10x Growth: How To Use MVPs In Your Marketing With Ash Maurya [AMP 069]

On the Actionable Marketing Podcast, we are kicking off a new series called 10x Marketing Interviews. CoSchedule’s own CEO, Garrett Moon, has written a book called The 10X Marketing Formula. While writing the book, he interviewed some of the sharpest minds in marketing. We’re going to be listening to some of his interviews. Today’s interview is with Ash Maurya, a successful entrepreneur and author of The Lean Startup Movement, That’s Running Lean, and Scaling Lean. He understands how Lean works and is going to talk to us about how we, as marketers, can apply the principles and tools to our work. You aren’t going to want to miss this series or the interview with Ash! Some of the highlights of the show include:

• The Lean Canvas: What it is, how it works, who would use it, and why it’s beneficial.
• The steps that go into creating and developing a Lean Canvas: Finding solutions, taking risks, and setting priorities.
• What a minimum viable product (MVP) is and is not, as well as how it provides value for both business-owners and customers.
• How to determine what’s next after the MVP process has been completed.
• How marketers can use the Lean Canvas to improve what they’re doing and to prevent them from going too far down the wrong path.
• The Lean Sprint mindset and how it can be used.
• Ways to take a big idea and turn it into a small MVP.
• Ash’s best tips for people who want to try Lean Canvas for the first time.

If you liked today’s show, please subscribe on iTunes to The Actionable Content Marketing Podcast! The podcast is also available on SoundCloud, Stitcher, and Google Play.

Transcript:

Jordan: Hello and welcome to the Actionable Marketing Podcast. My name is Jordan, and today, I’m excited to kick off a new series called 10x Marketing Interviews. Our CEO Garrett Moon has written a book called The 10x Marketing Formula, how to create competition-free content that stands out and gets results. It’s a total revolution in marketing. In writing the book, Garrett interviewed some of the sharpest minds in marketing and fortunately for us, he recorded them. The 10x marketing interview series will feature conversations on uncommon marketing mindsets, methods, and growth strategies. First up, Ash Maurya. Garrett: Hello everyone, it’s Garrett here and welcome to The 10x-Marketing Formula. I have another exclusive interview today with Ash Maurya. Ash is a successful entrepreneur and the author of two of my favorite books on the Lean Startup Movement. That’s Running Lean, and also his most recent book, Scaling Lean. He’s somebody who’s been directly involved in the Lean Movement and understands how Lean works, how startups have been using Lean to build product market fit, and build their businesses, and he’s done that with the tool called The Lean Canvas. I wanted to have him on to just dig in to how this all works and how we can apply as marketers to the work we’re doing here every single day. Welcome to the, I guess it’s a show, Ash. It’s great to have you on. Ash: Yeah, thank you, Garrett. Pleasure’s all mine. Garrett: Thanks for coming. I’ve been a long time fan and we’ve been able to cross paths a few times but it’s nice to sit down again. Give me the overview of the Lean Canvas. A bit of how you got that tool, but then, what it does, and how it works. Ash Maybe the high level concept of the Lean Canvas is it’s a tool that helps you organize your idea around a single page. You could call it a one-page business plan but it doesn’t have all the things that would typically go in the business plan. It’s supposed to be a concise summary. I often tell entrepreneurs that I work with that at the end of the day, you have to be able to condense your idea, distill it down, and communicate it pretty quickly. That’s where the one-page, 10-page slide deck, the executive summary, or the elevator pitch all come from because no one’s gonna read an entire business plan if it’s 20, 30, 40 pages. That’s a big loss of opportunity. That’s kind of in a nutshell the Lean Canvas can be seen as a replacement of that but it really is an idea sharing tool because it’s this single page, you can create one of these pretty quickly, I guess we’re gonna walk through the process here a little bit, but you can create one of these very quickly. The power of it is that if you put it in front of someone, they can’t help but read it or scan it and then a conversation ensues, and that’s where you find your biggest learnings, your biggest insights. Whether that’s as an advisor, investor, or even customer. Garrett: You kind of answered two big things there. One, it’s sort of this replacement for the business plan and I love the idea of that because it’s sort of like in these business plans, you get these 50-page documents and you end up with a lot of filler stuff in between. This kind of cuts that out and goes straight to the heart of the matter. Is that a good way to summarize it? Ash: That’s a very good way and also, I sometimes throw this analogy of thinking of an initial idea like clay, blocks, because they’re building blocks on the canvas. You’re really trying to put together a jigsaw puzzle. When you’re trying to write a big document, I’ve written a few books and they’re giant jigsaw puzzles and they’re very frustrating because you change something and the whole thing changes. With the canvas, you can play with it, you can reconfigure things, you can go in and iterate with it pretty quickly until at least the story begins to connect on paper. Then you start sharing it and then of course as the validation pieces which will then further reinforce your guesses, or your insights, or your hypothesis. That’s kind of what’s the power of that kind of a tool, is it the faster feedback loop to testing an idea than just