Test commercial feasibility and do the easy stuff first

By Thomas Klem Andersen, Published on september 14th 2015

This week Jakob Svagin from Scion DTU and Andreas Cleve Lohmann from Copenhagen Lean Startup circle are challenging the participating hardware startups in Danish Tech Challenge on their value propositions and market assumptions. Here are some insights from the kick off talk yesterday when the lean-rubber hit the road.

Running lean is different than “just doing it” (a mystic approach to entrepreneurship based on intuition) and the approach of traditional innovation management (an approach based on plans, specs and waterfall processes with way too long feedback loops). Running lean is neither about chance or planning rather it’s about optimizing learning under circumstances characterized by extreme uncertainty.

You have to build to test. And there’s a bunch of things you can do without even building anything because it’s crucial that you test your entire business model and not just the technical feasibility. Sure you need to test your technical solution. But you need to conduct commercial experiments and generate commercial data as well. 

Recognize that your big vision is based on assumptions and they all need to be tested. Test your value hypothesis, your market hypothesis, your growth hypothesis – which include sales channels, partners and customers. These are all part of the uncertain context which your technical innovation needs to adapt to in order to achieve problem-solution fit and product-market fit.

You should build minimum viable products (MVP’s) of your actual product. But you should also build and hack MVP’s for how you interact with key partners, suppliers, users and customers. You can do that very early on and long time before you finish your product development (if you ever do). It’s never fun to be sold a bad product, but it’s always fun to be part of building something that can become big, so have an inclusive mindset from the start.

Most likely your potential customers aren’t out there actively looking for you. So the questions you need to ask yourselves are:

•          How can you make them care?
•          Why is your product valuable to them?
•          Do you know their criteria for buying?

Your technical product development might take six months or longer. But testing commercial feasibility can be done in a matter of days and is essential to developing a sustainable business model. So go do the easy stuff first!

Pretotyping – leaner than lean?

By Thomas Klem Andersen, Published on october 18th 2013

The Copenhagen Lean Startup Circle threw an inspiring event on Pretotyping yesterday, hosted at Founders House, delivered by Tim Vang CEO of pretotyping.dk.

The Pretotyping concept is developed by Alberto Savoia, former Google Director of Engineering. The concept was initially coined pretendotype because the most unique aspect of this approach is to pretend or imagine the intended functionality.
Pretotyping is essentially about testing the initial appeal and actual usage of a potential new product by simulating its core experience with the smallest possible investment of time and money." (see pretotyping.org)

At Founders House Tim Vang argued that Pretotyping is a tool even more Lean than the Lean startup. It is an in depth supplement to the Lean Startup Movement concepts of the Minimum Viable Product (MVP) and concierge testing. The pretotyping tool focusses only on the very early phases of innovation – therefore as Tim Vang emphasized it is a hammer and not a Swiss knife as the Lean Startup concept is.

Market testing > product testing
The pretotyping concept emphazises that market testing should precede product testing. In other words it’s all about finding the right it before you build it right. Quickly testing the commercial value  of an idea will let you invest money in a mature way and live up to the Pretotyping tagline: 

 “Invent Like a startup, invest Like a grown up”

Practical testing vs. Abstract analysis

According to Tim Vang focus groups and market analysis are an abstract practice. Desk top research and board room talks can lead you to whatever conclusion. Practical testing and data from the moment of purchase however will prove you right or wrong.


Founders House and its inhabitant Iconfinder

The lively environment at Founders House

Pretend you have a product even before your first prototype and see if customers will buy it. “Fake it ‘till you validate it” could be the mantra until you feel confident that there is a commercial potential for your product.

Pretotyping might be a hammer compared to the Swiss knife of The Lean Startup but in the end it is not an either or, rather as Tim Vang emphasized pretotyping is a part of thinking as a lean startup!

A free PDF copy of the Pretotyping book is available here: http://www.pretotyping.org/pretotype-it---the-book

Is there a dichotomy between Lean & Venture Capital?

By Thomas Klem Andersen, Published on September 12th 2013

Some insights from Max Niederhofer (Sunstone Capital) straight from The Copenhagen Lean Startup Circle:

There is no real dichotomy between Lean and Venture Capital. The real question is: When to put gas on the tank. 

Everyone likes an enthusiastic guy with a new great idea, so when validating your ideas find ways to ask questions, so that people won’t answer like your mom encouraging you almost no matter what.

When lean methodology is applied wrong, companies stay small for too long or have allergic reactions to marketing and sales. Don’t be so set on being lean, that you never want to scale.

Don’t ever think you at long last have reached the product market fit. It’s not a point you reach, because it changes all the time!

If considering venture capital, make sure you understand the venture business model and consider whether its compatible with your ambitions. VC’s will have you grow fast and keep going until they see a nice return on their investment.