Arquivos lean startup - SoftDesign

Problem Solution Fit: how to achieve it?

Pâmela Seyffert — Thu, 08 Dec 2022 10:36:18 +0000

When we identify a problem, we also identify an opportunity for a solution. This is the starting point for several startups and scale-ups that, in the universe of digital products, constantly seek to validate ideas quickly and with the lowest possible investment. On this journey, one of the goals is to achieve Problem Solution Fit.

For Ash Maurya, author of the book Running Lean: Iterate from Plan A to a Plan That Works, before investing months or years of effort into creating a product, the first step should be to validate whether developing it really makes sense. That is, if the proposed solution to solve the problem meets the expectations of the stakeholders – in this case, customers and users. To achieve this, it is essential to raise questions about what the problem is.

Unraveling the Concept

The first objective of the validation phase of a digital solution is to achieve Problem Solution Fit. Product experimentation and the observation of metrics are key factors supporting this journey, as they can prove that the product hypothesis solves a relevant problem for a certain group of people. By reaching this point, it becomes easier to meet potential users, and analyze whether the digital product is technically and economically viable.

In the book “The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company“, Steve Blank and Bob Dorf point out that the customer discovery process helps in finding Problem-Solution Fit. This is why questions like: “Did we find a problem that many people want to be solved?” and “Does our solution convincingly solve this problem?” are so important. They help determine whether the value proposition matches the target audience that the digital solution plans to reach.

For the authors, “Problem Solution Fit is only achieved when the revenue model, prices, and acquisition efforts match the needs of customers”. To achieve this, it is necessary to validate hypotheses through interviews, surveys, and tests with prototypes, among others.

It is important to emphasize that many of these strategies can be tested even before the development of a Minimum Viable Product (MVP). Remember that your main mission is to find out if the specific solution is capable of solving a problem to such an extent that the customer will be convinced that he will have to pay for it.

Source: https://softdesign.com.br/blog/guia-da-startup-digital-e-book

A Challenge for Startups and Companies

As we mentioned, one of the main uncertainties of a startup is validating the real existence of an opportunity, and whether the proposed solution is applicable to the identified problem. However, it is important to emphasize that internal systems of medium and large companies also need to achieve Problem Solution Fit.

Often, a person in a management position proposes a digital solution based on the belief that it will make work easier or increase profits. Developing this, without conducting research with internal users, or working on a validation step, can result in spending time and money. Remember: customers and users don’t behave according to your business plan.

Problem Solution Fit X Product-Market Fit

The second objective of the validation phase of a digital solution is to find Product-Market Fit. After proving that the solution actually solves a real problem, we need to validate its acceptance and performance in the market. For this, it is necessary to have the Business Model defined and part of the MVP built, to collect feedback from the first users.

That is, Problem Solution Fit precedes Product-Market Fit and proposes to analyze and understand a problem that can affect the positioning and differentiators of a product in the market. Product-Market Fit is the process of finding a group of customers and a market that reacts positively to your product.

Problem-Solution Fit Canvas

Created by Daria Nepriakhina, the Problem-Solution Fit Canvas is based on Lean Startup principles. Its purpose is to help entrepreneurs, marketers, and innovation leaders to identify behavioral patterns. “This model helps to find solutions with greater chances of future adoption, in addition to reducing the time spent on tests”, Daria highlights.

The Problem Solution Fit Canvas is a tool that transforms a problem into a solution, taking into account the customer’s behavior and the surrounding context. According to Daria, with this model it is possible to analyze problem-solving in-depth, thus increasing the chances of finding Problem-Solution Fit and Product-Market Fit.

The structure of the canvas consists of four pillars:

Customer State Fit: ensure that you understand who your target audience is, what their limitations are, and what solutions are already available in the market.
Problem-Behavior Fit: helps filter information and identify the most urgent and frequent problems, understanding the reasons behind them. This is the right time to ask yourself: is this behavior a problem worth solving?
Communication-Channel Fit: this helps improve your communication through more emotional messages that resonate with customers in the right channels.
Solution Guess: translates and validates all collected data, solving a real problem by identifying a standard behavior among the target audience.

Problem Solution Fit Canvas. Source: Daria Nepriakhina.

