The basics of lean principles, how to apply them to your business and some mistakes to avoid – interview with Trevor Glen
In this episode I interview Trevor Glen, an Adelaide based software consultant from Sarugo about his experiences with lean principles and methodologies and how they can be applied to new businesses and new marketing initiatives.
- The ‘Lean Startup’ book and approach
- Who can benefit from the approach
- Some not-so-lean mistakes to avoid
- The concept of ‘minimum viable product’?
- How can the MVP concept be used to improve product development processes?
Mentions / Links;
- The Lean Startup book by Eric Ries
- The Four Hour Workweek by Tim Ferriss
- Trevor’s blog post; Lessons from a not-so-lean startup
- Trevor on Linkedin
- Trevor’s company – Sarugo.net
Video from this interview;
Transcript[spoiler title=”Click to reveal/hide the transcription”]
Nick: Welcome back to the Web marketing Adelaide Podcast. I’m your host Nick Morris and today, we are talking about Lean Start-up Methodologies. We have a special guest Trevor Glen, he’s an Adelaide based software consultant from Sorugo. Good day Trevor how you doing?
Trevor: Yeah, good day Nick, yourself.
Nick: Pretty good! It’s good to have you along for this video interview for my Podcast listeners to listen to the audio. I am now doing a lot of video interviews, so if you head to our website at www.webmarketingadelaide.com.au, you can actually see the video version of this interview, which would also be up on YouTube and I can see Trevor there ready to go so, I think we’ll just launch into this by – I’ll get you Trevor to just explain to us a little bit about yourself, what you have done to get you up to this point and what are you working on right now?
Trevor: Yeah sure, thanks, thanks for having me on today! My background has always been a software engineer at Motorola for a number of years and when they decided to shut down the software center, we had a team there that worked pretty well together, so we thought we’d start a software business. Along the way, we found a number of things that we could do well together as a team, some failings that we had as a team as well but most importantly what we’ve come across over the past few years, and specifically the outcome of the process of this lean start-up idea, and how a lot of the things that we did along the path that, perhaps at the time seemed like the right idea would have if I’d known about the lean start-up back then would have been a lot better.
Basically, we started a software company, from that, we decided to try and develop a product, and that product that we developed is an online backup solution that is distributed backup solution. So, rather than have a single server towards the back-up, they distributed around the network. So, utilizing spare how dispersed to a community of users. We made it, as a simply, made a lot of – we did a lot of great stuff, software that we made is fantastic software, then in terms of marketing tree strategy is where the lean start-up really, in my opinion, hasn’t nailed, the process that Eric Reese describes in his book as fantastic and I think a lot of it applies to what we could have done perhaps a little bit better as well.
Nick: Great! That was pretty good, just to expand on that, so the lean start-up sort of, lean start-up is a book by Eric Reese – I haven’t actually read it yet. It’s sitting over there on my dresser, that I need to read but it is a set of methodologies. Did he sort of invent them or did they exist before and he sort of popularized it? How did that fit in?
Trevor: From my understanding of the background and certainly, I’m not an expert on lean start up, it’s just my own reading of the book and my own understanding of the lean principles where I believed developed at Toyota in Japan and in relation to manufacturing. So, really what it is about it is cutting out a lot in the fat in the manufacturing process to ensure that there is minimum amount of waste and minimum amount of processing that occurs prior to them actually doing the manufacturing. So, in that regard, I think what Eric saw and what he’s applied and what others have applied even before him and didn’t perhaps give it that name, was a way of applying that to a start-up of a business and that can apply. I think it applies really, really well to software businesses and especially web start-ups. They can apply across the board as well.
Nick: Great! Let’s move on and start off the topic with, why don’t you explain a little bit about what the lean start-up approach is and what it is about?
Trevor: The way that I look at it, I guess my interpretation of the book and certainly, you say you haven’t read it and I’m sure most people haven’t to date but I definitely recommend you read it. It’s a great, it’s not a long book but it’s very well written and you can get the concepts pretty quickly. Lean start-up is really about developing what your minimum viable product is. What’s the thing that you can get out to the market as quickly as possible to start either making money ideally, but at the very least, learning what it is that your market needs before you can get to the point of selling it. So, a minimum viable product I was reminded – actually just this morning, I was watching the dropbox story, which is a great example of lean start-up, of an application of the lean start-up.
