Hello, and welcome to the bottom line skills podcast I might pass since I'm the CEO of quality tenants. And today. We are continuing our journey into the lean startup. And the topic of today's episode is everything about learning. Learning is so damn essential as you will have seen from the previous episode, the foundation of the lean startup is not guessing.

It's not just about having ideas. It's far more far more about. Execution and the key to this lean, uh, loop, uh, that we talked about in the previous episode, the key to making all these iterations work is learning. So [00:01:00] it's okay. If you don't have all the answers at the start. In fact, that's the essence of working in a lean and agile way that you won't have all the answers, however, you're on a quest to get them.

So the first rule. Of the lean startup is don't assume anything, make sure you test learn and validate and you know what you can actually test from day one. And that's the power of lean startup. You can test things like. Uh, the user problem, uh, the idea you have for the solution or how the experience of providing that solution may in fact work.

And there's a great tool set of tools, actually, a set of canvases that can kind of capture all of these learnings and they can be your North star to keeping on track and avoiding all the pitfalls of building a new product. So I want to tell you a little bit of a story about this idea of challenging all [00:02:00] assumptions.

And I've chosen to kind of famous lean startup case studies. One is with the, uh, shoe, uh, retailer Zappos, and the other is with Dropbox sort of unfair management, uh, service and both of them challenged assumptions. And here's how they did it. So is that part, um, Back in the day, the idea of people actually buying their shoes online and not going into stores was kind of a crazy idea.

And so Zappos could have made this huge mistake. They could have gone and bought a ton of shoes, put a ton of them in a warehouse. Can you imagine the expanse of all that warehousing distribution, inventory management, and so forth, they could have, you know, Encountered all of that risk, but they did something very different.

They used what we call a concierge MVP. They [00:03:00] basically tested the idea. They actually went and really just tested this whole assumption, uh, where people actually buy shoes online. So here's what they did. They went out and they built a very simple, rough and ready website and they held absolutely zero inventory.

In fact, one of the founders made a deal with a local wholesale shoe provider that they could photograph all their inventory. And if someone bought it online, they would actually go to. The, uh, the shoe company and, uh, purchase the shoes there and then, uh, shipped them off to the customer of zappos.com.

Now at first sound, this sounds really crazy to do what we call this concierge MVP, where you're basically doing everything by hand. And obviously one of the issues would be you'd be making very little money, but that wasn't really the point, the point of this test of this little experiment. Was how can we in a low risk [00:04:00] way test to the assumption that people want to build shoes, buy shoes online.

And so to certain point, they got so much interest. So many people buying that they knew, hang on a second. Were onto something, but they only invested in all that subsequent infrastructure and people, once they challenged the assumption, once they tested, once they learned, once they validated and they used this idea of a concierge MVP, and this is essential, lean startup thinking.

But let's take it even a level further with Dropbox. They didn't even concierge their experience or their service. They made a demo video, which they published in September 15, 2008. And it was. A fake product. This product could not be downloaded and used. It was a mood video. It was a concept video. The prototype was inside of the video.

Nobody could use it and they published it [00:05:00] and hundreds and hundreds of people saw it. And literally overnight, they got tens of thousands of people signing up. On their wait-list for the product, because just seeing the video was so exciting, it solves such a problem for them that they've got fires all over the place and they need some way to synchronize all these different files.

Dropbox knew instantly that they had to hit, they hadn't deployed the software, they hadn't incurred all that cost. They made a demo and you know, this is what we call the wizard of Oz, MVP, and other great lean startup concept. And this is all about just creating the illusion of the actual. Product that you intend to build, but you build a quick video just to check.

Hey, do people really want this? And this goes at the heart of lean startup and this idea of that we should always be learning. So what I want to do for you now is give you a little [00:06:00] framework of three sets of tests that you can be using all the time. And I hope that this helps you kind of frame the sort of tests and so that whatever stage you're at you can apply some of these tests so that you don't make the assumptions that lead to.

Bad products. All right. So what are these types of tests? First one you can do is you can kind of test, do users really have the problem you can test. What kind of overall need or jumps to be done does this fulfill, and you can start to play around with what if this solution existed? Would you be interested?

