Definition
Introduction to Lean Startup
The Lean Startup is a business methodology developed by Eric Ries, aimed at reducing market risks and sidestepping the need for large amounts of initial project funding. It emphasizes experimentation, customer feedback, and iterative design.
Key Concepts
The Lean Startup is built on three main principles:
- Build-Measure-Learn: An iterative process where a minimum viable product (MVP) is built, measured for effectiveness, and learned from to inform the next cycle.
- Validated Learning: A method of demonstrating progress in a chaotic and uncertain environment. It’s about learning how to build a sustainable business.
- Pivot or Persevere: Based on the feedback from the MVP, you either pivot (make a fundamental change to the product) or persevere (keep enhancing the product).
Importance in Today’s Business Environment
In today’s fast-paced, uncertain business environment, the Lean Startup methodology can help organizations become more innovative and adaptive, thereby increasing their chances of success.
Usage Examples
1. Dropbox used the Lean Startup methodology by first releasing a simple video explaining their product concept before building it. The video attracted a huge waiting list of interested users, validating the idea.
2. Zappos, the online shoe retailer, started by taking photos of shoes in local stores and posting them online. When someone ordered, they would buy the shoes from the store and ship them. This way, they validated the concept without investing in inventory.
3. A software development company uses Lean Startup principles to develop a new application. They release an MVP to a select group of users, gather feedback, make improvements, and repeat the process until the product meets the market needs.
Historical Context
Eric Ries coined the term ‘Lean Startup’ in 2008. He was influenced by his experiences as a startup advisor, employee, and founder. His book, ‘The Lean Startup,’ published in 2011, popularized the methodology worldwide.
Misconceptions
- Lean Startup is only for startups: While it originated in the startup environment, its principles can be applied to any organization that needs to innovate and adapt quickly.
- Lean means cheap: ‘Lean’ refers to reducing waste and increasing efficiency, not necessarily cutting costs.
Comparisons
- Lean Startup vs. Agile: Both are iterative methodologies, but while Agile is about managing complex projects, Lean Startup is about learning what to build and for whom.
- Lean Startup vs. Traditional Business Model: Traditional models often involve detailed plans and heavy upfront investment. Lean Startup, on the other hand, advocates starting small, learning from customer feedback, and iterating.
Related Concepts
- Minimum Viable Product (MVP)
- Product-Market Fit
- Customer Development
- Business Model Canvas
