A user focused approach...
Lean Startup
Indifferent to the operator and dispassionate of the idea, Lean’s strength is fine-tuning and rapidly learning.
What is Lean Startup?
The lean startup is a methodology is about testing, measuring, and iterating. Sometimes people refer to it as hypothesis-driven or evidenced based entrepreneurship. As your venture matures to a point where you can develop a Minimum Viable Product (MVP), lean is a strategy where you can begin a process of rapid, iterative learning.
A founder will test a series of MVPs, iterating their product based on feedback until they achieve product-market fit. The lean startup method is helpful because it mitigates the biggest risk that entrepreneurs face: "building a product that no one wants".
Customer Discovery
One core aspect of Lean Startup is customer discovery. It turns out that talking to your customer is one of the best ways to move your venture forward. There are numerous guides to conducting interviews, approaches, and best practices. We highly recommend you read some of them as there truly is an art form to talking to customers. A key challenge is sometimes you have to look at your customer's behavior rather than how they answer. Take for example asking someone how often they workout? Do you really work out 3 times a week or are you trying to workout 3 times a week.​
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Talking to Humans is an excellent resource about customer discovery that can help you determine who you need to talk to, draft an interview guide, and ensure an effective session from which you can learn valuable information. Talking to Humans is free for students and can be found here. Another resource comes from Harvard Business School and is a quick help guide.
Translate what's Imagined to Hypotheses
Whether a venture idea occurred in a eureka-like moment or was the product of years of research, whatever you are imagining working well--can fail.
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So take your vision and translate it into a set of testable hypotheses to determine whether it is valid. These assumptions about how the business will function can test many aspects about the potential venture.
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Consider all following hypotheses that the founders of Rent the Runway may have navigated:
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People will want to rent dresses
(a new fashion behavior) True / False
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3-4 rentals will cover the cost of a dress
($1,000 dress rents for $250?) True / False
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People will go through the process of shipping
the dress back to us in time True / False
MVP Testing
The best way to test your venture idea and hypotheses is to "launch early and often." In other words, putting your product on the market in a rough but ready form will allow you test your assumptions.
When putting together an MVP, it is not only acceptable but beneficial to constrain either the product functionality (what the product does) or operational capability (how well the product does its job). This way, founders can lower costs, test what features are must-haves for the target market, and build later versions of their product quicker.
By moving forward rapidly with a series of MVPs, ventures can integrate feedback and pivot on critical assumptions, moving their product towards a fit with the market.
What makes for good testing?
To learn as much from MVP testing as you can, it is best to conduct multiple rounds of testing, tweaking your assumptions and tests each time to reflect past learning. Multiple testing rounds will also increase the validity of your results by eliminating false positive and negative results.
When testing an MVP, it can be useful to use a "fake-it-til-you-make-it" approach: create the most unsophisticated but usable version of your product and apply it to your most urgent testable assumptions. Taking stock of all the hypotheses that underlie your venture idea and prioritizing the most risky assumptions will decrease uncertainty as you move forward with your venture idea.
Be prepared to call it quits
You'll learn a lot from the learn startup method, and eventually you will need to decide how to move forward with your venture. If your MVP validates all of your business hypotheses, then you will persevere and continue building your business. Soon it will be time to scale: aggressively pursue customer acquisition and increase the size of your organization.
It is unlikely that all of your assumptions will be validated. In this scenario, you may pivot, which just means to modify some aspects your business vision and MVP in light of the new information you have gained.
Alternatively, if MVP testing proves that the business vision is unfeasible and the product or service being build is not desirable to the market, then this venture might not be the right idea.
