Evaluating the importance of lean start-up methodology for start-upsAug 19
It is plausible that decisions made without much data at hand is subject to a number of risks. However fortunately for business ventures where investment in resources are purely stage gate, opportunities exist to refine the direction that the venture can take in terms of solution it provides for the end user. Hence, it can be valuable if key unknowns, and beliefs are validated as early as possible. Else valuable resources can be wasted in the wrong direction which can lead to an early withdrawal.
Fortunately, the “Lean Start-up methodology” has evolved as an important phenomenon, and coined by Eric Ries in his book “The Lean Startup”. It builds on the concept of lean six-sigma, a mechanism that emphasizes on eliminating wastes from processes. (Ries, Eric. "THE LEAN STARTUP METHODOLOGY." N.p., n.d. Web. )
Ries lean start-up methodology is built on the notion of hypothesis generation, adequately validating the hypothesis at every step, learning from the outcomes, and further refining to develop a product from what is initially a “Minimum Viable Product (MVP)” to what can be a “Viable product”. Ries mechanism is soon beginning to find application in a number of Silicon Valley start-ups and large companies like GE.
Thus as rightly noted by Steve Blank, lean start-up methodology ‘favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development’. (Blank, Steve. "Why the Lean Start-Up Changes Everything." Harvard Business Review) Further it is noted by McGrath, that integral to lean start-up implementation is “focusing on solutions to problems, creating a system that supports innovation, and building an experiment learn-iterate loop”.
(McGrath, Rita Gunther. “Transient Advantage,” Harvard Business Review. (June 2013))
Given this methodology, start-ups are argued to be particularly in a favorable position when compared to large corporations as they are believed to be well positioned to search for a repeatable and scalable business model, while keeping important decision criteria at the center which is: our products are providing customers with solutions that are better than competitor, while ensuring company is able to retain its best employees and build a cutting edge system within company over time.
Thus as has been established lean start-up methodology is an important phenomenon that can iteratively and effectively lead start-up growth, and the effective implementation of which can come through building a system and culture supportive of innovation.
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