Alexander Eberts led the team who won our recent workshop in Montreal. He has been an entrepreneur since 1997, ever since graduating from McGill University with a computer science degree. His reason for embracing the Lean Startup methodology is a familiar one. “I’ve never had the kind of breakout success I was imagining for myself, and I think many people are in the same boat. The problem is we're building stuff no one wants. We would have a vision of what people would be into three years from now and then raise a bunch of money based on that big vision. Then we would try to do whatever we can to try to make that vision a reality, even if people just don’t buy into it.”
After Alex’s housekeeper complained about how difficult it could be to collect and track payments, his team at the workshop decided to help housekeepers and similar service people manage payments using a mobile app. In the workshop, teams use the Validation Canvas to explicitly list their core assumptions, the assumptions that if proved false would sink their business. Then they identify the assumption that is the most important and most risky and then test it, like “housekeepers find it difficult to collect payments.” That much of the method, for Alex, was familiar.
But what happened next was, as he says, the “big insight.” The first test “failed quite dramatically and sensationally. We heard a bunch of clear no's right off the bat, the core assumption was completely invalidated.” But using the method, the team doesn’t simply throw out the whole business idea because of one invalid assumption. They record that the test failed, but they keep all the other assumptions that are still valid and then pivot, modifying an assumption about the customer, problem, or solution. “You build on your learning,” says Alex. “I previously thought it was all about learning within a silo and then pivot and throw out all the previous stuff. I realized the methodology helps you iterate on ideas you have.”
When the first test failed, they made a customer service pivot and tested the same business idea with small fashion industry businesses. That failed too. Then they pivoted again and tested the same idea but designed for freelancers. That worked.
The Validation Board helps teams track what worked and what didn’t throughout the course of several tests and pivots. This ability to iterate on business ideas has changed the way Alex approaches new ventures. “I spend 50% of my time consulting, and 50% running lean startup experiments on particular ideas. If one hits then I’ll shift to 100% of my time on that startup idea.”
An interesting parallel story was told by Malcolm Ong, co-founder of Skillshare, during the same weekend but at the Lean Startup Machine in New York. He and his co-founder spent months trying out ideas. Even as they enthusiastically worked on the Skillshare concept, he says, “We refused to write a line of code until we found a group of paying customers.”
So is Alex abandoning the Big Vision approach to startups? “I think the two fit extremely well together. It’s like the right brain and left brain coming together. The right brain comes up with something in the shower, and then the left brain says, ‘Hey, hold on a second. Is this really a good idea? Do you want to spend three years of your life doing this?’ I think the Lean Startup methodology is like a cool drink of water for entrepreneurs who have been struggling with this stuff.”