Sunday, May 29, 2016

Startup Lean Processes

I recently came across a posting on the Methodology of the Lean Startup which was very interesting because of how closely it follows the Design Thinking process. The article started by making some assertions about Lean Startup Methods and then outlining some Lean Startup Principles;

The Lean Startup - Overview

The Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers' hands faster.

The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.

Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer.

When Lean Startups fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don't care about the idea, the startup fails.

Eliminate Uncertainty (Reducing Risk)

The lack of management skills has led many a start-up to take an undisciplined approach to developing processes. Taking a "just do it" approach basically avoids forms of management.

Using Lean Startup, companies can create order by providing tools to test a vision continuously. It is Kaizen for the process of managing the startup.

Work Smarter not Harder (Answering the Right Question)

The Lean Startup methodology asks two questions; "Should this product be built?" and "Can the business of providing this set of products and services survive?" This is determined by prototyping a first product. If it is successful, it allows a manager to get started with the campaign: enlisting early adopters, adding employees to each further experiment or iteration, and eventually starting to build a real product. By the time we're read to distribute widely, have established customers, have solved real problems and offer detailed specifications for what needs to be built on a larger scale.

Develop A Minimum Viable Product (Express - Test - Cycle)

A core component of Lean Startup methodology is the build-measure-learn feedback loop.

As we just mentioned, the first step is figuring out what the real problem is. Next, you develop a Minimum Viable Product by prototyping in order to learn as quickly as possible. Once the MVP is established, a Lean Startup works on tuning the volume production engine (Scaling). The measure learn cycle must include actionable metrics which demonstrate cause and effect by asking the "Five Whys" (Kaizen)

Build-Measure-Learn uncovers the drivers of the business model and can lead to testing new fundamental hypothesis about the product, strategy and engine of growth. (Pivots)

Validated Learning

"The unit of progress for Lean Startups is validated learning - a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty." (Wicked Problems)

Focusing on finding what customers want and will pay for by rapidly prototyping an ever increasingly detailed set of prototypes avoids months waiting for a product beta launch.

Driving Principles

Entrepreneurs Are Everywhere

You don't have to work in a garage to be in a startup. Every company is constantly on the cusp of future growth, stagnation, or failure.

Entrepreneurship Is Management

A startup is an institution and requires management geared to its current context.

Validated Learning

Startups exist to learn how to build a sustainable business. This can be achieved by running experiments (prototypes) which allow us to incrementally test and validate each element of the plan.

Innovation Accounting (Feedback)

To improve entrepreneurial outcomes, we measure progress, set milestones, and prioritize work. This requires feedback - accounting - so we can adjusts the process and the product.

Build-Measure-Learn (Express-Test-Cycle)

The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop.

If you've been following our other posts on the Design Thinking process. the parallels to Lean are obvious. The next time you meet someone who wants to talk Lean, you'll know exactly what they are excited about.

Here is a link to a Stanford Webinar by the's Bill Burnett; The Design Thinking Hybrid: An evolution of Innovation

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