How can you use lean startup principles to manage risk?

In a simpler way, The problem is "low turn out in sales" The hypothesis is "I have confidence that if the marketing budget of the company increase by 30% and online ads is target at audience above 30 years of age and focusing on the city centers across the top 3 states in the country, the company should be able to record 65% revenue increase surpassing the last two quarters" Something like this has identified the problem and as well stated the hypothesis.

In my experience, leveraging the 'Build-Measure-Learn' cycle from Lean Startup is crucial for managing risks effectively. This approach enables quick testing and adaptation of strategies, ensuring agile responses to emerging risks and uncertainties.

A clearly defined problem helps to draw inferences that in turn inform the forming of a hypothesis. Problem definition is a crucial first step. You can't ignore or bypass it. This ties directly to your hypothesis, which is you simply making educated guesses of how your intended solution will solve the problem before the data collection.

🛠️Embarking on a lean startup journey is like sculpting with uncertainty. 🔄Carve your problem statement with the precision of a master artisan, chiseling away ambiguity. 🔄Shape your hypothesis as a malleable clay, molding it with insights gathered from the raw material of customer feedback. 🔄Be the alchemist, refining your idea through iterative cycles, like a forge tempering steel. 🔄Embrace the lean canvas as your canvas, sketching hypotheses with agile strokes. 🔄The risk, akin to uncharted terrain, requires a compass of constant learning. 🎨In this sculptor's workshop, each adjustment hones your creation, mitigating the uncertainty that often shadows innovation.

I work in drug development and "lean startup" principles don't apply much in that world. In general, I use whatever is best to address the problem at hand not because something sounds cool or everyone is using it. Risk depends on your business. If you look at Wall Street, they clearly don't understand what risk applies to what business. Someone sneezes and everything goes up and down. Got nothing to do with anything. Leave the word constructs and do some thinking, helps more in my experience.

Building your MVP is next. The MVP is the simplest and easiest-to-develop version of your solution (prototype) that allows you to either confirm or disprove your hypothesis. The MVP is not supposed to be complicated. It is a simple version and doesn't cost a lot to develop. For example, one general example would be a landing page or a mockup. Once built, you want to deploy rapidly too

The industry's focus on the MVP, a basic yet functional prototype, has been long-standing. In a saturated market, it's crucial to reconsider. Enter the Minimum Lovable Product (MLP): not merely "useful," but genuinely cherished by users. Crafting an MLP involves infusing passion from the start. Contrary to common perception, developing an MVP isn't necessarily significantly cheaper than an MLP.

🔧Crafting a minimum viable product in the realm of industrial design is akin to forging a prototype. 🛠️Assemble the MVP like a seasoned blacksmith, welding together only the essential components. 🛠️Embrace simplicity, wielding the hammer of focused features to avoid unnecessary complexities. 🛠️Sharpen the edges of functionality, using the smithy's tools of iterative refinement. 🛠️Test the prototype in the crucible of user feedback, letting it undergo the fires of scrutiny. 🛠️Like a blacksmith perfecting a blade, each iteration hones the MVP, minimizing risk and ensuring the final product emerges resilient, sharp and precisely tailored to the user's needs.

Your goal with an MVP is to leverage user research to identify what maximizes user satisfaction and perceived value with the minimum amount of effort from your side. It’s important to focus on minimizing your efforts, and not on reasoning away additional efforts that have no proven value. Also keep in mind that an MVP’s target market is made up of innovators & early adopters. They are not your typical customer and put more of an emphasis on features and functionality rather than design and aesthetics, and prefer technical data over the polished messaging. Once you validate your idea, focus your user research on validating whether your efforts are well directed towards creating a finished product that speaks to your entire target audience.

Another way of creating a lean startup is to look for early validation of the startup solution. This can be done through a simple landing page where people interested in the product can subscribe to the email list to know more. Other creative ways are possible. Once the validation is passed, there is room to build a prototype MVP. Although speed and cost are important, a crappy product won't always cut it even for early adopters. Better to use the scrum method to build the product, which is very fast, cost efficient and flexible, without foregoing on the quality aspect.

🛩️In the realm of lean startup principles, measuring results and feedback is akin to calibrating a finely tuned instrument. 🔧Use the gauges of data analytics and metrics, ensuring a precise reading on the performance scale. Employ the micrometer of customer feedback, capturing nuanced insights with meticulous attention. Create a dashboard, a cockpit of sorts, where key performance indicators serve as navigational guides through uncharted entrepreneurial skies. Adjust the dials with the agility of a pilot, steering towards success while avoiding turbulence. 📊Like an industrial designer refining a blueprint, iterate based on measured metrics, reducing uncertainties and steering your startup flight towards a smoother, calculated trajectory.

Without the data-driven approach of measuring impact and collecting first-party feedback, hypotheses remain hypotheses and any conclusions run a risk of being nothing more than pats on the back in echo chambers. The lean approach of starting small, deploying fast, and asking the right questions to determine whether the solution is successful mitigates risks on several layers compared with the classic approach of disregarding facts that could contradict the hypothesis. The biggest challenge is that it requires a more evolved character while natural tendencies dictate to double down on sunk investment in an attempt to avoid admitting ever being wrong.

Measuring results in the lean startup journey is like checking the oven to see if your cake rose or fell – it's all about figuring out if your idea is cooking up success or needs some adjustments. Defining key metrics is a bit like deciding what makes your cake perfect – is it the fluffiness, the sweetness, or both? And conducting experiments is akin to tweaking the recipe to find that sweet spot. Whether you're using analytics like taste testers or surveys like feedback forms, it's about gathering insights to refine your creation. It's the stage where you become both a chef and a scientist, carefully observing and adjusting until you get that perfect recipe for success.

