Does starting or running a business seem too complex or overwhelming?
After the recession, businesses had to adapt to changes in the economy and consumer behavior. As a result, the lean start up approach was born. This trending business model is currently being used by today’s leading tech companies such as Dropbox and Evernote.
This article highlights the essential aspects of the lean startup approach and how you can apply it to your business strategy.
What Is The Lean Start Up Approach?
In a nutshell, the lean start up approach is a fast and efficient way of developing a business. Essentially, the three stages of this method are build, measure and learn. By removing the small, complex steps in between, companies are able to save time, money and effort.
Lean start up business models are composed of the following elements:
- Small team with cross-functional skills
- Embrace an experimental approach
- Fast build-measure-learn cycles
- Frequent interaction with real/actual end users
- Many small experiments
The two key components of the lean startup are customer development and agile product development. Both involve a systematic process of learning through feedback and driving improvement through metrics driven testing. Contrasting this is the traditional startup approach of bloated budgets supporting large marketing and development initiatives based mostly on intuition.
What The Lean Startup Approach Is Not
Contrary to popular belief, the lean startup approach is not chopping up the budget to small bits and pieces. Doing this can lead to lack of resources, which can result in slow progress. This business approach focuses on speed and agility. It focuses on being flexible to changes and funneling the right resources needed for overwhelming tasks.
5 Lean Startup Fundamentals You Can Use In Your Business
1. Entrepreneurship is management.
The idea most people have of an entrepreneur is that of a Steve Jobs-type creative visionary. In reality, having the ability to implement an idea and management skills are every bit as important as creativity.
2. Validate ideas and assumptions.
Startups exist not to build products but to build a sustainable business. During the startup process, a company can validate its ideas and assumptions scientifically by running experiments and talking to customers.
3. Focus on the customer.
The fundamental activity of a lean startup is to turn ideas into products, to measure how customers respond and then learn whether to change tack, known as doing a pivot.
4. Be comfortable pivoting based on key insights.
Generally, this refers to pivoting or stopping what you are doing if the initial plan is not working (and your findings support the view that changing tack is more likely to be successful than continuing with the original plan).
5. Building off each other’s ideas and concepts.
By encouraging and systematizing an entrepreneurial environment, large corporations will be more able to unleash the creativity and innovative spirit of their entire work force. Not only would this model improve a corporation’s ability to rapidly and efficiently develop new concepts, it would also make the ability to innovate more equally.
To conclude, the lean startup approach changes the way decisions are made in the organization. Ultimately, this new business model is ideal for today’s faster pace in thinking, planning and technological advancements. Lastly, adopting some of the basic fundamentals of the lean startup approach can help businesses stay competitive and edgy.
Are you using the lean startup approach for your business? Share your experience with us.