A Case Study on Getting Started with Lean Startup Methodology

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The Lean Startup method to build products

The lean startup methodology is not a skillset you can learn all at once. Like yoga, it’s a practice you must develop and apply over time in order to get any value from it.

In a nutshell, lean offers a validated way to learn about your startup. It answers key questions like: Is there a market for your business? How can you gather key information about the features and functionality of a business concept?

Lean will help you practice identifying your market and developing product-market fit. It’s a process can be applied to any product concept — here’s how you get started.

Step 1: Choose and validate an idea.

One word lean practitioners rely on heavily is “validate,” and GA’s learning experiences are designed to help people understand what it means to validate an idea or product.

In one of our workshops, instructors provided the class with an app idea and walked them through the process of determining whether or not it would succeed. The app was called Cut the Line, and the concept was a mobile app that helps you skip the line at restaurants and other popular attractions. The idea drew inspiration from Disney World’s FastPass and applied it to all of New York City. Imagine being able to skip any line anywhere … for a price.

“Yes, that would be awesome,” was the response we got from most people when asked whether they liked the idea.

Step 2: Define the assumptions.

Before committing to the business idea as we had originally conceived of it and investing precious resources to build the “perfect” product, we challenged the class to identify whether there was a market for Cut the Line, and if so, the bare minimum feature set — or the minimum viable product (MVP) — people would actually pay for. Our class mapped out the idea’s riskiest business assumptions to reveal the bare minimum facets of the business (consumer behavior, pain) that must truly exist for this business to work.

  • Assumption #1: Patrons would pay to skip lines.
  • Assumption #2: Restaurants would accept payment for allowing some customers to skip the line.
  • Assumption #3: There is a large enough market for this product to build a sustainable business.

Step 3: Validate your assumptions.

After mapping the riskiest assumptions, we took to the streets to meet real, live potential customers and observe their behavior. Our learning exercises started with offering strangers money for their spot in line in efforts to define if we could pay to create a spot online. We experimented with a range of price points; if they refused a small sum, we countered with a higher offer.

Step 4: Analyze lessons learned.

Our experiments highlighted one key fact about consumer behavior: While you can gain some valuable qualitative information about your customer through conversation, people are generally terrible judges of hypothetical behavior. The only reliable way to test whether someone will pay for something is to actually charge them for a product.

  • #1 Lesson Learned: Patrons felt paying to skip the line was unfair to the others in the line. Many patrons refused the offer to pay us to Cut the Line. When we asked why, we got an interesting array of responses that included: Parents with children said that waiting in the line was a part of the “sight seeing experience.” Tourists enjoyed waiting in line because the longer the line, the better the restaurant. It was how they judged if a restaurant was good. One surprising exception: A man on a date paid to skip the line.
  • #2 Lesson Learned: Restaurants did not want to let some clients to skip the line. Restaurants did not want to seem unfair giving certain customers special treatment. They were afraid that any additional revenue generated by the FastPass would be offset by losing the business of irritated potential customers.
  • #3 Lesson Learned: Our target market significantly narrowed as we spoke with potential customers. The class expected the average patron waiting in a long line would be willing to pay to skip to the front. And with the refusal of venues to allow some patrons to skip the line, we were left wondering, was there an opportunity for this product at all?

Step 5: Identify flaws in the experiment and consider next steps.

There are some natural limitations to any experiment. Some potential issues that may have influenced our learning and warrant further exploration:

  • We looked very “unofficial,” approaching patrons at restaurants in line wearing street clothes.
  • Our small data-set was geographically limited to Times Square.
  • Our pool of potential customers was predominantly limited to restaurants, so a person’s level of hunger may have forced a different behavior.
  • Lastly, a digital solution such as a mobile app would have increased anonymity; in the in-person setting, we expect some would-be customers felt peer pressure to not cut the line.

Had our class extended beyond three days, our next step would have been to explore those learnings further and to address some of those limitations.

