After three years of rigorous testing, Ash Maurya (pioneer in the lean startup movement) has launched a new book, Scaling Lean. Listen as we review his insights on growth that have been praised by Eric Ries, Dave McClure, Seth Godin, and more.

TOPIC ASH MAURYA COVERS

→ He wrote the first book on Lean Startups

→ He is an OG of the Lean Startup Movement

→ He wrote the first book on Lean Startups, called “Running Lean”

→ The book aims to help entrepreneurs validate and test their ideas early on, and to build a business model around them

→ Vanity metrics are metrics that can always show positive growth

→ Scale is about implementing growth hacking tactics and strategies to grow the business

→ He talks about the three parts of his traction model: Problem, solution fit, market fit, and scale

→ Ash explains why traction matters and how it shows the proof that there might be a bigger market

→ And a whole lot more

LINKS & RESOURCES

→ Ash Maurya Blog

→ Running Lean Amazon link

WATCH THE INTERVIEW

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Bronson: Welcome to another episode of Growth Hacker TV. I’m Bronson Taylor and today I have Ash Mariah with us. Yes. Thanks for coming on the program again.

Ash: Thanks, Bronson. It’s a pleasure. Always.

Bronson: Absolutely. I love having you on because you’re one of those guests that are deep. You have thoughts that you’ve you’ve thought through for a long time. You’re not just coming on here giving opinions off the cuff. These are some things you’ve really worked through. But let me tell people a little bit about you. You are one of the OGs of the Lean Startup Movement. Actually, you wrote, if I’m not mistaken, you wrote the first book on Lean Startups. Technically, yeah. Technically, yes. Right. And and now I think you’ve done it again because you have a new book coming out this month called Scaling Lean. And I was actually lucky enough to get an advance copy of it. I shouldn’t say lucky enough, as is nice enough that I got your advance copy of it. And I think this is going to be a must read for modern entrepreneurs. But I’ll let you walk us through why that is as we talk here. But first, the question I want to ask is why did you feel the need to write a book about scaling a lean startup? What was the reasoning there?

Ash: Sure. So I think a lot of my process is really immersing myself in the problem. And maybe what you were alluding to early on. So since the book is a lean startup and the book Running Lean came out, I found that the big message there was really getting people outside the building. It was really trying to get the entrepreneur to have this big mind shift where it wasn’t just about the solution. What I sometimes call the entrepreneur is bias or the innovator’s bias, but really getting outside and testing, validating the idea. And then I found since that came out, we got enough people outside and then they came back inside, went to their stakeholders and said, Look at all the learning I’ve done. And the stakeholders said, Well, I don’t see the business model. So it’s great that you’re talking to people and you know, you’ve talked to ten people, but I don’t know what that means. I don’t know if that’s going to work. And so it was a valid objection. And so with this second book, I switched focus. And so it’s less it’s still a very entrepreneur book written by an entrepreneur for entrepreneurs, but it’s really how do you have that conversation with stakeholders? How can I count the entrepreneur themselves as the most important stakeholder because they are investing with their time. So how do you test whether your idea in the early stages is even worth pursuing and then, you know, it just kind of builds up from there.

Bronson: Yeah, and I can say this firsthand. You know, I’m someone who’s recently raised money for a startup. And there’s places in the book where you say, this is how the venture capitalists are viewing this conversation. This is how they see the world. And I can say that is 100% accurate, that I come in excited about the features, excited about the product, and they’re saying, how big is the market? What’s the business model? Do we have any proof that those features matter? And so there’s just we’re coming at it from different sides. And this book is almost like a translation guide how to hear what the VCs are saying or for them to hear what we’re saying.

Ash: Right. And that’s what I what I find funny is that the investors don’t really tell you what they need. So they ask, you know, what they’re looking for. The entrepreneurs kind of keep digging deeper into, here’s my tack, here’s my solution, and no one is really talking to each other. And so I call it the dichotomy of progress stories. You know, we have two stories that are playing in that room and no one’s communicating. And so how do we really turn that language? And so this is where I start with what is it that both entrepreneurs and investors want? And to me, that’s traction. Traction is one of those things that we both say, yes, we want, again, easy, easy to say, yes, I want this, but not that easy to communicate it. So the book really starts with the definition and then kind of peels the layers from there.

