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A Lean Startup is a business model that is based on consumer feedback to develop a product instead of developing a product first and then creating a demand through marketing. This approach is becoming more popular because it is a faster and cheaper way to profitability since you already know there is a demand and long periods of time and large amounts of money does not need to be spent on creating that demand.
Key Points:
- Don’t focus on the funds: A lot of startup ideas don’t require funds upfront. It all depends on the business model you pick and how you develop it.
- Assess the market: Play to your strengths and step into the mind of your target audience. Ask yourself what problem are you solving for your consumers?
- Experiment: When you’re first starting out, put your product or service to the test. Find ways to get customer feedback and see if your startup works long-term, needs fine-tuning, or has to be completely scrapped.
What is a Lean Startup?
A lean startup uses a scientific approach to building and managing a startup with the goal to grow a business with maximum acceleration. The main focus of lean startups is to get rid of wasteful practices early in a business’s development to improve the chances of long-term success.
Lean Startup Methodology
The Lean Startup Method aims to shorten product development cycles and determine whether a proposed business model is viable. Here are the basic approaches used when creating a lean startup:
- Build: This is the first step. You have to understand what the problem is and then develop a version of a product with just enough features to be usable by early customers (MVP).
- Measure: During this stage, you have to find different types of customers to test your product and provide feedback. Gather the data from your MVP and see how it measures up to your initial idea. Improve your MVP with what you learn in this stage, this is agile development.
- Learn: With all the information you've gathered on your MVP, it's now time to gauge how to move forward with your startup idea. Does it make sense to move on to product development, or should you change your idea and repeat the previous stages? Make sure you use your target audience feedback to measure your progress when it comes to customer needs.
History of the Lean Startup
The concept of lean startups began in the early 2000s in Silicon Valley and became a methodology around 2010. This methodology was developed by entrepreneur Eric Ries after he had two business failures. Inspired by the streamlined process of making vehicles with as few resources as possible in Japan during the years immediately following WWII, the methodology seeks to be as efficient as possible without wasting resources.
Lean Startup Benefits
- More productivity: The Lean Startup methodology encourages entrepreneurs to focus on priorities and core tasks. By doing this, development will be faster, which will ultimately boost productivity while saving time.
- Cost Reduction: When you're removing steps and tasks that don't contribute to sustainable development, you save time and boost your profit.
- Customer focused: The data you gather from customers is the key to creating a successful business model that will thrive.
Lean Startup vs Traditional Business
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