February 21, 2018
Running Lean, Iterative Business Models, & Innovation within Corporations – with Ash Maurya
On this episode of The Innovation Engine, we look at how you and your teams can start Running Lean with the man who wrote the book of the same title. Among the topics we discuss are why practice trumps theory, why your product is not really your product, how long it should take to figure out whether you have product-market fit, and why constraints can actually be valuable for anyone looking to innovate successfully.
Our guest, Ash Maurya, is the Founder and CEO of LeanStack, a company that focuses on teaching practices that lead to continuous innovation through workshops, books, a web curriculum, and more. He's the author of Running Lean: Iterate from Plan A to a Plan that Works, an "iterative book" that breaks down the process of building a successful company from the ground up, and also looks at how those same lessons can be applied by product professionals at more established companies. Ash is also the author of Scaling Lean: Mastering the Key Metrics for Startup Growth.
Listen to the Episode
Interested in hearing more? Tune in to the full episode below:
Practice Trumps Theory
- “You can't really know something until you've experienced it firsthand, until you've tested it, because a lot of the devil lies in the details.”
- You can spend a lifetime collecting theory, or you can start applying some of it.
- The first step on Ash’s Innovator Roadmap is documenting your ideas on a Lean Canvas, which is essentially a one-page business plan.
- The Lean Canvas helps entrepreneurs get concise about their business ideas – something they will have to do with potential customers and investors in the future, anyway – and think about their business model more clearly.
Your product is not the product – your business model is the product.
- We are already very disciplined, systematic, and methodical about building products and solutions – and we can apply the same principles to building the business model.
- The 9 blocks on The Lean Canvas are the building blocks of a business model.
- You can systematically deconstruct an idea into those component pieces, and then build them up like you would a product.
Uncertainty vs. Risk
- Uncertainty is really just a state of not knowing – it's not having evidence for something.
- A risk adds some weight, a real consequence, to what happens if you are wrong.
- “If you are wrong about your customers early on, that is probably the biggest risk because if your customers are wrong, the problems that you might be tackling, the solution you might be building, and the channels you might be using are also going to be wrong.”
Finding Product-Market Fit
- “Product-market fit is essentially getting a small-scale version of your business model working,” and the business model is nothing more than how you create, deliver, and capture value.
- It may not be optimized yet, it may not be fully scalable yet, but just the act of being able to give a product to someone, them using it, getting value out of it, and then paying you is what you want to get to in product-market fit.
- We can measure this using two metrics: activation (the first time someone uses a product) and retention (if the customer continues using a product), which tend to be leading indicators for revenue and satisfaction.
Applying Lean Concepts in Large Organizations
- Many of the concepts in Running Lean are universal, but the tactics can vary in large organizations and corporations.
- Often, these concepts are first adopted by innovation teams within larger organizations. They will mimic a startup within the organization, draft a Lean Canvas, and then go through many of the same problem-solution fit experiments that an early startup goes through.
- If they are successful, that team may come back to the stakeholders, get additional resources, and build a minimally viable product.
- Learn more at LeanStack.com
- Connect with Ash: LinkedIn | Twitter
- Read Ash's book on the Lean Canvas: Running Lean: Iterate from Plan A to a Plan that Works
- Read Ash's first book on how to grow your startup: Scaling Lean: Mastering the Key Metrics for Startup Growth