Why is lean startup?
The traditional operation model of business is not suitable for startups, because startups are meant to be with high growth and full of uncertainty. Therefore, startups need a completely different way to run business, and this is where lean startup comes in.
Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. Startups have neither.
What is lean startup?
In traditional business operation, the advanced plans and research are always carefully carried out, which may take much time. Regarding the uncertainty in startup business, such long planning brings risks to the business from two perspectives.
- There are constant changes during the planning. Without trials, planning itself may also change as well, so the planning will take much longer time.
- If the planning does not respond changes effectively, the planning has no value to further development.
Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop.
Therefore, the Lean Startup recommends a different approach called ‘Build-Measure-Learn’. Simply put:
- Build a MVP (minimum prototype) as quick as possible, and leave all fancy features to later development;
- Release the MVP to customers, and measure their reactions;
- Learn the feedback of customers, and make changes accordingly.
Economically, this is approach can save much cost. There is a trap in development that people tend to build fancy stuff to show their skills; however, this might be a complete waste if customers do not pay for it. Therefore, the core of this Build-Measure-Learn approach is only to build only a minimal product. Releasing fast can also limit the desire to build a perfect product, and forces people to focus on the most important tasks.
Lean thinking defines value as providing benefit to the customer; anything else is waste.
When releasing, relevant measurement should be included in the release, so the collected metrics can be easily processed for learning user feedback. If the feedback is collected and processed, they should be carefully studied to guide the further development: any feature beneficial to users should be polished, any feature useless to users should be discarded.
How to apply lean startup?
Toyota uses a “single-piece flow” approach in production to adapt to the constant changes of market, and lean startups should also apply such an approach. The core is to reduce the time of each Build-Measure-Learn feedback loop, so the product can be crafted according to the customer needs much faster. This is what ‘lean’ stands for.
This is true startup productivity: systematically figuring out the right things to build.
With a crafted product, a lean startup can therefore approach to build a sustainable business for a long-term win.
In the Lean Startup the goal is not to produce more stuff efficiently. It is to—as quickly as possible—learn how to build a sustainable business.