In some cases, many start-up businesses find themselves stalling at the beginning. They believe they have a great product or service and they are keen to develop a thriving business. However, many spend a vast amount of time analysing their markets, creating prototype websites, developing or changing their products or services prior to their launch date. This approach not only costs time it also increases a business’s start-up costs.
There is another way; in the shape of a pioneering movement developed by Eric Ries called ‘The Lean Startup’ (2011). ‘The Lean Startup’ applies scientific thought and innovative thinking to the processes behind starting a business. The aim is to launch as soon as possible and gain customer insight along the way, reducing the risk of failure and time and money invested. By launching quickly with a minimum viable product (MVP) you can measure the impact of your product/service on your customers and learn from this. This process of validated learning allows companies to adapt quickly and pivot their business model if needed before any large investments are made. This approach may seem completely backwards to traditional business approaches but it has been proven to work.
The Learning Cycle developed by Eric Ries called ‘Build Measure Learn’ shows the application of 'The Lean Startup' to a business.
(Source: Business Model Analyst)
This continuous cycle allows businesses to learn quickly and remain innovative.
There are numerous low cost, high impact ways a new start-up can test their MVP. Here are just a few examples:
- Customer interviews - In order to gage customer interest and feedback, face to face or over the phone interviews are the most detailed and engaging way to gain the consumer's perspective.
- Crowdfunding - There are many platforms like Angel investors or Kickstarter in which you can ask for funding for your project, this not only helps you fund your new venture but also validates it. If you do not get the interest in the project then it may be that there is no customer appetite for this.
- Create a waiting list - Use your MVP as an example and ask people to join a waiting list to be informed when the product is ready.
Throughout the process, measure the interest in the product, learn from the data gathered and build/change the product to reflect the new ideas you now have. This is only a short introduction to 'The Lean Startup' methodology, I hope it has been thought provoking. If you are interested, you can find out more on the Lean Startup website.
Emily Pegg,
Business Engagement Manager