The Lean Startup methodology was conceptualized by Eric Ries in late 2011. From his extensive experiences and those gathered at his popular blog, he analyses the entire process from his observations and makes the case for why this new method cuts the product development cycle by at least half. Starting from his simple observation that nine out of ten products flops and often their entire startup along with them, this approach reduces the product creation cycle by almost fifty percent.
Lean Startup methodology believes that most businesses are driven by the customer. Instead of being focused on creating the product, the focus of the organization becomes about meeting customers’ needs and requirements. Lean mindset believes that the problem-solving and action processes should be based on the understanding that a business is about identifying the customer’s needs first and then solving for these needs through the proper framework. Lean methodology helps entrepreneurs to focus more on customer value creation rather than just creating products. The methodology also helps the organization eliminate waste. Ash Maurya, the creator of the Lean Canvas is also one of the leading thought leaders in this space and recommends that we should start all projects by using the Lean canvas to outline our thoughts and get the ideas out of our heads, I completely agree.
Lean Startup starts with identifying a problem and a customer segment. Once the entrepreneur has identified the problem and the customer, they need to get into action. Lean methodology believes that businesses should measure their success or failure in the results of the customer feedback they have received. Entrepreneurs should therefore create Lean sprint plans as soon as possible after identifying the problems and solutions to improve customer learning.
Before starting the business, entrepreneurs should first identify their customer feedback, this is the first part of the journey and entails getting to problem-solution fit.
After getting the customer feedback, the next step should be analyzing the data obtained. One of the main elements of the lean startup methodology is the use of the MVP — the Minimum Viable Product. The MVP is the set of requirements that outlines the minimal viable products that can be offered to the customers. In addition, the online business program also lays down the protocols and policies that must be followed by the company to ensure compliance with various laws.
To make the most of the lean startup, the online entrepreneurs need to get hold of the necessary information from the MVP. However, there is one more important aspect of the business model that can be overlooked by most of entrepreneurs — traction metrics.
This aspect is equally as critical as the other aspects and is often ignored by both entrepreneurs and the management of the organization. However, the traction metrics can help the company to determine whether or not the business is being conducted profitably. Therefore, entrepreneurs should pay close attention to the traction metrics and make necessary changes to the business model if they are unable to bring profitability into the business. Although this aspect is not taken seriously by many of the entrepreneurs, it has been found out that the traction metrics is actually very useful in bringing profitability into the organization and in ensuring profitability in the long run.
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