Lean startup definition
The lean startup is a methodology used to create a new company or introduce a new product by an existing company. The lean start-up methodology promotes the development of products that customers have already proved that they want, so that a market already exists as quickly as the product is introduced instead of creating a product.
The Lean Startup methodology has been used by Google, Facebook, Snapchat, Instagram, Airbnb, YouTube, DropBox, TechCrunch, and MailChimp. By applying the Lean Startup methodology, the likelihood of failure is also considerably reduced.
The lean startup summary
The Lean Startup method means getting a product out there quickly while spending a minimum of cash.
The Lean Startup method helps to create a great proven product, allowing the startup to scale up much later in incredible ways.
The key to lean startup methodology is to continue learning through a series of fast experiments while at the same time managing a strong pitch & sell urge.
Lesson #1: Find a stable business model by validating your idea.
Throughout this overview, one term is referenced again and again, and it effectively reflects quite well the entire book: semi-scientific.
It fits perfectly with me as well as this class. “Validate your sh*t all the time.”
Okay, I might paraphrase here, but the gist of it is that you have to create a hypothesis like a scientist to find a sustainable business model (i.e. one that you can roll with for at least 5 years).
Lesson #2 Make sure you manage your startup like a startup
The process is simple for future growth for a long-standing company. Create a comprehensive plan and employ individuals to assist you see it through.
A startup, however, is a totally different fish kettle (side note, does anyone know where that saying comes from?).
A startup has no background from which to base choices, so it is almost impossible to plan a future. Many startups have recently been using corporate management instruments such as milestone plans and long-term business projections. Many of these startups are planning every little detail and making sure their product is ideal before they go to market.
At best for a startup, this logic is flawed. If you do not have a client, how can you generate an ideal service or product?
It’s almost like you’re creating a key in search of a lock that suits when you can locate an unopened lock and generate a key to open it.
Focusing on your product and not the customers will kill your startup.
If you start a company, there is only one original objective that should focus on: establishing a business model that is viable.
That implies you always have to experiment and try to discover a group of clients with the same issue and a way to fix it.
And like any experiment, you’re going to begin with your hypothesis – client ‘ x ‘ struggles with ‘ y ‘ and buy ‘ z ‘ to fix it – and test it accordingly.
Experiment until you find a proven hypothesis and a way for new customers to be brought in.
Lesson #4: Build, measure, learn (repeat)
If you have a successful startup, you will basically fail continuously until you lastly succeed. However, don’t worry, this failure is what we want. It’s learning this failure.
You need to know which item to create, who to create it for, and how to advertise it to have a company that is prepared for the long term. This learning process takes place in a cycle of building, measuring, and learning (BML).
What is BML?
A BML cycle involves the development of a minimum viable product (MVB) to test the hypotheses described in the first lesson.
Zappos, for example, had the hypothesis that online shoes would be bought by people. They developed a fake shop with pictures of shoes from shoe shops for their MVB (minimum feasible product).
Zappos created an actual store and started selling when enough people tried to buy the shoes on their website.
Your objective is to test and see what works and adapt with your minimally feasible product until you discover something that sticks. This needs you to obtain the correct information and discuss honest feedback with potential customers.
You might discover you need to create tiny tweaks, or you might even need to create a bigger pivot.
A pivot is a fundamentally more significant shift. Maybe your product’s key value is off, or maybe you need to slightly alter the target market.
Don’t recognize a pivot as a failure, no matter what. You are learning to create a sustainable business model and a step closer to it.
Lesson #5: Initially focus on one growth engine and build from there
There are several ways in which you can grow a startup.
- Make sure that current clients keep up with additional characteristics and return purchases
- To go viral and have your customers grow your business for you
- Advertising paid to generate new customers (as long as you make a profit)
Ultimately, you will work with others on all three techniques (SEO, content marketing), but at the start, concentrate on just one development technique.
Putting all the development attempts for one technique will ensure that the wheels spin faster and are simpler to test.
You may hypothesize, for instance, that your product will grow virally, but after testing you may find a paid technique of advertising more effective.
It’s tempting to try it all at once, and ultimately you’ll get there. But begin by mastering one development technique.