Bronson: And I think that’s an important point because a lot of people say traction matters, right? That but you actually say why traction matters. It’s because traction shows the proof that there might be a business model here, that there might be a bigger market here. It’s not just like, hey, we got some momentum, so let’s be excited about momentum. It’s no it’s momentum towards something that the VCs are looking for, correct.

Ash: Yeah. Yeah. And I think the key point there is that it’s really about show me leading indicators for future growth. So if I came to you and said a stock was this Big Apple or Tesla or whatever you want and it’s doing X, will you buy it? And that’s kind of a dumb question. You would say, well, let me go and look at its past performance. Let me look at where they are, where they’re going to go, and then I’m going to invest on that basis. But as you know, so when we just look at metrics, we look at a single data point and say, wow, the startup’s doing really well, and that could be the case. But maybe they’ve hit the S-curve and they’re not going anywhere, so they’re not still investable. And we see lots of companies get stuck. So to me, traction is really more about the conversation of Here’s where I am, but here’s where we can go. And that’s the story you want to tell.

Bronson: Yeah, absolutely. Now, with Traction, you know, you talk in your book about vanity metrics, right? Because you can show certain metrics that always go up into the right because they’re vanity metrics. Walk me through that. What is a vanity metric?

Ash: Yeah. So there are metrics we kind of tell ourselves and we fool ourselves kind of on the basis of it. But I would say that it’s not so much the metric that’s all that’s vanity or actionable, but rather how we measure it. So the classic to be metric is the cumulative number of anything. So cumulative number of sign ups. If I look at all my users since the beginning of time, that number since is a it’s an additive product outcome. It cannot go down. It can only flatline or go up. And so I can just show this curve looking like traction and I can show all the people who have come and use our product. But that’s if I plot that same graph as a monthly sign up rate, I’ll begin to see that maybe it’s actually flatlined. Maybe my, my, my sign up rates the same or it’s actually going down. And that’s the more or actionable kind of information you want to present.

Bronson: Yeah, absolutely. Now, in the book you have of traction model and I want to spend a little bit of time on this. You say it has three parts to it. Problem, solution, fit, problem, market, fit, and then scale. Let’s talk about each one of those because I feel like this gets to the heart of what entrepreneurs are trying to accomplish. So problem solution fits the first one. What is that?

Ash: Yeah. So maybe I’ll set the context up in the beginning. So oftentimes when entrepreneurs go, they’re always thinking about scale and premature scaling is one of the things you probably talked about in the show many times. There’s a top killer of ideas, top killer of startups, because we are just chasing this outcome that’s so far in the future and we end up trying to optimize everything and end up having suboptimal results at the end. So what I started talking about, even in the first book, is this idea of a staged approach. So a problem solution thread is really about building the foundation of the business model, right? So it really starts with, you know, if you’ve got a solution in mind, great. If you don’t have one, you still need to start with who are you going to serve? So who is the customer? What problems are you solving? And then the third part, even more important, how are they solving those problems today? So if there’s a problem out there that’s monetizable, no one’s attempting to solve, it doesn’t mean there is an opportunity there. But it could be one that there’s a reason why no one’s doing it. Maybe there’s too much behavior change involved. So it does address what problem solution fit is about. How does your solution fit with your customers problem? And you can test that oftentimes very qualitatively. You go out there, you can do customer interviews, you can show them some demos, you can drive them to landing pages, show them the offer. And so we get that qualitative kind of validation. The way I like to say is that if you can wave a magic wand and pretend you’re built this thing and you go and tell people, Here I have it and no one’s interested, that’s a big red flag. If, on the other hand, people say, Oh, I want this and you know, you have this the opposite problem where you can’t really deliver on time. You can do that on a small scale and convince yourself, okay, it’s worth building after that. That’s what problem solution first all about then product market fit is often when you have build that first iteration. But in the lean startup we call the minimum viable product. You put that out there, it’s probably not going to be a perfect product, are going to iterate and get it to a point where it is really delivering on value. So whether it’s the piece of software, a service, you start to iterate and and you’re still doing it. And in all of this you are going from small scale of, of customers and you’re gradually kind of leveling up. So in your product market fit stage, you’re not again trying to scale prematurely, you’re not trying to get everyone because what if your solution’s not yet right enough or good enough? You will just bring everyone on there that will leave the party. So when you get kind of enough of that tipping point for the critical mass, that’s product market fit and then our our strategy shifts. It’s less about perfecting the product and more about scale. So that’s where when we talk of growth hacking, you know, that’s even and we’ll often hear that it’s really at product market or after product market fit that a lot of the growth hacking types of tactics and strategies are really best applied. So you’re really focused on growing versus figuring out the business model.

