to test customer reactions to those hypotheses and turn them into facts. The experiments can be a series of questions you ask customers or even a minimum viable product to help potential customers understand your solution.

Furthermore, because startups aren’t building full-scale products—they are merely testing concepts and gauging potential markets by implementing lean methodology—there is no need to rush. The benefit of this method is that startups can take the time to hone their prototypes and develop products that will not just please consumers but also expand the boundaries of their industry.

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