The 5 Principles – key pillars of a lean startup
In today’s culture, where many start-ups are becoming unicorns, challenging traditional businesses, and scaling newer heights, many are inspired to bring their ideas to life. However, no one talks about numerous start-ups that failed miserably. This failure causes loss of finances, time, resources, personal confidence, and a lot more. Such start-ups are usually those that don’t have an addressable market. They might be unique with their offering but are neither solving a problem nor making something that people want. This is where Lean Startup methodology comes into play. It emphasizes on the customer being the ultimate king. In this methodology, start-ups are built basis the customer’s data and feedback consistently taken in the product development stage. This way, the risk level of the startup is minimized, and customers get what they want.
This methodology is based on five principles. Let’s have a look at them.
1. Entrepreneurs are everywhere:
As per this principle, having a certain status of your start-up is irrelevant. Having a billion-dollar valuation, a huge pool of human resources working on your payroll, a plush office, glamorous marketing, etc. is not required for applying lean startup methodology. You might be the only person just starting up and working out of anywhere, you can still use this methodology. Basically, anyone who has a startup can apply this.
2. Entrepreneurship is management:
Though start-ups are less structure, less process oriented, and quite ad-hoc to an extent as compared to any multinational, it still requires a lot of management. There might not be documented standard operating procedures but there are multiple stakeholders involved like investors, employees, customers, government, etc.
However, having a bit of flexibility, especially in decision making is what helps the startup retain its essence.
3. Validated learning:
Lean methodology revolves around building the startup and its products with the customer. Their feedback and needs are understood at every phase and the product is iterated as per those learnings. Thus, through this methodology, the business and its products are validated by the end-user itself, thus minimizing the risk of failure and building a business for the long run.
4. Innovation Accounting:
Lean methodology focusses on promoting innovation. Thus, it emphasizes and measures the entrepreneurs by setting goals and milestones for innovating new products. The ability to dig deep into data, conduct experiments and innovate something that will add value to customers and not just build another business is what this principle is all about.
5. Build-Measure-Learn:
According to this principle, take consistent customer feedback and keep developing upon it. The startup should first builds the prototype of the product and test the waters first rather than initiating an entire production cycle first. Once the prototype is built, it should then be floated out to actual customers for feedback. Once they use the product, the startup should take detailed feedback about each feature, with an open mind that can be later used to draw trends and patterns which can become insights. This feedback will help the startup to understand the features which their end user is liking or not liking and can accordingly, iterate the design. This will save him time and money while helping him to make the right product in the initial stages itself and then produce it in larger quantities.
A startup has limited resources in terms of finances, human talent, time, and everything else. They should use it optimally and minimize the risk of losses wherever possible. The Lean Startup methodology helps them achieve this optimization and shields them from going wrong with the core essence of their business, their product offering. For every current or upcoming startup, this is the most ideal methodology to implement for your startup.