Lean Start Up: #4 - Validated Learning

Validated Learning

a. The old waterfall method of building something (especially in software development) requires a problem that is known and a solution that is also known. Easy when building the next iteration of something already built. But, not good for starting something from scratch.
b. How to Achieve Failure: Building something that nobody wants and building it on time, under budget! Essentially we are executing a bad plan.
c. Edwards Deming: “The customer is the most important part of the production line.” All we should do is gauge whether the customer cares about it.
d. Agile methods have their origins in IT departments. The problem is known, but the solution is unknown and uncertain. But, what if we don’t know who the customer is or what s/he wants?
e. Steve Blank (a mentor of Ries) tells us to know our customer and use a process, from creating a prototype, to testing it, to validated learning, to innovative accounting.
f. Case Study: What Ries learned at previous company: Customers did not want to use his product to connect with existing friends, they wanted to connect to new people and make new friends. PIVOT—had to make a major move.
g. Lots of code written: 25,000 lines. All had to be tossed because it didn’t appeal to teens—target market. PIVOT…created an IM network instead that attached to existing system.
h. Could have discovered this if he had simply experimented with creating a single webpage…to see if people tried it! Nobody wanted it…so, he didn’t need page 2.

Leadersip: Thriving, Not Just Surviving in a Downturn Economy

This is the second in a series of posts on leading in a downturn economy.

In the January 2009 issue of the HBR, Donald Sull of the London Business School writes "How to Thrive in Turbulent Markets" (pp.78-88). In a piece full of advice and boxing analogies, Sull notes that thriving in such an economic downturn requires leaders and companies both to absorb the blows and be agile enough to take advantage of emerging opportunities. The problem is that often times leaders often retreat into such a defensive absorption role that they forget that there are opportunities (offense) as well that must be exploited to ensure a strong comeback.

Measures of Absorption (defense). Have...
--Diversified cash flow lines
--Unique tangible assets
--Powerful business partners
--Low fixed costs

Measures of Agility (offense):
--Exploit change (my note: if you get lemons…make lemonade)
--Use the sense of urgency to move the company forward. (everyone unites faster when faced with a common threat)
--Attract entrepreneurial leaders.
--Reallocate cash and talent across units.

This is an article worth getting for all managers and fashioning a hard discussion around what your company is doing both to absorb the blows and counter-punch.

By the way, Sull likes Mohammad Ali as the best boxing example of his model—an ability to absorb or take a punch and the ability to be agile and throw an offensive blow.

Remember Ali’s famous chant: Float like a butterfly,sting like a bee. Good advice for leaders today.