Lean Startup - Everything You Need to Know!
The Lean Startup principle is a modern method for developing and managing startups, aiming to minimize uncertainties and respond more efficiently to customer needs. The concept was developed by Eric Ries and is based on Lean Management principles as well as agile methods. Here are the core aspects of the Lean Startup approach.
Lean Startup Cycle: Build - Measure - Learn
- Build – The first step is to quickly and cost-effectively create a minimum viable product (MVP). This is the simplest form of a product that allows for testing hypotheses and collecting initial customer feedback.
- Measure – After the MVP is launched, relevant metrics and customer reactions are measured. This enables an objective evaluation of the product concept and facilitates the decision of whether the product should be further developed or adjusted.
- Learn – Based on the collected data and insights, conclusions are drawn. The gained insights influence the next development phase and help adjust the course of the startup.
MVP – Minimum Viable Product
A minimum viable product (MVP) is the first viable version of your product. The MVP fulfills only one or a few central performance aspects of a product. The main task of the MVP is to gather data points and insights about your key assumptions. A good MVP is based on insights from an intensive design thinking phase and engagement with the customer. MVP does not always mean it is cheap or fast. Depending on the industry or use case, the MVP can also take a significant amount of time and resources.
Pivot
A pivot is a strategic course correction based on the gathered insights. If the initial assumptions prove to be incorrect or the product does not achieve the expected success, a pivot allows for adjusting the strategy to achieve better results.
Product Market Fit
After multiple iterations of the Lean Startup, when you finally meet the market’s needs with a fitting product and a sustainable business model, you have found the “product market fit.” As a result, expanding and scaling your business model become the focus. However, you still remain true to the Lean Startup method when it comes to developing new essential features. The Lean Startup method and its associated approach are always excellent for discovering what truly excites the customer.
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Lean Startup Canvas
The Lean Startup Canvas is a tool that visualizes the central elements of a startup concept on a single page. It includes key factors such as customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structure. This canvas helps structure the business idea clearly and communicate it quickly.
Difference from Business Canvas
The main difference between the Lean Startup Canvas and the Business Model Canvas lies in focus and timing. The Lean Startup Canvas specifically focuses on the early development process of a startup, emphasizes the rapid validation of assumptions, and adapts flexibly to changes. In contrast, the Business Model Canvas is broader and addresses the entire business structure, even for established companies. It allows for a detailed analysis of all aspects of the business model, including the value chain, customer relationships, and resources.
