Why your business needs the Lean Startup method

By TRISOFT team

trisoft.ro
Remote Symfony Team

--

Launching a new product or business has always been a brain-teaser. You’ve got the tools, the talent, the people, but still chances are things won’t turn out the way you want them to.

Well maybe we’ve been all looking at this from a wrong angle; maybe it’s not all about the resources and the involvement, but about the actual way we decide to bring a new product or service into the market.

Everybody has a plan

As per the conventional formula, when a founder starts to create a new concept of product or service, he first needs to put together a well-organized business plan. Essentially, the business plan is a written exercise, made up of forecasts regarding the income, profit, cash flow and so on, this way minimizing the best he can the surprises and the unexpected.

Soon after, he will pitch it to possible investors, assemble a competent team and start working on the actual product. And since a product or service might take some time to build, it’s not uncommon that it becomes obsolete by the time it’s launched. Another possibility is that the clients don’t like it eventually, so you’ll find out that you have spent a few good years creating something no one is interested in.

Truth is business plans rarely survive the first contact with the clients. I remember what Mike Tyson once said about boxing strategies — he said

“Everybody has a plan until they get punched in the mouth”

and if you think about it, business plans are not all that different.

Flaws to the conventional business plan

So let’s assume you are an enthusiastic entrepreneur with a golden business plan and you have obtained the money you need from investors. Then you start developing the product, you bet all your time and money on it, but you fail to ask for any client feedback before launching in on the market.

When it’s finally out, the product starts getting feedback and this is when you learn the lesson the hard way. As new research by Harvard Business School shows, 75% of all start-ups fail, so the odds are not great.

There is no failure, only feedback. No mistakes, only learning.

So how do we go from here to there? How do we make the unexpected into a positive thing and the bad customer review into a valuable weapon? Some would say that a new business view called “Lean Startup” is the key. This methodology actually replaces the elaborate planning with bold experimentation, forecasts with customer feedback and the traditional “big design up front” development with iterative design. The Lean Startup is the movement that is transforming the way how new products worldwide are being built and launched.

They say failure is the best way to learn and this is just what this concept is about — failing over and over again and all the way learning what you can do to be better and eventually coming up with the best version (iteration) of that product. It’s easy, you just need to be bad at something in order to get good at it. Like Thomas Edison said:

“I have not failed. I’ve just found 10,000 ways that won’t work.”

The 3 Principles

Basically, the Lean Startup principle stands on 3 main pylons:

1. The good guess. It means that instead of doing all the planning and research at the start of the project, an entrepreneur will come to terms with the fact he only has a bunch of good guesses up his sleeve. And instead of creating a complex plan, he will gather all their hypotheses in a framework called a business model canvas — to be more exact, a kind of smart diagram of the ways in which a company can create value.

2. Listen to customers. This one is essential — you need to go out there and get all the feedback you possibly can, on every business level. You need to get in touch with partners, potential users and buyers and listen to what they have to say about features, prices, distribution channels and so on.

Based on this raw information, the product — initially launched as minimum viable product (MVP) will start growing and improving.

3. Iterative development. Small adjustments (iterations) or more intricate ones (pivots) are the base of what they call an iterative development. This is actually the core of the method, as it allows the founder of the startup to revise his assumptions, to make substantial changes as he incrementally goes up on the way to the best version of the product.

So why use it?

All the above in mind, the Lean Startup business method is starting to shape up like a great way to go for entrepreneurs out there. But let’s see what its strongest points and assets are, what it actually does for you and why you should adopt it for your company.

1. Helps you fight the horrifying uncertainty

Uncertainty can be a hard pill to swallow. Not knowing what will happen, when it will happen and mostly how it will happen are one of our worst fears as humans and as businessmen as well. Many succumb to this fear and abandon their plans before even having a real image of what happened.

But this is not the only way to do things. The Lean Startup approach shows us that we can keep control over the chaos. In order to do this, we can use certain tools that are able to continuously test the product or service we are working on. This way, we will constantly have a view on what’s going on. The Lean Startup basically applies a methodology around the development of a product and can figure out, based on all the collected information, important data about the market for the product in question.

2. Helps you use customer feedback wisely

One of these tools is the client’s feedback, but the way in which you choose to make use of it is crucial. Use customer feedback to improve your ideas, repeating the process in order to create an effective solution that will meet the needs of your audience. The Lean Startup will this way provide a scientific approach to building and managing startups to get the product into the customers’ hands faster.

