Daxko will play host this coming Monday, December 9th to Birmingham’s startup scene during the livestream of The Lean Startup Conference. We are the official streaming partner for Birmingham and invite anyone interested in Lean Startup to come out and view the conference at our offices. Registration is required.
I recently had a chance to talk more about Lean Startup with Austin Merritt, Daxko’s Director of Market Strategy. Austin is currently involved with Well, a new software offering for employee wellness and engagement.
- Austin, I hear that Lean Startup methodology really came out of some failed startup attempts by Eric Ries (author of The Lean Startup). How did you first come into contact with The Lean Startup?
- I actually first came across the methodology when a coworker at Daxko introduced me to an eBook by Steve Blank called The Four Steps to the Epiphany. We were talking about some past projects at Daxko that had gone really well when they were early and we were experimenting and prototyping rapidly. From there, I stumbled onto Ash Maurya’s blog, “Practice Trumps Theory” and his book Running Lean. The concepts really resonated with me because it reminded me of how we did things in the early days at Daxko.
- At its core, Lean Startup purports to eliminate wasteful practices and increase productivity so that startups can move from idea, to development to finished product without elaborate planning, or massive amounts of capital. Is this pretty on mark? Do you have anything to add?
- Essentially yes. The core idea is that an initial idea is nothing but a bunch of guesses, or hypotheses about the market, their problems, what the solution should be, etc. The quicker and more systematically we can go about proving or disproving our assumptions, the better the likelihood that we’ll deliver a product that really addresses a need and that there is a market who will be ready for that product. The other approach is to spend tons of money building a product and marketing it before you actually validate any of the assumptions…sometimes you get lucky but sometimes you fail massively. With Lean Startup, we may learn that our idea wasn’t valid, but we learn it much quicker so failure isn’t so bad.
- Daxko doesn’t exactly fit the profile of a startup, so how do we utilize the Lean Startup methods here at Daxko?
- We utilize Lean Startup concepts at Daxko to validate ideas for new products and new markets. We put a heavy emphases on validating business models, so we’re using tools like the business model canvas, we’re building minimum viable products (MVPs), and working hard to get products into the hands of real users as quickly as possible to validate assumptions early. With Well for example, we had caught onto the fact that engagement in corporate wellness programs was a challenge and we had some ideas on how we could fix that. We built out our initial hypotheses around what we thought the business would need to look like. For example, what kind of businesses we’d target, what their problems are, what we should build, how much we’d charge, etc. We then spent about a month talking with people in the market and refining our ideas based on the new things we were learning. We then built our MVP and went from idea to product with three signed customers in a little under three months. We’re still experimenting and testing around how we reach prospects, how we sell to them, what the future of the product should be, etc.
- Do you see any correlation to our customer base? How could any or all of the principles in Ries’s book help our YMCA, Well or other clients?
- I think at its core, the concepts could easily be applied to anyone who is delivering a new product or service to a customer. When YMCAs are trying to plan a new program, they no doubt have to make assumptions about what all to offer in the program, who to target, how much to charge, what times to offer, etc. The quicker and more efficiently they can go about validating or invalidating those assumptions, the better off they’ll be.