First things first. What is a lean startup?
While startups are typically new ventures (and most people imagine two guys in a garage bootstrapping resources), a lean startup can be the launch of a new product within a 25-year-old, Fortune 500 company. Launching a lean startup means using lean startup methodology to launch a new product with low risk and high learning.
The principle behind a lean startup is to create products for which there is already an existing market, versus creating a product and hoping that demand will rise up to meet it. In a traditional startup, you spend hours and big bucks developing a new product, then take a leap trying to bring it to market–it’s a big risk. In a lean launch, you gauge consumer interest and determine how to refine your product to meet the existing interest. In a lean startup, if you fail, you fail fast and cheaply instead of failing slowly and expensively.
The lean startup method was developed by Eric Ries, the CEO and founder of the Long-Term Stock Exchange (LTSE). The American entrepreneur’s book, The Lean Startup, is considered the Bible of the lean startup movement.
So. You want to launch a lean startup, and you want to do it quickly and efficiently. So where do you start?
Here are some guiding principles to help you successfully launch your lean startup.
Build a Working Business Model
In a lean startup, your first goal is always to find a working business model. This business model is based on hypotheses that can be tested quickly; it’s considered a working business model when there is measurable evidence of some traction within the market, tending toward real momentum. All you need for these hypotheses is sufficient data; it doesn’t have to be complete. In this way, as you introduce ideas and customers don’t respond as positively as desired, you can go back to the drawing board with minimal losses and adjust your goals, developing products that will better meet the consumer demand. A common saying in lean startups is “failure is the rule, not the exception”. Each unsuccessful attempt is a chance to learn how to refine your offerings to best suit the marketplace.
Once you have a working business model, there are three important steps to moving ahead with your lean launch.
Ask yourself some valuable questions about your idea in order to formulate your hypothesis:
- Who are our target users?
- What is the product used for?
- When is it best used?
- In what kind of situations is it useful?
- What is the most important feature of the product?
- What is the biggest risk for the delivery of the product?
This is the part where you develop an MVP (the most basic version of your product with the main features) that you’ll launch for a public test. You want to build something that can get fast feedback from users, like a prototype, mockup, landing page, etc.
At this stage, you’ll be all set to test your product and see what the user feedback is. You can find out if responses are favorable with A/B testing, Google Analytics or by sending out a survey to users.
If At First You Don’t Succeed
Remember, failure is a given. Chances are that the feedback you get from users may not all be positive; this gives you the chance to adjust and refine your product idea in response to what consumers have to say. Start back again at the Think step and work your way to Check…and then do it again. Each of these attempts will give you maximum learning and valuable intel with minimum risk.
Success and Scaling
If your working business model starts to gain traction, you move into the product/market fit stage. Signs you’ve entered this phase include a major uptick in sales, signups and referrals. Reaching this exponential growth is a big sign that your company is ready to scale.
Launching a lean startup is an exciting venture. It allows you to quickly design your product and test it, but it also has the advantage of knowing the impact it has on users and whether or not you should continue or modify its design.
Whether you’re a carrier of ideas, entrepreneur or digital startup, Techmate Labs can help you develop your ideas and design your apps. We can also help you flesh out your game plan for launching your product, including supporting you in a lean startup project. Reach out to us today to see how we can get your business moving forward and make your ideas become a reality.