Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“You’re one insight away from your next hockey stick inflection.”
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We often draw the hockey stick trajectory as a smooth curve, but actual traction doesn’t look like this. Traction comes as a series of staircase jumps:
You can think of each jump as a growth hack, but behind every growth hack lies an insight. An insight is a new and often contrarian perspective on customer behavior that unlocks growth.
Insights are obvious in hindsight, but the challenge is having the foresight to see them.
In today’s issue, I’m going to unpack insights and how to uncover them.
2 Underlying Strategies at Play
I. Insight versus blindsight.
While many insights start as leaps of faith, left unchecked, they can also turn your journey into a faith-based one driven by dogma, which doesn’t light the way but blinds you to an inevitable dead end.
While entrepreneurs need to hold strong beliefs, there is a difference between faith and belief.
Faith = blind belief, i.e., not based on proof
Labeling “leaps of faith” as hypotheses versus insights is better but not enough.
A well-constructed hypothesis should be verifiable through experiments. The problem is that running experiments consumes resources that startups are in short supply of. So rather than rushing to formulate any hypothesis, wouldn’t it be more prudent to chase “good” hypotheses?
II. Insights have to be learned or earned.
Good insights (and hypotheses) are based on prior evidence that must be learned or earned over time, not just guessed.
Russell Ackoff, a management consultant and organizational theorist, developed the Data-Information-Knowledge-Wisdom (DIKW) hierarchy, which is often depicted as a pyramid:
- Data: The product of Observations.
- Information: Data + Context.
- Knowledge: Information + Understanding.
- Wisdom: Knowledge + Judgment.
Here’s my rendering of an evidence-based hierarchy for entrepreneurship:
3 Actionable Tactics
I. First, baseline your current traction.
This may seem blindingly obvious, but how you baseline your current progress isn’t.
Too many founders measure their traction metric as a cumulative or running total (like total revenue). But, the key to establishing a good baseline is measuring traction over the smallest yet meaningful time period for your product.
I recommend starting with weekly intervals (like signups/week or upgrades/week) whenever possible.
II. Discovery before validation.
The next step isn’t rushing into a hypothesis-driven experimentation process for the above reasons but instead taking the requisite time to discover insights.
While there are many discovery techniques, I have found 1:1 customer conversations (interviews) have the highest return on learning.
Speed of learning is your only unfair advantage.
Remember, the key here isn’t validating what you already know but discovering what you don’t know.
III. Validation = A traction step-jump that sticks.
Armed with an insight, you then use small and fast experiments to test the insight. Good insights should yield almost immediate and measurable upticks in your hockey stick that stick.
Traction is the goal.
That's all for today. See you next week.
Ash
Author of Running Lean and creator of Lean Canvas
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P.S.
Here's a related video on the power of insights: