Lean Startup Method

One of the hardest parts of founding a startup is the uncertainty associated and attached with every decision and idea you make and create, respectively. Startups originally had a 90% failure rate for a variety of notorious reasons: lack of knowledge and manpower, burnout, the misplaced attention on inconsequential activities, or just having minimal luck. However, in the Information Age, it has become considerably easier to eliminate obstacles that could lead to the low performance of early-stage startups. With the progression of high-level software and the sharing of application programming interfaces (API), the resources for startups are more everpresent than before and can guarantee their success in the future.

What is the Information Age?

The beginning of the Information Age was marked by the introduction of the Internet, and subsequently the World Wide Web (www), which notoriously aids students, teachers, parents, kids, teenagers, seniors, and others to surf for information without any voluntary limits. This access to information not only helps founders teach themselves skills that they aren’t familiar with but also gain connections to administration and companies that they may not be able to physically meet with.

So how is the Information Age related to the Lean Startup Methodology (LSM)? One of the core ideas of the Lean Startup Methodology is to utilize technology such as software, the internet, and the connections you make on the internet to scale your startup in a faster and more efficient manner.

The 7 principles of the Lean Startup Methodology are as follows:

1. Eliminate Waste - the idea of not paying attention or using resources that does not provide value to your customer

2. Build quality in - automating tedious work and creating a accountability system for each task to ensure quality over quantity

3. Create knowledge - recording trainings that enforce new concepts and ideas as well as creating courses and resources for learning cycles to take place in your startup

4. Defer commitment - instead of excessively planning for the future, pay attention to the present

5. Deliver fast - build a simple solution and iterate later on with time and feedback

6. Respect people - although self-evident, respect sets the tone in a group to later inspire and push others to do their best

7. Optimize the whole - focus on creating a team with different strengths so that inconsistencies are pointed out and corrected efficiently

Let’s dig deeper into the basic ideas of this phenomenon:

Build-Measure-Learn

The process is quite self-explanatory -- building a simple representation/prototype of what you envision entering the market, subsequently receiving feedback from potential and current customers as to what can be improved and what features should be further accentuated, and creating a learning environment to improve the viable product. Ideas lead to the building of a product. In order to measure the success of the startup, a product must be created in order to receive feedback. And lastly, data from the measurements are used for further improvements and learning.

The implementation, however, of this feedback loop, is often restricted to the founders and executives of a startup. To ensure startup success, according to the Lean Startup Methodology, every member and employee of a startup should implement this very instruction in every task that is assigned. Measurement doesn’t require for a product to go to market, but rather receiving feedback from employees who aren’t involved in the building stage of the product would also be able to provide useful reviews of what can be improved.

Speed and Agility Replication in Older Businesses

Although this methodology is meant to be utilized in early-age startups in order for them to gain traction in the beginning stages of the business, it would be beneficial for older companies to regain speed and agility by reimplementing/implementing the methodology in areas of their business that may be lacking.

One business that is known to have implemented the Lean Startup Methodology during the later stages of their life cycle is General Electric -- a business that has been around for more than a century. This particular example was especially successful because of the combination of the resources that the big enterprise had and the traction that a fast-growing startup would usually have. Their software, Fastworks, created an entrepreneurial atmosphere in General Electric, eventually leading to a more innovation-saturated environment in the company. This, in turn, led to further employee satisfaction and customer satisfaction when implemented in the market.

The Lean Startup Methodology is not limited to SaaS (software as a service) early--stage startups. Principles of the methodology can eliminate aspects of uncertainty when creating a business in the earlier stages or even maintaining traction during the later stages of a business.

Good luck entrepreneurs!