What is Lean Startup Methodology?
A methodology for starting businesses and launching new products that aims to minimize the product development cycle.
What is Lean Startup Methodology?
It is not hidden from the general public that the majority of startups eventually fail. It is because launching a new venture, whether it’s a tech startup or an initiative within an existing organization, has been a hit-or-miss scheme. How do you go about creating a startup? The standard approach says: You need to pen out an exciting business plan, present it to financiers, assemble a versatile team, introduce an innovative product or service, and start making sales as sooner as you can. But somewhere in between these stages, you are going to face a fatal obstruction. According to recent research conducted at Harvard Business School, almost 75% of startups do not make it.
The question arises: Why? The answer is simple: More and more startups set up their ventures with an idea of a product or service that they believe people desire. Months, and sometimes years, are then spent creating the perfect version of their initial idea without getting any feedback from prospective customers because they lack the confidence to showcase their product before they think it is perfect. When the product is eventually unveiled, the creators fail to receive an appropriate response from the potential customers. This happens because the customers were never asked if the product is right for them or is interesting, resulting in another startup failure.
In the aftermath of the Great Recession, Eric Ries proposed an approach to creating and managing technology startups and gave it the shape of a book in 2011 by the name, The Lean Startup. The book has been a commercial success and has helped thousands of startups avoid mistakes that lead to catastrophic failures. The lean startup methodology can be described as a system of guidelines for solving business-related problems and it aims to work out tasks efficiently while dissecting all aspects of every enterprise. The basic principles that comprise the Lean startup methodology are discussed below.
Related Article: How Lean Startup Methodology Can Help Your Business Grow
The lean startup methodology considers every business’s action to be experimental that is intended to attain validated learning. It works on the principle that all ideas must first be experimentally proved before that put into action. Validated Learning comprises three stages: (a) Create a Minimum Viable Product (MVP) or simply a prototype for a future product or service, to start the learning process as soon as possible through feedback received from potential customers. (b) Try to keep the baseline for the venture to be realistic, which may require several attempts. © Decide whether the current direction is acceptable in the long run or declare that the startup requires pivoting. Validated learning is the most significant part of the lean methodology, therefore, it is important to rely only on accurate metrics and not distracted by superfluous figures.
Entrepreneurship is management
Rapid Experimentation is a need of every startup. The minds behind new businesses should be able to act quickly in uncertain situations and all employees must be continually encouraged to experiment with ideas and their executions.
Entrepreneurs are everywhere
Anyone with a business idea or an established startup is an entrepreneur, according to the author, and must act like one. The author also suggests that the lean methodology can be applied to any organization, regardless of domain or size.
This principle says that a product or service must be created and presented to the consumer market as early as possible. According to Reis, the right scheme that should be followed by every startup is: Build. Measure. Learn. Repeat. This is a continuous cycle and entrepreneurs must apply this loop and learn from feedback.
The last and most important of the lean methodology principles is understanding how progress must be measured for the actions taken previously, setting up realistic milestones, and prioritizing different tasks based on their relevance. Active assessment is crucial for any startup because only after knowing the current state of affairs, a startup can employ experimental ways for continuous improvement. As discussed above, knowing whether or not to take a pivot is possible if the minds behind the business are familiar with their ongoing progress.
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