Eric Ries believes building successful startups requires conducting continuous scientific experiments. The process involves a cycle of creating, getting market feedback, and iterating product design.
In his book, The Lean Startup, Ries also calls this method “validated learning.”
Validated learning denotes customer feedback and market reception. It means the startup leverages measures, tests, feedback, and data to gain insight into whether a market accepts their product. It determines whether a customer will value it. The method is empirical in nature, and reflects a positivistic view of entrepreneurship.
Legacy Models of Building Startups
Older, legacy models of entrepreneurship emphasized heavy use of market research. Afterward, the startup would flesh out a fully polished product based on a rigorous, caffeine-fueled whiteboard analysis.
The problem with that methodology, says Ries, lies in the fact that it doesn’t matter if you execute a perfect strategy based on market research. If there are no customers for that product, the startup would have wasted precious resources.
They relied on assumptions rather than raw data: that was their fatal flaw; their Achilles tendon.
The State of Markets and Leap of Faith Assumptions
In the modern era, markets are fluid and dynamic. They are in a constant state of flux. Market change is the reason why market research does not always provide accurate info regarding what customers desire. Market research can, however, aid in the experimentation process if leveraged correctly.
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In the Lean Startup Model, Ries says market research can also lead to a leap of faith assumption, implying a startup’s success or failure is hinged on that broad guess.
In order for a startup to overcome the leap of faith assumption, they must develop the minimally viable product. The startup can then begin to measure incoming data and decide to iterate or pivot based on that knowledge. This is the crux of validated learning. Ries elaborated:
The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
The Era of positivistic Entrepreneurship for Successful Startups
I refer to the modern era of startup-building using validating learning as positivistic entrepreneurship.
Positivism is a philosophy that relied on human sensory functions to gather data and make a determination of truth. Positivism is also based on a posteriori knowledge, meaning knowledge derived from prior experience and empirical evidence.
By leveraging positivistic thinking, entrepreneurs can quickly weed out faulty assumptions. By adopting a consistent, hard-nosed, scientific approach, they will save resources and pave a path to success.
As a final note, the positivistic and lean startup models do not have to discard creativity or empathy. To the contrary, getting customer feedback allows engineers and developers to create better, more innovative products. It also sets the stage for more contact with the customer. The entrepreneur and her team can now fully empathize with their target market.
At Pathinders, we believe positivism and empathetic marketing can synergize to create a world of successful startups.