Lean Startup Principles
Minimum viable product (MVP)
A minimum viable product is the first version of a new product. ‘Minimal’ in that it uses the least amount of resource and effort that still allows your company to collect the maximum amount of validated learning about early customers. The MVP’s goal is to test the market and speed up the learning process. This can absolutely apply to small businesses, allowing them to launch new ventures with minimal budgets.
Continuous deployment (applicable for website development)
Continuous deployment is where all the code written for a website/software/application is implemented immediately rather than being queued to be deployed in a batch every few days / weeks / months along with other bits of changes. It means that small changes can be deployed many times every day, and the results measured immediately.
This is something I do for a webstore, as it allows us to split test ideas quickly, and see if the new code changes cause any improvement.
I briefly touched on split testing above, but in short…
Split testing is an experiment where two or more versions of the product/service are shown to different customers at the same time. This allows business to compare the two versions against each other and see which works better, simple!
So, for example, if you have a landing page on your website and you want to try and improve conversions, you can implement a split test by having two landing pages published with the email sign-up button located in different places on the page.
Actionable metrics should lead to informed business decisions and subsequent action. This is a good thing.
To best explain actionable metrics, let’s look at its contrast, ‘vanity metrics’. Vanity Metrics are measurements that give the best picture possible but do not accurately reflect the key drivers of a business.
Vanity metrics for one company may be actionable metrics for another. For example, a local gardening business might view the number of website page-views per person as a vanity metric because their revenue is not based on number of page views. Their page-views may grow month by month, but as their revenue isn’t directly related to page-views, therefore it’s considered a vanity metric (it looks good but doesn’t mean much).
However in contrast, an online magazine with advertising as a revenue stream could very well use web page views as a key metric, because the more pages views they get, the more revenue can be collected from advertisers.
Starting a business can be difficult. Sometimes you may realise that the market you originally wanted to target isn’t really there. This is the point where you may want to pivot. Make some changes to your strategy.
Pivoting involves coming up with new ideas and designing tests to evaluate these ideas in the market as early as possible.
This is the part I love about lean startup principles. Innovation accounting focuses on how entrepreneurs can:
- Empower the team around them
- Maximise the business results by tracking progress
- Plan SMART (Smart, Measurable, Achievable, Realistic, Timely) milestones/goals
I particularly like the prioritising. For myself, every day when I wake up, I think, ‘What is the most important task I can do today that will push forward my business (or life)’. Then I’ll completely focus on achieving that task before going onto anything else like answering my emails, getting back to calls, etc.
Build-Measure-Learn is the overall core part of being a lean startup.
Idea > Build > Code > Measure > Analyse Data > Learn
The process above continues on a loop. It’s all about turning an idea into a product, measuring/collecting data on the customers’ reaction, and then deciding if the idea is worth persevering with, or pivoting.
Struggling with your website for your small business? Try this blog post – 5 Failures That Cause Small Businesses To Suffer From Bad Websites