How to apply the lean startup approach, MVP, experimenting, testing hypotheses, pivoting, questioning assumptions, learning and failing fast and finding product-market fit within eHealth's regulative markets?
Pauliina Smeds, Forum Virium Helsinki
Jaakko Ikävalko, Forum Virium Helsinki
The lean startup model aims at
increasing the odds for
success for startups,
by reducing the market
The goal is to
eliminate wasteful and
new product development
This means among others
not writing elaborate
Also, this signifies
launches and failures
Consequently, one goal is to
diminish the need
for high level of
The key methods of lean startup philosophy are
• iterative product releases
• validated learning
The objective for experimentations, iterations & learning is to
guide new ventures to
only launch products that
customers actually want
In the lean startup approach, a startup is viewed as
an experiment within
the context of
a startup doesn’t know
who is the customer or
what is the business model
Extreme uncertainty: in the beginning both the problem and the solution
are unknown. Thus, in the beginning,
a startup exists only to
create a new sustainable
The primary goal is to
discover a business
model that works before
running out of money &
time. And then scale it.
The business model or the scaling of a business should not be based
on assumptions but instead be
built on tested
In the search for a sustainable business model, it’s crucial
that before running out of money, the startup has the ability to either
pivot or persevere
Pivoting is productive failure for a startup.
Pivoting signifies learning something useful.
Pivoting means staying
grounded in the initial vision,
but changing one dimension
of the business at a time.
A startup should always consider
to pivot is left
Therefore, it is especially essential to
This is done by
accelerating validated learning by the
build-measure-learn feedback loop
Most startups are drawn apart by two approaches of building a product
when maximizing the chances for success
building the most perfect product
releasing early, releasing often
minimum viable product
(MVP) is a synthesis
of these two extremes
Most startups consider an MVP too big: including too many features.
contain only critical
In order to deliver an MVP
a startup needs to be
willing to iterate and
An easy formula
what you think
an MVP is,
cut it in half
Customer feedback loops
during product development
help to eliminate features or
products that the market doesn’t
Sales & Marketing
Source: Steve Blank`s Customer Development by Brant Cooper; custdev.com
Experimenting means testing the ideas against reality.
experimenting is NOT
about asking the
testing hypothesis, setting
metrics and measuring
how customers behave
Setting up the metrics requires also
identifying what is crucial
in order to establish a
Questioning the assumptions
• Is the problem worth solving?
• Who’s problem is being solved?
• Does anyone care about the solution?
• Will the customers buy the solution?
• How are the target customers solving the problem now?
• How will the startup grow?
• What is the unit cost model?
• What is the unit revenue model?
• What are the acquisition costs per customer?
• What channels will be used to get to customers?
• What is the startup’s unfair advantage that cannot
be easily copied or bought?
Product - market fit:
the point at which the startup can scale profitably
• The customer is willing to pay for the
• The unit of cost per customer is smaller
than the unit revenue per customer
• There is sufficient evidence indicating the
market is large enough to support the
• The sales model is repeatable and
Unit of progress: validated learning
Hypothesses, Experiments, Insights
Data, Feedback, Insights
Architectual Spike Release
Key Partners Key Activities
Cost Structure Revenue Streams
Canvas tools, one example
The focus is on
• business model,
not on business plan
• fast learning loops:
• avoiding investing in a bad idea:
a quick death is a good death
What Lean Startups Do Differently
Lean start-ups don’t begin with business plan but with the search for a business model
Quick rounds of experimentation & feedback reveal a model that works.
Then, lean startups focus on execution.
Business Model Hypothesis-driven Business Plan Implementation-driven
Get out of the office and test hypotheses
Prepare offering for market following a
linear, step-by-step plan
Build the product iteratively and incrementally
Agile of Waterfall Development.
Build the product iteratively, or fully specify the
product before building it
Metrics That Matter.
Customer acquisition cost, lifetime
customer value, churn, viralness
Accounting, income statement, balance sheet,
cash flow statement
Fix by iterating on ideas and pivoting
away from ones that don´t work
Fix by firing executives
Operates on good enough data
Operates on complate data
Customer and agile development teams hire for
learning, nimbleness, and speed
Departments by function
Hire for experience and ability to execute
eHealth specific aspects
with the lean startup approach
eHealth related aspects
• lots of regulation
• getting to product/market fit potentially expensive: even
MVPs have usually to meet certain standards and often
need approval from administrators & regulators
• important stakeholders can be hard to reach
• health providers can be conservative & reluctant to try
new things, resulting in slow adoption
• often complex ecosystems & value chains
Regulative aspects in eHealth
Within eHealth, there are requirements & directives for
• Privacy, security, language support
• SW development process
• Quality management system
• Risk management process
• Clinical investigation
• Placing on the market
• Incident reporting
• Suitability for the intended use
• Performance and reliability
When commercializing an eHealth innovation
if regulation concerns your
product, think for ways to
An example: Case Owlet
avoiding regulation in an eHealth startup
See video on the case: https://www.youtube.com/watch?v=rS6fHW9pRek