Taking a Look at the Lean Startup Methodology and it’s Benefits.
Though our economy appears to be slowly recovering from the recession that hit the business sector particularly hard, many entrepreneurs are still looking for easy and efficient ways to get their businesses off the ground, without investing exorbitant amounts of time, energy, or funds into the project. Of course, the ultimate goal is success, but can that success be found without the months of product development and testing that most startups have to go through before they can present and market their product?
The lean startup methodology that was first proposed by Eric Ries may have an answer to this question. The creator of this method believes that there is a way for new companies to “trim the fat,” so to speak, both in business practices and product development, which will lead not only to less time and money invested into starting the business, but also end up with a better product and more success down the line. The lean startup method rests on a few principles that can be applied across all industries, in many different ways, molded to fit the needs of the individual business. Unlike other business plans and startup methods, the lean method is designed to apply to most, if not all, businesses—even if yours is a service-based company, rather than a product-based one.
Simplicity in Business
For some reason, many startups believe they cannot begin product testing until they have both an elaborate and detailed business plan, as well as a perfect product. The lean startup method would claim that this is categorically untrue. In fact, this new method states that the simpler the business plan is, the better. Instead of waiting for investors and devoting money to outside help for writing business plans, developing product packaging (or design, for products like apps and other tech-based products), or paying for product testing, the lean method suggests starting with a baseline produce and initiating customer testing from the earliest stages of development. By cutting out many of the other costs, businesses will be able to remain solvent, without having to rely on the kindness of investors for money for business “necessities” that the company really does not need, until the product is actually ready to hit the shelves (or proverbial shelves, if it is not a physical product).
The lean startup method particularly fights against the idea that a product has to be conceptually perfect before it can be presented to the public. Some companies will keep their product under wraps until it is exactly how they want it, and then start testing it with focus groups. This leads to a bloated product, that the company has spent plenty of time and money developing, that may contain many features than no actual customer wants. Instead of developing a product for an imagined customer, lean startups will develop products for actual customers, but starting customer testing as soon as they begin developing the product. This way, the startup will know exactly what the customer actually wants, and what is just extra or fluff. Not only does this significantly truncate the development to testing period, it creates a better product. Customers will give honest feedback about what the product needs, what it does not, and even whether or not it is worth the proposed price.
Split testing allows the company to accurately gauge which features of the product consumers like best, and which should be nixed from the program all together. Often called, A/B testing, this kind of testing gives two separate but similar groups of customers different versions of the product. Reactions are then recorded, to see which version of the product plays out better. These statistics are then gathered and analyzed, so that the company can see where improvements need to be made. If both groups appeared to like their features equally, then the company can combine the two versions, and test the product again. Because all of this testing is done during the development phase, there is far little risk in the revelation that customers do not like a certain feature. The testing will continue to help develop a product that has only the features customers like. Instead of starting out with a product that the company believes is perfect—though the customer base may disagree—the lean startup methodology, with early-stage customer input and split testing—enables the company to end up with a product they know is perfect.
Want to know more? Read the ultimate guide to A/B testing.
Minimum Viable Product
The minimum viable product concept operates on a “leap of faith” on the part of the company owners. Instead of conducting massive testing or launching the company in full force, minimum viable product allows entrepreneurs to test the “hypothesis” of their company, with very little risk. This means that in order to test the waters, company owners should make a very small number of products available (the number that will still engender interest without draining the business’s funds), and see what kind of interest consumers have in the product. Take the example of Nick Swinmurn, the founder of Zappos. In order to test if consumers would actually want to buy shoes online, he went to shoe stores, bought pairs at full price, and then posted them on his website. When he began selling those pairs, he knew that consumers did have an interest in his product.
How to know if your are doing your MVP wrong? Read the following article from the Harvard Business Review.
How You Can Implement It
Whether you are offering a product or a service, consider how you can trim the fat from your startup plan, and how you can involve customer input as early as possible in your development stages. If you are creating an app or a physical product, make sure to put it in front of customers as soon as the first version is ready, not once you believe it is perfect. Listen to what you customers have to say, and never discount an opinion simply because you disagree with it. Your customers are your lifeblood, so listen to what they want in your product and cut out what they do not need or want.
If you are looking for the full book
My Take On Lean
My personal lean experience is something I unfortunately can’t disclose much about, but I will share my favorite aspect of the lean startup methodology. I think that only a few can claim like Steve Jobs that people don’t know yet what they want, yes there are still innovations that come out of nowhere that before you can even understand the product it goes viral, still you count those products and services with your both hands without any need of a spreadsheet. My point is that if you don’t choose the lean startup way then you are pretty much saying to your potential clients “I already know what you want and therefore there is no need to ask you”, this in my opinion is a very risky strategy that won’t help you improve yourself or your product.
Does the Lean Startup Methodology sound right for you and your startup business? Share with us what you feel in the comments section bellow.