To improve the measurement of results and feedback in the lean startup methodology, it's essential to emphasize the concept of a "feedback loop" and "data-driven decision-making." The feedback loop, comprising build, measure, and learn activities, is a recurrent process that allows startups to continuously gather insights, measure outcomes, and make informed decisions based on the results. Furthermore, the emphasis should be on data-driven decision-making, where startups collect and analyze data to identify trends, patterns, and key metrics that help evaluate their hypotheses' and solutions' success or failure.

To improve the results and feedback it's important to emphasize good decision-making based on evidence and results. Lots of people will use surveys to get a generic understanding which is good for “base level”. If you want to gain a more in-depth understanding you could consider doing interviews and that will help also. But it’s important to think about how you use this information you gain. Understanding key metrics that help evaluate a potential problem’s solution(s) will help determine the success or failure and can contribute to the overall development of your startup / ongoing company prospects.

🎨Embracing lean startup principles is like sculpting a dynamic masterpiece. 🔍Treat findings as the malleable clay of innovation, allowing each insight to shape your creation. Be the artisan of iteration, refining the design with the chisel of learned experience. Sculpt the prototype with the flexibility of a design virtuoso, adapting to the contours revealed by your discoveries. Let each iteration be a brushstroke, adding layers of refinement to your entrepreneurial canvas. Like a master sculptor attuned to the subtle shifts, continuously learn from findings, evolving your creation. 🔄In this iterative atelier, the risk metamorphoses into a polished masterpiece of adaptive entrepreneurship.

I love this point. To be honest most people think scaling is about having a wide variety of options in your product / service range. But in reality it’s just doubling down on what works. That’s why all e-commerce platforms have the “most running products” section at the very beginning of the home page. It’s just that simple. You sell what works and you keep making that easier to access to more people via a more comprehensive distribution strategy cause the product is already working.

"Sin miedo al éxito". Normalmente podemos encontrarnos en la incertidumbre de, si al experimentar, el resultado pueda llegar a ser el no deseado. Esa posibilidad es exactamente igual al del éxito; pero si prestamos un momento de analisis y medición, siempre experimentar y generar aprendizaje validado es una practica que consigue los resultados esperados... a la larga o a la corta. Distinto si nos quedamos en la incertidumbre y nos paralizamos en el miedo. Experimentar para generar aprendizaje validado es la mejor formula de evolucionar de manera Lean.

At the final step, the emphasis should be on data-driven decision-making, where startups collect and analyze data to identify trends, patterns, and key metrics that help evaluate their hypotheses' and solutions' success or failure. This approach ensures that the business is constantly learning and adapting, reducing the risk of investing in unvalidated ideas. By incorporating these perspectives, startups can improve their ability to learn from their findings and iterate, ensuring that they make data-driven decisions and continuously learn from customer interactions, ultimately increasing their chances of creating successful and sustainable businesses.

Going back to the section on MVP, if you’re having trouble gaining alignment on a definition of what your MVP is, jump forward to this step and make it clear to everyone that the goal is to come up with the simplest possible MVP, so that you can learn from it and add the right features. Often the reason people make so much noise about adding features to the MVP is because they believe that if the features are not added in the first test, they will not be added at all. Being clear about the end-to-end process and being able to point to this step and show how their desired features will be tested in future variations can calm people down and gain their buy-in for the initial MVP launch.

🏭In a recent kitchen cabinet venture, embracing Lean Startup principles was pivotal in risk management. Adopting a Build-Measure-Learn approach, we developed small-scale prototypes to test design concepts swiftly, minimizing upfront investment. Continuous customer feedback loops allowed rapid adjustments, ensuring the final product precisely met market demands. The iterative process, driven by validated learning, reduced the likelihood of large-scale failures. Moreover, employing the MVP concept enabled us to launch quickly, gauging market acceptance before extensive investment.

Remember that a lean startup methodology can be used after you launch your product. It almost never happens that after you launch the product, the work is done. You constantly need to iterate and observe the market to address the new problems and opportunities and lean startup methodology is still a valid method to use in the later stage of the product iterations.

Seeking certainty can actually increase risk because it often leads to a rigid and inflexible approach. When you seek certainty, you may spend a significant amount of time and resources trying to gather all the information and eliminate all uncertainties before taking action. However, this can delay progress and hinder your ability to adapt to changing market conditions or customer needs.. Embracing uncertainty allows for continuous experimentation, adaptability, and agility. It fosters innovation and creativity within the organization. By taking small, iterative steps and learning from failures, you can make informed decisions based on real-world feedback and increase your chances of success.

Don’t give up until it’s time, and don’t wait too long between tests. Large organizations can be too bureaucratic, so that after a test or two, instead of iterating and trying again, the project is sidelined until it’s forgotten. That’s why every project needs an executive champion that can drive progress, but who is outside of the project’s operations. Startups need to do the same thing, but instead of facing bureaucracy, it comes down to the passion, energy (and money) of the entrepreneur or small team.

It’s important to emphasize the role of continuous learning and adaptability. Markets are dynamic, and consumer preferences can change rapidly. The lean startup approach in marketing demands an open-minded attitude towards these changes and a willingness to pivot strategies accordingly based on the information and feedback you gather from your audience.