And all of these can be tested in surveys and interviews, or what's formally called a quantum qual research. And so the great news here is you can dip your toe in and actually see if there is a, um, some, some leading indicators. If you will, as to whether this problem really exists now. Let's assume you did those.

The next thing you could go and do is [00:07:00] start to actually test your product idea. And we talked about some of the concierge, a wizard of Oz, MVPs, some other things that are really classic, lean startup thinking you could create a landing page. For the product, which isn't, which isn't available yet, but you can test demand through the landing page.

Another one that can be really valuable is you could set up a go fund, me or a Kickstarter page for the product where you actually ask people to donate and look, frankly, if people see this proposition and aren't prepared to donate, well, then maybe you need a different product. So the whole idea here is that without building the actual product itself, the second bucket, uh, gives you the chance of testing your product idea without that time, effort and investment.

And the key thing here is that Eric Reese, the author of lean startup, he's like, you only want to build it once, you know, there's real interest, demand, desire [00:08:00] for it. And so very often. People build products that are not solving a problem that users actually have, or maybe it is solving a problem. That's not very big.

All of these tests that I've just mentioned will help you get a better feeling for, is this a problem worth solving? And it's a really important concept. Is this a problem worth solving? Now, let's assume you did a little bit of a survey in an interview. You tested the product idea. Now you want to shift into a different type of testing, some sort of prototype testing, and there's two things you want to test for here.

The first one is you want to test, uh, can users get the task completed? That's at the core, the essence of your product. And if you're building software, you know, I would really encourage you to use envision or Adobe XD to put together, um, a mock-up a prototype sort of a model or a sketch of the solution that you're envisioning.

And you will actually ask the users to complete the [00:09:00] task by clicking through on this, uh, digital prototype. Very good indicator. If you can see that users can get the job done. Get the task completed. It's a very good indicator that you've actually got a product with building. Now, if you want to really go a step further, you can start to write some code and build what we call a minimum viable product.

And I think obviously you want to ask users to complete a task, but. The thing you're measuring for in this sort of test is a bit more sophisticated. You actually want to look at how satisfied users are and how likely they might be to recommend this experience. It doesn't have to be flashy, not at all, but it's gotta be so good at getting an important job done and helping them complete a task that even without all that Polish.

The experience is so fundamentally valuable that they would recommend it. And you're often going to be doing with some, some early adopters. Now that's the end of the third bucket. So you can, your third bucket is building [00:10:00] prototypes. Uh, your second bucket is bringing, uh, testing the product idea. Uh, maybe some concierge thing.

Um, maybe some wizard of Oz is relevant for your idea. Or you can even go really early stage and just do some interviews and surveys. All of these will be captured, uh, in something that we call a value proposition canvas. When we focus on the problem solution fit like, okay. Customer has a problem. What are we proposing?

Does it actually relieve their pains? Does it create their gains? And, um, this is a really important care of us. I can't tell you how much I use these, uh, these two canvases, the first one being the lien. Um, business cannabis and the second one being the value prop canvas. These are really essential. Now I mentioned the lean business canvas.

This is a zoom out from the value prop canvas. So the value prop canvas is really going to give you problem solution. If you go into the lean business canvas, you'll [00:11:00] see everything from cost structure and revenues. But don't worry about all of these things. What is important to know? This is like the new form of the business plan and each of the areas and the, you know, depending on which version of the canvas you're using, you're going to see a, roughly nine or 10 boxes on the canvas.

Each of those contain things that you can test. And if you're always testing. You're all ways learning and that's how you avoid making assumptions. And you can start with certainty to go about building a product that is really worth building and delighting your customers, making sure you've got the right tech, but also make sure that there's a really good economic model inside of your product.

All right now, you're probably very interested in these canvases where, you know, you can pop up to bottom-up dot IO, where you can get all the information in the world around lean startup, design, [00:12:00] thinking, agile software methodology, you name it. It's all there. So bottom up. Well, I hope you've enjoyed this episode of the bottom-up skills podcast.

That's a wrap.