Lean Startup FrameworkEstimated Reading Time: just 7 min

Lean Start-up Framework is based on a lifecycle every successful new company/product goes through.

Being more specific, each phase of this lifecycle is based on the incremental percentage of growth given by every additional customer at each stage.

In general, the bigger the revenues get and the smaller the incremental percentage of growth given by every additional customer gets.

Therefore, each lifecycle stage of the company/product requires:

• Specific targets
• Specific techniques

Lean Start-up Framework is based on a 5 stages lifecycle

Stage1 – Searching for Problem/Solution Fit: the focus is on

1. Defining Target Customer Segments and formulating some hypothesis on the problems they are facing
2. Validating the hypothesis on the problems the Target Segments are facing
3. Formulating a hypothesis on the Solution for the validated problems
4. Validating the hypothesis on the Solution
5. Iterating the process for as long as it takes to reach a match between the Problems and the Solution

Output: Minimum Viable Product (MVP) that is the prototype/mock-up of the Solution approved by our customers

Stage 2 – Searching for Product/Market Fit: the focus is on building a product in collaboration with the customers and, in the process, to build a community.

The basis for doing this is the Minimum Viable Product.

Once a company sells the MVP, it finds the Early Adopters. These are the main actors of this stage since they are the customers in my Target Segment that feel the problem the most.

The company must

1. Formulate some hypothesis on the functionalities to be added to the MVP.
2. Validating the additional functionalities.
3. Iterating the process for as long as it takes to reach a match between the Product and the Market

Output: Product/Market Fit

Stage 3 – Searching for Channel/Product Fit (Optimizing the Funnel): the focus is on customer acquisition and growth.

The basis for doing this is the Product/Market Fit that is when the company

• found a market where it can operate with a product/service that can satisfy a target
• learned how to sell the product/service
• is ready to go hunting for a mass market

This is the field of Growth Hacking.

GH consists of a fast-paced testing process on marketing and product channels to find the best way to:

• scale a business
• reach the Viral Loop

A Viral Loop is the result of positive customer experience while interacting with a company’s Value Proposition. More precisely, if a customer is happy with a product or service, he/she might be so excited that he/she wants to share with others his/her experience as well as news and info about the company’s products or services.

A Viral Loop creates quick and cost-effective Brand Recognition.

Growth Hacking is based on mapping each phase of the company’s relationships with the customers through the A.A.A.R.R.R. Funnel also known as Pirate Funnel.

The funnel consists of 6 phases, each one managed through a metric that is called The Only Metric That Matters: 

• Awareness that is managed with the Number of Impressions
• Acquisition that is managed with Lead Generation metrics (i.e. the Number of Unique Visitors)
• Activation that is managed with the Conversion Rate (i.e. first listening to a song on Spotify)
• Retention that is managed with the Retention Rate
• Revenue that is managed with Net Income
• Referral that is managed with Net Promoter Score (NPS)

Once the Funnel is mapped, it is time to activate the Bullseye Framework as well known as the Growth Hacking Cycle.

The BullseyeFramework is an approach based on improving one metric of the funnel at a time to maximize the available budget and it is based on: 

1. Brainstorming (to generate ideas based on 20 possible Traction Channels)
2. Prioritizing(using Impact-Confidence-Ease methodology)
3. Testing best ideas
4. Implementing the 3-5 ideas with best ROIs
5. Analyzing the implemented ideas
6. Systemizing the idea with the best ROI

Output: Channel/Product Fit

Stage 4 – Pouring on the Resources for Growth: the focus is on maximizing the revenues out of the funnel while keeping on

• optimizing it with A/B Testing
• activating more Growth Hacking Cycles to generate new ideas

Output: Company’s Maturity

Stage 5 – Growing through Acquisitions and International Expansions

Stage 1 – Searching for Problem/Solution Fit

Lean Start-up Framework is based on a lifecycle every successful new company/product goes through.

The first stage is called Searching for Problem/Solution Fit.

At this stage, the focus is on:

1. Defining Target Customer Segments and formulating some hypothesis on the problems they are facing

2. Validating the hypothesis on the problems our Target Segments are facing. This has to be done by talking with members of the Target Segments through Customer Interviews and Polls. Some useful tools for online Customer Interviews and Polls are

• Qualaroo
• Zendesk
• Customerly
• Survicate
• Qerzy
• Type Forms
• Google Forms
• Survey Monkey
• Jot Form
• Zoho Survey

3. Formulating a hypothesis on the Solution for the validated problems

4. Validating the hypothesis on the Solution. This has to be done by

• Building a prototype or a mock-up of the Solution
• Talking with members of the Target Segments before and after they tested the Solution and possibly
  • Recording company’s Target Segments while they perform Test Sessions
  • Running Usability Tests

5. Iterating the process for as long as it takes to reach a match between the Problems and the Solution

The Output of this stage is called Minimum Viable Product (MVP).

