A lean, mean, “Startup” machine

Biases are dangerous things because they are so transparent to our own minds. This is quite obvious when you wish to start up a totally new business and think you know what people demand and what you can supply.

Giovanni, one of the workshop participants, pitching his idea during the opening session.

"Excuse me,” Priyesh cornered a mother who was pushing a stroller in a mall. “My friend and I are trying to start a business and we hope you can help us by answering a few questions. It will just take two minutes." I stood beside him, with my notepad and pen, ready to take notes.

"When was the last time you bought anything for your baby?" he asked.

"Yesterday, I think,” she replied. “It was some toys."

"How did you decide which toys to buy?"

"We either research on our own on the internet or we just go with a brand we trust."

We asked a few more questions and thanked the lady.

"This is horrible," Priyesh said to me.

One day earlier, I flew in from Penang to Singapore to join Lean Startup Machine, a three-day intensive workshop about Lean Startup.

Lean Startup was developed by Eric Ries in 2008. Inspired by the Lean Manufacturing philosophy derived from the Toyota Production System, Ries moulded a more efficient way to launch new products, especially for high-tech start-ups, by using methods such as validated learning, agile development cycle and customer development. The concept had taken the start-up world by storm.

Regi Wahyu, winner of the first Lean Startup Machine Singapore, was one of the mentors at this year's workshop.

The workshop began on Friday evening. The coordinator began by opening up the stage for anyone to come up and pitch start-up ideas. The ideas could be anything as long as they were fresh and not something that we had been working on. If the ideas were picked, we would be working on them using the Lean Startup method throughout the workshop.

About half of us lined up to pitch. The coordinator then went through each idea one by one and had us vote for them. The highest voted ideas were then shortlisted, and teams of three to five were formed.

I didn't have any team I wanted to join because I wasn’t particularly interested in any of the ideas. "It’s just a learning experience," I told myself. I paced around the room and bumped into Priyesh, an American whom I met earlier. He didn't have a team either.

"Our first assignment was to figure out our Customer Hypothesis and Problem Hypothesis. Basically: what problems are we trying to solve and who are experiencing this problem?"

Final presentation by one of the participants.

We decided to team up, and Priyesh pointed me towards a man named Guido. Guido is a German traveller and was passionate about helping first-time parents. "They simply don't know which diapers to buy," he said, pitching to us his idea of building a recommendation engine for first-time parents.

"Time’s up!” the coordinator called. “I believe all your teams are formed." The teams began to settle down and sat together in groups.

"Hey, can we join your team?" a voice said behind me. We were introduced to Idyam and Syriaz – two young Indonesian university students who were building a social network. "I was hoping for a girl to join us to give a female opinion,” Guido mused, “I guess they will do."

Our team of five was formed.

Our first assignment was to figure out our Customer Hypothesis and Problem Hypothesis. Basically: what problems are we trying to solve and who are experiencing this problem?

Workshop participants listening to the final presentations.

Guido said this was an easy one. "Our customers are young, internet-savvy parents. And the problem is there are too many brands on the market and these parents don’t know which to choose."

I wrote down what Guido said and put it on the Validation Board. The Validation Board is a tool that provides a guided framework to test ideas. It is separated with sections such as "Hypothesis", "Experiments" and "Results", where we could post sticky notes to track our progress.

"This is wrong," somebody interrupted us. He wore a Lean Startup Machine T-shirt, with a name tag that said "Brian, Mentor".

"You should not create your Customer and Problem Hypotheses based on your Solution Hypothesis,” he pointed out. “It's the other way around. Once you've validated the first two, then you form your Solution Hypothesis." This way, he added, we can avoid basing our ideas on our own biases.

A few other mentors also gave us advice. We continued to refine our hypothesis until 11pm before calling it a day.

"Tomorrow is when the fun begins," another mentor told us.

Our first team discussion, along with mentor Florian Cornu, founder of travel booking site Flocations.

