Lean Startup Lessons: Will it Fly? The Value of Validated Learning
Summary
TLDRThe speaker emphasizes the importance of 'validated learning' in startups, cautioning against the pitfall of 'achieving failure' by executing a flawed plan perfectly. He argues that traditional product and business milestones can be misleading when facing high uncertainty. Instead, startups should focus on learning milestones that validate or invalidate their business assumptions. The speaker shares his experience of building a complex product that no one wanted, leading to a pivot and the realization that minimal viable products can provide the same learning opportunities as extensive development efforts. He advocates for a lean approach to entrepreneurship that prioritizes learning and adaptability over excessive planning and execution.
Takeaways
- 🚀 The concept of 'achieving failure' is highlighted, where a business plan is executed perfectly but the end result is unwanted by customers, leading to a downfall.
- 📈 There is a critique of traditional business and startup practices that focus on meeting milestones and staying on budget, rather than validating the demand for the product.
- 🔍 The speaker introduces 'validated learning' as an alternative milestone, which is about discovering if a startup is on the path to a sustainable business or needs to pivot.
- 🛠️ The software business is described as a catalyst that transforms ideas into code, with all other activities being side effects of this transformation.
- 🔄 The importance of a feedback loop is emphasized, where customer interaction with products generates data that can be measured and learned from, influencing the next set of ideas.
- 📉 The speaker shares a personal anecdote about building a product that was ultimately rejected by customers, leading to a realization about the importance of validated learning.
- 📚 The idea that building something no one wants is the biggest waste in development, despite following agile and lean principles, is discussed.
- 🤔 The script questions why learning is often an afterthought or an excuse for failure, rather than a goal during the development process.
- 📉 The realization that less can be more in terms of development; a simple webpage experiment could provide the same learning as months of complex coding.
- 🛑 The need to work backwards from what we want to learn to determine the least amount of work required to achieve that learning is a key takeaway.
- 🚧 The script advocates for a shift in focus from execution to learning and validation, which can lead to more efficient and successful startups.
Q & A
What is the concept of 'achieving failure' mentioned in the transcript?
-Achieving failure refers to the scenario where a business plan is meticulously executed but ultimately fails because the initial plan was flawed or the product did not meet customer needs.
Why is it problematic to focus solely on executing a plan without considering its validity?
-Focusing only on execution without validating the plan's relevance or desirability can lead to significant waste of resources, time, and effort on something that ultimately has no market demand.
What is the alternative to traditional milestones proposed in the script?
-The alternative is 'validated learning,' which emphasizes learning about customer needs and adjusting the business strategy accordingly, rather than just meeting predefined product or business milestones.
How does the speaker describe the process of a software company in the context of validated learning?
-The speaker describes a software company as a catalyst that transforms ideas into code, with everything else being a side effect necessary for this transformation. The focus should be on generating data from customer interactions to learn and inform the next set of ideas.
What is the significance of the three-stage feedback loop mentioned in the script?
-The three-stage feedback loop is significant because it allows startups to continuously learn from customer interactions, measure outcomes, and adapt their strategies based on this learning, which is crucial for navigating uncertainty and finding a sustainable business path.
What was the speaker's experience with building a product that was not well-received?
-The speaker spent six months building a product that was complex and of high quality but was not well-received by customers. This led to a realization that the effort could have been significantly reduced if the focus was on learning rather than perfect execution.
Why did the speaker feel that the product development process was wasteful despite following agile and lean methodologies?
-The speaker felt that the process was wasteful because the product developed did not meet customer needs, and thus all the code written was essentially discarded. The focus on execution without validated learning led to this waste.
What is the importance of considering validated learning during the product development process?
-Validated learning is important because it ensures that the product development process is aligned with customer needs and market demands, reducing the risk of investing in products that will not be successful.
How did the speaker's realization about the inefficiency of their product development process change their approach to building products?
-The speaker's realization led to a shift in focus from perfect execution to validated learning, questioning the necessity of each feature and considering the minimum viable product that could still provide valuable learning about customer needs.
What is the speaker's suggestion for a more efficient approach to startup product development?
-The speaker suggests working backwards from the goal of learning to determine the least amount of work required to achieve that learning, which can lead to significant efficiency savings and better alignment with customer needs.
How does the speaker illustrate the concept of validated learning with the example of a single webpage and a download button?
-The speaker uses the example to show that even a simple webpage with a screenshot and a download button can provide valuable insights into customer interest without the need for a fully developed product, thus emphasizing the importance of validated learning over extensive development.