literally spending weeks or months just trying to write this big document out. Garrett: This is something that would be used by a startup or a new business that’s really trying to get an understanding of what they’re building and the market regarding after. Is that right? Ash: Yeah. It usually is a great way when you have a new idea to sketch one of these canvases, we also find businesses that are already established, when they’re doing new initiatives, or maybe resegmenting or going after a new market, that’s another time where this can be a great way to get the idea down and start with some of that initial planning before jumping all in. Garrett: You’ve covered a little bit on testing ideas, but maybe start even before that, give me kind of version 1.0, the first time they sit down and they’re going to go through the Lean Canvas, what are they going to be talking about? What’s that conversation look like and how do they go about building it? Ash: The Lean Canvas was designed to be as intuitive as we can make it. A lot of blocks should be self-explanatory. There’s a block in there for your customers. This is who are you building this thing for. There’s a box for the problem, what problems do you solve? There’s a box for the solution, how will we solve it? It kind of goes around where you start talking about your unique value proposition. How would you get attention, go to market. How would you make money? How would you find customers with your channels? How would you defend against competition? You can get through all these aspects of the canvas. What I find that a lot of entrepreneurs, and I’ve been one of those, is that when we have an idea, the thing we see most clearly is the solution. That’s what we wanna rush to, we just wanna go ahead and build this amazing product out and then just launch it. Often times, that may not be the right approach because what might be crystal clear in your mind may not be what people need or want at the moment, and so you may have to test that. The canvas allows you to really take a back seat. While you’re describing your solution, you’re doing it in the context of who are your customers, ideally your early adapters and what problems do you solve for them. That exercise in itself creates a transformation and just how you might view your product. When you go have this conversation with someone else, again, when you listen to an entrepreneur, typically they pitch just the solution but when you show the entire canvas, you talk about these other eight or nine boxes, and that creates a very rich conversation around the business model and not just the solution. Garrett: What is the next step once that first draft of a Lean Canvas is completed? Where does it lead to next? Ash: In the process that I described, it’s really then looking at the canvas and identifying what might be the riskiest set of assumptions around this idea. Sometimes, it could be technical risk. You may try to do something that’s just very hard to do, maybe never been done before. Some amount of technical due diligence or feasibility testing may be in order but you don’t have to go all the way through because very quickly, for most products today, the risk shifts into can we build this and more into should we build this? That’s a conversation that I really sit down with an entrepreneur and have which is if you are to put this business model, if you were to go and launch it, what are the riskiest assumptions that would make this idea just fall apart? Let’s start testing those. As I’ve mentioned, oftentimes, that is assumptions around who your customer is, or what problems you’re solving. We wanna get outside the building and look for evidence that these are problems that keep our future customers up at night, because if they don’t, I’m not gonna use this product unless it’s good. Garrett: What’s the risk for a company that doesn’t use this process? Ash: The traditional way we have built products is a bit of what I was describing before, is we get this big vision, but it really is just an idea that boils down to a solution, let’s go build this amazing product and good things will happen, and let’s hope that customers find us and buy our product. The challenge with all of that is that all that takes time. All of that takes a lot of money and effort. Even if you subscribe to a release early, release often kind of mindset, I’ve been in software for over a decade now and things that you think are gonna take you two months end up taking four or six months, and by then, you really start getting feedback. It’s eight, nine months, if you go down that approach. It’s just a very expensive process. This approach kind of flips that when you’re really testing for maybe market demand before actually building. There’s a concept of the minimum viable product. We are also trying to prioritize the biggest features that will have the biggest impact. We don’t have to go and build things when we initially launch that are maybe required in the product but not required day one, there’s that level of prioritization that also needs to happen which allows us to go really fast and start the learning process. Garrett: I always think of it as you go into a venture, in this case, we’re talking about startup in a business. You have a set of, you kind of identify the assumptions or guesses as to how you think that’s going to go, what you think the market needs, this is just a way to kind of short circuit that and make sure you’re right before you go too far. Ash: Correct. I think this is also more and more needed in that the unfair advantages of the last decade have gotten. What I mean by that is things used to be expensive to avail, even something like software required expensive licenses, expensive  hardware, you have to have everyone in an office because there was no internet, there was no