Hello and welcome to the bottom-up skills podcast and my passions own the CEO of Qualitas. And boy today we've got a whole series. We've been to design thinking and agile, but today we start on a totally new chapter. We're going to do a multi-part series on the lean startup. And frankly, I'm quite the fan.

Of the lean startup. So in this episode, I want to lay some context. I want to give you a little bit of background to lean and what I'm going to hope to do is point out to you what really defines it, um, as a great. Method to use when you're going out in the world to build a brand new product. All right.

Let's get into it. And the [00:01:00] story starts with a gentleman called Eric Reese who wrote the book, the lean startup. And I really want to share with you the most compelling part of his kind of founding story. And, um, it all starts. With failure. And that's why it's so interesting. He spent five years as a co-founder in a startup.

They spent over $40 million in funding and they built a product. They didn't nobody wanted to use. Now for many of us, this is a bit of a heartbreaking, it's a bit of a gut wrenching experience to spend so much of your life building a product that it turned out that nobody really wanted, but being ever so stoic.

Eric actually used it as an opportunity to kind of dig into the, you know, the [00:02:00] rapid process improvement universe and dig up this, um, Idea of lane and to really reinvent it through the eyes of a startup and those startups are generally software based and moving fast in the modern age. So I cannot tell you how powerful this is as a starting point, because he's literally written a playbook that has.

Taken off it is absolutely, uh, a global phenomenon now in anyone. So largely not only in the venturing world, but the product world, even in the enterprise world, you will find that not only are people trying to be agile, but they are trying to be lean as well. So I'm very excited to share with you what he put into the lean startup and how powerful it really is because he's effectively.

Written the book he'd wish he had read at the start to avoid [00:03:00] those five years and wasted $40 million. So let's look in to the learnings from Eric Reese and the lean startup. So what is this thing? Okay, so it's a methodology. So the good, good news about methodologies is they tend to be step one, step two, step three.

They tried to be repeatable. And that's certainly the case here with lean startup and is particularly good at building products. People use it for building businesses as well. And, um, Sure. That's, that's fine. I think it stands alone as a great way to build product and it needs to go hand in hand in hand with many other practices, but I'm going to try and pick apart what it's very special at and where it contributes so much value.

So. As I said, it's a methodology for building products and it's, what's really important is we emphasize building the [00:04:00] right product. It's very fast. It's very iterative process. And it really strives to determine is the product viable. And, um, viability is an, a very important, uh, topic because if we really go and ask ourselves is something viable.

We're saying really are the economics going to work out? Can we capture enough value now to reinforce you? What? I think this is so important. It's actually, it's not that hard. To build a product that, you know, users find desirable, but where it really becomes challenging is, is it technically feasible? And from a business model perspective, is it viable and lean is so damn good at helping us work out.

Is this a product? And here's the keep it, is it worth building? This [00:05:00] is really, really important. Um, nuance in it. Is it really worth building? Because I know I've personally made products that may have been either. Feasible, uh, or desirable. Um, but that doesn't guarantee it's going to be viable, that there's going to be a good economic model.

Value's going to be created. Customers are happy and willing to pay for the product or service. This is where lean helps. And what's so special. And why I love lean startup so much. Is this all about learning? It's all about this journey. That is defined at not by, you know, do you have like this amazing idea, right?

Um, it's this total fairytale that we're told that someone has an idea and then that makes them a gazillion dollars, lean startup acknowledges the hard truth. It's in the execution. And to take you back to Eric's [00:06:00] story, he spent five years and $40 million learning that he didn't get the execution. Right.

So if you learn along the way, You are way on track of forgetting execution, right? And therefore, what's so great about, uh, the lean startup. It doesn't matter how little, you know, at the start, what really matters is your rate of learning. And that's why it's so, so damn important. So to frame this, before we move on to some of the important aspects of lean startup, this is a way to know.

If your product's gonna make enough money, is it truly worth doing? And this is essential because actually, you know, the barriers to entry to building product have diminished. So there's a lot more products out there. And there's also quite a lot of products that are no good, but that's a whole nother course and masterclass and discussion here on bottom-up skills.

So. Let's have a [00:07:00] look at some of the surrounding practices around lean that you may have heard of perhaps, um, you know, you may have heard of, um, lean manufacturing, which goes, has a lot of heritage in, uh, Japan. Obviously it intersects a lot with some of the, the agile practices at, uh, Toyota motor company.

So, you know, definitely check that out if you're interested in it. It also has another intersection with agile in terms of the practice of Kanban, which is really focused on, um, feature driven development. Um, traditionally not very time-boxed. Um, now another couple that you might have heard of is, uh, just in time, uh, just in time manufacturing, um, you know, this whole idea of trying to only consume the resources at the very end, and this is perfect because then you're not left with a whole lot of inventory [00:08:00] just sitting around in a warehouse.

So there's a lot of, uh, process improvement, um, and agile connections with the lean startup. And if you're at all interested in any of those, just have a look at that greater world of the lean method beyond lean startup, what we're talking about, but go into the lean method and you will find a world of different methods and practices there.

So let's come back to software. Cause we talked for a moment then a little bit about, you know, manufacturing. Um, and some of the other related practices, lean startup is largely and foremost for software. And prior to lean startup, the way a lot of software got built was using what we call the waterfall process.

Now waterfall created all sorts of nice structure and certainly in people liked it a lot. You'd start with writing and requirements, doc, what does it need to do then? You write the specifications of, okay, this is how we think [00:09:00] the system, the software will do it. You design it, you implement it. And then once it's implemented, you do some testing before you launch it.

Now in this day and age, that's pretty crazy. And there was all sorts of bad habits that got, uh, related to the world of waterfall. First and foremost, people would write a requirements that were. Uh, between you and me, they were largely just one big guests. And, um, often in, particularly in large organizations, because we have agreed the requirements in the specs, that's what we promised to the boss.