3. Helps you be smarter about your work

As I said before, the Lean Startup method is made of good guesses, so it’s basically an experiment that is struggling to find the answer to a certain question. This questions is not “Can this product be built?”, but “Should this product be built” or better yet “Can we build a strong business around this set of products and services”.

Essentially, your experiment is your first version of the product and if it’s successful, it will allow you to start the real hard work — getting it to early customers, developing version after version until the feedback is great and finally accomplishing so much more with so much less. Eris Ries, the founder of the concept used to say:

“Lean Startup isn’t about being cheap, but about being less wasteful and still doing things that are big.”

4. Helps you develop great products

Since what you need to do to get going with Lean Startup is begin the actual learning process, your first step would be to create a minimum viable product, or an MVP. An MVP has only the core features that will allow it to be deployed, but not more than that and it will typically go to early adopters. Its purpose is to make sure that the market likes and needs the product, before investing large amounts of money or man hour work into it. Lean Startup will also make use of what they call the Five Whys method. This is mainly an investigation tool which enables you to ask simple questions along the development process, in order to solve problems that may arise. The answers to these questions will ensure a measurement and learning process, that will eventually transform your MVP into a product that is ready to be embraced by your target audience. I know I’ve made you curious, so, to not leave you hanging, here’s a link to the Five Whys I mentioned — https://hbr.org/2010/04/the-five-whys-for-startups/.

5. Helps you validate what you learn

Eric Ries writes in his guide to a Minimum Viable Product:

“The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

Validation comes in the shape of information that demonstrates that the issues with one version of the product have been addressed by the next version. Validated learning is the unit of progress for Lean Startups — this would also translate in making progress happen and really putting your finger on what’s improved and what still needs improvement. When you embrace this method, you will be able to build the product easier and faster, this way shrinking the development process altogether.

And although the two options might sound similar — startups are not about validating that you do the right thing, but about validating that you are not doing the wrong thing. A minimum viable product can actually be a product in itself, but also a prototype or a sub-set of the product (such as a feature).

6. Helps you create traction

At the end of your development process, it is essential that you can prove the viability and sustainability of your product, service and business model and this way create what investors call traction.

Traction is actually a measure of how well your business is doing and it is not important only for the investors, but for the founders of the startup as well, as it shows that their business hypothesis is grounded in reality.

7. Helps you be the change you want to be

Innovation and progress are the two most important things about a startup business. By using the Lean Startup concept, you will have the kind of freedom to juggle with your goals and be the change you want to be.

2 common worries of the Lean Startup concept adopters

One common worry is that things might happen too quickly for the product or service to actually be valuable. Some think that companies who adopt this vision will “release crap” and only have a negative impact on the possible customers, possibly even lose them and also cause the entrepreneur to lose interest in the project.

However, this is the actual basis of the concept — it’s not something that accidentally happens in its way to success, but something it consciously assumes. Just like art movies don’t mean to be all cool and they fail and end up being boring, they actually want to be… arty, or boring ☺ Anyway, it is just a matter of perspective and ultimately of choice. The minimum viable product shouldn’t by any standards be just anything that came out of someone’s head, but something that will help you learn as much as you can, as fast as you can.

The second concern is related to the effect that a bad outcome will have on the founder’s vision about the concept. There is this fear that things will turn out just like expected in the beginning, namely bad. Fears aside, business experience will teach you this is not well founded, as eventually what you will attain through validated learning will be put to very good use. You will get to understand what went wrong and most importantly the reasons things didn’t go perfectly. The ultimate purpose is that each time you are down, you get up and start over, start better.

Conclusions

The concepts of Lean Startup and Minimum Viable Product are reshaping the business environment with a whole new way of looking at work. They provide a way of constantly evaluating your work’s impact on the market, or whether it will just go by unobserved.

In the light of all circumstances, embracing them actually makes startups less risky and is helping them launch products and services that clients really want.

Here at TRISOFT we are applying the Lean Startup principles for our clients’ projects and internal products as well. Contact us and let’s develop your MVP!

--

--

trisoft.ro
Remote Symfony Team

We are TRISOFT, a Symfony oriented software development company, lead by @symfonydevro. Get in touch with us at www.trisoft.ro or info@trisoft.ro