There is no universal set of steps to launch a startup. The goal—to create a sustainable business—is broad and means that almost any approach can conceivably have success. For many entrepreneurs today, the only necessary things to launch a new business are an idea and some capital. With those in hand, the journey won’t matter as much as the destination.
However, this view can lead to short-sighted decisions, inefficient management, and holding on to bad ideas. Lean startups have emerged as a popular alternative, foregoing pure inspiration for validation. Lean startups aren’t a diametric opposite to traditional philosophies, but rather a managerial style that is closer to a product’s reality than the improvisational manner many young startups choose.
Lean startup methodology is process-oriented, focuses on working within means as opposed to shooting for high burn rates and a need for massive capital, and is focused on validating ideas. The question, however, is why a company should focus so much on process and incremental changes over looking to make a splash.
The answer is that lean startups can save significantly on overheads and are more likely to deliver a product that fits a real market need. To implement this philosophy, it’s important to consider several aspects that may run counter to established business norms, but deliver real results.
Find a Problem Without a Solution, Not The Inverse
Startups begin with an idea. The main goal of any business is to create a product or service that solves a pain point for a target audience. However, not every problem requires a full solution, and not all solutions have problems to fix. One big reason startups fail to take off is because their initial idea doesn’t survive contact with their target market.
The problem isn’t necessarily an idea by itself. The reality is that in many cases, entrepreneurs wed themselves to an idea, and are so invested in it, they refuse to see opposing viewpoints. The result is a solution for a nonexistent need, and the potential for thousands of dollars and hours wasted.
Instead, ideas should always be validated at each step of the development process to ensure they’re actually meeting a need. This also allows startups to ditch concepts that aren’t working, or pivot into a real area of need to maximize their potential. In lieu of forcing an idea to work, see if there is a real interest. If not, you still have time to rethink your core ideas or even create a newer, better concept.
Build-Measure-Learn and MVP Implementation
For an idea to prove sustainable, it must be constantly validated and show real success, as opposed to perceived or potential gains. For many startups, the first time introducing their product to the world is its launch. Getting a product to that stage, though, requires hundreds of hours of manpower, thousands of dollars, and effort. In the cases where a product succeeds, it seems the model is proven right.
More often than not, however, products fail. The problem isn’t that they fail—indeed, many business experts recommend that companies ‘fail fast, and fail cheap’. The problem is that their failure isn’t fast, or cheap. Drawn-out development cycles result in heavy losses and leave startups with a single shot at success.
Lean startups eschew this linear product cycle by creating a more circular loop of fine-tuning based on user feedback to continue perfecting a product. This approach means that instead of creating a final product, however, startups should focus first on creating a minimum viable product (MVP).
With an MVP in hand, entrepreneurs can create batteries of tests and collect consumer feedback to deliver actionable insights related to how a product is received and what needs to be improved. These insights can then be incorporated into future versions of the product. Instead of putting all your resources into a single launch, breaking it down into smaller, less expensive versions can let you meet a real market need at a fraction of the costs.
Process-Oriented Management and Accountability
A pervasive mindset in the startup world is that improvisation and free-flowing creation are more important than building a corporate structure. While there is a decided merit in having the freedom to improvise and change things on a dime, a lack of structure is more hindrance than help. Lean startups prize accountability and showing tangible results to craft a better development process.
One of the most important parts of validating an idea or a product is understanding how to measure success. For lean startups, a vital component during the measuring and learning phases is establishing clear key performance indicators that answer the questions your product may face. However, KPIs should be set after a product is conceptualized, but before it is created.
Having clear milestones to track and meet also means that startups can focus on developing more structured business plans, saving on extraneous spending and useless detours. While startups may prize their independence, improvising all the time quickly racks up bills, while having a plan lets you avoid those pitfalls. To give your startup better odds of successfully reaching the market, you must create clear processes, accountability, and ways to benchmark success.
Listen To Stakeholders
The last part of validating your product is listening to those it will impact most—consumers. For many startups, their first contact with consumers is their launch day. This is problematic, as it reduces the likelihood of success, and gives a compressed timeline if startups must react to negative feedback. Instead, KPIs, tests, and MVPs should always include a strong dose of consumer critiques.
Constant testing may seem costly, but it ends up being pennies on every dollar lost by ignoring a startups’ stakeholders. At the end of the day, personal opinions and beliefs are not good indicators of a product’s success, but the voices of your target audience have tremendous value. Listening to consumers early, and finding early adopters to test your services and products, can help you save money on bad ideas.
Regardless of the industry you’re entering, following lean startup methodologies can help you generate tailored solutions for your audience while avoiding the pitfalls that have hobbled many startups before they’re out of the gate. By focusing on remaining streamlined but structured, you can improve your odds of success and thrive in a competitive market.
Featured image – malei maeder @ pexels
MVP – Eric Delcroix @ Flickr
GIF – via Giphy