Customer Development The Lean Startup Methodology

Customer Development The Lean Startup Methodology by Eric Ries in action

Here I share with you the Experiment Map and Problem, Plan, and Progress framework (PPP). How they work together to extract value or/and to identify a problem. This was from a project that I research but even if you are successful at identifying the problem or value can you be bothered to solve or explore it? Let’s take a deep dive into this…

The Experiment Map is a tight, powerful framework that allows ideas or problems to be validated in a scientific way. The ideas (solution) or problem doesn’t have to be validated straight away or in the first experiment. If the ideas or problem are not conclusive then the process iterates. This is demonstrated in the graphic below: ‘the lean startup feedback loop’ from the lean startup (2011). In this example the idea (problem) > build (plan) measure (experiment) > learn (progress) can be used as a loop cycle to keep iterating until the idea is validated or not, and a pivot may be required, missing out the other elements of the loop, but once in production they can be bought into the cycle. This framework can sit on top of the Experiment Map.

My first experiment is titled “Is it true that there is friction in the mortgage industry”. As I work in financial services I decided to focus on this area and thought about exploring more of other people’s fiction and not my own ideas. This is a poor strategy to discover friction because it’s not focussed and you’re not excited about finding answers or solutions. However, this did create a pivot to “is it true that adults don’t have the skills to financially plan?”. Again this wasn’t very exciting and from the enterprise, clinic hosted by UCL course lecture. I learned that there are tech solutions to solving this problem but users don’t see it as a big issue. I still see this as an issue even if a small segment doesn’t realise it. What I learned from that is that sometimes people don’t realise they have problems and their lives could be better with such tools or financial planning. For example, if someone not investing in a pension for later life gets to retirement and has no income other than the state pension. This could become pretty grim, especially if life expectancy was at 100 years.

In the third experiment thus far there are three loops or iterations (experiments) which I’m still researching. This is a migraine problem and I’ve have had joy in discovering the layers that exist in where the problem lies. When putting together the MVP I gain a deeper understanding of the problem, the current process and the structure of the framework. My MVP was developed by using stock images from Shutterstock and creating a showreel in iMovie with a recorded script and music overlay on the voiceover which was produced in GarageBand. I found this to be a critical experiment and part of the customer discovery, and I will continue to reflect on the techniques and key questions, and continue to prepare scripts in advance of interviews until it’s natural. This line of inquiry elicits information that can help my idea grow or die: 1) is it viable, and 2) do I care enough about the problem to see it through the journey. Use Richards handout the (DoAbilty) validation has been a huge eye-opener for me personally. If the idea grows and develops, and I’m learning and developing the idea and still care then it’s all hands on deck. If not, I’ve just saved myself three to five years of time. My previous way of thinking was once you’ve come up with an idea you automatically committed to seeing it through. 

During my customer development – experiment 2 of 3 – I used an MVP and after many interviews and feedback requests, I discovered what has gone before. In May 2007, HIPS (home information packs) were introduced and later suspended in 2010. Using the antilog and analogs from Richard’s handout (Analog and Antilogs) I used this to accelerate my research and added information that was lacking in my knowledge of the process, and also added to my two iterations of the MVP. This has now allowed me to go deeper into the process and create a Mailchimp survey campaign with an outline of reaching the sale process at UCL and adding an option to email me at UCL or to use a form for anonymity. Out of 16 emails, only 7 clicked through and no one filled in the customer form to share their thoughts even though it’s anonymous, with options for us to contact them with their permission. So I have now created a further experiment. Whilst many didn’t reply I can see via Mailchimp analytics that seven did click on the email so I plan to contact them and arrange a meeting over a coffee to further validate my idea. 

Initially, I didn’t understand the relationship between PPPs and the Experiment Map. I have now learned that the PPPs are for customer development but I used it as a research tool to discover AI and Blockchain. I am very interested in these technologies and excited about the task. If I had set up an experiment map from the outset I would have developed my idea(s) of customer discovery. This would have allowed my PPPs to be more targeted, and actually, less work and smaller concentrated experiments. This can be seen in Week 3 of the PPPs where I seem to

have lost focus on the job at hand but from week 4 the problem has been the same. In fact, I didn’t need to change the wording as the problem was the same and would demonstrate that I corrected the loop. 

