Running Lean: Iterate from Plan A to a Plan That Works

by Ash Maurya

Also, because building products often used to be prohibitively expensive, teams that managed to raise funding used to have a significant unfair advantage over others, because they could get to market faster and learn faster than their competitors. Even if they got the product completely wrong the first time around, they could still manage to course-correct

Without customer feedback it’s too easy to fall prey to the “build trap,” where a breakthrough always seems one killer feature away but remains ever elusive. You end up spending needless time, money, and effort building something nobody wants, until you run out of resources.

A fundamental mindset shift for doing that is starting with problems before solutions.

This puts Larry’s idea on solid footing, and he spends the next four weeks building out a first version of his solution which is aimed not at everyone, but at his ideal early adopters.

but rather soft-launches his product to just 10 early adopters and starts charging them from day one.

I can’t deliver value to my first 10 handpicked customers, what makes me think I’ll be able to do that with thousands of customers trying the product on their own?”

successful companies today realize that good ideas are rare and hard to find, and that the best way to find the next big idea is to quickly test lots of ideas.

“I see. We made a similar mistake after our MVP launch. We stopped talking to our customers and relied solely on metrics to guide us. The problem with metrics is that they can only tell you what’s going wrong, not why. We kept guessing at what the problem was, but

nothing we did worked.

It was only when we started talking to our customers again that we were able to truly understand why things weren’t working, and turn things around. You ...

“Because customers today have lots of choices. If your MVP fails to resonate with them, they don’t turn into testers and patiently deliver you feedback on how to improve your product. They simply leave — a lot like your low-retention users.

“Think of it this way…starting with a solution is like building a key without a door. Sure, you can build a great-looking key quickly, but then you spend a whole load of time searching for the right door to open.

“If you simply flip this around and start with doors, or problems worth solving, key-building becomes a lot easier.

“Yes. That was what I was hoping you’d find in your research on MVPs. We didn’t start with building an MVP in our startup, but an offer. We first sketched out several variants of our idea on a Lean Canvas, which is a rapid idea modeling tool. That helped us identify and home in on several promising customer-problem-solution

problem-solution possibilities. We then set up some two dozen customer interviews to validate our customer and problem assumptions. Once we did that, defining the solution was a piece of cake. But even then, we didn’t rush to build out an MVP. We built a demo instead and assembled an offer that we delivered to prospects over many more interviews. Only when we got enough customers to buy into our offer did we start building out the MVP. What we eventually built looked very different from what we thought we’d build.”

Think of it as Demo-Sell-Build versus the more traditional Build-Demo-Sell approach.”

Steve quickly recognizes product/market fit on the roadmap, but a lot of the other terms are foreign to him. Figure I-10. The Continuous Innovation roadmap

Defining a UVP forces you to answer the question: why is your product different and worth paying attention to? Before paying for your

Bind a solution to your problem as late as possible.

Instead of measuring how much stuff you’re building (outputs), focus on measuring how many people are using your product and how (outcomes).

Examples of outcome metrics include: Number of new customers Monthly recurring revenue (MRR) Customer lifetime value (LTV)

Here are some examples of leading indicator metrics: Number of qualified leads in your pipeline Number of trials/pilots Customer attrition rate (churn)

“A real unfair advantage is something that cannot be easily copied or bought.”

advantages that fit this definition: Insider information The right “expert” endorsements A dream team Personal authority

Network effect Platform effect Community Existing cus...

For an idea to be successful, it must constantly balance three types of risks: customer, market, and technical.

The best way, then, to get a customer’s attention is not by leading with your solution, but leading with your unique value proposition.

A compelling unique value proposition either promises a better desired outcome, a better way of achieving the desired outcome, or both.

Meet the Innovator’s Gift

The basic premise of the Innovator’s Gift is simple: new problems come from old solutions.

The Innovator’s Gift is realizing that there is no such thing as a perfect solution. Problems and solutions are two sides of the same coin. And new problems worth solving come from old solutions.

Here are the key takeaways: New problems worth solving come from old solutions. There is always an old way. Innovation is fundamentally about causing a switch from the old way to a new way. The best way to cause this switch is by anchoring new solutions against problems caused by old solutions—i.e., breaking the old way.

where a team of researchers inadvertently uncovered some unexpected insights for improving milkshake sales at a fast-food company. Prior to hiring the research team, the company had conducted its own market research using more traditional approaches like surveys and focus groups. While this research had generated lots of promising customer-generated ideas for improvements, none of these ideas actually increased sales when implemented. Rather than follow a similar line of inquiry—i.e., asking customers what they wanted—the team they hired chose a different path. One of the researchers on the team, Bob Moesta,

wondered what job arises in people’s lives that causes them to come to this restaurant to hire a milkshake?

Framing the question this way allowed the team to uncover why people bought a milkshake, which led to very different insights than when you simply ...

a job-to-be-done is the instantiation of an unmet need or want in response to a trigger.

Triggers are what define the context that shapes the job-to-be-done.

…Until we encounter a switching trigger A switching trigger is a special type of trigger that comes with an expectation violation.

That’s when we realize that our existing alternative is no longer good enough to get the job done. That’s also when we begin to seek out a new and different solution. I label this motivation for change as PUSH in the Customer Forces Model shown in Figure 2-7 because it pushes us toward a better way of getting the job done.

The Customer Forces Model is a behavioral model that describes the causal forces (PUSH, PULL, INERTIA, and FRICTION) that shape

how people select and use (hire) a solution for a specific job-to-be-done.

There are generally three types of switching triggers: A bad experience (e.g., food poisoning from the usual lunch spot) A change in circumstance (e.g., a special occasion like a birthday) An awareness event (e.g., hearing about a new popular restaurant that just opened)

Switching triggers, on the other hand, create expectation violations that open spaces for new solutions. Entrepreneurs need to chase switching triggers.

Causing a switch starts with a promise of better If a new solution is only incrementally better,

the old way always wins.

A switch is set in motion when the attractor forces are greater than the detractor forces; i.e., PUSH + PULL > INERTIA + FRICTION.

“Functionally better” is where needs live. “Emotionally better” is where wants live.

Being functionally better is about addressing unmet needs. Positioning your product this way can be enough to cause a switch if these unmet needs are well understood by your customers as obstacles standing in the way of them achieving their desired outcomes (what they want). But if the unmet needs are not well understood by your customers, it’s far more powerful to switch your positioning to address their wants or desired outcomes.

Emotionally better lives in the bigger context Every product lives in two contexts: the solution context and the bigger context. The solution context is where your product’s features and benefits live. The bigger context is where your customer’s desired outcomes live (Figure 2-8). Figure 2-8. The bigger context A great way to direct your thinking toward being emotionally better is focusing on the bigger context.

“You’re right…but back to Earth. I’m starting to see problems and solutions through a totally different lens. Even when we describe products as entering new markets, that’s a relative category description. The market itself always had another way of getting the job done.”