5 Big Takeaways from Lean Startup Machine Toronto

This past weekend I attended Lean Startup Machine in Toronto. I’ve been using this method for a couple of months where I work and this was a great opportunity to get more experience.   I didn’t really know what I was in for but after reading (most of) Eric Ries Lean Startup book, Running Lean and some other online resources I knew I wanted more of whatever this was.

Thursday night after introductions, speeches by the mentors and some exercise to help people to get to know each other, it was pitch time.  I wasn’t really planning on pitching anything, but about half-way through pitches I decided to anyway.  I’m in no way shape or form a salesguy so I’m sure my pitch was pretty lame but mine made the top 15 based on votes from the crowd.  The idea was came from when I was a consultant, I experienced companies that sucked.  They had one other thing in common.  Good people worked there.  My idea was to help figure out how to get exceptional people into companies that didn’t suck using the theory that myself and Don Gray are pitching for Agile 2012.

After some networking, 3 other people joined.  Nikolai Bratkovski, Oleg Melnikov and Lily Samerkhanova.  Nikolai and Oleg co-founded HealthAware.ca and Lily is studying design and architecture.

Here’s the quick version of what Lean Startup is.  Start with a problem hypothesis and figure out a solution hypothesis.  After that, come up with your set of assumptions and identify your riskiest ones.  After that, “get out of the building” and go talk to who you think your customers are.  As you get information you’ll either validate or invalidate your assumptions and you can decide what to do, stay the course or pivot. The key is to validate your customer by getting them to give up something of value.   That can be money or something else of value.

After Thursday night we had already decided to pivot, we figured the original idea was too hard of a problem to solve because it involved helping people overcome fear and software can’t really do that!  I wanted to go ahead with trying out my theory of using MBTI and culture models to match employers/teams with people but it sounded like building a time machine.  That’s something everybody wants but knows isn’t possible.  You’re looking to find a balance between feasibility, desirability and viability.

As we interviewed and showed paper prototypes to 20 or so possible customers the idea evolved from finding better jobs for good people to allowing companies to quickly find the best possible candidates quickly and efficiently by some organizing and filtering of applicant information.

On Saturday we got our first paying customers, based on paper prototypes, and an explanation of what our differentiator was.  Saturday night at about 9:45pm Trevor Owens came up to us because he had the problem we were trying to solve.  He offered us $50 to go through 60 resumes and find the 10 best candidates for an Event Coordinator.  I wanted to go home, we’d been there for 11 hours already but the sweat shop started rolling and by midnight we ploughed through 60 resumes and had our top 10.   He called the candidates the next day and If he hires one of them, he owes us another $150!

On sunday we fine-tuned our presentation and findings and all the teams presented.  I was completely shocked that we won!  The winning team is the team that executed the method, demonstrated learning and generated evidence to support how they went through the process.  Getting $950 helped too.

Of the many learnings I took away, these 3 stood out the most:

  1. Let go of your fear: Max Cameron’s workshop was awesome.  At LSM Boston he mentioned he felt that same fear of going up to strangers and asking them for money for his idea.  The rush comes from that first customer that is willing to give you something of value.  Trust is so important and you need to know how to earn that trust quickly by using the right language.  I had a customer hooked really early and chickened out asking for money.  I didn’t make that mistake again.  Max’s story was inspiring, from the language he used to how passionately he spoke about building trust and listening to customers, understanding their pain and finding something to stop that pain.  Worst case, the customer says no and you move on.  Well, one team won the ‘almost-got-beatup’ award so maybe ‘no’ isn’t the worst thing that could happen.
  2. Let go of your assumptions: They told us this would happen and sure enough I still fell in the trap.  Your ideas and assumptions will be wrong.  Deal with it.  The first couple of times when mine were wrong, I was mad.  I couldn’t let it go.  How could me, the smartest person ever, be wrong?  Had to be a mistake.  One of the mentors said many people with the next million dollar idea come in excited and leave with a crushed ego.   Make your assumptions, design tests for them, pivot and if you can’t validate them, move on and let it go.  I learned that by Friday night and it was a hard lesson to learn.  Your assumptions are worth ZERO until you talk to your customer.
  3. Do Whatever It Takes to Deliver Your Service:  Eric Ries joined by Skype to answer some questions.  When people asked for advice he would ask “how many customers do you have?”  The answers were all sorta like “uh, well, we have 9 people that love it, but we don’t have any software to show or….”  Eric replied with “that’s entrepreneur speak for ZERO”  If your service crashes you have demand and that’s a good problem to have.  One tweet isn’t a conservative way to get feedback, it’s useless.  Write a bot and saturate twitter.  If you service crashes, you have demand.   One of the teams, Printify, had an idea to provide printing services in the cloud.  Upload your doc, they’ll print it and you pick it up on the way to where you’re going.  Eric’s advice was “start printing!” Tell students and anybody on the street you’ll print their document and bring it to them.  That’s the measure of whether or not the service is valuable.  We stayed up until midnight churning through resumes, finding social network information for 60 people all in the name of a paying customer.  That’s validation and that’s what’s going to work.
  4. MVP = Experiment: This was a biggie for me.  I always figured MVP (minimum viable product) was an actual product with a minimal set of features that are valuable.  That’s how I approached using Lean Startup where I work now.  An MVP is nothing more than an experiment.  It can be a landing page, poster on the street with a phone number, paper mockup, a survey or a hacked together service.  Make sure it’s an experiment that is testing one of your assumptions.
  5. Beware of Confirmation Bias: During Max Cameron’s workshop, he talked about the danger of confirmation bias.  Basically it’s the phenomena that happens when you have what you think validated.  Remember, because you read something on the internet, doesn’t mean it’s true.  Stay honest with yourself.  I’ve been guilty of this many times.  ”See!!! I’m right!!!”  It’s not helpful.

This experience was life changing.  It changed my whole perspective about how I approach problems and ideas.   I used to get annoyed with all the hoopla and tongue-in-cheek “you’re wrong!” snarkyness that comes out of the lean startup community but once you really experience that feeling of validation and invalidation with face-to-face (or phone) conversations with your customers, you will get it.  I get it now.  I “knew it” before, but now I get it.  Really.

Other Notes and Highlights

Alyssa Richard showed how they collected metrics to find out what messaging worked best for RateHub, where people were coming from and what keywords drove the most leads.  She also talked about calling hundreds of brokers in the early days to get off the ground.

Carlo Perez from Uknowa went into a ton of detail about how they organized their site, language tests for landing pages and how it was frightening to call contractors out of the blue to offer them business.  He talked about how he and his team used 30 minutes of their lunch hour at their day jobs to call people.

I want to thank all the sponsors, mentors and attendees, the energy and passion in the room was simply staggering.   Now if you’ll excuse me, I need to get out of the building.