How do you balance between building, measuring, and learning in your key activities?

Key Resources and Activities for lean startups are the essential elements of your business model that enable you to create value for your customers, deliver your value proposition, and generate revenue. They are also the main drivers of your costs and risks. In this article, we will explore how to identify and optimize your key resources and activities using the lean startup methodology, which focuses on building, measuring, and learning from your experiments.

1 What are key resources and activities?

Key resources are the assets, skills, and capabilities that you need to execute your business model. They can be physical, such as equipment, facilities, or inventory; human, such as employees, partners, or consultants; intellectual, such as patents, trademarks, or data; or financial, such as cash, credit, or funding. Key activities are the actions and tasks that you perform to create and deliver your value proposition, reach your customers, and generate revenue. They can be production, such as designing, manufacturing, or testing; problem-solving, such as researching, innovating, or troubleshooting; or platform/network, such as maintaining, updating, or enhancing.

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2 How to identify key resources and activities?

The Business Model Canvas is an effective tool for identifying your key resources and activities. This visual tool helps you map out the nine building blocks of your business model, such as the value proposition, customer segments, channels, and revenue streams. To determine what resources and activities you need to make your business model work, consider the following questions: what key resources are necessary to create and deliver value to customers, reach and serve them, and generate revenue? What key activities do you perform to achieve each of those goals? By answering these questions, the Business Model Canvas can help you identify the resources and activities that are essential for your business.

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3 How to optimize key resources and activities?

Once you have identified your key resources and activities, you need to optimize them to ensure they are in line with your value proposition, customer segments, channels, and revenue streams. Additionally, minimizing costs and risks while maximizing value and differentiation is essential. To do this, the lean startup methodology is recommended. This involves building a minimum viable product (MVP), measuring the feedback and data from customers and the market, learning from the results and insights, and then deciding whether to pivot or persevere depending on your key resources and activities. Metrics such as customer satisfaction, retention, acquisition, or revenue should be used to measure feedback.

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Jennifer Dulski

CEO @ Rising Team | Helping Leaders Drive High-Performing Teams | Faculty @ Stanford GSB
In addition to the MVP approach, I also follow the MRA rule, "Most Risky Assumption," sometimes called RAT "Riskiest Assumption Test." For any product or business to succeed, there's a set of assumptions that would need to be true. Lining up all your assumptions, like conversion rates, willingness to pay, etc. can help you determine which assumptions are riskier than others. Then you can design tests to validate your highest risk assumptions. For instance, you can do a "painted door" test to see if people would click on a link to express interest in an idea before you actually build the product. (If you do that, it's good to give people a benefit or incentive, like a future discount, so it isn't only a bait and switch experience for them.)
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4 How to balance between building, measuring, and learning?

Balancing between building, measuring, and learning is one of the biggest challenges for lean startups. If you rush into building without measuring or learning, you risk wasting time and money on features or activities that don't add value or solve problems for customers. On the other hand, if you focus too much on measuring and learning without building, you may miss opportunities or lose momentum in the market. To find the right balance, it's important to determine the optimal cycle time and scope for experiments, and to iterate quickly and frequently based on feedback and data. To help with this process, it's useful to define your goals and hypotheses clearly and prioritize them according to your riskiest assumptions. Additionally, design experiments with minimal effort and resources needed to test your hypotheses and achieve your goals. Collecting and analyzing feedback and data objectively is also important to avoid confirmation bias or vanity metrics. Finally, make data-driven decisions based on your evidence and insights, communicate them effectively to the team and stakeholders, and repeat the process until you find a product-market fit.

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Espen Sivertsen

CEO - Ivaldi Group | Reducing spare parts lead time and logistics cost through distributed manufacturing
A good tool to use is the ease/value matrix: brainstorm features and customer value adds and then rank them along two axes of ease of implementation (easy to complex) and value to the user (low to high). This gives you four quadrants, with easy to implement/high value ideas being obvious priorities. However, these are likely also the same features that your competition is going for, so to create additional value, a second brainstorm looking at low value/easy implement items and high value/hard to implement items and generating ideas on how to make them either easier to implement or more valuable to the user base can be a great way to push for more creative and meaningful solutions while staying within budget and iterating at a rapid pace.
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5 How to leverage your key partners?

Key partners are the external entities that help you execute your business model, such as suppliers, distributors, investors, or collaborators. These partners can provide access to key resources, activities, channels, or customers that you cannot or do not want to perform or acquire yourself. Leveraging your key partners can help you optimize your key resources and activities, and improve your performance and growth. To do this effectively, it is important to identify your key partners based on your key resources and evaluate their value proposition and strengths/weaknesses. Furthermore, creating a win-win relationship with mutual trust, respect and benefit is essential for success. Aligning goals and incentives with your partners and establishing a feedback loop to monitor results is also beneficial. Lastly, exploring new opportunities and synergies with your key partners can help co-create value and innovation for customers and the market.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you balance between building, measuring, and learning in your key activities?

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1 What are key resources and activities?

2 How to identify key resources and activities?

3 How to optimize key resources and activities?

4 How to balance between building, measuring, and learning?

5 How to leverage your key partners?

6 Here’s what else to consider

Business Modeling

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