Bronson: Yeah. So is it fair to say that problem solution fit it’s you’re dealing with the world of ideas. Here’s the idea of what this thing will do. Tell me the idea. If you think it’ll solve your problem, it’s just words. And you know, there’s nothing real concrete to sink our teeth into. And then we move into problem market fit and it’s okay, here’s an MVP. It’s a real thing that has real features. You can actually use it. It’s not great yet. There’s a lot wrong with it. But let’s see if what we thought in the world of ideas actually translates to the world of UI and features and that kind of thing. And then if it translates, you get to scale and you really figure out how. Now to get this to as many people as possible, is that the process?

Ash: Sure. So I would say I would say in problem solution, I look at the output as being an offer. So the offer is something that you that you tell your prospects. And if they raise their hands and say, I’m interested in. Enough of them do. Then you’ve got something. If you were going to an investor or a stakeholder, you would maybe go and say, I run this landing page and look at all the email sign ups I got. So these are people who are interested. At least that’s a leading indicator. If you had zero people interested, we know that they’re not. Even if you had the product, they wouldn’t get it. So that’s what so that’s what you test and problem solution find. As you said, product market fit is about the MVP and kind of getting it to a point where the product is working in small scale and then in the scale stage. To me, the output there is the growth engine. Can you go and show the business model and the kind of equation for how you will grow and that’s what kind of you get the stakeholders to invest in.

Bronson: Yeah, I like that. You know, it’s interesting right now I’m actually getting feedback on a problem solution fit thing that I’m working through. And I didn’t create a landing page. I didn’t put any dev into it at all. I literally met people at Starbucks, told them verbally what it’s going to do, and then I showed them an Excel file with a make believe payment package. And it’s like, look, you’re going to package one, two, three or four. Which one do you want? And they go get their credit card and tell me which one they want. And I manually type it in straight. And that’s it.

Ash: That’s all. And. Well, that’s a good. I just think that that’s that’s a classic I mean, that’s that’s an art of the doubt, right? So I look at the demo as being the smallest thing that you should do to get your idea across. Yeah. So in your case, you didn’t even do an animation. That’s awesome, because you could just describe it.

Bronson: Well, you know, and we had a discussion about it. We thought, well, let’s at least do a landing page. I mean, who’s going to hand over a credit card just because you say something that everyone knows doesn’t exist? And then we thought, Yeah, but how many hours is the landing going to cost? Is it going to cost any money or. Well, let’s just say it, because if they can’t get excited with a few sentences, you know, one landing page may not change that. And so we really just did it as lean as possible. But then, you know, just in the course of a day or two, we got six credit cards on file just from conversations. And we thought, okay, this is there’s something here, you know, now let’s go a little further. So now we have the devs starting to put together a little MVP to see if we can move to the next step. So I didn’t know we were doing it the right way. So it makes me feel good talking to, you.

Ash: Know, I almost always. And so this is this is again one of the innovator’s bias, but they always rush towards building things. The landing pages are also building, and that can take you days, as you said. And oftentimes, I’ll I’ll push them to go and have a conversation, because the problem with the landing page and with metrics in general is that you can tell whether people are clicking or not clicking, but you never get to why even the people like it and you don’t know who they really are. For sure that could be a bot, so you have no idea who is behind the other side. But when you go talk to someone, it’s a real conversation. You ask questions, they ask you questions. You learn a lot more in that process.

