Lean startup (young noble) In fact, the method of product development and business (especially startup) is the first by Eric Rise (Eric Rise ) was introduced today in the form of American entrepreneurs. Its philosophy is based on an iterative cycle in which we learn from the idea of making the product, from the product to collecting and measuring data, and from the data obtained. Although the concept of lean startup is formed from the experiences of knowledge-based and technology companies in the United States, these days, any person, team, or organization that seeks to introduce a new product to the market uses its concepts and solutions.
An entrepreneur knows very well, that it is always difficult to start. How frightening it can be to step into an unknown future and follow our heart’s desires. The bigger this “start“, the harder it will be to keep going. In the way of entrepreneurship, we have to start building small and move towards improvement with small steps. The Lean Startup approach introduces entrepreneurs to a light start and change style by introducing concepts such as MVP.
Using the Lean startup approach and attitude, we try to meet customer needs and solve the specific problem of our target market people as soon as possible in the product improvement cycle. We learn when to start pivoting, how to steer startups, and when to persevere.
Many startups start their own business by brainstorming on a particular product, spending months and energy on it to create the perfect product; Without even providing the basic version of the product, try to communicate with their potential customers (Prospective Customer) have. And unfortunately, they only realize their mistake when they encounter the customer’s disinterest in their product.
Lean startup seeks to break such perspectives in the first place by introducing concepts such as MVP (minimum product), A / B testing (or separate tests), the build – measure – learn- cycle, and the use of tools Like the Business Model Canvas, it encourages executives and startup founders to grow and develop products based on customer feedback.
3 key principles in Lean Startup
Note that startups are not small versions of large companies; Plans and plans are not big and weighty, and eventually, successful startups that move quickly from failure to failure, constantly adapting themselves to the facts, reproducing their product, and constantly learning from their customers. They improve their initial idea. Throughout this process, we must try to gather feedback and customer feedback so that we do not end up with products that others do not want.
Lean method (literally means lean!) Has three key principles:
Entrepreneurs and startup founders, instead of spending months trying to plan and research, have to accept the fact that all they have at the beginning are untested hypotheses about their idea and target market. So instead of writing complex business plans, they summarize their assumptions in a framework called the canvas Business Model. This graphic model is actually a diagram that shows how the organization generates value for its customers and itself.
* Familiarity with Lean Startup terms and vocabulary:
• What is MVP?
• Separate tests or A / B Testing:
• 10 General Tips in A / B Testing
• Actionable Metrics
• Construction – Measurement – Learning
2- Lean Startup approach or the specific customer process Customer Development is; And it asks entrepreneurs to get feedback or feedback from potential users, buyers, and partners about all components of their business model, feedback on product features, pricing, distribution channels, and cost-effective strategies to attract customers. In Lean Startup, the greatest emphasis is on lightness and speed: quickly generate an MVP and use it to extract customer feedback. Use customer feedback as valuable input to review hypotheses and repeat this cycle, experimenting with redesigned values. If the small changes you have made do not help improve the growth process, go for more fundamental changes (Pivot ).
The vast majority of startups experience failure over and over again before finding the right approach.
3- Lean Startup is a skill exercise called Agile Development. Agile development as opposed to long-term development programs, which require extensive knowledge of customer problems and product needs are for reproduction ( Iterations ) continuous and gradual product is based on data obtained from the test MVP. In fact, this process and the process of customer building in a close relationship helps startups to improve and build the product needed by customers.
Terms and Vocabulary Lean Startup
Introducing the concept of Lean Startup, we come across terms that are an integral part of this approach and its main elements. Items such as Canvas Business Model, A / B Testing, and MVP.
MVP stands for Minimum Viable Product, which in Persian has different meanings such as “minimum product”, “minimum marketable product” and “minimum valuable product”. MVP is actually a technique for conducting initial product testing on the market at the lowest possible cost and effort. In fact, the goal of the MVP is to help entrepreneurs get started in the learning process as quickly as possible.
Steve Blank sees MVP as selling our business vision to our first customers. Therefore, when presenting it to primary customers, it is assumed that these people can understand the product perspective and provide the feedback needed to develop it.
This basic version of the product can take many forms. From a simple landing page that introduces others to your value proposition to a single-featured app.
As long as the product, primary customers you familiar with your proposed value and make them into action, shape, and it does not matter. MVP’s two important principles: first, to select people as the primary customer who are more accepting of our product and are willing to use it despite the initial shortcomings, and second, the value of MVP is based on the data that We extract from it. Data that we can use to decide whether to continue or turn in another direction.
In short, MVP means testing and measuring the target market response to the product at the lowest cost; And trying to produce a product that others really want
Separate tests or A / B Testing
A / B Testing techniques increase the rate of conversion (Conversion Rate) and can have a significant impact on the process of customer access or Lead Generation, and despite all the advantages of its use is still the size of other internet marketing methods such as SEO ( SEO ) is not common.
But what is A / B Testing?
In this method, we show different versions of a website or application to different users simultaneously, and by examining the behavior of users in a certain period of time, the version that has better effectiveness and performance in meeting our goals, as a version We choose the final. When we talk about effectiveness, the first question that comes to mind is the goals we pursue by adding a section to the website.
How to test A / B? What should we change? What to measure?
