According to Wikipedia, a lean startup, or the lean startup “methodology” “advocates the creation of rapid prototypes designed to test market assumptions, and uses customer feedback to evolve them much faster than via more traditional software engineering practices.” That should make sense, but if you’d like more detail, you might consult the father of the term “lean startup”, Eric Ries, who gives his definition of the lean startup.
I like to think of a lean startup as a startup which, whether it has money or not, acts like it doesn’t. What would you do if you had to start a company with little or no money? You wouldn’t get a nice office, you’d work out of a cafe. You wouldn’t hire a bunch of employees first, and figure out how to pay them second. You wouldn’t invest in expensive software or hardware that you may or my not need. You wouldn’t spend time developing custom software solutions where you could use something off-the-shelf or open-source to get the job done. You would recognize the value of time.
Validation
Because you value time (and money) you would validate everything with data as quickly as possible. Want to sell a product? The old way of developing a product would be to have some smart people brainstorm ideas. Then present those to a focus group. Then get marketing teams involved. Then push the ideas over to engineering. Two years later you push the product out with big marketing campaign run by a major ad agency and…flop. No big deal, you’ve got to have some failures to find the success, right?
A Better Way
Ditch tradition. Here’s how to develop products today. Day one, you come up with an idea, register a domain name for it, throw up a quick and dirty website, and throw $500 in AdWords ads at it. When people come to the website it looks like your product is available for sale. They read about it, decide to buy it, and click on the big button that says “buy now for $29.99!” They fill out their information, put in their CC information, get their shipping calculated, and only when they go to send you the money do they get the notice “Sorry, we’re out of stock. Your card has not been charged. If you’d like us to save your email address and contact information to inform you when the product is available click this button.”
In one day with a few hundred dollars you can start testing out whether or not people want to buy your product. Then you can start testing out different product ideas, different features, different messaging and product descriptions, etc. and you get data on what converts the best. Then you go and build the product your customers have told you they want. A lot less time, a lot less money, and a virtually guaranteed home run. Why would you ever do things the old way ever again?
It Works For Services, Too
This is a product example, but the same idea holds for many types of products and services. The point is to get whatever you’re selling in front of potential buyers as soon as possible so you can test your assumptions. It should be hours or days instead of weeks, months, or years. And “lean startup” doesn’t just apply to startups. There’s no reason large enterprises can’t apply part or all of lean startup methodology to their operations. You can apply core features of it in your job, as well, to test out ideas with your boss and co-workers.
Have you started a company using lean startup principles? Have you applied them at a normal 9 to 5? Let us know your results in the comments below.
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