The LEAN Machines (S7E2)

What you’ll see this episode:

It’s going down in the premiere competition episode of season 7! Get ready to soak up your first lesson right alongside the Bloxers. While you’re learning the ropes, they’re gearing up for the very first daily challenge, which means that after each lesson, things get real for our entrepreneurs. They’ve got to cook up a snappy 3-minute pitch that uses what they’ve learned and applies it to their own businesses. They’ll split into pods with about 10 contenders and one judge per crew. The goal? Nailing the judge’s tough criteria to take the win for the day in their pods. Later in the episode, we’re dropping the names of the first Blox-Off contenders of the season – but you’ll have to wait for episode 3 to see how they do!

The Competition Launches into Orbit

Day One begins with the judges meeting over breakfast to discuss what they hope to give and get out of this experience, and the ideas and energy are already flying. One thing is agreed upon: everyone is about to gain so much knowledge from each other, and lives are about to be changed.

The eager and nervous Bloxers start their first day off with their first classroom experience, where the topic is The Lean Startup – quite a “meaty” methodology for something titled lean! Essentially, the Lean Startup boils down to using the Scientific Method to test what works in our business. It’s compared to when the Mighty Ducks have to go back to the basics of hockey – but in this case, going back to basics is applied to businesses. The goal is to launch sooner and faster than we are perhaps ready for because we can’t build, measure or learn without going live.

The new Bloxers seem to understand the concept, but their first challenge will truly be the test of that. They are tasked with preparing a 3-minute pitch that addresses a new build or MVP and the innovative accounting metrics that they will use to measure its success. The contestants head off to their pods where they have 15 minutes to work on their presentations. We watch as a variety of Bloxers give their pitches, and then sit down with their judge for some one-on-one mentoring to find out what it might take for them to pull off their new builds or MVPs. Although some contestants excel, many struggled with the metrics according to our judges.

The episode concludes with the announcement of the day’s seven pod winners, but you’ll have to tune into episode three to see how they fare in the first Blox-Off of Season 7!

The Lean Startup Revisited

Day 1 kicks off with a history lesson on lean principles, showing how they work for different kinds of businesses. It’s like a scientific experiment for startups. The reason we learn this? Well, there’s no instant investor panel waiting for our ideas. So, without those investments waiting, we need to find a way to break tasks into smaller, doable steps so that we can accomplish them daily. Getting traction is key, not just for investor interest but for steady growth. The real deal here is validated learning – proving your ideas work in the real world. Validated learning is proven with scientific facts, evidence, and proof that demonstrable improvements in your company are happening. We’re all about value over waste, focusing on things that matter to customers. The Learning Paradox/Analysis Paralysis, doing secondary research and planning for too long in an effort to de-risk something that can’t be fully derisked, is an example of waste.  We dive into real-world cases like Zappos and Groupon, showing how launching products as experiments and making smart changes based on real results can be a game-changer. We’re introduced to the concepts of Concierge MVP, Split Testing, and Wizard of Oz Testing, all ways to validate these scientific experiments. Innovation accounting helps you track progress in a quantifiable way. The decision to pivot or push forward depends on how things are improving in your baseline metrics. And when your product really clicks with the market, that’s the sweet spot. Essentially, “The Lean Startup” is all about arming startups with a smart approach to tackle uncertainties and turn visions into successes.

Key Takeaways From This Episode:

1. Traction is what makes you investable. It is what answers the two most important questions we must answer: 1) Is value being provided to the customer? 2) Is something powering our growth in a sustainable, scalable, and replicable way?
2. We have to learn how to sacrifice many aspects of our vision in the short-term in exchange for launching sooner, re-launching faster, pushing new products and experiments, and simply driving this thing regardless of what is at our disposal in the moment.
3. We have to launch our businesses, or projects, into a real market as a form of experimentation. So the only way this works is to launch, or re-launch, or reimagine, your company – in a way in which the company is LIVE.
4. Accounting is as important in startups as it is in business. But a business has a large enough sample size, in regards to revenue and other financial variables, for traditional accounting to work. So we must attempt to quantify the hard-to-quantify, in a way that allows us to establish baselines. Once baselines are established, we run experiments to improve the baseline metrics. This is called innovation accounting.
5. You know you’ve reached Product Market Fit when stuff finally starts to work, when customers are probably resonating with your offering, and when you’ve answered the value and growth hypothesis.