MVP is the prototype/mock-up of the Solution approved by our customers.

It is not the final product or service, but it has nothing more than what is needed for satisfying our Target Customer Segments. It is the basis for improvements meant to reach a larger base of customers.

Stage 2 – Searching for Product/Market Fit

The second stage of Lean Startup is called Searching for Product/Market Fit.

The focus is on building a product in collaboration with the customers and, in the process, to build a community.

The basis for doing this is the Minimum Viable Product, the lowest acceptable quality product/service. This is used to test business hypothesis such as Customer Problems vs Solutions and Business Model Design.

Once a company sells the MVP, it finds the Early Adopters. These are the main actors of this stage since they are the customers in my Target Segment that feel the problem the most.

At this stage, the company must

1. Formulate some hypothesis on the functionalities to be added to the MVP. This has to be done by talking with Early Adopters and members of the Target Segments through Customer Interviews and Polls. Useful tools for online Customer Interviews and Polls are

• Qualaroo
• Zendesk
• Customerly
• Survicate
• Qerzy
• Type Forms
• Google Forms
• Survey Monkey
• Jot Form
• Zoho Survey

2. Validate the additional functionalities. This has to be done by

• Building some prototypes of the additional functionalities
• Talking with Early Adopters and members of the Target Segments before and after they tested the functionalities, possibly
  • Recording Early Adopters and members of the Target Segments while they perform Test Sessions
  • Running Usability Tests

3. Iterate the process for as long as it takes to reach a match between the Product and the Market

The Output of this stage is called Product/Market Fit.

The Product/Market Fit is a stage where the company sees:

• New Customers asking for the Product
• High Lead Generation
• High Retention rate
• High Values in Net Promoter Score (NPS)
• Organic Virality

This means that the company found a market where it can operate with a product/service that can satisfy a target.

Moreover, during this stage, the company learned how to sell the product/service during the previous stages and it is ready to go hunting for a mass market.

Stage 3 – Searching for Channel/Product Fit (Optimizing the Funnel)

The third stage of Lean Startup is called Searching for Channel/Product Fit (aka Optimizing the Funnel).

At this stage, the focus is on customer acquisition and growth.

The basis for doing this is the Product/Market Fit that is when the company

• Found a market where it can operate with a product/service that can satisfy a target
• Learned how to sell the product/service is ready to go hunting for a mass market

This is the field of Growth Hacking (GH).

GH consists of a fast-paced process made of tests conducted on marketing and product channels to find the best way to:

• Scale a business
• Reach the Viral Loop

A Viral Loop is the result of positive customer experience while interacting with a company’s Value Proposition. More precisely if a customer is happy with a product or service, he/she might be so excited that he/she wants to share with others his/her experience as well as news and info about the company’s products or services.

A Viral Loop creates quick and cost-effective Brand Recognition.

Growth Hacking is based on mapping each phase of the company’s relationships with the customers through the A.A.A.R.R.R. Funnel also known as Pirate Funnel.

The funnel consists of 6 phases, each one managed through a metric that is called The Only Metric That Matters:

• Awareness managed with the Number of Impressions
• Acquisition managed with Lead Generation metrics (i.e. the Number of Unique Visitors)
• Activation managed with the Conversion Rate (i.e. first listening to a song on Spotify)
• Retention managed with the Retention Rate
• Revenue managed with Net Income
• Referral managed with Net Promoter Score (NPS)

Once the Funnel is mapped, it is time to activate the Bullseye Framework as well known as the Growth Hacking Cycle.

The Bullseye Framework is an approach based on improving one metric of the funnel at a time to maximize the available budget and it is based on:

1. Brainstorming (to generate ideas based on 20 possible Traction Channels)
2. Prioritizing (using Impact-Confidence-Ease methodology)
3. Testing best ideas
4. Implementing the 3-5 ideas with best ROIs
5. Analyzing the implemented ideas
6. Systemizing the idea with the best ROI

The Output of this stage is called Channel/Product Fit.

The Channel/Product Fit is a stage where the company has a comprehensive knowledge of:

• its Funnel
• the ROI of each Channel

The company is now ready to maximize the revenues out of the funnel while keeping on

• Optimizing it with A/B Testing
• Activating more Growth Hacking Cycles to generate new ideas

If you are you interested in more Growth Hacking stuff, you should then follow the White Rabbit through this link and check out some more of our content!