what we’re doing today, there was no Skype or co-working facilities. People had to spend a lot of money even to just get started. The old approach was create a big vision, write a big business plan, go pitch it, get all this money, and that bought you a lot time, it bought you runway, which no one else had. That isn’t true today. Today, you can find for every idea that’s out there 10 other people starting to tinker with cloud computing with the internet, with open source, and doing very similar types of things. That barrier to entry has changed and somehow it’s more important than ever to really focus in on what is the right thing to do and how do I get to market share as quickly as possible rather than just being first to market. Garrett: Absolutely. You’re gonna apply that to so many different areas of business and technology. These things are so fast and the adoption curve is easy. You spent a lot of this book talking about content marketing and creating the process of content but even if you look at that landscape, the barrier to entry on that is almost zero. Anyone can write. Anyone can have a blog. What business just about these days isn’t doing it already. You kind of have to find ways for just about everything to get past and to differentiate yourself into how to understand that market or how to approach it. Ash: Yup, that’s exactly right. Garrett: I wanna work a little bit later on here and relating it back to marketing, kind of get some of your takes on some of that. But before we get too far there, can we spend a couple more minutes just talking about MVPs? I think the minimum viable product is just what everybody is probably familiar with, but maybe define it a little bit more, and then I’d like to kind of talk about what it is and what it is not. Because I think it comes with a lot of assumptions that people make about it. Ash: For right and wrong, the minimum viable product has been used and abused in many - there are many different definitions out there. I think it’s always good to level [00:11:58]. When Eric was first describing it, he talked about this build-measure-learn. The idea was to go really fast with your first release so you could start this process of learning. But along the way, people began to use MVPs for anything they would put in front of customers including say, landing page, demo, because that allowed people to learn it, allow people fast, allow you to test before you build. To me, all those things are the right approaches that we need to take to test the product, but they’re not really products and so I have a stricter definition. I describe the minimum viable product as that smallest solution that you build that also creates value for the customer. If I just show you a demo, I’m promising you value but until I don’t give you whether it’s a service, whether it’s an actual physical product, or a software product, or some other thing, then I don’t put that in your hands. I don’t have a product that I’m giving you, I’m not creating value for you.   When I also kind of come in in that is making this big kind of business modelling distinction that there is a difference between building something interesting that people will use and then turning it into a business. In order to do that, you have to also capture some value back or in other words get paid or know how you’re getting to get paid. For me, the MVP is that smallest solution you build that both creates value for your customers but also captures some of that monetizable value back whether in the form of actual money or in the form of data, like what Facebook does, which they then turn into actual money down the road. That still is perfectly fine. Garrett: Smallest solution that creates value. I think that’s gonna resonate with a lot of marketers, particularly, in content we’re always thinking about how does our content and the work that we’re doing create value for our potential customer base. How do you know though when you’ve done an MVP, if it was a good test of those assumptions, if it went well or went poorly. Should you go back to Lean Canvas? How do you determine what’s next after you’ve done an MVP process? Ash: It’s the start and this is also some of just maturity and the Lean process itself. I guess the old mantra used to be just get outside the building because we were spending too much time inside. Then it got morphed into let’s go outside the building with a minimum viable product because then we can see if people actually used the product or not. Now it’s even more, “Let’s do some of that business modelling work.” Where I kind of come in with The Running Lean book is before you even build a minimum viable product, let’s kind of, on paper, see what that business model might look like and the customers, what would they pay. We can go and start testing all those assumptions with that minimum viable product. Unlike a lot of people, I don’t recommend hiding behind alpha labels, and beta labels, and giving away your MVP for free. I look at it as a carefully researched solution to a customer problem. Instead of using the alpha labels, why don’t we use something like early access, or exclusive, or golden ticket, or something like that. Find your right early adopters, give them something super valuable, and if you’re gonna collect money from them, if that’s your business model, then start doing that maybe not day one but as early as you possibly can. If they aren’t your customers, then figure out who your customers are and try to close that loop as quickly as possible because to me, that is not the ultimate validation but at least as far as litmus test. Can I create value, can I capture some of that value back? All of those will come from the business models. If I were building a Facebook type story versus a software service story which was targeted at, say, a smaller