#2 Mitigating Risk Early On

Mitigating Risk early on

The Lean Startup methodology altered how I mitigate risks and make decisions. (Learn more about Lean Startup by Eric Reis)

Before Lean Startup. I poured over ten months into building a Groupon-like daily deal app, focusing on creating all the necessary features without talking to real-world customers. This approach, or lack thereof, led us to a pivotal moment just before launch: the realization that our product was overly complicated and not easy to explain. In a last-minute pivot (3 days before launch), we stripped down our app to a simplified idea, only to discover that there was no demand for it post-launch. I realized at that moment that ten months ago, I could have spent three days building a product and testing it if the market wanted it.

As I was facing this realization, a product manager friend introduced me to a lean startup, which prioritizes starting with a Minimum Viable Product (MVP) to enable rapid learning and adaptation based on user feedback. This strategy saved subsequent projects and refined my decision-making approach across professional and personal endeavors.

Here's a step-by-step guide to getting started with the Lean Startup methodology:

• Step 1: Identify Your MVP. Focus on defining the simplest form of your product that addresses your customers' needs. This stage is crucial for honing in on the core problem you're solving without unnecessary features. The MVP looks to learn the most by doing the least, mitigating risks. If you're looking to launch a new restaurant concept, it might be best to test the concept as a popup rather than investing in a retail location.
• Step 2: Build Your MVP. Once you've outlined your MVP, proceed to build it. This phase is about efficiency and speed. The aim is to avoid perfectionism and quickly deliver a functional product to your customers for feedback. Here, the goal is to build your core value proposition.
• Step 3: Listen & Measure After your MVP is in the market and with customers, collect and analyze interaction and feedback. Questions to consider: How did they like your solution? What did they enjoy most? What didn't they like? Would they come back again? How much would they pay? This step is vital for understanding how your product is being received and identifying areas for improvement.
• Step 4: Learn and Analyze the Data. Dive deep into the data and feedback collected to extract actionable insights. Understanding how your product is used and perceived will guide your next steps.
• Step 5: Iterate Based on Feedback Leverage the insights from your analysis to refine or pivot your product. The goal is to be agile and responsive to user needs based on actual data. This process continues until you have product-market fit or even problem-solve fit.

The Lean Startup methodology is not only for tech products; it applies universally across all types of products. I used the above steps when working on manufacturing Android tablets. As the product leader, I was looking for new markets, and several friends were having kids. What about a kid-friendly Tablet? However, I had no data to validate my idea. Instead of investing heavily in developing a new product from scratch, I decided to repurpose our existing tablet. By adding a child-friendly bumper, licensing apps for kids, and designing kid-friendly packaging, we were able to transform our current product into an MVP for the children's market. Within 90 days from ideation to retail availability, we launched the iDeaPLAY kids tablet, which sold out during the holiday season. This test validated the market demand for such a product and allowed us to mitigate any risk if it failed.

The Lean Startup Methodology has fundamentally changed my approach to building startups. It instills a cycle of learning and adaptation that is critical for mitigating risks. Its proven effectiveness across different domains, including hardware, showcases its value in driving innovation and ensuring product-market fit.

Success Stories

23andMe by Anne Wojcicki

In honor of Women's History Month - I want to highlight Anne Wojcicki, co-founder of 23andMe. 23andMe has become synonymous with at-home DNA testing, challenging traditional medical gatekeeping and emphasizing consumer access to genetic information. Despite facing skepticism from the medical community and navigating regulatory hurdles with the FDA, Wojcicki's vision has led 23andMe to define a new category in healthcare and genetics research. Her commitment to transparency, consumer rights, and the potential of genetics for personalized health insights has made 23andMe a household name and opened new avenues for consumers to explore their ancestry and health predispositions, marking a significant shift in how individuals engage with their genetic data.