90% of startups fail. This remarkable statistic is attributable to two factors: poor management and an unwillingness to gauge prospective customer interest. The Lean Startup method remedies this common issue by turning ineffectual chaos into actionable order.
Okay, what is a lean startup?
"Lean Startup" is a product development and management method that is especially tailored for startups. It is a framework that tells a startup whether or not a product is translatable into a viable, sustainable business; it employs iterative development techniques that incorporate, at its core, feedback from prospective customers.
Who actually uses this?
Many prominent companies such as Dropbox, Aardvark, Grockit, and more have used Lean Startup to pave their way to success. This method is effective because it enables fast, affordable, and data-driven product development that steers startups away from the fatal mistake of prematurely scaling a product.
How does it work, exactly?
The "build-measure-learn" feedback loop is at the heart of the Lean Startup method:
- Build - The first step involves defining the problem that needs solving and developing a simple product prototype, otherwise known as a "minimum viable product" (MVP).
- Measure - The results of the first step will then be measured. Here, a company measures the interest generated by the MVP and determines whether or not there is a strong product-market fit (the degree to which a hypothetical product satisfies a hypothetical market demand).
- Learn - Analyze the results of the previous step and do one of two things: continue to develop the MVP into a full-fledged product, or pivot if the product iteration does not cohere with market demands.
Okay, any failure cases?
Most failures associated with the Lean Startup model are attributable to companies that fail to properly execute one or more of the steps featured in the aforementioned build-learn-feedback loop. In the case of Fab, an improper series of pivots led to its downfall. In the case of Webvan, an inability to learn and correctly orient its service to market demands (a case of premature scaling) led to its demise. Numerous other failure cases exist.
How do I get started?
If you have a good idea and are willing to put in the work necessary to transform that idea into reality, the first step is to begin developing a Minimum Viable Product. We'll talk more about how to do that in coming weeks.
Over the next few weeks, we'll explore more about Lean Startup and talk more about how we apply these principles at The IC. You can find out more about Lean and Agile principles and find more resources on the topic page. Stay connected by signing up to our newsletter.