Lean startup

Lean startup is a methodology to reduce the risk taken when launching new projects or products to the market, to increase the chances of success. This methodology has its origin in Eric Ries and his work:“The lean startup method: How to create successful companies using continuous innovation“, 2008.

In other words, it aims to reduce the time and cost of bringing a product to market, and it also applies to launching a company, a service, and more.

Let’s analyze the two words that give name to this methodology, to try to offer a clearer vision of the concept:

Lean

In its form as an adjective, it has the connotations of lean, slim, and thin. In the business world, it means eliminating anything unnecessary that doesn’t add value to the production process.

Startup

A startup is the early stage of launching a business, often involving innovation and creative work to reach a specific target audience.

Together, they form the concept of lean startup, which can be understood as the art of building a business with minimal resources by leveraging innovation and creativity.

1. Stages of lean startup

The lean startup method can be implemented in five key stages, which are:

• Formulating the hypothesis

  In the first phase, we need to identify the need or problem our potential customers face and develop a hypothesis around it. To properly assess it and craft a value proposition we can deliver, allowing us to address the identified need.

• Validating the hypothesis and MVP

  It’s time to confirm that there’s a potential customer willing to pay for our product. After that, we launch our MVP (minimum viable product) to the market to offer an initial version we can improve based on early user feedback—without requiring major investments.

• Measuring the hypotheses

  Now we define the KPIs or key metrics to measure whether we’re achieving the results set at the beginning. The key KPI might track the revenue generated in relation to the investment made.

• Learning and generating knowledge

  The information gathered so far helps us validate the hypothesis by using the market, the competition, and feedback from early adopters as reference points.

• Repetition cycle

  The final phase focuses on improving what already works by restarting the lean startup process to uncover new opportunities for improvement. This is one of the keys of this methodology, lean startup: continuous improvement and innovation.