The PPPs are the framework where data is collected; the experiment map being the lab work where everything started with the leap of faith assumption. First, we need an assumption or leap of faith and make the research (PPP) focussed around that for the following week (cycle). In the context of the MSc program at UCL, by using time – 17:00 Tuesday – this allows each iteration of work to proceed. If I can eliminate an idea in any cycle, that’s great and the quicker the better: validating the death, quickly, is a job well done. Following that, a pivot or new assumption is required. If new assumption then move on to the next leap of faith. The leap of faith is non-scientific assumption; by using the experiment map and the work of PPP activity we validate the idea in a scientific method where faith is eliminated and becomes a solid conclusion which again leads to a pivot, trashing the idea or persevering with experiments until we hit a conclusion. 

Before the program, I had fallen into the mindset of not executing ideas. However, this model has provided a methodology of how to research and validate ideas. Even the way I initially executed the PPPs was to execute them first. I should have slowed down to speed up and look at what went on before and analyse the example of the work from the student last year that was handed out as part of the assignment brief. I can see this gung ho execution method is where one’s ambition can potentially reduce the chances of success, as we all have only a finite amount of time. 

It goes back to The Practice Thump Theory: “Many startups fail, not because they fail to build what they set out to build, but because they waste time, money and effort building the wrong product.” – Ash Maurya (Thump Theory). 

Customer discovery should always be at the heart of any startup or business. Especially startups because the early discussion has a major impact on its success or failure. The business should be in a consent feedback loop of learning from the customer whether it’s feedback, interviews or product usage. This is all essential feedback. Plus, there are always technological advances, e.g. a tech push or a market pull. Bitcoin was a market pull, with a segment of users purchasing illegal products on the dark web with the underlying technology. Blockchain has been critical but the technology started developed in 1991 and Bitcoin emerged c. 2008 after the financial crisis, e.g. a market pull. In coming years this technology could make the World Wide Web look like the Wild West, displaying how a new piece of tech can enter into the market and change the game or be a doormat until an event triggers its usage. Therefore, every business should be in startup mode for long-term success/survival. This could also be said for people’s careers in the workplace in this new economy. 

The Experiment Map and PPP framework in action

PPP (WEEK 1) 

Tuesday, 9 October 2018, 1:32 PM 

WEEK 1 

Problem 

Investigating problems in the fintech space. Exploring banking problems, mortgage challenges for end-users, and the industry or workplace issues. 

Plan 

1. Speak to a group of people that use online banking and find out their friction B2C. 
2. B2B speak to 3-5 mortgage advisors and see where they have friction in their processes. 
3. Start to seek UCL resources to learn more about new technologies such as AI and blockchain. Plus learn about Software as a Service (SaaS). 

Progress 

• I spoke to a gentleman, aged 50, who has x2 children in private school. Friction is finance generally. Could he use general finance management tools? ● I spoke to a client, a 55-year-old female / US citizen who has 2 teenage children and finds friction when transferring her account from one bank account to another. Friction exists when the account switches over the direct debit. The process is slow. The language re each savings account is different from the US. She uses HSBC international and considered Citi bank for American payments so when the family sent kids money it was easier. She used to have a separate account and her husband can see what is being spent now they have merged

accounts, his tolerance for spending is less. The kids will need extra cash when they are older. Also, the family needs to consider weddings, uni fees, deposit for a house. 

• I spoke to a 45 year old male, 1 child approx 2 years and one on the way. He forecasts his finances in excel, analysing every 3 months for large purchases and monitors so not to get overdrawn once a week. He thinks Monzo and Santander have tools for notifications if you go into overdraft. 
• Booked and attended an event at UCL blockchain on 8th October 2018. Learned about more uses of blockchain as a technology. This event was also an intro to LBL society (London Blockchain Labs) 
• Also booked an AI Event at AV Hill Lecture Theatre UCL Monday 15th October 18:30-19:30. 
• I spoke to a mortgage advisor who uses a network intrinsic and thinks an API tool for client data extraction would be useful. 
• I spoke to a client and he felt that a website tool for progress, feedback is important, online is best as a face-to-face. 
• I spoke to a mortgage, investment advisor. He uses SimplyBiz which links to True Potential (there is no feature that allows him to download his clients) This is the same for intrinsic and with no renewal alert tools. 
• I’m still conducting interviews and research for this business tool. 

