GRAND RAPIDS ? What makes Lean Entrepreneurship so different from more traditional business development is the market decides the value of the product or service developed, experts said Thursday during the Michigan Lean Startup Conference, sponsored by Start Garden.

Brant Cooper, author of the popular Lean Startup book, “The Entrepreneurs’ Guide to Customer Development,” summed up the theme of the day when he said, “If no one has bought your product yet, you only have what is between your ears. The measure of a lean startup is learning.”

His co-author in the book, Patrick Vlaskovits, who joined him on stage, said lean startups” those companies not backed by bags of venture and angel cash surf uncertainty.”

Taking the surfing analogy a step further, Vlaskovits said, when you are on the wave of change, you can either build a lighthouse on the beach to survive its force, or carve the wave. He recommended the latter, and said make your decisions based on instant feedback from your customers, who he said lean entrepreneurs need to understand deeply.

“We urge you to iterate and learn to surf,” he said. “Use the heart of the wave to build a great experience for your customer.”

Cooper used the example of Betabrand.com, which identifies groups already on the Internet and then builds custom clothing for them. People who bike to work, for instance, now have a line of apparel that includes pant cuffs that don?t need to be clipped, and reflectors built into the back sides.

Betabrand.Com also illustrates another point made by Cooper: ?Test value proposition on a manageable sized group.? Betabrand.Com may only do a run of 100 or 200 apparel items. If the experiment fails, the loss is minimal. But if the focus group gobbles up the items, they know they have a new market.

Lean startups do something different than large companies; they search for the truth, said Steve Blank, author of the text-book sized book given to conference participants, ?How to Build a Great Company, Step by Step: An Intro to The Startup Owner?s Manual.? Blank delivered his lecture from California, via Skype. He is a professor at both U.C. Berkeley and Stanford University.

He said no business plan survives the first contact with the customer. That?s why he recommends business-plan writing be taught as a creative-writing course.

?Business-plan writing is great for professors,? he said. ?But they are the biggest waste of time. You could have spent your time better outside the building talking to perspective customers.?

He said planning comes before the business plan.

?A business model is a hypothesis. A business model says this is what we need to know and we?re probably guessing on day one. You don?t know the customers? problem when you launch the plan. It?s hard to understand what people need. More businesses fail from a lack of customers rather than lack of product development.?

Blank said a start up wants to develop a search strategy for the business model. The founders want to run a customer development team. Startups don?t need titles on day one. Don?t want execution people before you figure out what they need to execute. Only the founders can establish this.

Job one is to find out who your customers are, what products they want, and how to deliver those products to them efficiently, Blank said. His definition of a start-up? A temporary organization designed to search for something that is a repeatable and scalable business model.

The core of his business model is how does a company create value for itself while delivering products that are valuable to its customers? Here?s the boxes that fill out his business-model canvas:

1) Value proposition – solve problem, fill a need.

2) Customer Segment: Who are you and why would they buy?

3) Channels. How does your product get to your customers?

4) Customer Relationships. How get, keep and grow customers?

5) How make money? Revenue Model. Pricing just a tactic?

6) Key Resources. What is your most important asset required to make the biz model work?

7) Key Partners. Who are the key partners and suppliers needed to make the biz model work?

8) Key Activities. What are the most important things for your business model to work?

9) Cost structure. What are the costs to make the business model happen?

?In the end, they are just guesses,? Blank said. ?How do I turn hypotheses into facts? Search for the truth behind these hypotheses. When you understand enough of the building scale, spend end user money, and build a company. Try to run a series of experiments and keep score with the business model canvas. ?

He said data is just the beginning. What founders are doing is looking for insight, extraction of patterns coming from this data. You want to create a minimum viable product (MVP). Read more about MVP in startups.You then build the product incrementally to get feedback saving time and resources to make sure we?re on the right track. He said this approach then tells the founders what key assumptions were wrong. The MVP allows the founders to iterate. When you get your assumptions wrong, pivot and try a new approach.

“The pivot allows us to fire the hypothesis and not the sales person or CEO,” he said. “We expect changes. We expect failures. We expect most of your assumptions to be wrong.”

Step 1, state the hypotheses. Step 2, test the problem with a low fidelity MVP. Step 3, test the solution. A high fidelity MVP. See if people think your problem is something they want you to solve. Step 4, customer validation. People must commit either dollars or time to tell you whether you actually have potential customers who will buy this product.

“One you figure this out,? Blank said, ?then you can hire sales and marketing people, and build the organization. If you have something real here, you commit to spending some serious dollars.”

The Lean Startup Conference was presented by Rick DeVos? Start Garden, a $15 Million startup venture fund. To learn more, click on StartupGarden