The whitepaper, Innovate the Lean Way: Applying Lean Startup: Methodology in the Association Environment, written by Guillermo Ortiz de Zarate and Elizabeth Weaver Engel, hit the association world back in October of last year and if you haven't had the chance to read it, you need to. The twenty-four page whitepaper brings some interesting concepts to associations on how they can put into practice some of the valuable ideas used by startups today. It's an interesting read that shows that even though startups and associations are wildly different, the association industry can benefit from learning through these fledgling businesses.
We Can't Give Up, We've Invested Too Much
Sound familiar? The authors begin by regaling the reader with an all too familiar story a great idea that died. But unlike businesses that implement, fail, and move on, many associations cling to their investment with the loyalty of a Boston Terrier.
The idea must work. It has to. We've invested too much time, energy, and resources. It cannot fail.
What association leaders don't realize at this uncomfortable time is that it already has.
Why Does the Idea Fail?
As the authors point out, the idea may have been a good one but as a membership organization if you don't take the time to obtain membership feedback you may be attempting to fix something that your members don't think is broken.
Marketing has become very personalized and a switch has occurred from businesses pushing out what products they want to launch to customers clamoring for a business that provides a product or service that meets their needs. Startups address potential customer needs as part of their offerings.
The authors based their suggestions for associations on Eric Ries's 2011 book, The Lean Startup. Here are some important highlights of the whitepaper:
What is a Lean Startup?
You may be familiar with the lean manufacturing environment that Toyota became known for back in the 70s and early 80s. The authors write, "The term lean comes from the notion of removing waste (fat) from processes." Many associations are familiar with the concept of lean six-sigma, which focuses on achieving greater efficiency through process improvements designed to eliminate wasted effort and minimize defects.
Lean startup takes the lean manufacturing concept and humanizes it. Henry Ford was rumored to have said that if he had asked the public what it wanted (before launching the automobile) they would've said faster horses. This sentiment that entrepreneur knows best is dying.
Lean startups believe the market knows best and the people who buy (or use) must be involved in the process. Creating something that is of no interest to them will only bring inevitable failure.
Startups enjoy something most established businesses do not agility and the flexibility. They are able to respond to changes in the market and market data that takes established companies with traditional business plans a while to recognize and react to.
Engel and de Zarate encourage associations to be more like agile startups and less like entrenched companies. They write associations, need to view themselves as startups, constantly seeking to find sustainable business models in an era when that landscape shifts more frequently than at any point in history.
According to the authors, The lean startup method is based on a few simple concepts:
- The Business Model Canvas
- The Build-Measure-Learn Cycle
- The Minimum Viable Product (MVP)
- The Pivot
The Business Model Canvas
The Business Model Canvas uncovers and details how the new business will provide value to its audience. In the case of an association, the audience would be its members. It does not imply the same cast-in-stone knowledge of a business plan but a list of hypothesis of what might be true about the value equation.
The Build-Measure-Learn Cycle
In the past, a product was launched after a little panel R&D, but it was still largely what the business wanted to launch. It was held in secret until it was ready for the world. Under the Build-Measure-Learn Cycle, a product or service undergoes a soft launch where people can begin using it and provide feedback through online communities, email, or a company support site. That then helps the startup tweak and perfect the product or service. We often see this in software with beta testing and it's something that's ideal for the launch of an online community. Seed the community with content but don't worry about everything being perfect. It's not perfect until you've had audience feedback and you've been able to learn from it.
Lean Startup Takeaways for Associations
The paper provides a lot deeper look into the lean startup methodology and what associations can learn from its application. Associations are in a strong position to implement these ideas because of their connections to their members. Businesses may be quite removed from their ideal audiences and it may take a great deal of discovery to perfect their product or service and get it aligned with what the market desires.
Some associations are already embracing the lean startup concept when they use their member data to shape their offerings. Placing members, and their desires first, means less costly failures in the long run. For more information, and a deeper look at this startup concept read Innovate in the Lean Way. Applying Lean Startup Methodology in the Association Environment.