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Most startups fail. But many of those failures are preventable. The Lean Startup is a new approach being adopted across the globe, changing the way companies are built and new products are launched.
Lean startup is a method for developing businesses and products proposed by Eric Ries in 2008 at Silicon Valley.
The method helps startups to shorten their product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases and validated learning.
Below are 4 ways Lean Startup can help your start up.
1. Minimum viable product
This is the version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
MVP tests your fundamental business processes and helps you to learn as quickly as possible to identify whether customers need your product or not.
Through the Lean Startup method, your startup will also utilize an investigative development method called the “Five Whys”-asking simple questions to study and solve problems along the way.
When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth.
2. Validated Learning
Progress in manufacturing is measured by the production of high quality goods. The unit of progress for Lean Startups is validated learning-a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty.
Once entrepreneurs embrace validated learning, the development process can shrink substantially.
When you focus on figuring the right thing to build-the thing customers want and will pay for-you need not spend months waiting for a product beta launch to change the company’s direction. Instead, entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.
3. Work smarter not harder
The Lean Startup methodology has as a premise that every startup is a grand experiment that attempts to answer a question.
The question is not “Can this product be built?” Instead, the questions are “Should this product be built?” and “Can we build a sustainable business around this set of products and services?”
This experiment is more than just theoretical inquiry; it is a first product. If it is successful, it allows you to get started with your campaign: enlisting early adopters, adding employees to each further experiment or iteration, and eventually starting to build a product.
By the time that product is ready to be distributed widely, it will already have established customers. It will have solved real problems and offer detailed specifications for what needs to be build.
4. Split Testing
A split or A/B test is an experiment in which “different versions of a product are offered to customers at the same time.”
The goal of a split test is to observe differences in behavior between the two groups and to measure the impact of each version on an actionable metric.
A/B testing can also be performed in serial fashion where a group of users one week may see one version of the product while the next week users see another.
This can be criticized in circumstances where external events may influence user behavior one time period but not the other.
For example, a split test of two ice cream flavors performed in serial during the summer and winter would see a marked decrease in demand during the winter where that decrease is mostly related to the weather and not to the flavor offer.
Lean startup method involves ways in which startups invest their time into alliteratively building products or services to meet the needs of early customers.
This helps them to reduce the market risks and sidestep the need for large amounts of initial project funding and expensive product launches and failures.
Published on 1st Issue of Inversk Magazine.