What is a Lean Start-Up Methodology? – Apply, Advantages, and More
What is a Lean Start-Up Methodology?
Lean Start-Up Methodology is a work that increases the chances of success by providing the best practices to innovate against market dynamics and external interruptions, thus eliminating all the useless.
Lean means thin, something that does not produce value in a process, and start-up is a business start-up. Therefore, the concrete meaning of Lean Start-up is a lean start-up methodology.
The entrepreneurs use this method to use their resources as efficiently as possible. In this way, they manage risks and seek a system with deep insight into the customer and rapid iteration.
How does Lean Start-Up Methodology Apply?
The Lean Start-up method applies through the building, measuring, and learning. These allow you to be in constant motion when testing the created product with customers and rebuild once the results have analyze.
1. Build Lean Start-Up Procedures
The idea must transfer to a material product in this initial phase. As the necessary data to create an article that adapts to all the potential customer’s needs not yet contain, And also, companies include those characteristics they consider a priority.
The result obtained is a minimum viable product (MPV) or prototype with essential functions to study customers’ reactions. Thus, with the data collected, it will be possible to polish the article and know which public is the one that will be interested.
2. Measure Lean Start-Up Methodology
To know if the project works, you must have good measurement tools. The first thing is to know what resources the company has to guarantee the product’s success. The second is to collect information about the product and consumer reactions.
There are so-called ‘pirate metrics’ from which the minimum viable product is collected. These ‘pirate metrics’ are:
Acquisition: winning a new customer.
Activation: the new customer registers and uses the product.
Also, Retention: the customer uses it again.
Reference: the customer shares the product with his friends.
And also, Income: the customer pays for your product.
3. Learn Thin Start-Up Method
In this last step, the company learns from the results collected throughout the process. It is built knowing what potential clients need and stakeholders’ opinions, directly or indirectly relate to the project. From here on, the cycle starts again to produce the final product.
The effectiveness of the Lean Start-up methodology means that not only developing companies apply it to their creative processes, but already consolidated entities, such as Telefonica or Resold, have incorporated it, for more than five years, into their innovation processes to slow down the failures.
Thin Start-up Methodology Advantages
The Lean Start-up methodology allows you to check the validity of the product throughout the entire process. The clients’ needs are known from a prototype, Basically, which provides that, as it is not a finished product, the investment is less and the failure.
The main Advantages of Lean Start-Up Method are:
1. Eliminate Risks of Thin Start-Up
It allows not to make significant investments of money at the beginning of a project without knowing if the product will fit the market or not.
2. Useful Effort of Lean Start-Up
All useless processes that add value to the product are more expensive.
3. Meets the Needs of Thin Start-Up
The minimum viable product satisfies potential customers, assuring the business of success.
4. Structure the Ideas of Lean Start-Up
The procedure carries out step by step with measurable data and a team.
5. Reduce Failures of Thin Start-Up
By knowing what the customer wants, there are many guarantees that the product will succeed.
Some Examples of Lean Start-Up Procedures
The Lean Start-up was inspired by methodologies such as Lean Manufacturing and was an example for others that emerged later, such as Thin Change Management.
Rise found in Lean manufacturing —or lean production— the essential principles for Lean Start-up. Firstly, this methodology was created by Kiichiro Toyoda, creator of the Toyota automobile company. Toyoda’s methodology is a model that tries to deliver the maximum value to clients using the minimum necessary resources. It focuses on continuously optimizing the product eliminating activities that do not add value to the process.
Thin Change Management
It is another agile methodology created by Jason little and based on the Lean Start-up cycle. Also, It is based on experimentation, continuous feedback, facing changes from co-creation, and focusing on people. Through innovation, experiments is create iteratively to see the results and adapt them to the environment’s responses quickly.
Little’s model base on an iterative cycle in which discoveries come first, then alternatives when problems identifies, and finally, the experiment applying the minimum viable change.
These methods make it possible to adapt the way of working to the conditions of the project, And also, allowing speed and efficiency. There is collaborative and self-manage work, which motivates the work team and the client’s satisfaction who also involve in the process. But, Some of the most used is Scrum (the Scrum Master appears) or Design Sprint, operated by Google.
Finally, The Thin Start-up is about learning what your customers want — and learning it quickly. It’s about continuously testing what you think your clienteles strength want and adapting based on the results — and doing this before you run out of money.