Solutions to Your Problems

Finding the Problem Solution Fit may not be an easy task. At SoftDesign, the Product Conception service helps in defining the target audience, the value proposition, and the strategic planning of new products.

While in the Product Experimentation service, our multidisciplinary team works on the development of MVPs, which allow for testing hypotheses and validating business ideas. Thus, you reduce risks and save financial resources before going into the development stage.

Need help finding solutions and creating products that meet user needs? Fill out the form below and chat with our team of experts.

Let’s build exceptional software solutions together!

Experience having a reliable partner to your IT challenges. Let’s talk about our unique approach to discover and deliver outstanding solutions.

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What is Lean Change Management

Pâmela Seyffert — Thu, 11 Aug 2022 13:17:08 +0000

Some people like to think of change as linear. In this context, the idea of planning, executing, and completing a project causes an illusory feeling that we have everything under control. However, we know that in practice change is synonymous with uncertainty. Therefore, Lean Change Management (LCM) can be a good strategy to make room for change, through a safe, effective, and innovative approach. One of the few certainties we have in life is that the world is constantly changing. Business is no different, and facilitating the change process can be a challenge for companies and startups. Just like Digital Transformation, Change Management has become a mandatory requirement for anyone who wants to stay alive in the current market, which is made up of countless data, stimuli, and offers. However, traditional Change Management as disseminated by the Project Management Institute (PMI) seems to no longer meet the needs of a VUCA (Volatile, Uncertain, Complex, and Ambiguous) world.

Validating Change Process

Lean Change Management is a lean change management model developed by Jason Little. The approach proposes to manage change in an agile way, with tools, modern ideas, and skills from multiple areas of activity. For the author, life is a great experiment and feedback is an important ally to drive organizational advances. According to Little, when he wrote the book Lean Change Management: Innovative practices for managing organizational change, the original intention was to portray the working methods in the organization in which he worked as an Agile Coach, guiding a department of 300 people in the adoption of the Agile Method. However, throughout this process, the author discovered that there was a lot of complexity in contemporary companies and, therefore, changing with the help of simple and linear tools was not possible. Around that time, in 2011, the Lean Startup approach, created by Eric Ries, emerged and revolutionized the way new products are created. Influenced by this book, Little began to wonder if it was not possible to apply this same concept to rethink the validation of the change process as well. With this in mind and thinking about how to facilitate this interaction, in 2014 he created the Lean Change Management approach. As many of us want to promote changes that others do not, the model needed to be adaptable to different contexts, after all, each change process is unique. Therefore, to elaborate the strategic vision, the approach suggests answering the Strategic Change Canvas. In it, it is possible to indicate the vision and importance of the change that must be made, in addition to metrics of success and progress – and, of course, the impacts that the change will have on people, departments, and processes.

Strategic Change Canvas. Source: https://leanchange.org/

5 Universal Dimensions of Change

To guide us through this journey, Little defined the five dimensions that help us drive change:

Cause and Purpose: what is urgent for you may not be for the other, and this situation can generate stress among team members. However, when we come together for a collective purpose, we are more likely to move towards a solution in a light and collaborative way.
Significant Dialogue: Communication is very important in the change process. When working with complex changes, it is necessary to create an environment conducive to dialogue, where practices from the Lean Change Management model and the Agile Manifesto are important tools.
Response to Change: resisting change and innovation can be common in some companies, especially in more traditional ones, and this is one of the reasons why the Agile Method can fail during its adoption process. If people are very resistant to change, it can also mean that they do not feel invited to participate in this moment of company transformation. Remember that being inclusive and diverse is crucial.
Co-creation: to make everyone believe and accept change, it is necessary to empower people. The Culture of Collaboration is essential to promote understanding and alignment among all. For this, it is necessary to make room for people to co-create together.
Experimentation: it is necessary to run experiments instead of tasks. It’s not possible to predict what will happen with complex changes, which is why trusting cycles of experimentation and feedback is so important. Only in this way can you modify and adapt plans as you go along.

