Eps 1521: 6 Steps To Finish First In A Lean Startup
— The too lazy to register an account podcast
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Host
Greg Dean
Podcast Content
At its core, the lean startup is based on the premise that when a start-up company puts its own time and effort into building products or services incrementally, in order to satisfy early customers needs, that the business is able to mitigate its risk to the market, avoiding large amounts of seed money and costly product launches and financial setbacks. When adopting a Lean Startup approach, the company using a Lean Startup approach will focus on developing the product, as well as getting feedback from customers, usually by releasing a Minimum Viable Product into the market or to a smaller segment of their customers. For The Lean Startup Process to succeed, a startup using it will have to focus on getting customer feedback for their initial product. The system called Lean Startup calls for sharing a product to early users at an early stage of development, and getting instant feedback.
When a start-up cannot afford to have all its investments hinged on the success of just one product or service, lean startups suggest that, by releasing a minimally viable product, which is not yet finished, a company can then leverage customer feedback to help it further customize a product or service for its customers particular needs. The Lean Startup Methodology is a way to run and grow a company or startup through experiments, tests, and iterations, developing products from what you learn through testing and feedback. The Lean Startup methodology is all about building new businesses around the idea that entrepreneurs should research, experiment, test, and iterate as they develop products. Lean startups are a business and product development methodology aimed at reducing the development cycle of products and quickly discovering whether the proposed business model is feasible; this is achieved through the adoption of a combination of hypothesis-driven business experiments, iterative product releases, and verified learning.
The Lean Startup methodology is designed to get products in front of customers quickly while focusing on product features that have been proven by clear customer feedback in different stages of a products development cycle. Continuous testing and validation is built into the lean startup process in order to deliver products into customers hands as quickly as possible, maximizing growth for a lean start-up. Through a validated learning process, one can thoroughly validate their assumptions with product prototypes, and analyse the hard, empirical data obtained through customer feedback. Product-Y development effectively relies on ongoing conversations between a customer and a business or agency, via a concept of validated learning: New products are introduced iteratively, with customer feedback being integrated in every iteration.
Only once a product is built and launched does a startup receive meaningful feedback from customers - that is, when a sales force attempts to market a product. Sure, you can begin testing in the lab setting, but in order to truly enter everyday usage with the completed product, you have to put it into real users hands. You begin testing with an early version of your product, and your customers give you feedback that you will need to make adjustments, or scrap the project entirely.
Once you have seen your startup is working, the market has a demand for your product, and customers are using it, then it is time to scale up and grow. For entrepreneurs, the first step to starting a company is building upon a strong foundation of a great idea. According to common wisdom, the first thing that any founder should do before doing anything else is create a business plan, or, to put it in simpler terms, a document describing the scope of an opportunity, the problems to be solved, and the solutions the new business will deliver.
The founder constructs a truly compelling business plan, gets funding from investors, and begins the development process. Most startups spend hours upon hours working on a highly detailed business plan, building up the team, presenting to investors, and finally beginning the effort to market to customers. Entrepreneurs spend months, sometimes years, building their products, waiting impatiently for it to be ready to launch.
Deciding whether or not to pivot is one of the hardest aspects of this method, as founders and entrepreneurs are emotionally attached to their products, having invested so much effort and money in them. Often, this feedback leads founders to pivot from idea, market, or niche to other, on the search for the perfect product. Tech companies mostly employ a system called Lean Startups, as they have learned that spending too many years working on one product with no measurements is extremely risky, particularly in the fast-changing technology landscape.
Building a lean startup is all about finding a problem, validating the problem, and building the product that solves that problem. Successfully using these lean concepts and strategies can help your company get off to a fast start on each new product idea.
While the word start-up usually has very specific meanings in business, in this case, start-up just means any team looking to build a new product or service that is future is not 100% sure. Eric Ries defines startup as any company that has yet to discover a product/market fit, meaning it is not yet in a position to sell reliably on an established offering to an established customer.