Which German we choose to test depends entirely on our goals for the test. Suppose in the process of customer acquisition or lead generation we want to increase the number of people who subscribe to the discount bin list or website newsletter. To do this, we design different forms for registration and, for example, show these forms to different users for a week; At the end of the specified time, we select the form in which more members have registered as the main form.
Call to Action buttons, headlines, product descriptions, and general sales-related designs can be options for A / B testing.
— Buy Web site Traffic (@BuyAdClicks) June 23, 2021
When do A / B Testing should always step down the sales funnel (Sales Funnel ) will be considered. Because sometimes a situation that leads to more lead generation actually reduces sales.
1. Implement a test each time. Testing more than one element at a time can confuse results. For example, if the time of A / B testing landing page (Landing Page ), is testing out two different email campaigns to increase traffic to be Fan page, the results can easily be confusing. In such a case, how can we determine which of the changes has led to an increase in Leads?
2- Check one variable at a time. Just like the case above. To determine the extent of the effect of a particular component, we must keep the other components constant and examine only the results of the change of that component.
3. Also check for larger variables. For example, if you have a special membership form on the website and you want to measure the effectiveness of the form, do not settle for small changes such as the shape of buttons or titles. Run the A / B Test for general tram modes (such as the entire form or even the entire page)
4. Take as many measurements as you can at the bottom of the sales funnel. A / B testing can have a positive effect on increasing the conversion rate in the desired segment. But does it also drive sales growth? Are the effects positive in the lower stages of the sales funnel as well? Sometimes our sales may increase as the number of potential customers decreases.
Suppose our goal is to sell an online training course and to collect sales leads, we have prepared two forms “Get an electronic version of the book.” In one form, we email the electronic version of our book for free, and at the same time in another form, we email the same version to our users for a small price, such as 5,000 Tomans. In this case, we may find that those who bought the book in the second form by paying money, it is easier to buy and participate in training courses, and to sell products to these people, we need less effort in marketing and sales… At the same time, we find that the first form will have less “efficiency” in the overall sales process, even though it gives us more leads. Therefore, when implementing A / B Testing, we must always pay attention to the conversion rate in the lower stages of the sales funnel.
A / B Test implementation tips
5. Try small changes as well. Sometimes small changes can have a significant impact on the Lead Generation process. Changes such as changing the color of the Call to Action button, changing the background image or headlines. The point here is that it is much easier to measure and evaluate the results of such changes than large changes.
6- In A / B Testing, we have the main version which we call the control version. We have to keep this version constant in each test and make version B by making the desired change. After that, we divide the incoming traffic to the website between these two versions and by measuring and examining the users’ behavior, we select the optimal version as the main version.
7. Decide what you want to test. Your variable does not have to be elements on the website. More intangible parameters can be selected for consideration. For example, social network users versus incoming users from Google, different forms of scheduling, communication between an email and the landing page, and so on.
8- Perform the tests at the same time. If you show version A to users for one month and version B the following month, you will not understand the root cause of the changes. Changes made to the landing page caused a conversion rate. Or has public demand for your product and similar products increased this month?
9. Sample groups must be random. Do not selectively show different versions to users. Inbound traffic to a website or app should be distributed completely randomly between the two versions.
10. Decide on the amount of change. Before launching the test, specify how much increase in the desired parameter should occur to implement the necessary changes accordingly.
3- Actionable Metrics
Actionable Metrics are one of the most influential and important concepts in Lean Startup. This concept is often coined alongside another concept called Vanity Metrics. Nonsense metrics are things that somehow determine the current situation but do not give us any specific insight into how to get to this point or future plans.
Applied metrics are indicators on which we can make decisions and plan the next steps. Vanity Metrics, on the other hand, are statistics that look good on paper, but in reality, we can do nothing special with them. These “absurd metrics” make good sense, but they do not accurately reflect key business growth points.
On the other hand, practical metrics provide information and statistics about a particular repetitive action. The action that results and goals are tied to our business, to survive it is necessary, and can take steps to improve it.
This may sound annoying and contradictory to all the advice we hear every day, but the number of visitors, followers, or some app downloads are practically meaningless; Unless we look at them with other indicators.
Before determining which metrics to follow, we must first review the goals of the website. Actionable Metrics are determined by the goals we are currently pursuing through our website.
Note that absurd metrics in one business can be applied to metrics in other businesses. For example, a startup that sells ecotourism tours may consider page views as an absurd measure, but an online ecotourism magazine designed to promote travel accessories can Consider the same data as key indicators. Or, for example, if the purpose of launching a website is only to create a medium to introduce and highlight the presence in the online space, then the number of Page Views per day will be an important criterion.
Actionable Metric is a deep topic, but the most important point is that we should always consider the sales funnel when determining the metrics. Define criteria for different stages of the sales funnel and at
5- Build-measure-learn
Build-measure-learn cycle, the speed as a vital part of the product development process emphasizes. The productivity of a startup is determined by its ability to generate ideas, the speed of building an MVP based on the idea, measuring the effectiveness of the initial product, and the amount of learning based on the experiences gained from these measurements. In other words, in this learning cycle, ideas are turned into products, customer behavior towards the product is examined, and then, based on the collected data, we decide whether to continue on our path or to pivot. This process is repeated many times for a startup. The different stages of this cycle are as follows:
Idea -> Build -> Product -> Measure -> Data -> Learn.
Rapid and repetitive reproduction of this cycle leads the team to discover the path to product/market fit.
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