Step 6: Decide whether or not to proceed with the idea.

After three nights of validated learning inquiry into Cut the Line, we didn’t feel confident that there’s a market for the product; at least not with the implementation that we had envisioned. Our student who did make a sale had a brilliant customer development hack: He put in his name to get a table for dinner at the Hard Rock Hotel, waited 30 minutes until his buzzer would be called next, and then sold his spot in the line to a patron who had only been waiting five minutes (a gentleman on a date).

Key Takeaway

There are a number of other factors to consider as well, but social factors like “perceived fairness” and peer pressure are clear barriers to successfully monetizing the business idea. The biggest lessons we hope our students took away, though, is that just because people say, “Oh yes, I would pay for your product,” doesn’t actually mean they will or that there’s even a market for it. Uncovering insights and understanding the nuances of a potential customer’s behavior is key to learning whether there’s a market for your business idea.

Learn to Create Products People Will Love

The Unique Benefits of eBook Publishing for Businesses

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At the Digital Book World conference in January 2012, Forrester Research revealed that 25 million people in the U.S. now own an e-reader and 34 million have a tablet of some kind. They also predicted that 40 million people in the U.S. will have an e-reader and 61 million will have tablets by the end of 2012–a number that surpasses the population of many European countries.

For those writers who used to pursue having their books stocked at one of the major booksellers in the U.S., Canada, the UK or Australia, now the race is on to get your ebook distributed on as many virtual shelves as possible including your local library, bookstore and other alternative venues.

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The Biggest Opportunity of 2012? Learning Objective-C

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Time and time again, the question of “what programming language should I learn?” seems to surface in various internet locales. There are a lot of ways to answer this question, depending on factors like existing skill set, desired end result, and personal preference.

Here’s another approach to consider–one that looks at career utility as opposed to didactic value: which programming languages currently have the most attractive supply and demand ratio in the job marketplace? That is, which languages are associated with the most open jobs and the fewest candidates to fill them?

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Movin’ on Over to the West Side…of the Street

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We opened our campus last year to create a place where New Yorkers could collaborate and learn together. We adore our space at 902 Broadway, from the chalk art to the Craft Coffee station. But, as anyone who has ever rented an apartment in New York City knows, whatever space you have never ends up seeming like enough. Such is the case for GA, and so we are expanding.

Rather than struggling with a cramped kitchen or limited closet space, though, we’ve come upon the challenge of not enough classrooms for all the classes, workshops, and programs we’d like to offer. S0, we’re taking up a beautiful space at 915 Broadway, view of The Empire State Building and all. Unfortunately, common sense and city ordinances will prevent zip lining from one side to the other, however, we do anticipate a fully wired for a tin can phone system and, of course, lots more space for students.

For more info, check out these blog posts from Untapped Cities and Business Insider.

We hope you’ll join us, at least on one side of the tin can.

Questions? Feedback? Thoughts? Tweet us @GA

Three Reasons to Love NY (and How They Inspire Us at General Assembly)

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“Despite the crush and the noise, I never tire of plunging into the crowd. I love the crowd as I love the sea. Not to be engulfed or lost in it, but to sail on it like a solitary pirate, content to be carried by the current, yet strike out on my own the moment it breaks or dissipates. Like the sea, a crowd is invigorating to my wandering mind. Almost all my ideas come to me in the street, even those related to my work.”

— Frédéric, from Eric Rohmer’s Love in the Afternoon

Reason No 1:  SERENDIPITOUS ENCOUNTERS

I was standing in line the other morning waiting to order my latte, when loud squeals exploded behind me, interrupting my pre-caffeine haze. I couldn’t help but smile when I turned around to discover two young women in a heartfelt embrace. It was clear from their interaction that this encounter was an unplanned one, and long overdue.

