the value hypothesis and the growth hypothesis

Every startup has some underlying vision that drives it. There are two underlying assumptions of the startup that are essential to understand and address, according to the Lean Startup by Eric Ries:

The value hypothesis tests whether a product or service really delivers value to the customers once they are using it.

The growth hypothesis tests how new customers will discover a product or service.

(page 61)


These two assumptions are pretty simple to grasp, and refocus your attention to people who will be using whatever you are making.  It’s easy to get lost in the technical details, or to try and make a high quality product.  What the lean startup methodology advocates is to let go of that desire to make a perfect product away from customers, and begin interfacing with them as soon as possible- even if the product is unfinished.  This way you won’t waste your time build features that you think will be valuable, but which may not be useful at all.

When I think of products, it is easy to miss one of these assumptions, especially the growth assumption.

As I continue reading the book, the case studies are helpful to read, especially that of Ries’ own company IMVU and its early days with slow traction.  It’s hard to come out with a product and have little reception.  Seeing the steps out of this slump- like switching to cohort analysis and in person customer interviews- is very helpful.

I came out with an Android game several weeks ago after a code sprint weekend and uploaded it to the Android Market (now Google Play).  It was pretty exciting to see it up there, but of course, very few people actually downloaded it.  I imagined that the market would present it to enough people, and the $0 price with no permissions would be attractive enough.  I was hesitant to market it, or convince friends to try it out, because it still did not feel finished.  Underlying each of those thoughts  are assumptions.  I wouldn’t know if people enjoyed it or not unless I saw people play test it.  I also assumed the growth would be taken care of by the Android Market.  Finally, I assumed people would judge me based on something that is not as complete as the top games on the market.

The impression I get going through The Lean Startup is that as long as an entrepreneur is receptive and willing to iterate on the product to improve its growth and value, the customer will be happy.  It is not essential that a product be shipped flawless and with full features.  In retrospect this makes sense, when I would show this game to friends they were excited to play it.  They weren’t thinking of what it was missing.

This re-focus is exciting to me.  I think bringing the customers into the development process in this way is natural, especially considering the growing popularity of participatory design, or co-design, and I hope to implement some of these ideas moving forward. Already, as I think up ideas, I consider what metrics I may include alongside the development to measure if it is creating value the way I hope it to.