The Lean Startup – A Life Changing Concept for Entrepreneurs

Today I would like to share with you all, what I think, is the best business concept I have learned in the last year.

I present you – The Lean Startup.

The concept of The Lean Startup was first coined by entrepreneur Eric Ries in 2008. The core idea behind it is that it is basically impossible for an startup to know, up front, if their idea will really work. For every successful company out there, there are dozens that failed. The Lean Startup seeks to prevent those failures from happening by embracing customer feedback and product iteration.

In the traditional business model, the entrepreneur spends a lot of time planning and building before launching the business or product. Once the product is released the entrepreneur keeps the product relatively static and then focuses on marketing to sell the product. Customer feedback is accepted, but is generally not the focus of future business operations. Think for example a restaurant that opens and never changes the menu. They may offer specials, promotions, and advertisements, but they never really change the core product.

In the Lean Startup the difference is that customer feedback and iteration have significantly more weight throughout the growth process. Instead of starting with building the lean startup starts by asking the question ‘What do our customers want?’ Entrepreneurs in Lean Startups spend a lot of time talking to customers and learning their problems and desires. They then build a VERY BASIC version of a product and launch it. Ideally they will try to sell this initial product, but sometimes they give it away for free. This product, called The Minimum Viable Product, is then used as a basis to gain valuable information about the market, the product, and the customers. Maybe everyone hates it, maybe everyone loves it. Most likely though, some parts work, some parts are missing, and some suck. Regardless of the outcome, the concept of getting the basic product out there significantly helps to guide future strategic decisions.

Regarding iteration, the Lean Startup seeks to iterate as fast and often as possible. The rationale is that only through iteration and testing can one really understand the market. The more you iterate the more you learn, and, over time, the more successful you will be.

A serious challenge of the Lean Startup is that our minds have been conditioned over the years to think of products as ‘finished’. Until the creation of the internet, most products were indeed ‘finished’. Books, movies, tests, papers – all of these are ‘finished’ – with little or no post-completion iteration. With technology, and especially the web, it is possible to change an iterate faster and cheaper. This gives entrepreneurs the ability to try different ideas to see what works for the customers.

OK – well I hope you found this informative.  What do you think of the idea?

Here are some resources for more information on Lean Startups:

Startups Lessons Learned – Blog by Eric Reis

The Four Steps to the Epiphany – Book by Steve Blank

New York Times Article

Buenos Aires Lean Startups Group

More About Me: Over the past 2 years, as the founder of the web design company Uplifted, I have been involved with at least 25 startups – and seen many successes and many flops. Prior to that I spent 9+ years working as an IT consultant for incredibly large (and very non-lean) US Government programs, including the 2010 US Census.

Uplifted sponsored the Buenos Aires Lean Startups conference in April and created the Lean Startups Buenos Aires community.  Working in the startup culture is one of the most enjoyable things that I have ever immersed myself in – and also one of the most frustrating. From an intellectual standpoint though, the learning is invaluable.  The Lean Startup concept is just one of many fascinating parts of living in the startup culture.