In this video, we're going to talk about lean startup. We're going to talk about how you, as a product manager, can avoid waste and keep your team more focused on building something that's going to be valuable to the customer, drive to that intersection of that happy place that you want to be as a product manager. First thing I'll say is that lean startup is about testing motivation. Is the customer wanting what we have? Is our proposition better enough than the alternatives? And I really like B.J. Fogg's Fogg curve here as a way to think about that. That his concept is, there is this relationship between motivation and ability, which is kind of the inverse of usability. So how hard is it for somebody to do something is what's on the x axis, and what he's saying is that for somebody that's really, really motivated, they'll do something that's really hard. So if your product has terrible usability, but the customer has excellent motivation, they'll still do this. You'll get your action. And if they are not so motivated, your thing needs to be proportionately or relatively much easier to do. And so lean startup is about focusing here. And by the end of this course, you probably be like, "Why is he always talking about the difference between motivation and usability.?" The reason is so many teams that I see, and ironically, it's usually the most high functioning best trained teams, get sort of overly focused here on usability. So they do user testing, and they make the product look really nice, and then it still encounters this echoing silence. Nobody wants it. Nobody cares. It's just not rising above the noise floor of all the alternatives that are out there for the customer. Lean startup is a way to test motivation and avoid that. When you see lean startup, you often see this loop: build, measure, learn. And I think this is a good way. This is what Eric Ries used in the original lean startup, and this is great. It's a good way to look at the process of lean startup. When I apply lean startup, I like to use the scientific method, which is what you're seeing here. I just find it a little more robust, and I think it's important to structure your work a little bit more. I just find an easier way to introduce the idea of practicing lean startup. In the scientific method, we start with an idea. The best way to get to a good experimental result that's valuable is to start with a strong idea, and you get those from going out and talking to customers, observing them, encapsulating on understanding and personas and problems scenarios. And then around our value proposition, we create a hypothesis. I like to generally write it in this form. If we do something for a persona, be the buyer or user, they will respond in a certain way. Doesn't necessarily have to be the way you form your hypothesis but you definitely want this kind of syllogism thing. If this then, then that because, otherwise, you may have something that's not really a testable statement. So have a testable hypothesis, and then you move to experimental design. This is where the practice and the kind of art of lean startup comes into play. We use these vehicles called MVPs, minimum viable product. If you heard of that, if you watch the HBO show Silicon Valley, you probably have. The idea is that, let's find a scrappy creative way to see if people really care about this, something that we can run in about a week, rather than building our product and then seeing if they like it or not. We use that in various ways to run an experiment, and experiment must have metrics and thresholds that say, below this is a pass, and above this is a fail or whatever the the relevance is. And then you're driving at this moment, this pivot or persevere moment, as they say in the lean startup, where you're either saying, "This is good. Let's persevere and intelligently invest in this idea and test it again," or "This idea is not a winner. It's not going to be better than the alternative. And it is not worth spending engineering time sales and marketing time on. And we should leave it alone." Just think about how powerful that would be to get that result as a product manager before you have your company invest all that time and money. That's why this is so important. Let's talk about how we actually go and create these experimental designs because that's really the tricky part. So the lean startup really sits right here in the middle of this process we've talked about. And if you have a team that's highly trained in human-centered design, they may be really focused on doing a good job here and going out talking to customers, learning about them, and doing a good job here in achieving a high degree of usability. But this is really the fulcrum here, and this may be an area where you need to provide some leadership and introduce these techniques so that you avoid waste because here is really where you're testing for motivation, which you can't engineer your way around a lack of motivation, and you can't use or test your way around a lack of motivation. You're going to waste a lot of time and money to deliver something that the market's not going to care about, and that's why this technique is so important. We talked about the experimental design. The best experiments can be run in about a week. The best most interesting minimal viable products are really scrappy. Here are three major archetypes. Concierge is where we hand-create the user experience, and we take the user through it to see if they care about it or not. It's also a very generative. We get a lot of data about how they experienced it, what they did. When we took the phone, and we duct-taped it to the bicycle, that was an example of such a concierge MVP. If you're in B2B or you're in enterprise software, another great concierge vehicle is your consulting group. So they can hand-create things for the customer that you can eventually standardize and automate into software. That's another, I think, vastly under exploited concierge MVP. Wizard of Oz is where you fake the customer experience and see if they care. Probably the most famous example is Dropbox. In order to test for value about the Dropbox experience, they created a demo, and they put it on YouTube, and it was all fake behind the scenes. But it was like, "Hey, here's how this works." So user A drags this folder into this file into this folder on Dropbox, and user B sees it on their phone or whatever, and they embedded that YouTube video on a webpage. So this is the YouTube video, and they said, "If you want to hear about when this cool thing comes out, sign up," which they sort of concatenated what we'll call a Wizard of Oz, which was the YouTube part of faking the user experience with the sales MVP which was, "Hey, why don't you sign up if you want it and submit." And guess what? Lots of people did this, and that was a really valuable result. It allowed them to raise money and become the gigantic success that they are today. So sales MVP is where you see if you can sell something, probably the simplest and most focal, but you can always get directly there. So if you are able to get a down payment from a customer or some material commitment or you're even able to get people to sign up because, hey, if they're just finding your thing on the Internet, they don't have to sign up. That's a good signal, and that's a sales MVP. Lean startup, super easy to understand. You probably understand it now, but it's hard to put into practice, especially in a big organization. One of the things that I see a lot is this idea that, well, I have these developers, and I'm going to lose them if I don't use them now. Try to avoid this. Make time for yourself to do short but focal tests for value and motivation. The best MVPs can be done in a week. And companies, very often now, who have sort of repeatable innovation programs will earmark a 90 to 120-day period for a team to test an idea. And so it's understood that they may have developers in there to participate in the process, which is a great idea, but they're not there to write working software and shippable code. So it's understood that there is this 90 to 120 interval, which is enough time to go out and do some discovery, run a few MVPs and just see if you should build something. So that may be something that you want to suggest or undertake. This, I'm prototyping because it feels like real work. We're more like we're building something. This is more something that I kind of observe than actually hear people say. This is what I was trying to point out with the Fogg curve. Prototyping feels like real work, and people love it, and it is quite useful, but it's not really a good way to test motivation. The way to test motivation is with these minimum viable product vehicles, where you're putting something in front of the customer and seeing how they react. If you put a prototype in front of the customer and say, "Hey, do you like this?" They will always tell you yes because they don't want to hurt your feelings, and they don't want to hear you rub it onto them about why you should like it if you say that you don't. It's kind of weird to run these experiments. It doesn't feel like real work. I haven't done it before. I'm uncomfortable. This happens too. But the reality is if you just ask customers what they want, you can't do that. You can't learn from that. You can't test that. They'll tell you something but even if they sincerely are trying to help you, it probably won't be right. There's no shortcut for doing this. I wish there was. If there was, I would totally tell you. There's not a shortcut. The only way to test for value in a repeatable way is this technique of lean startup, and it will help you avoid investing in engineering development sales and marketing time that just generates nothing for your company. So I would encourage you to give this a try. There is resources in the resource section of the course. I think it will really help you as a product manager.