Lean Startup for Associations Part 1: Beyond the HPPO Realm

Written by Associations Catalyzing Entrepreneurship on December 13, 2018

“Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer,” says a description on Eric Ries’ Lean Startup website.

“When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don’t care about the idea, the startup fails.”

Ouch! Sound familiar?

ACERs have discussed how we in associations like to throw everything against the wall, hoping something will stick. We often carry the baggage of legacy programs and suffer the fallout of emotionally vested decisions for years. And this is starting to hurt us like never before.

So ACE invited Peter Dudka, two-time startup veteran and lead organizer for the DC Lean Startup Circle to give us a crash course in core Lean Startup methods and tactics.

The best part of Lean Startup for associations is that it helps us take critical decisions “out of the realm of the HPPO (highest paid person’s opinion)” and grounds everything in what’s going to work in the real world, says Peter. Lean Startup helps us make the quantum leap from “This is THE solution” to “These are all the possible solutions.”

Peter expounded on practitioner Jeff Gothelf’s definition “Lean Startup forces us to reframe our ideas as hypotheses and to quickly and cheaply test them using the results to justify further investments (or not) in the work. In other words, it’s a risk mitigation strategy [specifically tuned for the context of innovation].”

Joe Klem points out that the success of Lean Startup hinges on willingness to be guided by the data and results — because in many associations, data-driven decision making is easily pushed aside for emotion-driven decision making.

Lean Startup is applied through a Build-Measure-Learn cycle. This methodology treats insights and learning as the major success metrics and excels in scenarios where the final deliverable is poorly defined.

At its core, the Lean Startup uses concepts such as

  • Minimum Viable Product: The quickest (often most cost-effective) approach for testing assumptions about what is desired by customers — not necessarily a product in its own right.
  • Fail Fast: Focus on testing multiple approaches quickly (and seeing which ones work) vs. trying to decide which solution is the best one.
  • Pivot or Persevere: Making continuous course corrections based on feedback obtained while testing a hypothesis.

Start by asking what is the riskiest assumption, advises Peter — the assumption that, if invalidated, would be most damaging to the success of a solution, product, or business model. And then validate — systematically address the assumptions to move from “I don’t know” to “I know.”

Lean Startup offers a few basics:

  • Work smarter not harder.
  • Pay attention to your data.
  • Work in small batches.
  • Launch early, launch often.
  • Figure out how to rigorously monitor what you’re doing.

How would these Lean Startup concepts be used in a real-life association challenge? How would the market respond to such change? Watch out for the second part of this article, in which we’ll apply Lean Startup steps to a particular scenario, and arrive at a solution that looks very different from that conceived by the HPPO…