I am reading “The Lean Startup” by Eric Ries and highly recommend it to anyone who has interest in entrepreneurship and product management. There are many interesting concepts that Eric talks about in this book, but one that really stood out for me is the concept of build-measure-learn. This is relatively simple concept and seems obvious but I felt it is very powerful if applied correctly.
Eric argues that traditional product development methodologies are suited for established companies or products. But startups operate in an environment of high uncertainty where it is not known how customers are going to respond to product and business strategies. Therefore, startups need to adopt build-measure-learn methodology to test their assumptions quickly and constantly fine tune based on feedback.
In my opinion, the key to this concept is identifying the correct hypothesis to test. Strategies are based on many assumptions and it is critical to be cognizant of those assumptions and be ready to change direction. Once the hypotheses are known, you should build what Eric describes as Minimum Viable Product (MVP) to test hypothesis. MVP focuses on just the basic functionality to test hypothesis. No bells and whistles- just the basic product. As a next step, you put MVP in front of your customers and measure based on qualitative and quantitative feedback to determine whether the hypothesis is right or wrong. This process helps in constantly getting feedback from the customers and fine tune assumptions before it is too late to change direction.
I found this concept quite powerful and completely believe that it can prove very useful to many startups. The beauty of this is that it is not applicable to just product development but can be extended to any strategy in business. For example, a startup can pass business models through this filter to figure out what is working best. The key is to develop the “lean mindset” and keep looking for assumptions that needs to be validated.