The Lean Startup - Eric Ries [29]
Most important, this product would serve as a seed that could germinate into a much more elaborate service. With this beginning, the agency could engage in a continuous process of improvement, slowly but surely adding more and better solutions. Eventually, it would staff the hotline with caseworkers, perhaps at first addressing only one category of problems, to give the caseworkers the best chance of success. By the time the official plan was ready for implementation, this early service could serve as a real-world template.
The CFPB is just getting started, but already they are showing signs of following an experimental approach. For example, instead of doing a geographically limited rollout, they are segmenting their first products by use case. They have established a preliminary order of financial products to provide consumer services for, with credit cards coming first. As their first experiment unfolds, they will have the opportunity to closely monitor all of the other complaints and consumer feedback they receive. This data will influence the depth, breadth, and sequence of future offerings.
As David Forrest, the CFPB’s chief technology officer, told me, “Our goal is to give American citizens an easy way to tell us about the problems they see out there in the consumer financial marketplace. We have an opportunity to closely monitor what the public is telling us and react to new information. Markets change all the time and our job is to change with them.”6
The entrepreneurs and managers profiled in this book are smart, capable, and extremely results-oriented. In many cases, they are in the midst of building an organization in a way consistent with the best practices of current management thinking. They face the same challenges in both the public and private sectors, regardless of industry. As we’ve seen, even the seasoned managers and executives at the world’s best-run companies struggle to consistently develop and launch innovative new products.
Their challenge is to overcome the prevailing management thinking that puts its faith in well-researched plans. Remember, planning is a tool that only works in the presence of a long and stable operating history. And yet, do any of us feel that the world around us is getting more and more stable every day? Changing such a mind-set is hard but critical to startup success. My hope is that this book will help managers and entrepreneurs make this change.
Part Two
STEER
How Vision Leads to Steering
At its heart, a startup is a catalyst that transforms ideas into products. As customers interact with those products, they generate feedback and data. The feedback is both qualitative (such as what they like and don’t like) and quantitative (such as how many people use it and find it valuable). As we saw in Part One, the products a startup builds are really experiments; the learning about how to build a sustainable business is the outcome of those experiments. For startups, that information is much more important than dollars, awards, or mentions in the press, because it can influence and reshape the next set of ideas.
We can visualize this three-step process with this simple diagram:
This Build-Measure-Learn feedback loop is at the core of the Lean Startup model. In Part Two, we will examine it in great detail.
Many people have professional training that emphasizes one element of this feedback loop. For engineers, it’s learning to build things as efficiently as possible. Some managers are experts at strategizing and learning at the whiteboard. Plenty of entrepreneurs focus their energies on the individual nouns: having the best product idea or the best-designed initial product or obsessing over data and metrics. The truth is that none of these activities by itself is of paramount importance. Instead, we need to focus our energies on minimizing the total time through