It was a classic New York moment—one we, as inhabitants of this city, have the great fortune of observing on a daily basis far more frequently than those who elect to live elsewhere. It’s a constant reminder of the extent to which this city is defined by serendipity, by happenstance, by the certainty of crossing paths with those from our past, present, and future. Much of this can be attributed simply to the city’s density, diversity, and scale (as deftly articulated by Steven Johnson); much of this is likely the by-product of its pedestrian nature; and much of this is undoubtedly due to the fact that New York functions as the Main Street of the world, attracting natives and transients alike. We live in a city perpetually in flux—where the only constant is the lack of constants, where the cast of characters changes every day, and possibility lies dormant around every corner.

In early days, when General Assembly was a nascent idea, we talked about this notion of alchemy—of the inevitable magic that happens when you take a group of bright, impassioned people from a diverse set of backgrounds and put them in a room together. Having spent the prior three and a half years at IDEO, I was electrified by the rich dialogue and exchange of ideas that occurred on a daily basis among our interdisciplinary project teams, and was eager to see these types of interactions play out organically among a community of people with individualized agendas but with overlapping interests in technology, design, and entrepreneurship.

Our name, General Assembly, was inspired by the models set forth by schools (a community of learners), factories (a community of makers), and legislative bodies (a community of self-governing people). We worked with Andrea Steele, an architect well-versed in campus design, to design a spatial program that centers around a communal gathering area that we hope will become our campus green, our town square, our Main Street—encouraging the types of fortuitous introductions and cross-pollinating behaviors that enrich our lives and forge new paths ahead.

 

Reason No. 2: COURTSHIPS IN MOTION

Like those rare and fleeting moments when the local and express trains move in slow synchronicity through the city’s subterranean depths, New York perpetually offers us glimpses of lives beyond our own, but ones seemingly within grasp. It’s inevitable that at some point during our time here we will find ourselves musing: this could be my future apartment, one day I could have a solo show, he/she could be my future husband/wife, oh please please please let me get this cab.

Within the first few months of moving to New York as a fresh faced 21 year old, I realized why this city aroused such impassioned allegiance among its inhabitants. At the time, I was sharing a claustrophobic apartment in the area now known as NoMad, two doors down from a particularly rowdy (but friendly) brothel of transvestite prostitutes. Every month, I would eagerly fork over half of my meager monthly earnings to pay my rent—all while feeling incredibly grateful for the opportunity to be here at all. Imagined or real, I felt an instant camaraderie with those around me—they, too, were willing to forgo the pleasures of backyard gardens and flush savings accounts for the chance to pursue a greater goal. It occurred to me that sacrifice seemed to inspire both passion and will—the more we invested, the greater our resolve, the more staunchly we defended our decisions. How else might we rationalize denying ourselves the comforts of a more civilized existence for a shot at a dream with unfavorable odds? Similarly, how else might we explain the conviction of the sleepless entrepreneur?

The dehumanizing mechanics of this city do much to attract a self-selecting population. By nature, New York transplants are voyeuristic, opting for connection and broader exposure over a more controlled, hermetic existence. We are buoyed and enlivened by the success of others—especially those with whom we feel a certain kinship or whose lot in life most closely resembles our own. At General Assembly, we’ve invited some of the city’s most inspiring startups to join our inaugural class. Our hope is that they might benefit from a empathic relationship with like-minded individuals on a parallel track—fellow travelers on another train, hoping to arrive at the same destination.

 

Reason No. 3: LAUNDRY ROOM RECIPROCITY

A few weeks after moving into my current apartment, I braved a visit to the laundry room. It was your typical tenement building laundry room—underground, overheated, and smelling strongly of Tide®. But by far, the best feature was that the table opposite the washers clearly functioned as much more than a folding surface. It had been designated as the building’s barter site—the unofficial marketplace for the free exchange of goods between tenants. On this particular night, I discovered a stack of three books: a textbook on financial risk management, another on econometrics, and The Giant Book of Tofu Cooking. In the end I claimed the cookbook, but left the others to find a more deserving home.

