Lean Startups are all the rage. Eric Ries’s recent book, The Lean Startup, debuted at #2 on the New York Times bestseller list. There are now lean startup meetups in 94 cities and 17 countries. Eric Ries has been written about in The New York Times, The Wall Street Journal, Harvard Business Review,Wired, Fast Company and appeared on the cover of Inc. Magazine.
Can some of the same tenants of Lean Startup (which were derived, in part, from lean manufacturing) apply to marketing?
I think they can, and should, apply to marketing.
Validated Learning and the Build-Measure-Learn Feedback Loop
Lean startups are all about validated learning, learning that takes place in an iterative fashion using the build-measure-learn feedback loop. Eric Ries likens it to Henry Ford tinkering with the internal combustion engine, adjusting the mechanics and the timing, until the engine runs smoothly. In a similar fashion, the entrepreneur is tinkering with his companies “engine of growth” until it is firing on all cylinders.
Marketing can apply this same method – building marketing materials or programs, measuring the results, learning from customer feedback, and improving the marketing pitch until it achieves the desired result.
One of the central tenants of lean is that anything that doesn’t provide benefit to the customer is a form of waste. I propose that we can apply this to marketing: anything that doesn’t make it easier for the customer to buy your product or service is a form of waste. Chest-thumping, gobbledygook laden, corporate speak web sites which cause buyers eyes to glaze over are a form of waste. Traditional trade shows staffed by scantily clad booth babes who barely know the name of your product are a form of waste. Digital advertising that has nothing to do with the product or service, but draws click throughs with tricks and slight-of-eye, are forms of waste.
Many of the principles of the lean startup had been introduced over the years in Eric’s blog. But one of the beauties of the book was the introduction of Innovation Accounting. Startups measure their progress and ensure accountability by implementing metrics that are actionable, accessible and auditable. Ries uses these metrics to determine if product changes are creating value; in other words, if they are leading to more customer conversions. Marketing can apply the same discipline: are your marketing programs working? How do you know? If you can’t demonstrate through hard numbers that they’re leading to shorter buying cycles or greater conversions, then you don’t know if they’re working. To my mind, measures like brand recall are “vanity metrics”.
The Role of Management
One of my favorite sections of Eric Ries’s book is the section describing the Seven-Thousand person lean startup. It relates the story of Scott Cook’s journey in transforming the culture of Intuit from one of politicians to one of entrepreneurs. In a culture of politicians, value is placed on analysis and the ability to sell ideas internally. In a culture of entrepreneurs, value is placed on innovation and experimentation. As he came to recognize, learning comes out of implementing hundreds of different changes in a three-month tax season, and measuring the impact of those changes. The manager’s role is to create an environment that encourages this kind of experimentation.
Marketing managers must also encourage experimentation. Rather than ruling the production of marketing materials and programs like Caesar, giving a final thumbs up or thumbs down on creative, marketing managers need to build a culture of experimentation and measurement – programs and creative that work should continue to be funded, those that don’t should be celebrated for the learning they provide on what doesn’t work.
Lean Startups are a response to the extreme uncertainties surrounding bringing new products and companies to market in rapidly changing environments. Marketing is also often filled with uncertainty and rapid change. Many of the same approaches and techniques advocated by lean startup advocates can be applied to marketing, at any size company, and any level of market maturity.
So what do you think? Many of you told me that my last post, on the application of agile to marketing, resonated with you. Does the same apply to Lean?