Bronson: You know, it’s so true even that a make believe payment package page, the first one I showed, they were like, Oh, that’s way too expensive. I’m like, Oh, let me change it. So I just changed it. I was like, Does that look better? And they’re like, Yeah, that’s a little better. I was like, Great. And then they bought one of those, and then I got the next person and they’re like, Yeah, I like that package. This one doesn’t make any sense. I’m like, Does it? Now we change features on it. And so like the package literally morphed over the course of a couple of days. They were nothing like what I showed the first person to what I showed the last person, but the last one was like, Wow, this is way better because people were just ripping into it and it was an Excel dog. I wasn’t married to it. I didn’t care what was on it. We were just playing with numbers, you know?

Ash: Absolutely.

Bronson: It felt fluid, so the process felt better, that’s for sure. Now, you know, another thing you talk about in the book and you have a whole section called The Art of the Scientist. You know, normally we think of science as not an art. So what do you mean by the art of a scientist? What are you referring to there?

Ash: Yeah. So again, maybe just as that context, a lot of a lean startup wasn’t influenced by Lean Thinking, which was heavily baked in the scientific method. So Erik Reece is known for saying this this startup is an experiment, and so he draws a lot of those parallels. But what I found so for this second book, I said, let’s go and figure out what scientists really do. You know, they run experiments. Let’s go figure that out. And I found that that wasn’t the most important thing they did. And a lot of scientists would point me to Einstein and said he never ran an experiment. He was actually terrible at running experiments. And so I said, Well, what do they do then? And I realized that what they really do is they build models, so they start with problems. You know, there’s something they’re trying to explore and they build a model and that model helps them predict sort of an outcome. So they compute some consequences and then they use experiments to validate or invalidate that. So the most important thing is really starting with the model. And then I draw that same parallel with, with, with entrepreneurs and we do the same thing. We start with the business model and if you don’t, you should. So that’s kind of a key learning barriers that just experimenting your way to greatness often doesn’t work because you don’t quite know your goal. You don’t quite understand the dynamics of what you should be testing. So in the first book, I introduced the Slim Canvas One pager, which was essentially a one page business model. It’s not the only one, but it’s the one that, you know, it’s close to me. So I mentioned that one, but essentially it describes the whole business on a single page. And so that to me is how we we started with a model and it could be all wrong, but at least you’ve got a business model still right now. Then we go run experiments to test them. So the experiments come second. And so that chapter kind of starts with the model and then it goes into some of the ground rules. When you do start running experiments, how to think like a scientist and even there there are lots of pitfalls to avoid.

Bronson: Yes, I love this so much. I’m actually a science nerd. I’m an armchair physicist in my free time. And, you know, I’ve always thought that, like, if you just go out and run experiments, there’s no boundaries to what the experiments are or what they’re testing. You know, Einstein wasn’t like, hey, let’s go play with like and then tomorrow Gravity. And then the next day let’s play with something totally unrelated to him. He would have mental models of what would happen if a human was on a train and the train was moving at the speed of light. And like he had these ideas that then he would, you know, go and work with and it put the boundaries on everything. And I think as entrepreneurs, you know, we talk about, you know, building. As you’re learning the Eric Reece stuff and everything is an experiment. And I think some people misunderstand and they just try stuff and see what works, like the one spaghetti against the wall. And that’s not the goal. You have to have an opinion on the world and then you test to see if your opinion is correct. If your model is correct, not just try random stuff, right?