They’re actually talking in there, the founder was talking in the video about the fact that a lot of the lean start-up stuff that they did, some of it was delivered and some of it they actually just accidentally come across as well but in there, his minimum viable product was actually a video that he posted on Hacker News site, where he basically did a screen grab of him using the technology, using his product and invited comments from people and straight away he was interacting with the market and finding out from the market what it is that they would willing to buy.
So, what they bought [Inaudible 00:06:15] is getting a product out there as soon as you can and then from that, following the process of building something, measuring what you’re doing and learning from it. So, upfront you want to ask yourself some key questions. What is it that people gonna buy? What is it that people might buy that are in my space and start investigating that, and that’s not desk work, that’s actually putting something out there and getting people to, either put their email address online – another thing is having a landing page where people can actually go in and say yes, I am interested in this product when you launch it.
By doing that, you can actually see that there is an appetite for your product out there in the market. Having a landing page is where you are actually having different types of wording and finding out what it is that your market, the type of language they use as well. But at every step along the way, you want to be building something, measuring what it is that you’re building, measuring that and learning from it and in the book they talk about that, that in the early stages of a company, it’s not actually about the number of dollars that you have in but those sort of learning points that you have.
So, what is it that you have learnt along the way, obviously it all needs to turn into a business eventually where you are making money but along the way, it is actually you can be showing progress, not by how much you have sold but by how much you have learned and how closely do you rely to having something that is of interest to the market and what they are willing to pay for.
Nick: That makes good sense. Seems to be concepts that every business should follow but is it, specifically for technologies type businesses, start-up businesses? I mean, you mentioned that it can apply to other businesses too, can it apply to every business, in your opinion?
Trevor: Look, I think there are facets that can apply to every business. I think the build measure learn, sort of idea can definitely apply to probably every business in some way. The value of it to a technology start up of course is that you can get a web page up in 5 minutes. You can change the content of that web page in 30 seconds, so your time to market for and time to be able to react is a lot quicker than say, a manufacturing business, where if you were trying to get out and a build a widget and find out if people are interested in that widget, even just the idea of getting to a prototype stage where you might deliver a prototype to 20 different people and get their opinion on it.
That’s a lot costlier than getting the next Instagram created website for example. It’s a lot easier to do than software and technology. So, specifically software in the world, so our industry in that regard could be a better place to make the most of the ideas of lean start up but also – I think what they talk about in the book is that start-up doesn’t necessarily mean someone working out of their garage. The idea of this, it is really about a being a lean entrepreneur, an entrepreneur can exist within larger companies too you know.
The term entrepreneur is usually given to those sorts of people and those entrepreneurs can actually, given the right structure go out and do this process within a large company as well so if you think about start-up not necessarily in terms of a business but in terms of an idea and it’s about innovation and about applying those principles to taking that innovation to market in a way that actually gets the most customers quicker, quickest is really the end go.
Nick: That would make quite a bit of sense there as well. I guess the other thing with the web is that makes the measurement path easier.
Trevor: Exactly! That is exactly right, again going back to manufacturing example and giving someone a widget measuring that is hard. They play with it for an hour or 2 hours, they give it to their son and they play with it for 3 hours and measuring that is a lot harder with a physical device that as a whole industry around that process whereas you are exactly right on the web with tools like Google analytics and even tools like un-bounce is I’ve come across recently as a landing page tool, and there is a lot of them out just Google on the front but you can find that information.
Nick: Yep, definitely it is one of the advantages of the web. When I sort of first heard about this lean start-up approach, lean start-up methodologies, I was actually hearing about it from Podcast and things, whether talking about more from an established business who is launching a new product. I just want to get your thoughts on that, that its not just for starting a new business but it can also be used for an established business who’s launching a new product or perhaps some other new aspect.