The mechanisms for how knowledge sharing occurs within any community, organization, or institution are as varied as our individual preferences and aptitudes for learning. For some, a wall of books is as tempting as an aromatic bowl of Tofu Stroganoff waiting to be consumed. For others, the best resources are easily sorted, searched, and transported. For others yet, their best learning occurs within the context of a classroom where they’re freed from life’s daily distractions. And lastly, some prefer tacit learning experiences—through observation and discussion, hands-on application, internalization and reflection.

At General Assembly, our aim is to design educational programming that establishes a reciprocal relationship between the wealth of talent, experience, and expertise that exists within these walls and the community at large. We ask our members to submit blog posts or teach classes on a regular basis and are also establishing partnerships with leading academics and thought leaders to offer a comprehensive curriculum within the domain of technology, design, and entrepreneurship. Lastly, we’re hoping to assemble both an online resource and a physical library that helps to aggregate the vast range of content shared. Our hope is that from this emerges a collective brain larger than the sum of its parts—one that inspires a new type of discourse and creation reflective of the changing world in which we live.

Why Entrepreneurs Need to Stop Making “Brand” a Dirty Word

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Brand is a dirty word to many entrepreneurs, but their skepticism comes from a fundamental misunderstanding of what brand is.

Brand is a lot more than just your name, logo or visual identity.

A strong brand should crisply encapsulate the role your organization plays in the world, and it should act as a filter to guide your business decisions. While a clever name and logo can set you apart from some competitors, a strong brand is what gets you your funding, builds your engaged community of users, and creates a focused vision for the future.

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Startup Marketing: You’re Doing it Wrong

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You don’t need to hire a “marketing guru” (in fact, you should probably avoid hiring people who refer to themselves that way) or amass a substantial marketing budget to get people to use your product–there are lots of free strategies out there. Still, just because you can do something doesn’t mean you’re doing it right–here are a few pitfalls to avoid:

Mistake 1:

CEO: I need 500 Twitter followers by the end of Q3. Procure these for me plzthxbye.

Marketer: Um, why 500? And how is having those followers going to help us get more users?

CEO: I just want more followers.

Marketer: /facepalm

Twitter followers don’t necessarily help your company just because they’re there. You could have 500 followers who are ALL spambots, and that would be worthless. On the other hand, you could have 250 followers who each engage heavily with your content, click on the links you post, and buy your products. Yes, there can be perceived brand value associated with a lot of followers, but spending a lot of resources to gain perceived brand value is a risky proposition early on.

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On Learning to Code, pt. 3: Resources to Teach You Rails in a Month

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Since I find the process of memorizing by looking at the same material over and over again extremely tedious, I’ve developed my own method, which involves finding a handful of introductory classes online and speeding through them really quickly. When I was in college, I used to download podcasts of the same courses I was taking but at different universities, like Berkeley or Stanford. Then I’d listen to the podcasts while I was on the subway or walking around. It turned out that my approach eliminated hours of studying I would have had to do otherwise, and teachers love it when you’re able to bring in a unique perspective that wasn’t covered in class.

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On Learning to Code, pt. 2: Choosing a Programming Language

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Not knowing much about coding makes it especially scary to jump right in. You’ve probably heard just enough about all the different programming languages–C++, PHP, Java, Python, Ruby, etc.–to have no idea where to start.

The truth is, most of these languages can do the same thing. They’re just different ways of doing it. Yes, there are some exceptions, but you don’t really need to know about those when you’re starting out. So which language should you learn?

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On Learning to Code, pt. 1

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I want to write about a topic that I think will benefit a lot of people: learning how to code. When I first quit my job to start my own company, all I had was an idea. The goal at that point was to find someone with a technical background to actually execute my idea. I suspect that many of you are in similar situations. There’s something you should know: it’s never going to happen.

Demand for developers has skyrocketed to unprecedented levels. Think about it. Anyone with any aspirations in the tech scene is starting their own company right now. Each of those startups needs its own lead developer (not to mention that companies like Facebook and Google are sucking up thousands of talented developers).

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