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. CHAPTER 4 GENUINE EFFICIENCY 117Build-Measure-LearnIn 2011, Eric Ries published The Lean Startup,9 in which herecommends using the scientific method to improve thesuccess of startups.In the introduction he says, Through-out my career, I kept having the experience of working in-credibly hard on products that ultimately failed in the marketplace. He cites as an example the many months of intense effort that wentinto what he thought was a critical feature for IMVU, a company hecofounded.After the feature was launched, however, no one used it.Investigation showed that one of the basic assumptions behind thefeature was dead wrong.So the months of work spent on the featureturned out to be completely wasted effort.10Through experiences like this, Ries came to realize that startup com-panies are founded on a set of assumptions, and it s almost certain thatsome of those assumptions are wrong.So it is a good idea to validatethe assumptions earlier rather than later.How do you do that? Youdon t wait until the product is completely finished before launchingit; you launch a minimum viable product (MVP) as soon as possibleand use it to test and refine assumptions.Ries notes that the only realprogress made during IMVU s early months was learning about whatcreated value for customers.Everything else they spent time on endedup being waste.11The Lean Startup approach is based on the idea that the job ofa startup is to learn how to build a sustainable business.The bestway to do this is to validate business assumptions by running experi-ments that reveal the cause-and-effect relationship between productcapabilities and the business results they generate.Product develop-ment becomes a series of Build-Measure-Learn cycles: Build a fea-ture, measure whether it delivers the expected outcomes, learn fromthe results.To illustrate this idea, Ries tells the story of Grockit, a company thathad launched an acclaimed Web site to help people study togetherfor university admission tests.12 The development team used a highly9.Eric Ries, The Lean Startup: How Today s Entrepreneurs Use Continuous Innova-tion to Create Radically Successful Businesses (Crown Business, 2011).10.Unfortunately this is not an isolated incident; it is a very common occurrence.11.Ries, The Lean Startup.12.Ibid., pp.129 42. 118 THE LEAN MINDSETdisciplined agile process and reliably delivered the features thatfounder Farbood Nivi (Farb) believed were most important.But one day Ries asked development team members a simple ques-tion: How do you know that the prioritization decisions Farb is mak-ing actually make sense? They answered: That is not our department.Farb makes the decisions; we execute them. 13 Think about that an-swer.It tells you that the Grockit development team was doing whatit was asked to do, but its members did not accept responsibility forthe success of the product they were developing.They left all productdecisions to Farb, who had neither the time nor the tools to be surethe decisions he made were the right decisions.This is a good wayfor technical people to end up wasting a lot of their time working onthings that don t matter in the end.Once he understood the power of the Build-Measure-Learn cycle,Farb asked the development team to become engaged in the entire cy-cle and share responsibility for the product s success.The team starteddeploying features using A/B tests; a feature was not considered com-plete until there was accurate data showing the impact of that specificfeature on key business metrics.This led everyone to a deeper under-standing of how each feature affected overall business performanceand dramatically improved the ability of both the product team andthe founder to move the business forward.Anna: This Lean Startup stuff seems to be mostly for smallcompanies.M&T: On the contrary, large companies are finding thatLean Startup ideas work well for new products being devel-oped in their companies.Todd Park, whose story we told in Chapter 1,encouraged government teams to use Lean Startup techniques asthey made their data available to the public.Intuit, a $4 billioncompany highlighted in Chapter 5, encourages product teams tocome up with new product ideas and use Lean Startup techniques totest those ideas
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