Lean Startup in Practice

Updated: Jan 20


Lean Startup is an approach of Eric Ries and belongs to "The Three Most Promising Innovation Methods," which I described in a previous blog post. According to Ries, his concept has roots in Lean Management and the startup business. It intends to avoid unnecessary efforts, to deliver value to customers, and to pursue a path of "continuous improvement." The so-called "minimum viable product" is an early release of a product that might also contain errors and is provided to customers to start the learning process as early as possible. Important decisions regarding product development are based on the creation and test of hypotheses during experiments with customers. Despite its name, the method is also applicable to mature companies.


As stated many times before, the innovation method needs to be effective in terms of a positive business impact for the company while creating an acceptable effort for the organization. The results from using a specific method should have to be worth the effort. Ideally, the outcomes in terms of product and service innovations should speak for themselves. In the end, the investment has to pay off.


Could the Lean Startup method be the right approach for you and your company? How can you get the most out of it?


As already explained in the previous blog post "Blue Ocean Strategy in Practice," it is essential to create a team with the right people. Humans are critical factors in any innovation activity. Their attitudes and competencies are crucial to success. The team should be multi-disciplinary, and its particular configuration depends on the specific subjects. The team members should be curious, creative, and willing to invent and create something new together. They should have no fear of challenging the status quo of the organization and everything that the company has ever done before.


Ideally, the team is supported by an appropriate infrastructure and is allowed to choose its work environment. It needs easy access to information and should be allowed to select its favorite software tools and information and communication devices.


Regardless, whether you want to launch a company-wide implementation or just a trial-run of an innovation method, it is essential to define the scope and the goals of the initiative or project. Furthermore, there should be a reasonable budget available. A lack of funding can slow-down team-work and even frustrate people when something important but inexpensive is missing. On the other side, a huge budget can reduce the cost-effectiveness of your project or initiative. In the end, this might lead to innovations that never reach a break-even.


As not all parts of an innovation method are complex or difficult to use, a minimum of training is necessary. It is recommended to proceed joined training sessions with the entire team. The reason is that it creates a common understanding among team members and reduces the probability of misunderstandings and frustrations.


Creating and running experiments with hypotheses and potential customers is at the core of this method. Therefore the team needs expertise in the design of experiments and related statistics, as it makes crucial decisions in product and service development based on the outcomes of experiments. 


Even the method supports highly customer-oriented development; the team needs a basic idea, a vision, or a roadmap that provides some direction at least at the beginning. Without this, it might be tough to prepare relevant experiments and reach a so-called "minimum viable product."


The entire approach relies on the availability of potential customers and interested people, that are willing to join your experiments and test the product or service at specific stages of the development phase. Therefore you need some fan base for your idea and your project. A common way is to use social media tools in combination with crowd-funding platforms to create and grow this fan base. It depends on your ideas and the markets you try to address, which means and platforms are helpful. Sometimes you have to reward and even pay people for their participation and contribution. In specific cases, the relevant groups cannot be reached by social media at all, and you have to contact people with more traditional approaches.


Many of today's services and products use or consist of combinations of hardware and software. I assume this will also be true in the foreseeable future. There are differences in the way hardware and software are maintained and improved. Today, hardware obviously cannot be updated easily, in contrast to the well-known software updates. Sometimes it is more or less impossible to access and change hardware. Changing large numbers of a mass product can lead to enormous efforts. Therefore, a strategy and systematics are needed to create hardware-software combinations that provide sufficient flexibility for experiments during the development phase.


For obvious reasons, it makes a huge difference, whether you would like to evaluate and compare during the development phase different versions of business websites, mobile payment apps, chips in laptops, electric motors in an electric car, or medical implants such as cardiac pacemakers. As the Lean Startup method itself tolerates errors in early product releases, these risks have to be countered by effective risk management, at least where humans and legal compliance might be at risk.


Depending on the type of product or service innovations and the particular markets you are addressing, the entire development process and its results have to be compliant with the relevant market regulations. Typically, these regulations are in place to ensure the safety and security of customers and society, environmental protection, and furthermore. It makes sense to integrate the requirements of these regulations into your strategy and your roadmap right from the beginning.


In the case of a business website, you have a lot of freedom to experiment with what potential and existing customers like the most. You can choose appropriate designs and statistical analysis to run your experiments and get the necessary insights to make decisions. 


In the case of vehicles and medical devices, in particular, the situation is very different. You face a tremendous amount of regulation; you have to ask for approvals from regulators and proceed clinical trials for medical products, to name just a couple of aspects. Due to the stiff regulations, the way you do experiments has to follow the rules and standards. As medical research and development has already used sophisticated statistical methods to design and run experiments for a long time, creating and testing of hypothesis as it is part of the Lean Startup approach, means nothing new to the medical industries. 


Conclusions


The Lean Startup is a sophisticated and powerful approach to create successful innovations. Of course, the way you prepare the implementation and usage of the method is relevant:


Define the scope and the goals of your project or initiative.Always be aware of humans as a critical factor in innovation. Create a team of people with the right attitudes and competencies.Provide training sessions regarding the method as some parts of it are not very easy, and a shared understanding is helpful.Make sure that you have a fan base of potential customers available with who you can run the experiments.Provide the necessary infrastructure, work environment, and a reasonable budget.Always treat people in and outside your organization fairly and with respect.


Get in touch with me today to discuss your needs and desires and find out how I can help you and your organization to reach growth, profit, and success through technology innovation. Schedule Your Free Discovery Call Now.




Sources and Recommendations


The Lean Startup: The Movement That Is Transforming The Way How New Products Are Built And Launched. Retrieved from http://theleanstartup.com


Ries, Eric. (2011). The Lean Startup: How constant innovation creates radically successful businesses. Retrieved from https://itunes.apple.com/us/book/the-lean-startup/id422540072?mt=11


Thiebus, Sven (November 12, 2018). Blue Ocean Strategy in Practice [Blog post]. Retrieved from https://buero-zueri.ch/blog/blue-ocean-strategy-in-practice


Thiebus, Sven (October 22, 2018). The Three Most Promising Innovation Methods [Blog post]. Retrieved from https://buero-zueri.ch/blog/the-3-most-promising-innovation-methods


Photo: AEPerspectives.com


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