"It won't be fun,” Cameron Priest, founder of TradeGecko, a developer of online inventory management software, told us the next morning. “It's going to be tough. You are going to get rejected a lot." He went on and gave us some tips and tricks on conducting customer interviews. "Tell them you're an entrepreneur starting up a new business." "Ask open-ended questions." "Collect emails."

We took notes as we would be doing customer interviews all day long. We were going to "get out of the building", a famous customer development term that meant leaving your comfort zone and talking to real people.

The goal was to validate our customer and problem hypotheses. We needed to make sure this particular problem really does exist with this particular demographic, and not only in our imagination. We could prove this by having at least six out of 10 customers we interview tell us about it.

We split the team into two groups. Priyesh and I went one way; Idyam, Syriaz and Guido went another.

We decided to start with a nearby grocery store; it seemed like a great place to begin our research, with many parents pushing their strollers around, shopping for groceries.

Except that it wasn't. We were given cold shoulders and hard rejections. "Sorry, no," was often the response.

While we were leaving the grocery store, we saw a young couple (with their baby stroller) sitting down in the food court. "Maybe we shouldn't interrupt them while they are eating," Priyesh warned me. I insisted that we try anyway.

It worked, and the young couple answered all our questions. We were excited after getting our first customer interview, even though they invalidated our hypothesis. "Food courts are awesome because people have nowhere to run away from you," Priyesh said.

One down. Nine more to go.

We moved to a nearby mall. We did a few interviews in the food court and a few more in front of a baby store.

We learned the lesson (the hard way) of not interrupting parents while they were engaging in what we called “brain-intensive” tasks, like shopping. Another thing we learned was to set expectations early by telling them the interview would only take two minutes.

Priyesh and I went back in the afternoon to meet with the team and compare notes. The results weren’t good.

"Well, all of our assumptions were pretty much invalidated," Guido sighed, reaching the same conclusion as we did. Most parents just didn't have a problem choosing things to buy. They either picked things off the shelves based on their pricing, or they just went with the brand they were familiar with.

It was time to pivot.

From left to right: myself, Priyesh, Guido, Idyam and Syriaz.

Pivot in Lean Startup Methodology means changing the business model without changing the vision. In our case, we still wanted to help first-time parents, but we needed to change our customer/problem hypotheses.

We looked at our notes and found some recurring patterns. "Expensive" and "short product lifespan" were often the concern of parents when they bought things for their children. It made sense. Baby items like clothes, toys, strollers and beds were not only expensive, babies also quickly outgrew them.

"We even found out that some parents had already hacked their own solutions by posting used baby products on Facebook groups."

We eventually pivoted to a new business model: a marketplace where it's easy to buy and sell used baby products.

With renewed vigour, we went out of the building again. This time, most of our assumptions were validated. We even found out that some parents have already hacked their own solutions by posting used baby products on Facebook groups. And according to some expatriate parents, similar marketplaces had already existed in the US and Europe. They couldn't wait to have one started in Singapore.

We hit the jackpot.

On the third day, we prepared for the final presentation session of the workshop. I gave our project a name – BabyBay. "It's like eBay, but for Baby," I helpfully explained to my team members.

I worked on my script and presentation slides. Guido and Priyesh worked on the copywriting. Idyam and Syriaz worked on summarising the data and numbers from the customer interviews.

At 5pm, the teams started presenting. It was refreshing to find most teams had their own struggles of validating their hypotheses. Some even went as far as five pivots.

After it ended, the coordinator announced the winning teams. We didn't win, but our team was given a special award for "finding product-market fit".

I was a little disappointed we didn’t win, but Priyesh said, "It doesn't matter at all. We learned a lot here."

While I was heading out, I saw a group of people gathering in the front of the building. "We’re going to the after party,” one of them said. “I heard there will be free beers." "I doubt it," another person answered. Then the both of them looked at me as if I had the answer.

"I have no idea," I told them. "But let's validate these assumptions."

Lim Cheng Soon is the founder of Hacker Monthly, a popular print magazine for programmers worldwide. A born and bred Penangite, he enjoys playing basketball and food hunting with his wife.

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