niche, obviously the numbers are going to be different but all those numbers you would build those assumptions. You would build up a model that allows you to then test, “Is my MVP moving me in that right direction or not?” Garrett: I love this kind of analogy. We started with actually where the Lean Canvas as a replacement for the business plan, this big heavy document. I think, in a marketers’ world, the marketing plan is kind of the equivalent. There’s this big document. We’re making a bunch of guesses and assumptions on how we think our potential audience will respond, what kind of traffic, or lead scoring, or lead qualification we will see from there. We kind of pick a lot of methods that we think will work but we don’t really ever take the time to test them out. How do you think that marketers or really anyone that’s kind of going into a new process or a new campaign in a marketer’s case, a new venture, can use that Lean Canvas process to improve what they’re doing and to prevent them from going too far down the wrong path? Ash: In the second book, I kind of described this Lean Sprint process which is essentially taking some of the [00:16:49] we talked about and rolling it into a sprint-like cadence. Some of your readers may have heard of Agile and Scrum which is a software development type of a cadence. There’s the design sprint now. The Lean Sprint is essentially kind of a third type of sprint but it has the same principles which is timeboxing is critical with ideas, because very quickly, time escapes us, time might be one of the scarcest resources we have because we never get it back. The whole idea of the Lean Sprint mindset is that whatever project you’re doing, whether it’s a campaign, the marketing campaign, or actually a new product launch, let’s catch out some of those initial assumptions on a tool like Lean Canvas, and it allows us to again describe the story of how this will unfold. Let’s then begin to identify some of those risky assumptions and then design some experiments to test them. For any product, if I was considering a new iPhone app launch, I may want to actually test whether there’s even demand for that. I may hit my newsletter, I may hit my audience in other places, and show them this great shot and look for the clicks, and look for people that are giving me their email addresses for instance, and turning those into conversations. All those could be turned into a two-week, three-week sprint. The idea there is that we can begin to guest log those leading signals or early indicators of whether the campaign or the idea that we’re doing is heading in the right direction, or you need to force correct, or pivot, or reset it. Garrett: One thing I like about that as you talked earlier about how you really encourage startups to actually be taking it to a purchase or revenue, and measuring it based on the final metric that you really need the customer to help you out with. Ash: Yes, that’s exactly right. One of the universal truths of all businesses is that we all want more customers. I’d actually, in a cheeky way, gone and tested that, and no one’s said no to me me yet. If we are all in here to create a customer, why don’t we try to get as close to one as possible? Of course, that’s not always the case but however far you can go, you wanna take it there because ultimately when we just measure what people say, it might do in the future like, “I like your product. Tell me when it launches. I’ll use it definitely.” As much as they say that, they usually don’t follow through with that. You want to turn those into actual, measurable actions that you can use to increase that confidence. Garrett: In marketers world, I would kind of say, “Whatever your end goal KPI is of the campaign, if it is leads or if it is actual customers, whatever it might be, that’s where you should be measuring for MVP. You shouldn’t be measuring a lesser KPI or something sort of on the perimeter.” Ash: Sure, yeah. Garrett: I think, even still, it’s hard to see what that smallest solution that creates value could be. Is there an example or a story that you could tell us where a company, it doesn’t have to be a marketer obviously but somebody was able to take a big idea and turn into that small MVP without going too far? Ash: I guess there are many of these. But I would say that, and this is also where I kind of differ from some, I’m not of the opinion let’s just go ahead and build what we think is going to be the MVP and then test it. Because I find that in theory, while we can learn from that MVP, sometimes all we learn is that that idea really sucked and we just shouldn’t do it. We don’t know where to go because people don’t tell us what was wrong with it other than, “I just don’t want it.” I find that the process that we end up using is quite different is that we run a series of problem interviews where we are really going and talking to customers and trying to understand what outcomes, or what jobs, or what tasks were they trying to do, and where are they running into issues. Then we follow that up with a solution interview where we might show them a demo, we might talk about the value proposition, we might talk about the pricing, and we try to convert them into a customer. Maybe they’d give us that advance payment, maybe they just give us their permission to follow up. Those are all still okay. That’s when we know what’s going to go on that MVP. There is a process to how we define it. Maybe to just give an example of that, there was someone in my workshop a few years ago, kind of shared a story which I still share with others. He had this idea of retrofitting GPS into cars. It’s an expensive process if you have a car that doesn’t have GPS. You go out and buy all the equipment you need. It’s an expensive process. But he has this idea of potentially doing this