Applying Lean Startup Techniques
Lean Startup is a philosophy about starting a product/service where market demand is verified as quickly as possible for with the minimum resources required.
I am currently working on a “video yellowpages of dentist” where unlike a yellowpages there is no monthly fee and the dental clinic only pays for the lead generated from our service. This is how I applied some of the Lean Startup principles:
- Get customers before making the product
The original idea was quite different from what it was now because customers were not willing to pay for it and it was too much work. After talking with a couple of dental offices extensively we were able to make an offer the customer was willing to pay for. So far I had meetings with 2 dentists and both signed on. And one dentist referred 2 other dental clinic that were interested in the idea. Our goal is to get 10 customers to cover all of our cost of making the site. We do not offer any “freemium” plan as it diverts from creating something customers would pay for as well as we need money to fund the project.
- Make a demo for selling
Because we had nothing it was hard to get dental clinics to pay us money. So we made a quick demo mock up with very limited features, scrape the internet for data to populate it then pitch it to dentists. The great design and functionality was important in communicating with the dentist to build the trust.
- Didn’t waste time with design contests like 99designs… at the beginning.
I have used 99deisgns many times and love it. But to move quicker for the demo we grabbed a template from the internet and got the designer to modify it. Design contests takes time and lots of communication. And no we don’t have or need a logo at this point. When we do need a logo and once we finalize the site and direction by getting feedback then we will use 99designs to create it.
- Minimize cost for coding but keeping the quality
It is absolutely important to have great code. I wanted to use Ruby on Rails (ROR) for this project. Because ROR coders are expensive I got my coder in Philippines to learn ROR which decrease the cost of development. But to make sure the code is right and we move quickly I hired a experienced coder from Toronto to “consult” and review his code and pay him his full rate but for only for a set limited hours a week.
- Use the right tools for agile communication
We are using Pivotal Tracker for Agile Software Development
- Minimum Viable Product
There is an extensive wish list of features for the product. As such we segmented it to 3 major phases. Phase one is the MVP and we might never even do phase 2 or 3, we just wishlist features there so our minds stay clear. Within Phase one there are 3 different stages and the site can go live when each section is complete. Each stage can be done within a week.
- Move faster, develop as little as possible
These are the software we plan to use. The majority of the development would be integrating the APIs instead of making new software.
- Twilio – Track leads. We offer Twilio numbers on the site, visitors call that number, get directed to the dental office and the dental office is charge for that lead.
- Postmark – Sending emails to users
- Recurly or Chargify – Monthly billing. Based on our current forecast the price structure of Reculry is substantially lower then Chargify but we have to do more research.
- YouTube/Wistia – Would like to use Wistia for hosting the videos but to keep cost low we will start by using youtube to hose the videos.
- Lean Sales Process
To get sales quickly I bypassed the urge to dedicate my attention building a sales team and sales program. Instead I am focusing on getting referrals to and from dentist. To fill out the rest of the customers needed to meet the target of 10 I will be making cold calls to dental offices that have already bought “video” listings on yellowpages, those are the perfect candidate for this service.
- Lean Sales Pitch
Even our sales pitch is lean! Due to the simplicity of our service our sales pitch can be done in 15mins (by intention and necessity). We will be testing this with more clients so I can’t say this is a success but it’s our aim.
- Using Mentors and LinkedIn to Minimize Mistakes
To learn about best practices and find any pitfalls I might asked several mentor or people that had been through this for feedback and learn about their experience. That has helped a lot. Also I join and have been participate in the dental groups on LinkedIn to learn about the dentists and sales professionals in the industry as well as to make contacts and have potential future partnership. Lastly I also tell everyone and anyone about the project and i have gotten the most insightful feedback from people I least expected.
You can get special discounts to many of the tools by buying it from AppSumo.com. Please vote for me here for the Lean Startup Challenge. Also I highly recommend getting Running Lean by Ash Maurya which also has great tidbits of real life experience using the Lean Startup methodogy.