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Validated Learning in the Lean Startup
Reis promotes the idea of "Validated Learning" for new entrepreneurs who are seeking to start building on their entrepreneurial vision. Validated learning is supposed to be a rigourous and methodological model through which entrepreneurs can reduce waste during the product development phase. Reis' validated learning model follows the teachings of Taiichi Ohno and Shigeo Shingo who started the lean manufacturing revolution in Toyota.
Lean manufacturing is concerned with value creating activities and waste in manufacturing facility, and how to build quality into a product from the inside out. Progress in manufacturing is measured by the production of high-quality physical goods, while Reis measures progress in entrepreneurial ventures through an altogether different unit called validated learning.
Learning is the essential unit of progress for startups as without learning entrepreneurs will continue to waste time in development of products that are not required by customers. therefore validated learning in an entrepreneurial setting deals with the reduction of waste spent building products that consumers do not desire and are thus not marketable.
Validated learning begins with testing the entrepreneurs grand vision into what Reis refers believes are the two most important assumptions of the entrepreneurial venture, Value Hypothesis and Growth Hypothesis that are tested with the introduction of a Minimum Viable Product (MVP).
The value hypothesis tests the viability of the product or service in the market, and its ability to deliver value to the customers. The growth hypothesis tests the virality of the product and its ability to grow without too much coercion thus ensuring its stickiness to customers. These hypothesis are tested though the development of a MVP, where the basic product or service is tested to ensure the plausibility of the value and growth hypothesis. Unlike in focus group testing or interviews, entrepreneurs can actually measure what customer actually do through giving MVP to their customers and measuring the interaction with the product.