Trevor: Definitely I think, to be honest the way that I see this and it’s sort of an innovation can be simply even a new process of how you do what you do. Following the lean start-up methodologies is a great way to do that, and it really is just about testing in a hypothesis in the market to see if it is actually gonna stick, if you want to put it another way and that can apply to any new business, to any new product, to any new process, to any new service. Any of those can take some of that lean start-up ideas and apply it to their business.
There’s probably going to be eco-system of support around that. In the book, they talk about , I think it’s Intuit is the name of the company. I might be wrong on that but basically, I think they’re pretty large software vendor in the U.S. I think it counts as a top software and they actually, they might be as big as 15,000 people. Whenever they bring a new product to market, follow this lean start-up idea or methodology because it’s a great way to bring a product to market.
So, around that, their management structure support and understand that there has got to be some give and take around dollars. It can’t be just all about next quarter’s results, excuse me because what you’re trying to do is get something out of the market and get some feedback around what it should be doing before delving too deep into product development.
Nick: Yeah, great! We will move on now. You actually recently gave a talk, I think it was at the lean start-up meet up in Adelaide and you wrote a blog post about some of the not so much mistakes you made but your business in which we want to perhaps talk about a few of them. The two I’ve sort of singled out, that I thought would be interesting were, one, listen to your market and two, expect failure. So, could you just talk to us a little a little about the listen to your market aspect.
Trevor: It comes back to the build measure learn thing. One of the things that I think the mistakes we made is that we thought we knew what our market wanted and went out and developed a fantastic piece of software that sold for that imagined market and as we got it out we realized that, there was a market for that, maybe they weren’t willing to pay as much as we needed to charge or they weren’t willing to use it in the way we thought they would use it, so, listen to your market. In my mind, it’s really about the fact that you actually need to be out there talking to the market every step along the way.
Don’t invest too much time in building this wonderful software or wonderful system that nobody’s ever gonna use. If you don’t know what the market wants and what the market’s willing to pay for, then it’s absolutely irrelevant how good your software is and really, that is the key part of that listen to your market, is to not only listen to them but actually explicitly go out there and solicit at their feedback as early as you possibly can. We did do some of this through you know betas and sure enough, but we weren’t asking the right questions.
The questions we are asking them about the market was, does this product work for you? Are there any bugs, when really what we should have been asking was would you be willing to pay money for this? And at that point what’s missing from it that would make you want to fork over your cash? That’s really, at the end of the day, for business, that’s what matters, is people paying for it not how many users that you have.
Nick: Yeah, absolutely and I don’t know if that thing relates to it is often described that people can say that they will buy a product but actually buying a product is a different sort of thing. So, if you can, I don’t know, are there any strategies that you are aware of where you can kind of bridge that gap between what people will say and what they will actually do?
Trevor: A great way to do it, obviously, it depends on your product, is to ask for a credit card number, so even if you don’t have a product to say or that your you know you’ve got a product that you don’t think it’s exactly 100% there, is to actually ask for a credit card, is to get people to pay for it now. What they are paying for and know that is something you can test, so are they paying for 2 years subscription or are they paying to get into the beta program? That’s one way around it. It is a tough one, it’s one that I don’t think there’s a catch or a solution for but it really, I think if you are solving their problems along the way, one would hope that the money comes with that.
So, if you are actually solving a market need, yeah you’d hope that eventually, that would relate into dollars, and so if you’ve got that right and you listened to your market and you know what is that they want, then you can find that out and then you can do some testing around that as well. So, even if you get the point to the product, the product will point where you are, yes, we are happy with this as a product in the market. You can then see a different product points and so okay, let’s try it at $300 a month and see what sort of results you get and using that information, we’ll be able to determine what the sweet spot for that particular market.
Nick: Yeah, that seems to work out for businesses when they’re not, before that when they are trying to speak to the market. What’s a good way to get out there and do that? I’ve heard mentioned before that you should do lots of cold calling to your target market and to get them on the phone and talk to them about their problem so you can really understand it. Is that a good strategy do you think or are there any others?
