What is Lean Startup?
The Lean Startup is a systematic approach to establishing and managing startups to get a product prototype to the hands of the customers faster. The Lean Startup approach teaches you how to kick-start and maintain a startup to grow a business with maximum acceleration. It is also a principled approach to the development of a new product.
It is common practice that many startups are established based on what they think people need or like. They end up spending so much time perfecting the idea without showing the product to prospective customers for a test. When the product eventually launches, and the customers get to communicate negative feedback, the startup fails. It is at this that the Lean startup approach comes in.
Importance of The Lean Startup Approach
Organizations can use the LEAN methodology to provide tools to test a vision continuously and conveniently. The importance of the LEAN startup approach is as follows:
1. It Promotes Smart Work
The Lean Startup approach works on the presumption that every startup is an experiment that seeks to answer specific questions. The questions should be around things like – If the building of the product should commence or if you can model a sustainable business around the business idea.
The answers to these questions enable the manager to create a better theoretical approach to the experimentation of the new product. If it is successful, the manager can begin his campaign and build the product without further delay.
2. It Eliminates Uncertainties
An inadequate tailored management process has led many startups to abandon the due process. This concern has often triggered their collapse shortly after launch. They usually take a traditional approach that avoids systematic forms of management. But using the Lean Startup method, companies can bring order by creating an enabling environment to test their innovation continuously. The LEAN method is about putting a process around the development of a product.
3. It Helps in Developing a Minimum Viable Product (MVP)
To learn and to comprehend the viability of the product, the first step is to identify the problem that needs to be solved using the MVP. Once the Minimum Viable Product establishes, a startup can work on making the product stick to the consumer’s consciousness. It will involve actionable metrics that will integrate measurement and learning that can demonstrate the cause and effect of these activities.
The startup can also use an investigative development approach, probing into how to utilize a particular process to solve specific problems. When the process of learning and measuring is successful, it will be apparent if a company is moving the operation of the business model or not.
Principles of The Lean Startup Approach
The LEAN startup approach factors in five main principles which guide its application to any startup, and they include the following;
- Entrepreneurs are everywhere and can be anywhere.
- Entrepreneurship is management – this means that a startup is beyond developing a product or service; it is an institution as a whole that requires management.
- Always a learning process – startups are not primarily built to serve customers or make money; they exist to learn the process of building a sustainable business.
- An innovative method of accounting
- Build – Measure – Learn approach – the primary activity of a startup is to turn the idea into a viable service or product.
- Measure the responsiveness of customers and learn whether to stop, adapt or persevere.
Every year, thousands of startups/small-scale businesses fall because of the wrong approach they have taken to launching the product or service. A LEAN startup approach is an essential tool for any aspiring entrepreneur, and it can help guard against costly mistakes.
There are three significant steps entrepreneurs can take to start a lean startup approach, and they include: Find, Execute, and Validate.
- FIND the Business Idea.
- EXECUTE the Business Idea.
- VALIDATE the Business idea.