Lean Change Management X Traditional Change Management

But, after all, what are the main differences between Lean Change Management and Traditional Change Management? We know that our brain does not manage uncertainty very well, since human beings prefer to know in advance where they are and where they are going, and this happens in all aspects of our lives. Therefore, we can say that the main difference between the two approaches is precisely the fact that one of them seeks certainty, while the other prioritizes experimentation and rapid learning. In traditional management, it is customary to start a project, convince the stakeholders to accept the change and then start executing the plan. In this model, the work schedule is long and the consultant is considered “Mr. Know-it-All”. In Lean Change Management, the alignment process is continuous, since no one will be aligned to the change at the same time and at the same intensity. In this model, there is an understanding that changes are complex and, therefore, it is important to make room for learning. In addition, the work is developed in short cycles, which makes it possible to evolve little by little. For Karina Hartmann, Head of Product and Innovation at SoftDesign, by applying the concepts of Lean Change Management in the service of Consulting, we identified some gains and advantages such as: Changes are more co-created: consultants do not act like “Mr. Know-it-All”, who will say what is right when adopting a method. Instead, these people act as facilitators and mentors; Changes are more realistic: the processes of adopting new methods are often ignored by collaborating people and end up dying after a certain time. However, when the process is collaborative and interactive, the changes are more real and permanent.

LCM at SoftDesign

At SoftDesign, Lean Change Management is an inspiration to work on changes, as it is very much in line with the way we think. “We are inspired by LCM mainly in our Consulting services, performed iteratively, through cycles of experimentation with change, learning, and evolution. In this way, we do not work on gigantic projects, as we can show quick results (Quick Wins) since each cycle is already building a small change”, emphasizes Karina. According to the Head of Product and Innovation, this form of change must be iterative and incremental, that is, you need to apply the whole concept of agility to changes as well: work in cycles, get quick feedback, learn and improve. Furthermore, it must also respect the existing culture and environment. “We always find it strange when consultants want to “implement” a method. The very idea of implementing something seems outdated to me; it’s as if we were talking about machines”. We believe that culture and human interaction are complex and determining factors for achieving success. “We cannot establish a process or method without context. Before that, we need to build and develop it within our environment, considering the restrictions and the existing reality in the client”, Karina highlights.

Change is Our Only Certainty

When we focus on a journey that prioritizes beginning and end, we end up forgetting how much the middle can be pioneering for the project under development, as much as it may mean not meeting a pre-established result. We know that fear of failure is one of the obstacles to overcome during the change process, so you can count on our multidisciplinary team to test ideas and experiment differently through Lean Change Management and Agile Methods. Fill out the form below so that together we can promote the change that will boost your business.

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Innovation Beyond Glamour: Frameworks and Practices

Pâmela Seyffert — Wed, 03 Aug 2022 18:03:08 +0000

We are halfway through the year. The first half of 2022 is over and the startup bubble has really burst. Amid layoffs and fearful entrepreneurs, the technology market is retreating after a few years of high investments, rampant cash burn, and great promises of innovation.

In this scenario, some questions are inevitable. Did all the startups that emerged in recent years really have innovative potential? Could it be that so many digital products were effectively suited to their market and optimized for users?

The truth is that glamorized innovation is a trap. When the responsibility for a product’s success rests with the genius entrepreneur or creative inventor, business failure is always close at hand. True innovation, driven by multidisciplinary teams and based on continuous experimentation, brings success closer – and makes it possible to create digital products that will be loved and generate value.

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How to Drive Innovation?

The first step is knowledge. Relying on the work of researchers who are at the forefront of developing innovation frameworks is essential to achieving satisfactory results. Since the 1980s, the area has been studied by theorists around the world, and real experiments have been conducted to validate such theories.

Already in the book Innovation and Entrepreneurship (1985), by Peter Drucker, it was discussed the orientation that innovation should be developed through scientific thinking focused on empirical data, and not based on personal opinions or passions. The following year, Hirotaka Takeuchi and Ikujiru Nonaka released the article The New New Product Development Game, in which they advocated the development of complex products with multidisciplinary teams engaged in iterative experimentation.

Approximately ten years later, in Discovery-Driven Planning (1995), Rita McGrath and Ian McMillan introduced the title’s concept, arguing that in new ventures it is more important to learn about assumptions than to make long-term plans. Soon after, through a multiple case study, Gary Lynn contributed to the article The Probe and Learn Process, saying that he identified that companies capable of innovating in a stagnant economic scenario were those that were using such a process – testing and learning – experimenting with initial and unfinished versions of the product and iterating in this process.