Trevor: I think it is. I think, certainly like occasionally like Adelaide is quite good in some look outs because getting access to some of the people is key decision makers in companies can be relatively simple because of the size of the network here in Adelaide. So, everybody knows everybody as you would know, so eventually, it doesn’t take you too long if you want to talk to the head of XYZ or the head of this branch. Obviously, that’s important the market you are trying to enter into, so, having those conversations is really, really important and especially if you want to try and find someone who can help you to develop the product to help you be your channel to the market.
Having early conversations with those sorts of people, and people who are actually talking to the market you are selling to day in and day out. So, they might be selling a product that’s similar to what you are proposing, maybe not a competitor but something that is complimentary. If you go out there and talk to them and find out because they will know you would hope, what their customers paying points are and be able to cover off a large set of customers with potentially one conversation. Look, other ways you can do it as well are surveys, again come back to the dropbox example with the video .
If your audience saw you know that you need to get earlier doctors on board, find the areas on the web where those people are having conversations. If you are selling, you’re selling something that relates to over clocking your motherboard well, there is an over-clockers website, a forum there, so go talk to those people there. So, being smart about it and using the internet to do, and social media is another great example of that and might get informed coming to social media in that regard as well just a bit different flavor of it, but going out there and using and finding out what your customers are talking, even if you are just watching the conversations that they are having there, you will find out a lot about what their talking points are by linking groups, now Google Plus communities, these sorts of environments now, utilize those to find out what it is that your market is saying so… It does depend on what your market is if you obviously if you sell consumer product, versus say an enterprise product will be different communication style. So, is and they would communicate in different ways and will have to ensure that you use the language of those different communities but generally find out what is your market talks and get involved in those conversations.
Nick: That makes sense, obviously. Another thing I’ve seen and I think you sort of briefly touched on it earlier on in the interview, was you can get these sort of email, captcha things that you put up on a website and then you just drive traffic to it perhaps by adwords or some other paid mechanism and it might be like a simple question related to some sort of product that you’re thinking of developing and then the idea is, what kind of conversion can you get to people putting in their email, address which is you know it’s not a payment but an email address is something that’s semi-valuable. So, people don’t just give it out. Yeah so at least you’ve got some sort of investment there. I guess that’s another thing that you can do. Have you had any experience, any ideas on using paid traffic?
Trevor: Another book that I would recommend that is along the same lines of the lean start-ups in terms of thinking about your business in a different ways is The Four Hour Work Week. I definitely recommend that as another book to read, it talks a lot about paid search and setting up a niche and I think really paid search is best search for a niche. Without product at one stage there, we had online back-up. As it turned, you’re looking at business, probably a couple years ago now, you are looking at $6 a click. So, if you are selling a product that is $60 a year and at $60 a click, you’re gonna need more than 1 in 10 people to sign up from clicking on your ads.
So, that might be an expensive way for you to get more traffic, however if you’ve got a niche product that people still search for but it’s not highly auctioned or what’s the term, bid on in the Google adwords infrastructure, then you’ve got a better chances of getting some conversions happening there and that’s but obviously, it has to make sense and that’s where you’ve got to make sure that you marry up your adwords content with the content on your website as well so, so definitely it can work. I haven’t personally been involved in [Inaudible 00:23:19] that have done it successfully but again, if you could read Four Hour Work Week, there’s some great examples in there of people who had just done that.
Nick: Yeah I just thought reach back and pull out the book of The Four Hour Work Week, which I do have, so yeah glad to say that I’ve actually started this one and like the lean start-up and sort of so good, it’s really quite well written and interesting. Let’s move on to the second point here, expect failure, can you elaborate on this little bit?
Trevor: In some ways, that’s the, our background as software engineers working for a large software organization quality was of the outmost and releasing anything that had a bug in it was a big no no, for a various reasons especially at that point in time. Once you got a mobile phone or a base station out in the wall, having to do patches on those to fix bugs isn’t that easy and could be quite costly if you can imagine a phone recall for an organization to bring back a mobile phone to be able to re-flash it and to fix a bug, is just not gonna happen. So, I get it, for an organization like that makes sense, but we probably took some of that, took too much of that methodology, applied it to our business where a back-up product has to work, absolutely no doubt about it but it has to work. But, it has to work for the things that people will need it to work for, so, getting it out there it doesn’t have to be perfect.
