The lean startup approach supports incremental organizational changes, in order to achieve long term company success. Here’s how this concept’s principles can help startups grow their business.
Do not chase perfection.
Many entrepreneurs postpone the production date of software products. That’s wrong, and here’s why. Traditional approach says that everything has to turn out great the first time around. That’s right, but not for startups. Well established companies already know which markets they serve. Also, marketing and PR have already done their part in establishing a reputable brand name. Therefore, they already have the information they need to build a nearly perfect product.
Startups, on the other hand, work under extreme uncertainty. They cannot ever be 100% sure that customers will love using their product. They cannot even be sure which market segment they serve. Therefore, they have to learn. And the best way to do that, is to learn by the customers themselves. That’s why lean stands for imperfection. According to lean principles, releasing a minimum valuable product is good, because it gives you more time to learn about your customers. We’ll explain that in details further.
You cannot learn what your customers want, unless you give them a product that works. But, here’s the catch. Do not overdo it. For the first release, make sure you have a product that contains the basic features, so you can start learning. Sometimes, prototyping doesn’t include an actual product. It also can be improvised, by using explainer video of how the product is supposed to work. We recommend this option only if you have a very limited budget and cannot afford building the actual product.
When you have a basic product, test it in front of real customers. Testing in product development is very similar to how testing works in science. First, you develop a hypothesis. Afterwards, you do experiments on it. The less time you need for testing, the greater the learning speed.
Use different kinds of methods to gather information and do your tests. Surveys are okay, but they cannot help you observe the actual user behavior. Therefore, use interviews to gather information, like: What is it that the user struggles with? Are you lacking an important feature? Do you have some features they don’t need? Or, are there some external factors that influence their behavior?
Testing can provide you with a great valuable lesson. You may learn that you need to enhance the network effect. Therefore, users will need approval from their friends’, before they start using the app. The more users adapt it, the greater the value. Users have problems. And testing should provide you with the solution to that problem.
Testing is useless until you use it to learn what customers want. And if you want your startup to grow, you have to learn fast. Use iteration to get acquainted with customer needs. Often, customers don’t even know what they want. Meet their unmet need. Listen to them to unlock the product value.
The main goal of lean is to minimize the waste. The faster you learn, the lower the waste. Testing provides you with real customer data. Use it to excel the next version of your product. Create a product, strong enough for you to start learning. Do not build product improvements, unless you test that your customers want it. Any work that goes beyond the minimum valuable product is a wasted time. Do not work harder. Work smarter.
Measure your results.
No startup growth can be evident, unless you measure your progress. Make sure you include the right metrics. Company growth and product growth are two different things. Do not confuse them, or delusion yourself that just because your company earns more profits, your product becomes better. Get to the real root cause and develop a methodology to it.
Five whys. In order for you to get to the real cause of your problem, this is a common technique to use. As the question “Why?” 5 times, when a problem rises. More often than not, the background of a technical problem, is a human problem. Make sure that everyone affected by the problem is in the room and start listening carefully.
Cross-functional teams empower creativity, innovation and communication. And that is what lean stands for. A great product requires continuous iteration, with customers and between team members. It also provides a sense of ownership for all functional teams in the organization.
To get the best out of cross-functional teams, it’s preferable if you work in small batches. What does that mean? Go feature by feature. Do not release an entirely new product the next time around. Go step, by step, instead. You want customer feedback to come early in the process. A good practice for big companies is to work in smaller teams. Establish a team for each feature and test them one by one.
A common myth: No one would buy a low quality product.
Early releases do not mean low quality product, by default. They use those releases to learn valuable lessons, instead. That’s why lean startups should target the early adopters on the market. Early adopter are the people who are excited about new technology. They do not chase trends, and are likely to cooperate with a useful feedback about the product functionality. Actually, early adopters do not even use products when they become a trend. That is when that product enters the massive market. So, do not fear low(er) quality, when it’s for a greater good.
Lean is all about entrepreneurship. Lean managers have to be great visionaries and risk takers. They also need the right team to establish a company culture that nurtures innovation and creativity. In such an environment, the lean principles, excel.