However, it was only from the 2000s onwards, that experimentation practices for Discovery and Validation finally gained the attention of the public. They are among the most current in the area of innovation in digital products.

Customer Development Process

In 2003, Steve Blank presented his newest framework for the technology market. Based on four steps, the Customer Development Process (CDP) aims to discover and validate if: you have identified a need that your potential customer actually has; you have built the right product to satisfy this need; you have tested the correct methods to convert this customer; and implemented the right features in development to meet the demand for your product.

The CDM is still used today and serves so that businesses do not base the creation of their products on premises and/or assumptions. We can see these four steps more clearly below:

Customer Discovery: understanding potential customers and the needs you can satisfy;
Customer Validation: validate if your product really satisfies the customer’s need;
Company Creation: determine whether you will create this product;
Company Building: grow your business to support your product.

Source: https://learn.marsdd.com/

Business Model Canvas

A few years later, Alex Osterwalder and Yves Pigneur created the Business Model Canvas (2004). According to them, a Business Model is a conceptual tool that contains a set of elements and their relationships and allows the expression of an organization’s moneymaking logic.

It is a description of the value that a company offers to one or several customer segments. Moreover, it expresses the architecture of the company and its network of partners to create, market, and deliver that value and relationship capital to generate profitable and sustainable revenue streams.

The Business Model Canvas, which allows the creation of a more complete business proposal, is important to identify hypotheses that need to be tested. For the theorist, it is not only the products and services of an organization that make it competitive in the market: the Business Model is also decisive.

Source: Book Business Model Canvas (2004).

The Lean Startup

Eric Ries revolutionized the market the following year in 2011 when he released the famous book The Lean Startup, in which he detailed the build-measure-learn cycle. The method proposed by the author aims to shorten product development cycles and quickly discover whether a Business Model is viable or not.

In practice, the framework involves a cycle of hypothesis creation and testing, in which something small is built (MVP) for potential customers to test. Their reactions are documented by the team, to generate learning and drive new improved cycles.

The Lean Startup idea is to continually improve the product’s offering so that you eventually deliver exactly what your customers want. Thus, the picture of savings becomes a reality, as resources are only used with data that justify them.

Source: https://tinytracker.co/blog/

Testing Business Ideas

Finally, in 2020, in the book Testing Business Ideas, Osterwalder continues his Business Model Canvas and proposes a new framework to innovate Business Models. It aims to minimize the importance of “building” (the Lean Startup) and make the relevance and meaning of “experimenting” clear. According to the author, “testing is the activity of reducing risks chasing ideas that sound good in theory. You test ideas by conducting quick experiments that allow you to learn and adapt.”

In the framework in question, in the lower left corner are the entrepreneurs and in the upper right corner is the positive result of the business. To follow this path, decisions need to be made and Osterwalder proposes that they be carried out based on two cycles: in the first, by creating hypotheses for the Business Model Canvas and, in the second, by testing these hypotheses to learn.

After the round of experiments, the Business Model Canvas must be revised, so that the cycles are repeated until you have data on which to base decisions. This means that through this method, it is possible to discover if the direction we imagine makes sense (Discovery) and validate if the chosen paths have evidence of success (Validation).

Source: Book Testing Business Ideas (2019).

Chasing True Innovation

Conducting such practices within the business is not an easy task. It is necessary to have at least one person who masters the frameworks and leads the team through the development and innovation process.

At SoftDesign, we offer distinguished services that can support true innovation, as they are based precisely on the Customer Development Process, the Business Model Canvas, the Lean Startup, and the Testing of Business Ideas. We act from the idea or problem, carrying out the Product Conception of the solution; then we go on to Experimentation to validate the feasibility of this solution; and finally, we work on Development, from the quickest, which are the MVPs, up to the more robust solutions, evolving from data and user feedback, adding new features and a better user experience.

Contact us! Our multidisciplinary professionals have the necessary skills to support the digital innovation journey of your business.

This article was based on the Final Paper for the MBA in Digital Business (USP/ESALQ), by Karina Klein Hartmann, entitled The adoption of experimentation practices for discovery and validation of digital products in Brazil (Adoção de práticas de experimentação para descoberta e validação em produtos digitais no Brasil).

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