If people expect that things that gonna be wrong with software, sadly enough, it says if that is the case but what’s more important is that you put something out there knowing that something’s gonna fail because you wouldn’t have thought of every single moment that somebody’s gonna use your software. Again, if you’re doing a consumer sort of solution, I guarantee it will get it out there and someone will use it in some way that you never even thought of you know. They are still running Windows 95 or they’re trying to install it on their laptop, that’s only got 1 megabyte of space left, you know.
So, things like that that you’ve, you can’t even, you probably wouldn’t even think of before you released your software but what’s so important is knowing that’s gonna fail and being prepared for dealing with various failures. So, being responsive to people’s concern and one probably important thing from my personal perspective is owning up to them, not trying to hide the fact that this software has failures, and then once you’ve found those problems, releasing often and that is another important part of, I guess, the lean start-up is that you are always releasing new versions of your software, getting it out there, so that people can experience the new version and fixing bugs in that time.
Nick: Yeah, that makes sense. Well, I think that last point about owning up to them is something probably certain business owners, me included struggle with sometimes because you’re sort of so invested in it and you feel like it’s you know part of you so almost saying that it’s failing is almost a thing against you personally and it’s difficult to own up sometimes, having that at front of mine you should always be owning up and getting onto it quickly and making sure you give them good customer service.
Trevor: I think an important, there’s some cultural things that exist in Australia to around value. Australians generally whether be two puppy or whatever is it we’re not great on trying things and expecting something of it to fail. So, culturally, you have to deal with that as well and you have to battle your own internal feelings about this as well as others in the community or why are you doing this? It probably gonna fail anyway and that relates not only just to lean start-up and entrepreneurship, generally in Australia and it’s get them a soap box over here. In my opinion in Australia, this we are well placed, pretty better than many other places in the world to be entrepreneurs. The way that our system works where you can lose all of your money on a venture and still be able to feed the kids, have a house over here, have a roof over your head and still be able get health care, is better than 99% of the world. I think it’s a fact that we need to embrace that failure, embrace the fact that we are going to fail in certain things and recognize that when that happens you are actually in the best place in the world for failure to occur and not be end up living up in a car as we’ve seen happen for people who are not even entrepreneurs in the States and all around the world over the last few years with the financial issues.
People who thought they had a stable job, lose the job, can’t find any more work and end up out on the streets. So, in Australia [Inaudible 00:28:46] we’ve avoided most of that at a micro level. At a micro level, I think that people would just accept that they can and will fail at something and just have to go because it is so much more satisfying than just doing the 9 to 5.
Nick: Yeah absolutely, and a concept that I think relates well to this I’ve heard described, this fail forward, so trying to make sure when you do fail, you actually learning something from it, so you can re-apply that to your business or change something or fix something.
Trevor: Yeah definitely and I think it’s one of the things that, one of the reasons that I did the blog post and why I’m more than happy to spend the time with you today is because, there are some of those things, the mistakes that we made, I don’t want others to make those mistakes. So, I think, we’ve, a lot of what is happening in Adelaide in the last few years you know Silicon Beach, these co-working groups that they are setting up, there is a real vibe around entrepreneurship and start-ups now in Adelaide that didn’t exist in the past. So, I think it’s important that we all do work together to pool our learnings, so that we can all collectively grow this opportunity of Australia being, in Adelaide, be a great place to have a start-up.
Nick: Yeah, it really is interesting. I’ve been going to various events lately and through another project, I’ve just started what I’m gonna be interviewing various entrepreneurs in Adelaide. It’s really interesting thing that the community grow and concepts like, what we’re talking about today, like the lean start-up methodologies I think are really gonna be important for people who have that energy and have that desire to start something but want to make sure that you’re doing it in the right way.
So you’re not, it’s not much of a waste and so you listen to your market as you’ve said and coming up with solutions that are gonna actually solve some problems that make up, importantly pay for so you can fund your venture so that you can get some value out of it in the end. I sort of touched on briefly again the minimum viable product idea, you sort of explained, what it is to begin with and you sort of mentioned the dropbox video idea. Could you just expand on minimum viable product a little bit, maybe some examples of what a minimum viable product could be?
