Ask not: Can this product be built? Instead, ask: Should this product be built? and Can we build a sustainable business around this? Or as Eric Ries, founder of the Lean Startup, puts it: “It’s not about making stuff efficiently, but efficiently figuring out which stuff to make.”
These ideas were presented to Philips, ING, TomTom and 800 other listeners last week at a Live on Demand congress given by Ries. But they weren't initially meant to apply to large companies – the Lean concept and methodologies were built for start-ups.
What is the LEAN startup principle?
The Lean Startup principle is a methodology that views startups as a ‘grand experiment’ which engages customers from the very beginning, instead of presenting customers with a finished product or service. This way, entrepreneurs can discover their customers’ preferences and create the best possible offering before it goes out the market. In other words, the Lean Startup principle helps entrepreneurs learn what customers want, while they are still developing their business.
Feedback is Key
As an entrepreneur, you need two things to work according to the Lean principle: a minimum viable product (MVP), which is the bare minimum that can be deployed to early users. It is the product in its most simplistic form. And a build-measure-learn feedback-loop, which enables entrepreneurs to implement the reactions they receive from their MVP and make informed decisions. This is called ‘validated learning’ and it helps cut back on development time and minimize the risk of failure.
Building a sustainable business using the Lean Principle can be confusing, especially in the early phases. Luckily organizations that support entrepreneurs, such as Rockstart, are there to help. You can read more about the Lean Startup methodology and ways to apply it, in Rockstart’s blog.
Dropbox Did It
Most people know Dropbox, but they don’t know that Dropbox was created using the Lean Startup principles. When Dropbox began, it faced many competitors and didn’t know when or how to launch, given the environment they were working in. So they decided to start by speaking to their target audience, to find out if Dropbox was appealing. Dropbox presented its MVP – a 3 minute video that presented a snap-shot – to its target audience and based on feedback, they were able to get a better understanding of their customers early in the process. By connecting potential users with their MVP, Dropbox was also able to capture interest and gain buy-in, before their product had officially launched.
You Can Too
Dropbox used Lean Startup principles to create a product that was reliable and “just worked” and showcase it. By connecting consumers with your MVP, you can have authentic conversations and gain an understanding of what resonates with your customers. That is what Lean Startup principles are all about. Or as Ries describes his approach: it is “a process for systematically figuring out which parts of our idea are brilliant and which ones are crazy.” This way, entrepreneurs can focus on ‘keeping the main thing the main thing’ and build a sustainable startup.
Interview with Eric Ries