Steve Blank and Eric Ries, co-founders of the lean startup movement, describe startups as “temporary businesses” because the owners have a relatively short period of time to “build, measure and learn” in order to champion their startups into successful companies.
Basically, the lean startup movement advocates creating iterations of the minimum viable product (MVP) in quick succession, using customer feedback to evolve the product much faster than through more traditional product development practices.
In the Information technology, Communications and Entertainment (ICE) practice here at MaRS, we are fortunate to guide startups through this process on a daily basis, helping them save money and time by using this build, measure and learn cycle.
A critical process of customer development that is used by “Leanists” and adopted here at MaRS, build, measure and learn is a guide by which startups can first build their minimum viable product, then measure its success through metrics (for example, Dave McClure’s Startup Metrics for Pirates), learn from the implementation and lastly, iterate their next MVP.
Price My Ride is helping auto owners and buyers understand the real cost(s) of buying a new auto or owning their existing one.
One startup that embodies this lean startup philosophy is Price My Ride (PMR). Fully bootstrapped, PMR is an early-stage startup founded by the talented Kuhan Puvanesasingham. The company is currently in the process of building a ‘magnetic’ platform that helps auto owners and buyers understand the real cost(s) of buying a new auto or owning their existing one. Why is it magnetic?
- It’s irrepressibly attractive in terms of design and user experience.
- It combines great functionality and immediately conveys value to the user.
- It’s capable of creating a powerful stream of demand: passing the ‘wow’ test.
We feel that PMR showcases a solid product market fit, and we aren’t the only ones. Check out their recent feature on Techvibes.
This is the first installment in a new ICE practice series called Lean Startup Showcase. The series will feature interviews with lean startups, giving you a window into how they describe their companies and iterate through the build, measure and learn process.
In an effort not to ‘drink our own Kool-Aid,’ but validate our learning through startups, we’re very pleased to present to you the first Showcase interview featuring PMR founder, Kuhan Puvanesasingham:
MaRS: Tell us about Price My Ride.
Kuhan: Canadian consumers spend as much as six months shopping for a new or used car. They buy three million new vehicles annually, but many of them agonize over the purchase.**
Price My Ride is a platform designed to make this process easier. The idea is simple: know the total cost to purchase and operate a new or used car before you buy and avoid any nasty surprises after the car is in your driveway.
The site offers users a simple, personalized way to evaluate virtually any car built since 1996. With just a handful of inputs, PMR will calculate what it costs you to drive the vehicles you’re thinking of buying and the ones already own using data from industry and government sources.
MaRS: What are the key activities that makes PMR successful?
Kuhan: Our team started through friends and family moonlighting in a former company. One of our founders came from a background in advertising production and readily assembled a team with programming, creative, design, and copy writing capabilities. With the exception of some of the database and data modeling skills required for our backend, we had all the tools to produce PMR entirely in-house.
The entire development of the project was mostly funded by service work in web and media production. Lastly, with the long gestation of a project the size of PMR and its uncertain timing (and burn), we explored several other entrepreneurial ideas and continued with service work while building PMR.
MaRS: What are some of the challenges you face as a startup?
Kuhan: Every stage of PMR’s build, measure and learn cycle is new to us. We have a diverse skillset, but our previous experience and even the experience we gain with other projects are not so transferable. We’ve had to adjust and learn a lot about the auto space.
Here are some of the challenges we faced:
- Creating realistic expectations: Every step of the project we embark on has implicit expectations, and often we find some disappointment or frustration at the outcome, no matter how successful we may be.
- Maintaining enthusiasm: Keeping momentum despite our many setbacks has been very difficult. Our morale seems to operate in spurts, our deep interest in the project gets challenged often and we don’t know if there is any real cure for this – we’d love to consider team morale in our project plan. Is that even possible?
- Making the “right” decision is hard: It’s difficult to know who you can trust. An advisor may say one thing, a blog post or case study another. As a founder, it’s really important to trust your gut. We find even hindsight isn’t 20/20.
- Competing with little in the way of funding: Finally, trying to compete on a shoestring budget is a challenge, but it is possible.
MaRS: How have you operated using the lean startup methodology?
Kuhan: Our critical mistake in the beginning was that we didn’t follow the lean startup methodology and dove too far and fast into a refined product before release.
A shiny, polished product helped wow people during pitches and their enthusiastic reactions reinforced our idea of making a slick product. This was actually before we connected with concepts like MVP, which was an incredibly influential idea that would become critical later.
We stepped away from PMR for a while and decided that it needed to be stripped down to something basic. Doing this really helped us define our core offering. The MVP concept proved to be intimately related to our value proposition.
We scaled back on features on the site, removed things that were already programmed, and adopted the mentality of TESTING instead of building a polished product in isolation based on our guesses.
The idea of scientifically approaching entrepreneurial activities is a difficult process, but it seems to be the right way to go. We had to eliminate the mentality of keeping our ideas tight to our chest, and we had to learn to be open. We stopped treating our meetings as PITCHES, but instead as meetings with potential partners discussing a mutual opportunity.
Overall, the biggest advantage of using the lean startup methodology has been that it’s helped us eliminate the guess work from building our product. We take a lot more time testing/listening to our customers in order to make PMR a better service.
Have an idea and want to change the world? We invite you to engage with an Advisor and/or learn more about how we at the MaRS Commons can help. Also, feel free to join us at one of our many events for entrepreneurs.
A major thanks to our MaRS Media team, specifically, Senior Producer, Jeff Beardall, who produced the shots you see in this blog.
Scotiabank economics report, 2009 – The report said the rebound in Canadian household new vehicle purchases will drive overall 2010 car and light truck sales to a record 4.4 million units — 2.9 million used vehicles and 1.57 million new models. The 2012 update for new cars is 1.56 million (Scotia 2012), but the used number isn’t easily found.