Trevor: It is, my experience today with minimum viable products has been its [Inaudible 00:31:24] for some people and in their industry they have their minimum viable product. It has to be quite complete before anyone would even consider using it. It’s probably in something like a – especially if you’re talking about technology where you’re traditionally working with technology where you’re working with lawyers and doctors because lawyer and doctors would be less willing to put up with bugs, less willing to put up with issues.
So, that doesn’t mean you don’t go out there and talk to them and find out what the issues are, and try to build that in but your minimum viable product that might be a lot more full featured, released, a well rounded than it might be for say something if you were targeting earlier doctors in the software industry who would know that things are gonna fail, know what the term alpha and beta means and what that would mean for this data, know that if you’re can using a service, they’re gonna have to back up their own data because it may fail at any point in time.
So, you do have to think about who your target market is what it is they might be looking to do but the way that I’ve done it recently is really just to develop a list of features or user stories that describe how the system should function and working with the market in terms of finding out what those features should be, is really just keep looking over those list of features and come back on what you think, now do we really need this for people to start using the product, for people to start buying the product and constantly checking your own assumptions about what it is that you think you’re gonna be building for people. And validating those assumptions with the market and getting it out there.
So, when it comes to a web based software, you know, obviously things like minimum viable product, someone is going to have to log in, someone is gonna have to do something with your app, whatever the key feature is of your app and be able to log out. If that’s what you need to do with your app, then that may be your minimum viable product but, in other cases, you actually may want to include in your minimum viable product, the acceptance of people’s money. If you think that you need to do that before you can launch, then that’s, again, [Inaudible 00:33:52], but again – so I think from my experience, I think, the two definitions of minimum viable product, one is sales based.
So, what’s the minimum viable product that we can release to people who are gonna start buying this solution and the other is, one in which and that was from the dropbox example, one in which people are actually just going to start providing you feed back on it. So, either of those could be determined a minimum viable product but it just really depends upon what it is that you are trying to achieve. I mean for the latter, if I could get something out there as soon as you can, that is going to extract some feedback from people and get some direct, so that you actually use your product and heading towards the goal of you buying it eventually, I think is a better approach than waiting too long until you have something that people are going to start using straight away and buy straight away.
Nick: I mean it’s probably not a perfect example but when I started, first started the Podcast, I had this idea and I had the idea for a while and then I was putting it off heaps and then, eventually I thought I would try and take a bit of a lean approach to this and I’ll just record a podcast and you know I just did it on my phone, which is probably not the best technology and then I thought I’d try to prove over time with the thinking that the main part of the product is really the content and not so much, even on a basic level of sound quality but there are sorts of bits and pieces that sort of surround that sort of extra bits which I can add later, where the minimum viable product is just the content and the sound getting out there.
Trevor: And that’s really good because see what I mean what you’ve shown there as well what you’re doing your podcast and the blog and all of that is not specifically a business, it’s about, you know, marketing sort of opportunity or marketing process that you are following to get people aware of you and to provide that content but you can still apply the lean start-up thinking to that and so, that’s where, to go back, I think to your very first question of where can it be applied? I think if you start thinking about what the methodology is teaching you or trying to achieve, you can apply in a lot of different facets of business and not just around the making of money.
Nick: Absolutely, that’s been a really great interview Trevor. Thanks a lot for coming on. I think this very useful for people who are looking to start a business but also people who are in business and they are looking to sort of improve their processes in relation to products or leaning themselves up. If anyone wants to find out more about you and sort of what you’re doing, where’s the best place to do that?
Trevor: You can obviously find me on places like Linked in, I’m on there and that’s it, sorugo.net is my company, so have a look there. I would love to help people understand more about their current idea for going into market and can help them make that happen.
Nick: Fantastic, I’ll have some links in the show notes for this episode with – to your blog post and then also to your website and your social profile where people can find you. Thanks again for coming on and have a good one.
Trevor: Thanks for having me Nick, take care mate![/spoiler]