with a gadget he was going to build that went around the license plate, those plastic things that you can put on a license plate. That was basically the idea but he didn’t quite know how far to go, what features people would want, how they would use it. He didn’t quite know that. He did know that he wanted this to be a one-to-many sale. He knew that he wanted to sell this to rental car companies, not big rental car companies because they already have cars with GPS, he was going after the more mid-tier car rental companies. But what he used was a props for him to understand what his MVP was going to be. He took one of these license plate owners and put some circuitry in there but it was not functional at this point and then he sealed it shut, then he went into a rental car company, he asked to speak with a manager. Propped this little prop of a demo in front of him and say, “I found a way to retrofit GPS into cars. You just put this in the car and you’ve got GPS capability.” That was both his value proposition and his demo right there. Now, unlike what most people think, the manager didn’t bring out a screwdriver and try to understand what was inside it, he says, “Why don’t you sit down? Let’s talk about what it can do.” With the next 30 minutes, they went back and forth on features and he eventually left that meeting with a very concise minimum viable product spec. He repeated that process 30 other times and got letters of intent from 30 rental car companies which gave him a pipeline of customers and helped him define what that minimum viable product was going to be which he then started shipping two months later. Garrett: That’s really good. I think it highlights a lot of the things that happen with new ideas and entrepreneurs is you’re so quickly wanting to jump into production. You wanna build and mass produce, that’s the problem you really think is there. Slowing down and validating it that way by just kind of making one, not even really making one, but just making one of them. That’s pretty powerful and I can see why it would be helpful. Ash: Sure. Garrett: Just kind of maybe finishing up, I think, from this, there’s a lot of folks that are gonna jump to your site. We’re gonna be linking to Lean Canvas. What would you just say, two or three tips for the person that’s gonna be doing it for the first time and working through that process, what should they be thinking about and looking at as they start? Ash: What I typically recommend people do is timebox the exercise because I find that whenever we put people into capture idea down, the first thing we get is just overly analytical, they spend too much time, they wanna get all the right answers down because they go back to the business planning where you’re building this perfect plan but I want to kind of reinforce this concept of it’s going to be intuitive, think of it like lego blocks, the first model is not going to be the right one so timebox that activity. When we do these with entrepreneurs, we set up timer for 20 minutes, 30 minutes. The idea is just to take a snapshot. You’ve been working on this idea, it’s in your mind, you just wanna put it down, and then take a look at it and see which boxes were easy to fill out, which weren’t. What is that confidence interval that you have on each of them, and that allows you to do what we–which is the second step–identify the riskiest set of assumptions, and that’s how I recommend going about it. Don’t look for perfection. That isn’t the goal. It’s really that snapshot. Then think of it more as an iterative process. The pasteur you can go around that build measure, learn with that canvas. The more refined it’s gonna get, the more solid it’s gonna get, the more your confidence is gonna go up, your success rate is gonna go up. Garrett: Would you call that failing fast? Ash: There’s too much taboo around the word failure. Sometimes, when you’re going in two or three week sprints, I would actually start saying, “It may not even be failing, just learning,” because you actually kind of switch with evidence before you even had a failure that you say we failed. You just say, “Oh, I thought this was gonna happen. I didn’t quite know what to do next.” Will that really be failing or learning? You can go with it either ways. I find that, again, if you don’t wait too long, if you can make the learning come very quickly, it looks a lot more like course-correcting and learning than really failing. I prefer kind of using that because a lot of people still shy away from the word failure. It’s got a lot of taboo around it. Garrett: No, I think that’s good. As always, Ash, you’re very good at taking an idea and adding a new layer to it and defining it better. I think that is exactly right. The failure may help learning but the goal is learning, that’s why it works. That’s perfect. Thanks, Ash, for going through this. I think it’s been really helpful to our audience and maybe just to kind of finish things up, where can our readers learn more about you and Lean Canvas? Ash: Sure. I have kind of collected a bunch of things we’ve done over the years with the books and the canvas listed into a website called leanstack.com. That’s where you find a lot of our tools. We have an online platform, links to the books, everything. That’s where I point everyone. That’s the easiest way to find our stuff and also me. Garrett: The key to many things that we do at CoSchedule is based on a lot of these ideas. Understanding how MVPs work, how to test assumptions, making sure that we don’t go too far, too fast. As Ash was saying, learning fast is a key part of everything that we do in marketing, and especially the business. Ash, I thank you for sharing that bit with us. I thank you for the work that you do in the canvas. I really appreciate you joining us today. Thank you. Ash: Thank you, Garrett.