Startup Learns Lean Lesson

As one of the founders of Scratchd.ca, I have participated in multiple lean startup weekends, meet-ups, and discussions. As an “idea driven” founder, I have learned that keeping the lean startup methodology in mind is key for accelerating the growth of our startup. Each and every idea must be validated in the real world before we build it, we must carefully measure the return, and learn from the results- fast!

I have learned first hand that a good product idea doesn’t always make a good product in the market. We made some early mistakes when launching Scratchd as our first startup, which lead us to follow the lean startup methodology much closer. We often find ourselves assuming our customers will want a new feature and use the lean startup methodology as a constant reminder that assumptions will hurt us if we do not validate them by talking to our customers first.

As first time technology entrepreneurs, two years ago, we were very excited to have our first app created to share with the world. Our friends and family knew we had spent months working on this project and we wanted to make sure everyone would be blown away at launch. Our fear was that we were going to be compared to all of the established apps out there. We also had to make it work on every phone platform, include location based services, push notifications, sharing features, and much more. The focus of the app was digital scratch & win, and soon after launching, we learned that all our users wanted was to scratch & win. Our core feature was all we actually needed!

Unfortunately, when we started out, our mind-set was “build every feature for launch because I want to make sure everybody loves it!” We were aware of the lean principles at this time, but could not separate our mind-set of wanting to be startup rock stars from what would be the smartest way to build a minimal viable product before receiving real world feedback on what our users would have wanted to see next- if anything.

To make matter worse, about a year later, we learned that our product was not sustainable in the market. The money we spent not only on the fancy features but complete development on the product had gone to waste. As non-technical founders, this money was straight out of our pocket. Lesson learned: follow lean principles! Eight months after launching product number one, we had a new product concept and at this time we recognized that it was crucial for our business to follow lean principles. To our surprise, we launched a solid pilot with a National brand using our MVP, and were across the country within 90 days. We had generated more revenue in 30 days, than we had in the eight months prior.

Our team has spent two years generating ideas, building, validating, and learning to find the right fit in the market for our product. We have had multiple small pivots and one very large to find the right fit our product maintains today. It is important to follow the lean startup methodology when testing a new idea or feature as if you are going to fail; it’s better to fail fast and cheap. It is crucial for any entrepreneur to test all assumption in the real world and collect customer user input before developing a minimal viable product, and re-visiting those customers prior to fully developing the solution.

I talk to many new tech entrepreneurs who are concerned about sharing their idea. The truth is that step one for a startup entrepreneur is get the idea out and ask as many questions possible. Make any early pivots necessary prior to even getting started on development. The best exercise I did was at lean startup weekend when our group came up with an idea and spent 5 hours visiting small business owners in the area to ask questions. We made a major pivot after talking to the first two business owners!

Like anything, I believe getting into the mindset of “lean” takes practice. When you are launching your first startup and are full of excitement to show the world, all you want is to be a hit. As you grow and evolve your business, have more ideas than time, and many more expenses, you really take every dollar you spend seriously. As a “lean startup,” you have no choice but to make sure you will see a return on every dollar spent on development, and the lean principles really do help guide the right decisions for our business.

Today, we have our sales team document quotes from customers to track feedback and ideas for new features. We refer to this document when planning our development sprints and be sure to get multiple customers to validate any ideas or assumptions we come up with (and sometimes even agree to pay for) before investing into the development of the software. The lean startup methodology has been a life-saver for us, and we strongly endorse it to all new entrepreneur!