Make it Lean
Through Red Brick Accelerator (RBA), we had the pleasure of attending a workshop by Christoph Rabl, a business coach and a mentor, who came to train us on how to implement a lean innovation method to validate our business model. One of the main reasons was to try give as many startups a chance on succeeding, as it is not uncommon that many startups fail. And not only in RBA.
Anjawi Agarwal listed top 10 reasons why startups fail. Among other guesses we started listing money problems, having the wrong team or wrong timing for the startup idea to break through. The most common assumption often is, that due to not having enough money the startup can’t evolve and improve. For our surprise the lack of market need was the first one to cause failure by 42%. The lack of money came second with 29% and a wrong team came third with 23%. (Agarwal 2018).
When talking about product – solution fit, Rabl wanted us to turn the idea to a product – market point of view. Why did he do this? He gave us a great example with pain points: If a person is having a bad headache, on a scale of 0-10 the pain would be 7. That is a pretty intense headache. That really makes a painkiller necessary to be used. It is already a problem – solution fit; to take the pain away, people are willing and eager the buy the product that makes this happen. What makes a product desirable and necessary depends a lot on the market and its supply. For example, an avocado peeler does not stand of as commonly desirable nor necessary. It is a great tool with a knife and hooks that removes the seed from the fruit, but how necessary is it after all? The fruit can be easily cut and peeled with a regular knife. And even if someone would buy the tool, they wouldn’t need to buy it more than once. So, the question is, does the solution really solve the problem? Business vice a solution would be both repeatable and scalable.
Rabl introduced us this lean model and we are going to walk you through it with examples using our startup idea. With this lean technique, we aim to minimize the total time it takes to go through the loop.
We are always starting with a hypothesis. For us, this would be that the university students don’t collaborate to work together on projects. This hypothesis comes both from a general conversation between our community at Proakatemia and some random discussions with other network contacts involved with students and doing co-operation with them. Our solution for this is a platform where students from various fields could both find people and projects around them to work with and learn to use their skills better.
Next comes the step, along the details with it, explaining how we are going to do it. For this, we need a customer journey map. This journey map explains from the beginning the customer realizes their pains to the goal, when they find our solution and decide they need it. We did this by interviewing students from different fields to understand this thoroughly. For comparison, we also asked our network to give their insight in this path from an external point of view (a community, company and corporation who work actively with students).
After our journey map is done, we need to have a clear image of the revenue model(s) we can implement for our product. For us, the clearest path would be to include this inside the education plan as a separate tool for the students to take advantage of, but due to bureaucracy we started to explore other models as well. In addition to understanding our revenues, we need to understand our cost structures. For us so far, it includes of course our salary, but in addition we need to budget marketing, coding the prototype, coding and using an AI and having legal documents done by a professional, such as an NDA. Even after all these phases cleared out, we need to learn more about our customers and the product itself constantly. After every fix we make on our product, validation should follow to see whether we are going on the right direction. Once our product is out on the market, validation is done via customer feedback.
MVP (Minimum Viable Product) – “The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort” (Rayes 2009). At this point we should already be able to define the key elements of our business model to find out what factors we need to have for MVP. This is the moment where classify what are the details we need to measure and test.
With testing, we have discussed a few suitable options for us, and one way would be to carry out A/B testing. This method aims to simply compare two versions to define which one works better (Gallo 2017). What makes A/B testing so great and reusable is, that it allows us to continue testing quite easily and find ways to improve along the way. We simply compare what we have already, to a new improvement we have established and see, whether the improvement is actually an improvement.
Another way we are conducting user testing is a combination of Guerilla and Lab usability testing. A Guerilla testing works pretty much on any random people you find from a street or a coffee shop, who have no beforehand knowledge of your work. The idea is to get them test your prototype and give feedback on it in return of a small reward. A lab usability test is conducted in special environment (usually laboratories) facilitated by a specialist, who is a professional gathering observations and feedback through tasks given to the tester (Babich 2019). The way we do this, is forming a random/collected group of testers to do the testing remotely via a screen share set up. This allows us to record the testing situation, to have more timeframes on observing the behavior of the tester via tasks we give during the testing. After the testing is done, we gather feedback from the usability of our prototype.
We want to know how our business is doing. This happens with quantitative research, feedback you may say. So how can our results be measured? Well first we want to know what we want to measure and what outcomes are we hoping for. Customer satisfaction is a certain and easy way to measure the outcome form the customers point of view; using a numbered scale of 1 to 5 how happy/content etc. the customer was using our product or asking sentences where the customer needs to choose between (1) “I strongly disagree” to (5) “I strongly agree” are an easy and engaging way of getting the more detailed data that you are ready to plan and ask.
Babich, N. 2019. Top 7 Usability Tetsing Methods. Adobe. Read 12.5.2020 https://xd.adobe.com/ideas/process/user-testing/top-7-usability-testing-methods/
Gallo, A. 2017. A Refresher on A/B Testing. Harvard Business Review. Read 12.5.2020. https://hbr.org/2017/06/a-refresher-on-ab-testing
Rabl, C. 2020. Lean Innovation Workshop 9.3.2020 Red Brick Accelerator
Ries, E. 2009. Minimum Viable Product: a guide. Read 12.5.2020 http://www.startuplessonslearned.com/2009/08/minimum-viable-product-guide.html
Agarwal, A. 2018. The top 10 Reasons Startups Fail. Read 11.5.2020.