Welcome to the sixth article of our Entrepreneurial Wednesdays series. In this series, I share my thoughts on lean entrepreneurship as I take my first steps in my journey. I will be sharing my lessons learned with you.
By now you undoubtedly understand that “The Lean Startup” does not use traditional ways of management, development or leadership. This time, it will be no different and I will try to give you tons of useful info!
Last time, among different elements of business, I have also mentioned validation. Which is needed if you want to build a continuous business. In this chapter, I will introduce the feedback loop, which plays an important role in the creation of a product. The feedback loop consists of several parts/areas that your product has to undertake. What is especially important is that you want to shorten the amount of time this whole process takes. You really want to move quickly but on the other hand, you want to do quality work. In order to get the feedback you desperately need, you have to act fast. The less time it takes you to go through the whole feedback loop the more energy and time you save for yourself. Your goal should be to absorb and get the feedback in shortest possible time. Plus this is also the question of finance. You don’t have to invest so much money into research. Trust me, minimizing the time is positive in every way. As soon as you have enough info from your customer, you can build your MVP (discussed in the previous part).
Focus on important things
The feedback loop is sometimes referred to as create-validate-learn process. These three words give you the clearest idea of what the feedback loop really is. You simply set what kind of feedback you want and what should it focus on. Then you use innovation accounting which scales only things you need scaled and gives you very clear info where you waste time, energy and to what you should pay attention more. Thanks to the innovation accounting you see if you validated successfully what your customers need and would like to buy. After this process, you have enough information to go and build the product they desire! But do not forget! First, you have to make experiments and scale the opinions of your customers. You do this by giving them the chance to try your MVP before creating a more complex version of the product. This is the first challenge of each and every businessman.
The feedback loop and hypothesis of growth and value are something that must be done before jumping straight into the market. Why? The book gives a great example.
Years ago company X controlled market Y because their product had feature Z. Our company has new technology X2 which will control Y2 because we have feature Z.
This is a statement that does not have an argument backing it up. There is no validation and probably the new company hasn’t thought about checking the hypothesis before releasing the product. This is what company says to make it look less risky but obviously based on pure assumptions. This way the company could release a product which would not create value but destroy it! Trust me, there are still people who consider themselves successful according to the value they create and not money.
Go and see for yourself
Last but not least. Have you ever heard of genchi genbutsu? I have mentioned that the original form of the lean startup was invented in Toyota. Genchi genbutsu is a key element in it. The whole idea of the lean startup is based on it. It means ”go and see”. But what it really means? It means your decisions should be made based on your own experience with the problem you are dealing with. Which, put in different words mean, no-one’s going to build the company of your dreams for you, it is there for the taking but only, if you want to see for yourself. Genchi Genbutsu is a very interesting element and approach, I highly recommend you to dig deeper into it!