Lean Startup is a risk-reducing methodology for rapidly developing and scaling products and businesses based on concepts borrowed from lean manufacturing. It was conceived by American entrepreneur and author Eric Ries as a result of his experiences as part of a number of SCV startups in the early 2000s.
To provide a structured management process for projects under extreme uncertainty.
Outcome / Deliverables
Systematically de-risked product or service concepts.
The first step of a lean startup project is to figure out what approximately may need to be built or designed. This can either be purely based on a hypothesis or derived from a prior process like e.g. a Design Thinking project.
In the next step a minimum viable product (MVP) is being built as a start into a learning process. For that, MVPs don’t have to be fully functional products but rather just enough of an embodiment of the hypothesis or idea to allow for testing it.
Subsequently the MVP is tested against users or customers of the anticipated product or service starting with the most risky assumptions. When testing, focus is on what in lean startup parlance is called “actionable metrics”. Actionable metrics tie specific user or customer (re)actions to observable results and ideally highlight clear causal links.
Applying a “build-measure-learn” cycle, the concept is further refined based on the validated learnings from a continuous series of tests.
Should the data gathered point to the original concept not being sustainable, it needs to be pivoted – i.e. undergo a structured course correction – to arrive at a new strategic hypothesis that then again is tested and improved until sustainable product/service market fit is achieved.
Key elements of the Lean Startup methodology are an integral part of the systematic “Customer Development” process that is being used by the majority of Silicon Valley startups.
Dos & Dont’s
- Do design actionable metrics
- Do pivot quickly when necessary
- Don’t fall for vanity metrics
- Don’t over design your MVPs;
- Book: The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (2011) by Eric Ries