At Scurri.com we have been influenced in the way we work by Lean Startup since we attended iGAP2 and Eric Ries encouraged me to launch during his workshop. As we did not have our payment engine completed and our site was still weeks from going live, its seem ludicrous at the time. However Eric is persuasive and convinced me to launch and at that moment we really started to learn about our business. He was also right, its was some time later, and the payment engine was well built, before we had sorted out a few other issues in our funnel and we had our first payment.
Recently we have refocused on Eric’s material and we have started to use Innovation Accounting to measure how we are progressing. Eric describes Innovation accounting as “turning leaps of faith into a quantitative financial model”. But how does this practically work? These are the three steps we established that we felt needed to be done to implement Innovation Accounting.
Innovation accounting works through three learning milestones.
- Build a Minimal Viable Product (MVP) to establish real data on the assumption that you require to be tested. This is your baseline.
- Now use experiments to tune your “engine” from the baseline to the stated ideal.
- Review progress toward the stated ideal and decide to either pivot (change direction) or persevere.
Check out my post at Scurri.com for more detail.
