What is the lean startup method?
The core of the lean startup method is understanding what works and what does not. We are used to working out an idea first and then, once it is finished and perfected, launching the product. After spending time and money on launching the product, we find out whether it works or not. This can be done more efficiently with the lean startup method.
The lean startup method works the other way around: instead of thinking about what will work and what not, you test your product in the market. This means that you enter the market before your product is perfected. You start with a simple prototype of your new product or service. Then you test whether you like it. You test your product by asking the customer for feedback. Finally, you integrate this feedback, which can help you improve your product.
The founder of this method is Eric Ries, internet entrepreneur and author of the book 'The Lean Startup' (2011). You can use this method for working on new (innovative) projects in any field. Ries explains how you can innovate faster, with less failure costs (lean).
Benefits of the lean startup method
The lean startup method has several advantages. For example, you spend less time and money on developing ideas, and you make a product that is better tailored to the needs of your customers. You try out, test, and constantly improve your product. When you create a new product in co-creation with customers and other entrepreneurs, you can also achieve your desired results faster.
5 golden rules
1. Dare to fail and experiment
Making mistakes while using the lean startup method is necessary. When you make mistakes in the early stages of your product development, you save money and you learn. You keep optimising and innovating your product or service until your customers are happy and are willing to pay for it.
The best way to learn from mistakes is to show your customers the unfinished product. This takes guts. The product then consists of only a limited number of parts. We call this an MVP: a Minimum Viable Product. The MVP contains all elements that are minimally necessary for the product to work properly. It is a prototype, not yet a fully working product.
2. Test your own assumptions
Many innovators are convinced that their product is better. But you do not know whether that is true if you have not yet tested it. With the lean startup method you test your assumption by marketing a miniature version of your product or idea to a small group. Any business model will likely fail when it is first introduced to the market. That is part of the lean startup model. You improve your product or service until you find the right fit with your customers.
3. Build, measure, and learn
The lean startup method consists of 3 steps: build, measure, and learn. To make a good and scalable business model as quickly as possible, you perform mini-experiments that always consist of these steps. Based on the results, you decide whether you should continue or adjust the original strategy. You use the feedback from your customers for improvement. Only when something works well, you spend money on scaling it up.
You start before you have a perfect plan. If your plan or product performs well, you can improve it and add some finishing touches. If it is not well-received, you can start making new plans. In this case, not much time or money will have been lost.
Always remember to build, measure, and learn. This will help you to gain feedback with little effort and within a short time. This way, you can innovate while minimising the risk of a major failure.
4. Keep it small
The lean startup method means that you keep the steps of your innovation process small. Test your idea immediately and make your expectations (hypotheses) concrete and measurable. Then come up with as many experiments as possible to test and measure your hypotheses. Choose the experiment that offers the quickest way to test whether your assumptions are right and does not cost you too much money.
Have your MVP tested by a small target group and collect the feedback. Collect data on the behaviour of these users by asking them questions and by observing them. This provides a lot of information and data. What do they think of your product? Do they understand it? Do they really need it? They may have valuable feedback to improve your product.
After building your prototype and collecting data, you will implement adjustments on your product or service. What do you need to change to attract more customers? Which parts of the product or service worked well or which did not? It is useful to measure in such a way that you can quickly see the result of an adjustment. Once the product meets the needs of your target group, it makes sense to invest in (large-scale) production, marketing, and sales.
5. See your employees as product developers
The lean startup method requires a great deal of flexibility and agility, both from you and from the organisation. If you have staff, you can make your employees responsible for the product development: from idea to implementation. Use their skills. In this way, they are also more involved in the entire innovation process.