Lean Startup: Aprender (4/4)

The Lean Startup in a Nutshell IV: Learn

In this part of the Lean Startup in a Nutshell series, we finally close the build-measure-learn loop and learn how to—well, learn. Learning is arguably the most crucial step within the feedback loop. If a startup is unable to learn properly, people's time is wasted. Lean means: eliminate waste. Waste is eliminated by learning as much as possible as frequently as possible.

Customer interviews

Learning from accessible and actionable metrics is straightforward. Learning from qualitative one-on-one interviews with customers is harder. When conducting these interviews, the reality distortion field of the founders must be taken into account:

True visionaries spend considerable energy every day trying to maintain the reality distortion field. Try to see it from their point of view – none of the disruptive innovations in history were amenable to simple ROI calculations and standard linear thinking. In order to do something on that scale, you need to get people thinking, believing, and acting outside the box. Their greatest fear is categorically not that their vision is wrong. Their real fear is that the company will give up without ever really trying.

— Eric Ries

Nobody wants to become trapped in local maxima: "Customers don't know what they want." It's true—they don't. So how can we then learn from customers? The rules are simple:

1. Stay true to the vision—an acute pain that others do not see.
2. Present the currently specified product to early adopters.
3. Look for customers for whom your product vision is a perfect fit.
4. Only if you are unable to find them after extensive trials, pivot.

In a customer interview, you are thus essentially looking for a negative result. It is like a scientific experiment—you are trying to prove your current product vision wrong. It is not that you want to extract feature requests from customer interviews—it is the vision and the founders' intuition which should dictate the next feature additions. You are merely looking for the constant assurance that you are on the right track.

If you are curious to see how a negative result in customer interviews—even withstanding the enormous power of the reality distortion field—looks like, enter Eric Ries:

 "I've never heard of that. My friends have never heard of that. Why do you want me to do that?" It requires a lot of explanation. Instant messaging add-on is not a category that exists in your mind. But since she is in the room with us, we could talk her into doing it. So, she downloads the product. We have her install it on the computer. And then we say, "Okay. It’s time to check it out. Invite one of your friends to chat."

And she says, "No way."

Customer segmentation

One-on-one conversations with customers are a good way to look for patterns in the noise. While you should be ignoring a single feature request made by a single customer, a feature request being articulated consistently across interviews should make you aware of the possibility that you have identified a real need.

Often, using the knowledge from customer interviews is not enough to identify reliable customer segments. Surveys are a good tool to broaden the search. Of course, you always want to know which customer segment is closest to bring you product/market fit.

Segmentation will help you see which customers are the most relevant to realizing the overall vision of your startup.

Customer Advisory Board

The culmination of letting customer feedback penetrate your company as part of an integrated discipline is a Customer Advisory Board:

Here’s what it looks like. In a previous company, we put together a group of passionate early adopters. They had their own private forum, and a company founder (aka me) personally ran the group in its early days. Every two months, the company would have a big end-of-milestone meeting, with our Board of Directors, Business Advisory Board, and all employees present. At this meeting, we’d present a big package of our progress over the course of the cycle. And at each meeting, we’d also include an unedited, uncensored report direct from the Customer Advisory Board.

I wish I could say that these reports were always positive. In fact, we often got a failing grade. And, as you can see in my previous post on “The cardinal sin of community management” the feedback could be all over the map. But we had some super-active customers who would act as editors, collecting feedback from all over the community and synthesizing it into a report of the top issues. It was a labor of love, and it meant we always had a real voice of the customer right there in the meeting with us. It was absolutely worth it.

— Eric Ries, A real Customer Advisory Board

A Customer Advisory Board is essentially a safety net, safeguarding against the cases where the reality distortion field of the founders clouds their vision.Facebook Beacon comes to mind. A customer advisory board gives the customers the power to break through to the visionaries, essentially begging them for help: Look, we aren't asking for much, but this is absolutely necessary. Please, please, implement this.

Five Whys

Five Whys is one of my personal favorites. It is a technique for solving problems in a sustainable way, not combatting symptoms, but using root cause analysis. Five Whys is easy to formulate. It consists of two distinct steps.

The first step is to ask "Why?" five times whenever there is a problem, going deeper with each question and unconvering the root cause of the problem, not just the surfacing symptoms:

A new release broke a key feature for customers. 

1. Why? Because a particular server failed.
2. Why did the server fail? Because an obscure subsystem was used in the wrong way.
3. Why was it used in the wrong way? The engineer who used it didn't know how to use it properly.
4. Why didn't he know? Because he was never trained.
5. Why wasn't he trained? Because his manager doesn't believe in training new engineers, because they are "too busy."

— Eric Ries, The Five Whys for Start-Ups

The second step is to make proportional investments at each layer of the problem. For the above example that means that:

1. The broken release should be rolled back and fixed.
2. The subsystem should be made less obscure.
3. The engineer should be trained to be able to use it properly in the future.
4. A roadmap for setting up a training program should be formulated.
5. The manager should be talked to and convinced of the value of training.

Five Whys usually traces back a technical problem to a human problem.

Proportional investments are never complete solutions at each problem layer. Rather, they are a first step to improving the situation at that level of depth. Imagine the Five Whys hierarchy as a building. Each floor should be reinforced a little bit. That makes more sense than reworking the entire first floor and leaving the other floors in their desolate condition.

Proportional investments leverage the 80/20 rule. The minimal solutions will always account for the bulk of the problem. With each subsequent Five Whys analysis, similar investments will lead to more complete solutions for those layers which seem to be among the root causes of many surfacing issues.

If you are interested in the detailed mechanics of conducting a Five Why root cause analysis, I highly recommend this in-depth guide by Eric Ries. 

Conclusion

Learning in a Lean Startup is the hardest part. It takes a commitment to objective standards and scientific methods to break through the reality distortion field. Learning creates anxiety for the founder's ego. Setting up processes designed for continuous learning are thus indispensable for a thriving startup whose success is not based on mere luck, but on method.

This concludes the Lean Startup in a Nutshell series. I have left out some of the concepts which I personally consider more controversial and less well illustrated in detail—such as the subdivision of a startup into two cross-functional teams—, but I bet that you will not have a difficult time continuing your Lean Startup journey on Eric's blog or by reading his book.

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