Posts Tagged ‘“Lean Startup’

The Validation Board: a “Lean Startup” strategy worth testing

A few months ago, a colleague recommended I pick up a copy of the popular book The Lean Startup by Eric Ries. This book challenges “startup founders to build and run their companies in a new way, maximizing customer value while minimizing wasted effort.” Having run my own business for the past decade, I immediately connected with the wisdom shared by the author regarding how organizations from any sector can achieve higher results while simultaneously investing less time, effort and money. I thought back over my career and noticed for the first time that many of the mistakes I had made over and over would have been totally preventable had I been using these Lean principles.

As I hopped on Google and began investigating this philosophy in more depth, I stumbled upon a website called “Lean Impact – Lean Startup for Social Good.” Since I run a for-profit business that serves the nonprofit sector, I was intrigued by how the site describes how this work-smart approach could benefit the social sector in the following ways:

  • Figuring out what creates real impact and discarding what doesn’t
  • Operating with fewer wasted resources
  • Leveraging forward-thinking technologies to achieve our goals
  • Gathering continual feedback from our community
  • Creating a culture that sees failure as learning that brings us closer to a solution
  • Eliminating mission creep influenced by funding.

What an amazing list of benefits a Lean strategy could have! When I discovered the Lean Startup Conference was coming up in San Francisco, I excitedly booked my ticket and headed there ready to learn more. Having just returned, I’d like to share with you my biggest take-away from the event as it helped me view effective social change in a whole new way. I’d like to introduce you to the Validation Board.

The Lean philosophy is all about failing fast by testing your ideas early before you invest a lot of effort into them. We’ve all been there…We have a “great” idea but after working on developing it for months (and sometimes years), it bombs. What happened? Most likely we had our target market wrong or we were trying to solve a problem that really didn’t matter to our target market in the first place. Our idea may have very well been amazing but unless your target client wants it, it’s really not that viable an idea after all.

Just how does the Validation Board work? Here is a quick seven-step overview. For a more detailed explanation, please watch the video below the seven steps.

1. Identify your “Customer Hypothesis”: Who is your organization’s specific target client? Although we like the idea of helping anyone who needs help, the truth is your organization will be most effective by delivering specific, customized solutions to a specific market.

  • Nonprofit example: women aged 25-45 from the Washington, DC, area who have been victims of domestic abuse.

2. Identify your “Problem Hypothesis”: What problem do you think they have for which they are searching for a solution? I know for me in my work as a coach, it is so easy to see a glaring problem that I can help my client solve; however, if my target market doesn’t personally identify with that same challenge, my solution to their problem won’t “sell” no matter what.

  • Nonprofit example: In an effort to serve these women, you hypothesize these abused women need a shelter to escape the abuse.

3. The first time working through the Validation board, skip the “Solution Hypothesis” because we need some data about the problems our target market is currently facing around a specific issue before we come up with any potential solutions. Once we have some feedback from our market, we can then begin to test the viability of potential solutions.

4. Identify your “Riskiest Assumption”: What are you assuming about what your target clients want? In addition, what data do you need to support your assumption?

  • Nonprofit example: You assume this target market would be willing to come to a shelter to escape when you might not know if women will utilize the shelter until you have some data to prove it. For argument’s sake,  these women may want to escape but would not feel safe in a shelter. Before you invest in building an expensive shelter for them, it would be important to find out what kind of escape resources they would want instead of just assuming you know what they need.

5. Method: How are you going to test your idea? How are you going to find out if your target market identifies with the problem you’re looking to help them solve? Are you going to ask them in person, do a survey, etc.?

6. Minimum Success Criterion: How will I know when I have enough data to validate my idea?

  • Nonprofit example: Before deciding on creating any particular solution to help these women escape, you may decide  you need 18-20 women from your target market to say they would use a shelter. If you don’t get the numbers you need, then you go back and create a new hypothetical problem. For example, maybe the women would feel more comfortable coming to a kid-friendly, established church building.

7.  Pivot as necessary: As you get more feedback from your target market, adjust your approach as necessary. Perhaps the problem you’re setting out to solve isn’t what they really connect with but there is another problem they’d like you to help them solve. Keep tweaking your concept until you have enough information to validate that your idea is viable for both you and for them. Use as many columns on the Validation Board as necessary.

Here is the video resource that explains the Validation Board in more detail:

I admit that after spending two days talking about the Lean Impact conference and then spending hours reading through the different resources on this topic, it is very easy to slip into a mindset where we feel like we are handling our target market’s problems in a way that involves way too much head and not enough heart. Data, numbers, hypothesis…not focused on the heart of the mission; however, I want to offer the questions below to you.

What if being Lean allows you to impact more lives in a more meaningful way, giving your donors a higher ROI on their dollars, thus encouraging them to increase the frequency and amount of their gifts to your organization? What if being Lean makes your nonprofit leadership job easier and more satisfying? Wouldn’t that be worth at least looking into?

More and more, the organizations that are able to change the world will be those who become experts at listening to their target clients’ real needs and then developing customized, innovative solutions to solve them. How they will arrive at these solutions will be through a process of thorough testing, attention to the real data from those they exist to serve and then pivoting accordingly.

I’d love to hear from you…What do you think of the Lean philosophy as it applies to the nonprofit sector? Please leave a comment.

See also:

Little Bets: How Breakthrough Ideas Emerge from Small Discoveries

Leap of Reason: Managing to Outcomes in an Era of Scarcity

The End of Fundraising: Raise More Money by Selling Your Impact

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