PPP (WEEK 2) 

Tuesday, 16 October 2018, 5:18 PM

WEEK 2 

Progress

• I spoke to a gentleman, aged 50, whom has x2 children in private school. Friction is finance generally. Could he use general finance management tools? 
• I spoke to a client, a 55 year old female / US citizen who has 2 teenage children and finds friction when transferring her account from one bank account to another. Friction exists when the account switches 

over the direct debit. The process is slow. The language re each savings account is different to the US. She uses HSBC international and considered Citi bank for American payments so when the family sent kids money it was easier. She used to have a separate account and her husband can see what is being spent now they have merged accounts, his tolerance for spending is less. The kids will need extra cash when they are older. Also, the family needs to consider weddings, uni fees, deposit for a house. 

• I spoke to a 45 year old male, 1 child approx 2 years and one on the way. He forecasts his finances in excel, analysing every 3 months for large purchases and monitors so not to get overdrawn once a week. He thinks Monzo and Santander have tools for notifications if you go into overdraft. 
• Booked and attended an event at UCL blockchain on 8th October 2018. Learned about more uses of blockchain as a technology. This event was also an intro to LBL society (London Blockchain Labs) 
• Also booked an AI Event at AV Hill Lecture Theatre UCL Monday 15th October 18:30-19:30.
• I spoke to a mortgage advisors who uses a network intrinsic and thinks an API tool for client data extraction would be useful. 
• I spoke to a client and he felt that a website tool for progress, feedback is important, online is best as a face to face. 
• I spoke to a mortgage, investment advisor. He uses Simply Biz which links to Tru potential (there is no feature that allows him to download his clients) This is the same for intrinsic and with no renewal alert tools. ● I’m still conducting interviews and research for this business tool. 

Problem 

• Will Iress, true potential and any others I discover open to solution integration? 
• Does this friction have a larger audience? 
• We need to pursue where the b2c issue is greater than the b2b challenge 
• We need to determine if the problem is worth solving 

Plan 

• To communicate to vendors and see if they are open to a software integration. 
• To focus on a b2b solution and arrange 3 interviews 
• Start to connect for a similar discovery for the following week to experiment with b2c

PPP (WEEK 3) 

Monday, 22 October 2018, 10:49 PM 

WEEK 3 

Progress 

Last week, I met with Simon and other students during an enterprise clinic. I decided to continue making inquiries to learn in the areas where I identified previous challenges. The students were more B2C and I discovered that there are other companies exploring my solution or have executed the idea. For example, a Russian bank has a software tool that analyses your transactions and tags them as categories making it easier for the user to budget. As a wealth creation tool, Simon mentioned running a calculation for an individual that saves £100 a month for 8 years with a compound interest rate and see if that leaves them with a deposit for a house. 

I attended a blockchain event at UCL and discovered a few new usages for blockchain that were not obvious to me until this event such as when shopping in a store on the BC network you would not leave your details with the store once you’ve purchased. Also, logistics companies can track every single item in its inventory and its location whilst dispatching. This would / could be removed, lost or stolen items from the supply chain. This is quite mind-blowing! The blockchain network could make the world wide web look like the wild west. 

I’ve emailed Andrew Todd CTO at IRESS for an interview for customer discovery to see if as a company they are open to software integrations as a feeler to this market. 

I’ve booked 2 interviews with wealth manager advisers. One from a member St James Place on the Friday 26th October 16:30 and the other with KDW on Monday 22nd October 16:00. The interview with KDW has taken place but I have decided to keep the appointment on the 26th even though I have moved on from this idea. 

I’ve now decided to park the current idea and explore a new idea after Richards lecture where he mentioned our ‘means’ and a ‘headache problem’. So I

developed this Hypothesis “is it true that in the property sales process there is a lot of friction and a software tool could help the process?’ 

Problem 

I need to explore that in the property sales process there is a lot of friction/frustration and a software tool could help the process. 

Plan 

I need to speak to ‘would be’ purchasers or people that have purchased, Estate Agents, Mortgage Advisers, Banks, Lawyers or Law Society and possibly the Land Registry. 

I also still need to find an AI event to attend as I missed the event on the 15th October at UCL. Also, I want to visit the Computer Science Lab Event. 

PPP (WEEK 4) 

Tuesday, 30 October 2018, 3:01 PM 

Progress 

• I’ve booked onto an AI event of PHDs at UCL for Thursday 1st November 2018. 
• I’ve reached out to consents.online as they are the technology that synchronises bank account and Experian. 
• Maiko gave me feedback on my PPP’s last week and suggested a meet up with Mark as we maybe working on a similar project/customer discovery. I’ve arranged a meeting with Mark for Wednesday 31st October 12:00 after class. 
• I’ve booked an interview with Paul Barnes on 1st November at 15:00. Paul’s at a Solicitors LLP and the Law Society Council so it ties into my plan from last week.
• I’ve reached out to the previous CIO, Rowland Coombs, and Gordon McMullan, at the Land Registry as the current one isn’t displayed ● I’m scheduled to spend time in the Computer Science Labs Thursday 1st November. 
• I attended Tech Day at Old Billingsgate. I met with Founders and learned how they are raising funding, met with Fintech banks, and discovered how Salesforce integrates with other solutions such as air call. I also learned how we work has created a community from their property offering and how by renting at WeWork you are buying into a community with events exclusively for members. 

Problem 

• I need to pursue my investigation to discover if there is friction in the property sales process and explore if a software tool could aid the process. 

Plan 

• I intend to continue to explore my investigation around the friction in the sales process with the activity above to be executed that has overlapped into this week. 
• I will commit to source interviews with a professional 
• I need to re-arrange a meeting with <person> of St James Place.
• I’m also going to perform a carpet bomb approach to some customer interviews with the general public e.g. Banks, Lawyers or Law Society and possibly the Land Registry. 

PPP (WEEK 5) 

Wednesday, 7 November 2018, 7:27 AM 

WEEK 5 

Progress 

• I spoke to multiple Estate Agents in the NW3, NW8 and W9 location regarding the friction in the sales process. In their opinion sales fall through due to legal technical issues such as a defective lease, license to alter issues and poor pace of the legal professionals. Plus managing agents taking their time not responding to enquiries. 
• I spoke with a member of the public 25 – 45 year olds re the property sales process and they didn’t really have a conclusion or solution but on interesting thing came out about deposits. A customer finds it difficult to save the funds for a deposit. Even though the mortgage would be a cheaper option than renting by a considerable amount. This is a line to follow at some point. In the current market the maximum LTV loan from a bank is currently 95%. 
• I can see that there are many different elements in the process that either need refining or tweaking for the current market.
• I’ve learnt more about AI and its capabilities and how the program can develop or improve strategies over time to start to build better solutions to a given problem. 
• My solution will evolve as I constantly learn new things. I have learnt that managing agents also play a role in the interference to the process. 
• Connected with John Abbott Director of Digital, Data and Technology at HM Land Registry from a connection with Rowland Coombs on Linkedin and to arrange a meeting. 

Problem 

There is a frustration and friction in the property sales process but I need a product that is able to evolve with the market needs and my learning. 

Plan 

• I’m going to create an MVP and present the solution to customers (Estate Agents, Lawyers, End Users – Purchasers, Managing Agents). ● I will continue with customer development. When I have an MVP then I will use that as a way to learn more from the problem 

PPP (WEEK 6) 

Monday, 19 November 2018, 9:39 PM 

Progress

• I built an MVP and I am now in the pursuit to learn more and structure my research into an experiment map. 
• Whilst planning the MVP I observed where the true process challenges are positioned. I now aim to use my MVP with a lawyer to see what I can learn. 

Problem 

Is there frustration and friction in the property sales process? Plan 

• I will continue with customer development with the MVP. 

PPP (WEEK 7) 

Tuesday, 27 November 2018, 1:12 PM 

WEEK 8 

Progress 

• From my MVP I learned about the HIPS pack that was scrapped. introduced in 2007 and was suspended in 2010. 
• The HIPS pack was suspended due to the cost that was incurred by the sellers. Estate Agents claimed it slowed down the market. 
• RICS also put pressure on the government. I suspect they could see themselves losing business.
• Using the antilog and analogs I have enhanced my MVP from the HIPS discovery and tested with a customer segment of 25 – 40 year old would be buyers. They all get it and it makes perfect sense. At this stage they probably learned more than me. 
• By going through this process, of developing an MVP, it’s allowed me to identify the problem and also the structure of events and zoom in on different aspects. 

Problem 

Is there frustration and friction in the property sales process? Plan 

● I will continue with customer development of the problem and a questionnaire will test another customer segment. I will send a survey via email with mailchimp to 16 lawyers to find out their friction in the sales process, if at all. This has been added to my experiment map along with 5 other experiments. I plan to use the new enhanced MVP on the lawyer once I have some feedback via the mailchimp email campaign.