The Lean Startup methodology was developed by Eric Ries and first mentioned in September 2008 his blog „Startup Lessons Learned“. In 2011, Eric Ries then published „The Lean Startup“, which forms the basis for the Lean Startup concept. Lean Startup fundamentally changed the nature of new product and services development. The aim is to identify, with the help of this method, what a given target audience really needs and wants. This is done through the targeted testing of the main hypotheses that represent elementary factors for an idea’s success. Quick adjustments can be thus made possible with Lean Startup, freeing staff to explore new directions. Through validated learning it is possible to make decisions based on data, rather than speculation.
Build – Measure – Learn
The principle behind the Startup method Lean is simple, yet highly efficient. A business idea, product, or service is designed and brought to market as quickly as possible. The goal is to draw conclusions for possible for further product development and/or reconfiguration from the feedback given by the innovators and early adopters.
An important component of the Lean Startup is the minimum Viable Product (MVP). This represents the prototype of a future product and has the main characteristics of the final product which are necessary to obtain proper feedback from the first users. Therefore, the first user must obtain a product which shows the potential of the final product. This creates an incentive to actively participate in the product design process by way of critique and feedback. Lean Startup is therefore characterised by its high ability to adapt to customer needs, as well as the needs of the market as a whole.
Through myriad improvements and updates to the product or service, and the many new versions released, market feedback is then taken into account in further steps in order to make further improvements possible. This leads to what is known as a Lean Startup cycle, which ultimately ends in a product which meets the requirements and wishes of the market. Continue reading…
Another important element of the Lean Startup methodology is Actionable Metrics. These are indicators that empower one to perform an action which directly leads to improvement, as opposed to absolute indicators such as monthly homepage visits. Data is collected in various ways within the scope of Lean Startup for this purpose. The following example shows how meaningful data can be collected.
Split Test – Customers are divided into two groups. Group A is given potential future changes to the product which can be used in advance, while Group B continues with the existing features. By comparing the two groups one can then determine how successful an innovation is and how it affects user behaviour. If the change is received positively, the innovation is then released to the wider user base.
Pivot – As previously described, Lean Startup is about testing and improving upon important hypotheses that are crucial for the success of the idea Not even the most elementary hypotheses and/or factors remain untouched. This therefore leads to a change of direction from the previous route in favor of a new hypothesis, which is again tested for market success. In the Lean Startup vernacular this is referred to as a „pivot“.