Starting a new, innovative business can sometimes feel like a leap into the unknown, as pioneering entrepreneurs seek to find out whether a new idea, product or service has any future.
However, not all leaps are successful. In fact, it is often quite the opposite, as statistics collated by Investopedia suggests that nine out of ten startups end up failing, over a fifth of which in their first year.
This often means that outside of those rare unicorns that immediately have huge valuations, most startups are doomed to failure. Or are they?
Since 2011, a new approach to startups has emerged in the form of the lean startup coach. Coined by Eric Ries in his eponymous book, lean startups have the innovative spirit of classic startups but rather than focusing on burn rate and big expensive launches, they focus on speed and flexibility.
The ultimate aim of a lean startup is to meet the demand of customers using as few resources as possible and does this by involving customers in the development process as quickly as possible.
The central focus of this is the minimum viable product (MVP), which tests the fundamental ideas that led to the startup’s formation and collect as much information about how customers engage and react to the product.
This iterative approach is built around digital services, as they can be quickly altered and adjusted to meet demand, learning lessons with each iteration. This is known as the Build-Measure-Learn cycle and highlights the need to be flexible and treat iterations as a series of experiments.
Examples of this in action include Mr Ries’ own IMVU, a virtual social hub that was built on the principle of connecting to already existing social platforms of the time such as AOL Instant Messenger, MSN and Yahoo, which became a huge success thanks to iteration.