Blog

August 25, 2011
Lessons from the Lean Startup Challenge

I started using lean before joining the Lean Startup
Challenge so I wasn’t expecting to learn too much from the competition, but,
even so, I learned more about my startup in the first two weeks of the
Challenge than I had in the previous two months.

Going lean is hard. When I say "Lean", I’m not
talking about just building a company – I’m talking about getting out of the building,
relentlessly focusing on performance,
and pivoting like
lightning. And when I say "hard", I’m not talking about sleepless
nights – I’m talking Stanley Goodspeed on his knees in a warehouse at Alcatraz
stabbing himself in the chest with a syringe
. Lean Startup requires that you confront all of the most
uncertain parts of your business model up-front, based on the realization that
uncertainty is the greatest foe of a startup. Uncertainty is stupid. You’re
smart.

Joining the Lean Startup Challenge (LSC) was a great way to
get feedback, support, and a little healthy social pressure to accelerate my
startup’s war on uncertainty. And these benefits are universal - there’s
nothing uniquely lean-friendly about my startup (called Starfish, my startup makes it so you
don’t have to use the same username/password/email combination online over
and over again – think of it as bitly for email addresses combined with a
username/password wallet).  

How the LSC helps contestants isn’t a mystery; its power
comes from its focus on transparency. As contestants, we share some critical
information for LSC judge review every week: our business models, our
hypotheses, our performance metrics, and a weekly blog describing the inner
workings of our business' development. I'm not going to lie and tell you it's
easy: opening the kimono all the way for the first time takes a healthy shot of
courage and a good long look at the face in the mirror. But this transparency
is incredibly valuable. Sharing real performance metrics (typically AARRR)
encourages a focus on the parts of the business that really matter.

In addition, many of us have elected to voluntarily share
openly with our peers. Most of us share our metrics and blogs with the whole
LSC community. We also share our latest challenges in the weekly Thursday LSC
Q&A sessions at VentureCafe, or through the LSC Forum on the LSC website. I
saw a great example of this peer-to-peer sharing early in the competition, when
Brant Cooper came to run a workshop on business ecosystems. In that session,
Brant ran through the entire ecosystem for Localocracy with
its founder Conor up on a whiteboard with all of the LSC contestants in
attendance. Ash Maurya did something similar during a session on the lean
canvas with Brian from SociabO (lean canvas is an approach to
showing a business model in a consolidated form which is handy for logging
pivots and visualizing uncertainty). The open sharing really sets LSC apart
from many other competitions. There’s more camaraderie among the contestants
than I expected and I’ve received some great assistance from other contestants.

For my part, in these first few weeks of the LSC, I’ve
rapidly moved closer to my goal. At times I have had to take creative and
dramatic actions to achieve truly significant performance improvements, as
in week 3 when I
re-hauled Starfish’s marketing campaign to cut customer acquisition cost by
more than half. At times I have had to find creative ways to rapidly collect
customer feedback, as in week 1 when I
interviewed Red Line riders at Charles/MGH, or in week 4 when I
quantitatively measured the pain point on 150 Mechanical Turkers. In the past
few weeks, I've confirmed several product-fit hypotheses, locked in some good
marketing strategies, improved pricing, and realized that a bunch of things I
thought were good ideas actually were not. 

The LSC’s solid structure, and the positive social
reinforcement that comes with it, helped me remain disciplined in using the
lean methodology with my startup. These things come in handy when you’ve got to
do something tough that you know is good for you. I could have ignored the
contest, and I’m not sure I’d know as much about my business as I know now. And
ultimately, that's the best outcome I could have asked for from the Lean
Startup Challenge.  

Jared Chung is the Founder & CEO of Starfish, an email privacy startup and a former McKinsey Engagement Manager.  You can read additional posts about Jared's experience with his company as part of the Lean Startup Challenge by clicking here.  You can also follow Jared on Twitter (@jaredchung) by clicking here.  

Editor's note: Jared is a contestant in the Lean Startup Challenge and his opinions are independent of the lean startup program leadership.  To find out more about the Lean Startup Challenge, go
to http://www.leanstartupchallenge.com.