Ash: Right. That’s exactly right. So you have to start with the model. But to me, the flip side is also true, is that oftentimes more of those. It is still moral when you’re wrong and something else happens. So you see entrepreneurs when they hit failure, they start running away from it. So they will use again this lean startup term and it will pivot away from failure. But again, a pivot not grounded in learning. If you don’t understand why you fail, is it the sky to see what’s the strategy? You’re just throwing stuff on the wall again. And there do I just see people buried in more yet more experiments. Okay. This didn’t work with scientists and it’s a brute forcing approach, but it doesn’t get you to breakthrough. So to me, when I actually see failure, I actually don’t even call it failure. So I borrow Buckminster Fuller Storm. It’s an unexpected outcome, so I expect that something else will happen. And it didn’t. But that’s interesting. Let’s figure out why that happened. Right. So if no one’s buying, like you said, maybe the price is too high. Maybe we are talking to the wrong people. Maybe no one really saw something. So? So to me, it’s getting into those whys. And once you uncover that, that’s when you can go fix things. Until then, you’re just, again, randomly guessing.

Bronson: Absolutely. There’s no bugs. There just features. There’s no failures. There’s just unexpected outcomes. Oh, I like that. So, as you know, like most authors, I’m sure you have a goal when you sit down to write a book like this, what do you want to accomplish with scaling? What do you want to be the outcome from you writing this book?

Ash: Sure. So I’ll start with kind of my bigger goal and then can apply that to the book. So I started I really got sucked into a lot of being an I would say becoming an author was not a master plan. It was something I kind of fell into. And so I was an entrepreneur running a different business. I started blogging about some of these ideas, got sucked into the Lean Startup kind of movement, if you call it that, and then wrote the first book Running Lean, and then decided that I wanted to have some impact with entrepreneurs. So that’s something that really drives me. So I’ve been an entrepreneur many years and that was something that I wanted to figure out for myself and then for others, is how can we raise these odds of success? So that’s where the first book really came out from. And then the second book is really, as I said, a different part of that same story. I find that to be able to make entrepreneurs successful, we have to help them tell a story to their stakeholders as well. So that’s why scaling lean is term in terms of impact. You know, we have a company Lean Stack and we have a goal of serving entrepreneurs and we have a number of that in mind. So for us, it’s just moving towards that goal and this is one product in many towards that end goal.

Bronson: It makes sense. You know, I’ve read a lot of the book so far and I know there’s a lot of big ideas in it. There’s a lot of important ideas in it. What do you think is one of the most breakthrough ideas in this book? What do you think that’s really going to resonate with people that they need to hear?

Ash: Yeah, so I think the big one is starting with kind of the end in mind. And Stephen Covey said it, of course, in The Seven Habits, but how do you really apply that? So I find that a lot of people will be pushed to do financial forecasts or business plans. And to me, that’s not what I’m talking about. I’m really talking about how do you build and you use that term early on, how do you build a traction model for your idea and then hold yourself accountable to it? And of course it’s going to change and morph and evolve along the way. But just starting with that to me is a is a big step in the right direction because it allows people to figure out what the goal is and then everything else is, how do we get ourselves to that goal?

Bronson: Yeah, I agree. I think that it’s hard to imagine something calibrating you more than that, because if you start with the end in mind and you work backwards, you’re going to make the right next decision. But if you don’t start with the end in mind, you know you can be off so easily. All right. So the last couple of questions here. These are fun ones that I ask all the guests. So what are you working on? As soon as this interview is over, no matter how boring it is, what’s the next thing you’re going to do?

Ash: So the book is launching in literally two weeks. I’ve got tons of stuff to do around there, but one of the things that I do have to do is get a excerpt to for an article, so I need to get that out this afternoon.

Bronson: There you go. And then last question. What is the best advice you have for any startup that’s trying to grow?

Ash: So for startups trying to grow, I often will tell them that repeatability is a prerequisite to growth. And the way that I see this kind of manifesting is I talk about startups and they point to their metrics that point to the the customers they have. And I’m like, That’s great, but tell me where you get your name, your ten next best customers from and if they can tell me who they’re looking for and how they’re going to go get them. That to me is a big red flag. So to me, you have to have a repeatable, predictable model. And if you can figure that out, you know, growth is really about optimizing from there.

Bronson: Yeah, well, as this has been another awesome interview, I recommend everyone go and buy scaling lean. It’s going to be an awesome read. Well worth it. Ash, thanks for again coming on growth actor TV.

Ash: Thank you, Bronson. It was a pleasure. Thank.