From Intuition to Data: Or "it's the boring stuff that matters the most," Eric Ries
www.nalpeiron.com, October 2013
From Intuition to Data: Or “…it’s the boring stuff that matters the most.” Eric Ries.
One of the most memorable parts of the book, Lean Analytics, is the excellent case studies included of companies well-known to us that have experienced a meteoric rise to success. It’s always fun to have some insider information, but it’s extremely useful to look at an analysis of how to imitate these company’s business models and measurement tools!
One of the lessons learned is about Airbnb Photography. At the point that Airbnb decided to try Photography, the company was already doing well. But, as anyone who has tried putting up their own Airbnb page will already know, the photographs can leave a lot to be desired! So the company intuitively felt that professional photographs would create more business.
And, in the Lean Analytics model, intuitively, is pretty much a 4-letter word! But in all seriousness, it’s not that having an intuition is wrong, after all, for most entrepreneurs it is their intuition and vision that leads them to success. What Lean Analytics might say is that intuition needs to be tested with real data or the business is doomed.
Given their intuition, Airbnb built a Minimum Viable Product to test their theory in the cheapest and quickest way possible. The first stage in a successful lean startup is building a product that people like, and in this minimal test Airbnb discovered that “professionally photographed listings got two to three times more bookings than the market average.” (Lean Analytics, px). The company also gained some wildly enthusiastic customers who no doubt told all their friends about Airbnb’s offer.
So, given that the initial intuition had now been tested, in mid- to late 2011, Airbnb increased its testing to hire 20 photographers, and next began adding new services to the photography – offering the service when renters called in, improving the quality of the photography. At each stage of development of the new service, the company tested for end user adoption metrics – in this case, shoots per month. “By February 2012, Airbnb was doing nearly 5,000 shoots per month and continuing to accelerate the growth of the professional photography.” (Lean Analytics, p.xy)