Outlines
🚗 Achieving Failure Through Validated Learning
The speaker discusses the concept of 'achieving failure', where a business plan is executed perfectly but ultimately fails because it doesn't meet customer needs. This is likened to driving a car off a cliff while celebrating good gas mileage. The speaker emphasizes the importance of 'validated learning' over traditional product and business milestones, which often don't account for whether the product is actually desired by the market. The goal of a startup should be to discover if they are on the path to a sustainable business, and if not, to make changes. The speaker uses the analogy of a software company as a catalyst that transforms ideas into code, with customer interaction generating data that can be measured and learned from, forming a feedback loop. The speaker shares a personal anecdote about building a product that no one wanted, which led to a pivot and the realization that much of the work done was wasted effort. The focus should be on learning what is necessary for the business to succeed, rather than just executing a plan.
🔬 Experimentation and Efficiency in Startups
In this paragraph, the speaker reflects on the efficiency of startup operations by questioning the value of extensive development work. They consider the hypothetical scenario of supporting fewer networks or creating a simple webpage with a screenshot and a download button, which would have led to the same learning outcome with significantly less effort. The speaker suggests that startups should work backwards from the learning objectives to determine the minimum work required to achieve those learnings. This approach can lead to breakthrough efficiency savings, as opposed to simply building or measuring faster. The speaker humorously contrasts their role as a chief technology officer with the idea of being a 'chief one-page landing page officer', highlighting the potential absurdity of focusing on minimal viable products for the sake of learning and efficiency.
Mindmap
Keywords
💡Validated Learning
💡Achieving Failure
💡Product Milestones
💡Business Plan
💡High Uncertainty
💡Feedback Loop
💡Sustainable Business
💡Quality
💡Pivot
💡Experiment
💡Efficiency Savings
Highlights
The concept of 'achieving failure' where a business plan is executed perfectly but the end product is unwanted.
The importance of validated learning over traditional product and business milestones in startups.
The three-stage feedback loop in software development that focuses on customer interaction and data generation.
The realization that forecasting is not possible in high uncertainty environments, thus validated learning becomes crucial.
The idea that a startup's purpose is to discover a sustainable business path or make necessary changes.
The story of a startup that spent six months developing a product only to find out it was not needed.
The paradox of being proud of executing a plan that ultimately leads to an unwanted outcome.
The inefficiency of building a product with high quality that no one wants.
The need for startups to focus on learning and adapting rather than just executing a plan.
The example of a CTO who wrote thousands of lines of code that were eventually discarded due to lack of product demand.
The argument that learning from failure should be a goal from the start, not an afterthought.
The concept of working backwards from what we need to learn to determine the minimum work required.
The idea that a simple webpage could provide the same learning as six months of development work.
The challenge of balancing the desire for a perfect product with the need for validated learning.
The importance of measuring customer interaction and data to inform the next steps in product development.
The realization that startups should focus on experiments and learning rather than just building products.
The call to action for entrepreneurs to rethink their approach to planning and execution in light of validated learning.
Transcripts
so I'm gonna talk about validated
learning I said if we were wasting
people's time on an industrial scale and
here's why we are busy doing what I call
achieving failure which is when we build
a really excellent business plan and we
successfully execute it to the letter
and then it turns out that it wasn't a
very good plan in the first place that
nobody wants the thing and then you know
we go right off a cliff so I liken it to
your driving your car off a cliff and
you're like but we're getting great gas
mileage right right as you go over the
side and yet if we're building something
that nobody wants
why are we so proud of having done it on
time and on budget when I go startup
board meetings when I work with you know
new product teams who are being asked to
give reports in big companies they're
always reporting on how like we're doing
just what we said we're gonna do
everything's on plan you know or on
budget it's got high quality that where
the test plan is being executed
successfully and yet relatively little
conversation is being had about does
anybody actually want this thing at the
end and you know the reason I'm most the
startups I've worked at have failed is
because we successfully executed a bad
plan
actually really really good at that so
what's the alternative if we can't judge
our progress according to product
milestones in business milestones
because remember forecasting is just not
possible when you face high uncertainty
we want to create a different kind of
milestone we call it validated learning
our whole purpose as a start-up is to
discover if we are on the path to a
sustainable business and if not make a
change and graphically it looks like
this since we're all in the software
business we can speak candidly but it
would be true at other businesses too a
software company is a catalyst that
transforms ideas into code everything
else is a side effect all the meetings
and documentation and pizza and mountain
