Soraya Afzali, CEU iLab
August 19, 2020
When you decide to start your business, the thoughts of failure hit often. But don’t worry! You are in the right place to change your fears to lessons of success through Lean Startup Management.
This method is client-centered based on building, measuring, and learning. The idea is to find an efficient way of knowing what works and what does not work in the quickest way possible.
Lean startup management is practical learning based on tryouts and experiments. In this article I walk you through the very essence of this method.
The theory of lean startup was introduced in 2008 by Eric Reis who describes the Lean Startup Method as the following:
“The Lean Startup method teaches you how to drive a startup - how to steer, when to turn, and when to preserve and grow business with maximum acceleration.”
Today in 2020, values of less waste, more efficiency, more authenticity are becoming more important in the eyes of entrepreneurs and customers. Lean Startup Management promotes these values in the process of growing your startup.
By applying lean startup management, you are not taking a leap of faith but rather entering a world of learning while building and measuring. This method encourages entrepreneurs to spend less time and money on long term planning and to start testing their product as soon as possible. This way entrepreneurs realize that the most valuable pieces of input on which product development can be based are not their own hypotheses about the market, but the actual feedback that customers provide.
An MVP is a version of your product which is enough to gain feedback and feed into your data/information for improvement. It does not mean that you offer your customers whatever you have in hand, rather offering customers the minimum of your products which will give you results that can be measured and learnt from.
Experimentation is at the heart of MVP. The value of your product or service at this stage becomes more explicit in relation to customers. All the additional functionalities that could potentially be added to your product can come later, based on the needs of your market and customers.
In lean startup management and the practice of Minimum Viable Product (MVP), we are shortening the production cycle while wasting less resources.
What is hard about the MVP is that it requires the entrepreneur to accept that the initial quality of their service will not be as perfect as they imagined. An MVP is bad by definition, and what will make it better is exactly the market feedback.
Example: In a restaurant setup, the kind and value of your food is the priority in this scenario. The food as a product can build customer loyalty and a niche need, should there be a demand. By offering the food in the early stages of your restaurant setup will determine the success of your restaurant which can be flourished later by a continuous cycle of MVP. Once the demand for the type of food is secured, you can move to experiment with atmosphere, décor, deals, and more. This proves to be the quickest way to comprehend your market and analyze what works and what does not work.
Anything that we cannot measure or evaluate in an entrepreneurial world becomes a challenge eventually. The essence of lean model is constant measurement and evaluation. You can never be satisfied with your product as you always have to adapt to market demands.
To put measurement and evaluation as the second phase of MVP is to use the exact data and information for better implementation. Constant measurement and rebuilding based on the market feedback increase the chances that your startup is going to succeed with a reduced risk level.
In lean startup management, entrepreneurs start small to move faster and create a safer business environment. Measuring and evaluating reduces expenses to avoid the production of unnecessary elements whilst decreasing waste and drawbacks. In this model, everyone is a winner!
Example: in a restaurant business, measurement and evaluation based on preference of customers is a means of measurement and evaluation that can navigate feedback for the improvement of food quality and type. I am sure you have heard people talking about a venue, not too fancy but serving the best food. This is exactly why application of MVP – measurement or evaluation not only make your restaurant successful but also sustainable in the long run. Customers start to change and shape your startup. If we stay with this example, you might realize early on that your customers don’t come to eat lunch at your place because of the atmosphere, but because of great food. This way you will know that you don’t need to spend fortunes on the outlooks of the restaurant but can concentrate on your food choice or maybe on finding other locations where customers think similarly.
Building, measuring and learning create a cycle of efficient implementation that should go on and on. You can build your product, measure it through MVP, and learn by customer feedback and implement. This is not a one-time process to practice, rather is a management style with the goal of improvement and efficacy. There is no time to rest, you are never ready with it. You have to live with it, but in return it will make you more effective and profitable.
The inspiration behind this cycle is to move as fast as possible and get on with your implementation gear. You don’t have to wait until the perfect presentation of your product. The goal is to keep going until implementation of this cycle becomes a nature of your startup. This method will change you to a person who is okay with plans not working and sees critics and feedback as a positive note.
The lean startup management is applicable everywhere. If you are starting your business or are into your business for a couple of years, it is never late to adopt this management. You can always adopt this method of management to increase efficiency and encourage less risk, waste, and drawbacks. This also allows startup and business owners to be innovative in adding new features to their products or service while being client oriented. Meanwhile, it is also an opportunity to get rid of what no longer serves your startup.
The CEU iLab incubation program makes entrepreneurship more accessible by providing mentoring, know-how, network and a community for high-impact teams. All of this in a world-class environment, at a world-class university.Apply