When David Tran stepped onto the scene at Lean Startup Machine Toronto, he wasn’t interested in creating a minimum viable product. He wasn’t even interested in developing what would be his award-winning idea, one he’d been keeping in his back pocket for the past few months. He was interested in validating his beliefs about management and what it took to build a strong team.
After years in advertising, Tran knew his strengths: selling, building solid revenue models, and working on marketing strategies. He had learned about Lean Startup a year earlier from Dan Martell, then attending Mesh in Toronto, and eventually reading Steve Blank’s and Ash Maurya’s books, as well as other blogs for tactical ideas. In January, he decided to come to LSM Toronto to validate his understanding of Lean by working on a brand new product: “I had no biases and [therefore] I could apply Lean to its fullest.”
He also looked beyond the apparent benefits of the workshop, such as the guidance provided by mentors and speakers, the three-day dedication to experiments and pivoting, or networking with some of the top folks in the Lean Startup community. Tran wanted to validate his understanding of management, to see if he had “the right blink factor for picking people, quickly assessing their strengths, and designating tasks.”
"I had no biases and [therefore] I could apply Lean to its fullest."
The A Team
His first test was attracting the right people. A few months earlier, a tattoo store owner told him during an cust dev interview for a different product that he’d buy a tattoo business management application if Tran could build it. Tran used that story in his pitch of the management tool, purposely mentioning that there were seven tattoo stores just down the street, making the validation process easier. This way, his “early adopter” team would be attendees like him, interested in learning and reinforcing their knowledge of lean principles as efficiently as possible within the three-day time limit.
Tran’s pitch attracted nine, three of which he had to cut. But besides attracting a large group, he found that his pitch connected with the right people, who shared a key trait: practicality. By focusing on the accessibility of their target market and proposing a realistic idea, he’d attracted a team of like-minded people sharing a common set of values, something he believed was crucial to his Lean Startup Machine victory.
Customers Down the Street
The team's focus on applying Lean Startup principles to a practical idea meant two things: heated arguments were avoided and validation was made easier. Working with strangers to develop a new idea in just three days is a situation naturally conducive to high emotions and heated debates. With a team focused on learning, they were able to look past the natural tendency to defend their opinions at the expense of productivity.
Every difference of opinion led to an experiment. Every point was either supported with a test or killed. There was no time or need for debate, increasing efficiency and productivity. The accessibility of their target market made it easier to test: they worked down the street, available all three days. Little time was wasted exploring all the possible features they could offer due to using a similar business management tool as the model. With a clear vision of the product, explaining their idea to their prospects was easy. The customers quickly and easily understood the concept. Picking a business idea with customers literally down the street saved them much of this logistical effort and allowed them to focus on Lean Startup principles.
The first time they got out of the building, they talked to the ten tattoo store owners and came back with disheartening news: six of the ten owners weren’t interested in management software. They were happy with paper pushing. After a few pivots, one of which abandoned tattoo stores entirely, Tran’s team decided to revisit the data.
When they went back and looked at why these six stores were disinterested, they noticed a crucial part of the story: the prospects that said “no” were the parlors that only attracted a few customers a day. Paper pushing was easy for them. The customers that were interested in a management tool were parlors with four or more artists and attracted at least 20 customers a day. For these larger tattoo parlors, management software would not only help them organize their information, but would help them easily follow up with customers and handle referrals. This would mean increased customer lifetime value and word of mouth marketing.
Tran found that his team needed to look beyond the simple yes and no to focus on understanding the customer’s why. Doing so helped them make a critical customer segment pivot, focusing on a specific type of tattoo shop owner rather than targeting all of them. This pivot would also allow them to demonstrate a clear learning path to the LSM judges.
A Strong Finish
His focus on creating a strong team that stuck to Lean Startup principles led to their LSM win. During his presentation, one of the tattoo owners came with a $3,000 check, and another store owner from Los Angeles faxed a letter of intent for the same amount.
While he and his Lean Startup Machine team members were toying with further pursuing the idea, Tran didn’t see LSM as simply a way to launch: “This is a great way … if you are an entrepreneur, and most entrepreneurs have more than one idea … to filter through your list rapidly to find the gem.”
Beyond winning that weekend, it was Tran's ability to build a strong team on that first day that he's most pleased with. The team's intense focus on learning Lean Startup principles on a practical product was key in their ultimate success.