do that's all interesting side effects
that are necessary to transform ideas
into code and when customers interact
with our products that necessarily
generates a data qualitative and
quantitative that we can choose to
measure if we want and then from that we
can learn which influences our next set
of ideas so very simple three stage
feedback loop but still very powerful
concept because it allows us to
reconcile the seemingly contradictory
advice we're constantly being given as
entrepreneurs so if we spend as I did
one one company I built spent six months
building a product that I thought was
really awesome but the problem was it
was like such an expansive product but
in six months we had to cut some corners
the engineers in the room
no time quality money pick two yeah so
we didn't have any any time or any money
so that's just engineering speak for
this product was terrible and I mean I'm
not kidding it's probably more likely to
crash your computer then it would be to
give you any kind of delightful
experience I'm being totally honest and
when we were about to launch this
product I was super nervous because I
was like how what if people find out and
you know I had this image in my mind
journalist gets this product on launch
day and they read this article is my
last company called in view and so the
headline would always say idiots at IMVU
don't know what quality means you know
there's my picture
you know never hire these guys again
it's a subtitle and we're like okay well
we got to get it out there see what
happens and I kid you not at first I was
completely relieved when no one would
even try the product and so that at
least nobody found out how bad it was
and I was like whoa dodged a bullet
that's and I was like wait a minute I
just spent six months of my life killing
myself to build this product and yet no
nobody wants it and to make a long story
short we weren't having to pivot the
business to a different strategy and all
the code that I had written during those
six months basically got thrown away I
was depressed he just sympathized with
me for a second I was the CTO I per
thank you right
I personally with my bare hands wrote
thousands and thousands of lines of
extremely elegant
well factored well documented well
tested code okay and it all got thrown
away and I done it all agile all lean
which is all supposed to drive out the
waste for my development process right
and yet Here I am committing the biggest
waste of all which is building something
that nobody wants and so I was really
disturbed because I said wait a minute
why did I even have to be here could my
co-founder cup thrown away couldn't I
have been on vacation on a beach
somewhere starting this time what why
did I have to be here and I was like
okay we all know exactly what I did to
make myself feel better you've all done
this at some point in your life when
you're running out of excuses when you
really fail there's always scraping the
bottom of the barrel looking for an
excuse the last one you can reach out
you'd always be like well if I hadn't
done this thing we hadn't ship this
product customers hadn't rejected it we
would not have learned this important
thing right and therefore the learning
justifies the failure and you all know a
manager who's bragging how much they
learned in other companies anyway is
about to get fired because they means
they didn't make a very good plan or
they did make a good plan and didn't
execute it which is like you should be
double fired for that one and yet that's
our fate as entrepreneurs we're
constantly having to learn and so the
thing that really bothered
was learning was my goal these six
months how come I'm only talking about
it now at the end as an excuse my
co-founders and I weren't ever talking
about learning during the six months
right what did we talk about you know
what features do we absolutely have to
have in version one which bugs do we
absolutely have to fix what should be in
the test plan which customers do we want
to target of course what kind of car are
we gonna drive when we're all super
successful like all conversations none
of which contribute anything to our idea
of learning and so I started to work
backwards and say wait a minute this is
a product you know you did the book for
more details that would you did in
cementing interoperability and we
supported a dozen different networks out
of the gate and I asked myself would the
learning have been the same if we
supported only six networks or only
three or only one namely the customers
won't even try the product yeah same
learning was like geez from an
engineering point of view that's already
a 10x reduction amount of code I would
have had to write from 12 networks to
one that's pretty depressing and then I
had this thought I said wait what if we
just created a single webpage with a
screenshot of the product we proposed to
build on a gigantic download button
would we even have had to create page
two or we apologize that there's no
product to download no why because what
did I say before I said they wouldn't
try it but he literally wouldn't click
the download button so it really didn't
matter what was on page two and that was
really disturbing how is it possible
that you know a one-day landing page
experiment could have the same value as
my six months of beautiful code right
what did I say my business card Eric
Ries chief technology officer not chief
one page landing page officer right how
depressing was that and yet I think if
we think about startups as experiments
the way we get really breakthrough
efficiency savings is not by building
faster or measuring faster it's by
working backwards from what are we
trying to learn to what is the least
amount of work we have to do to learn
that thing
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Web 2.0 Expo SF 2010: Eric Ries, "The Lean Startup: Innovation Through Experimentation. ..."
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