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Entrepreneurs are, above all, passionate people. They are passionate about developing ideas into products that will change the lives of users. Creating is therefore one of the reasons for entrepreneurs to live, whether they are beginners or experienced. The less experienced entrepreneurs will often ask themselves the following questions: How do I know if my idea is feasible? Will I have users for this product? What are the basics of team building? These questions are legitimate. The good news is that there is an approach to building companies and products that is there to help them. This approach is called Lean Startup, and I suggest you discover the basics for entrepreneurs in the following article.
The Lean Startup method was initiated by Eric Ries in 2008. With his various experiences as a consultant, employee and company founder, Eric Ries formalizes his method in the best-selling book âThe Lean Startup: How Constant Innovation Creates Radically Successful Businessesâ. This is an ideal method for entrepreneurs. Indeed, it allows you to start without the need to have solid experience in the business world. In concrete terms, Lean Startup allows entrepreneurs to quickly test an idea as a product and develop value and relationships with potential customers.
The basics of Lean Startup
Lean Startup is a radically different way to build companies. Lean Startup is not necessarily more complicated but it is simply a different approach.
In 2008, Eric Ries made a fairly simple observation. He notes that many companies are simply not aware of the process they use to develop products and then connect to their customers. As a result, they cannot really measure their efforts. The fact that these cannot be measured using metrics is problematic. Indeed, this makes it impossible to implement a continuous improvement approach. Eric Ries concluded that it was necessary to define a method to address this issue.
Lean Startup assumes that entrepreneurs seek to answer a question
The Lean Startup methodology assumes that each entrepreneur seeks to answer a question by setting up a startup. For Eric Ries, the big question is not âCan this product be built?â but rather: âShould this product be built?â or âCan we build a sustainable company around this set of products and services?â.
Each startup is therefore a great experience. An entrepreneur will have to answer these questions. The answers provided will be the first product. If this product is successful, it allows the entrepreneur to proceed to the next steps:
- Recruit the first users
- Possibly add employees to each new experience or iteration
- Possibly start building the product
Once the product is ready for large-scale distribution, it will already have its first established customers. In addition, the product will already have solved real problems. In fact, the detailed specifications of what is to be built will already be defined.
An iterative creative process
At the most basic level, the idea refers to a company that tests itself at every stage of the journey of creating the product. Lean Startup allows you to set up a flexible and intelligent iterative creation process for the initial test phases. While creating a product from scratch is not an easy process, using Lean Startup allows entrepreneurs to know with certainty if there is a market for what they are building.
In addition, Lean Startup promotes an approach where entrepreneurs use resources wisely. This is essential when launching a product from scratch.
The 4 key ideas of Lean Startup
Detailed in Eric Riesâ book âThe Lean Startup: How Constant Innovation Creates Radically Successful Businessesâ, Lean Startup is based on 4 key ideas:
- MVP for Minimum Viable Product which highlights the need to create the minimum viable product at each iteration
- A/B tests
- Usable metrics
- âBuild-Measure-Learnâ iterative loop
Creation of the MVP or Minimum Viable Product
The MVP or Minimum Viable Product is the cornerstone of your idea in the Lean Startup method. Indeed, as an entrepreneur, it often happens that you have an idea of a product but you need data and user feedback to know if you need to go further. Creating an MVP will help you. Thus, the MVP is the smallest and most flexible version of your idea. It allows you to gather enough information to know your potential customers.
A good example of using Lean Startup for entrepreneurs comes from the Airbnb platform. The founders of the startup that connects people with travellers who have a room or apartment to rent regularly use the MVP approach. Thus, they used the minimum viable product to see if beautiful photos could stimulate bookings. Once the user information was collected, they validated their idea. All that remained was to make this new feature available to as many people as possible.
A/B tests
A/B Tests are often referred to as Split Testing in literature. They consist in offering different versions of a product to your customers or potential customers. We talk about A/B tests because the results are often divided into group A and group B. Lean Startup uses the A/B test to observe user behaviour. Then, the goal is to see which version of a feature is the strongest and understand why.
Imagine that you are developing a series of videos for the Web. You will probably wonder whether your users prefer short content of about 5 minutes once a week or longer content of about 15 minutes twice a month. With the A/B test approach, you create two groups from incoming traffic to a home page of your site. You will test both approaches for your video content. After a few weeks, you will analyze the results to find out which group is most involved in your videos. These results will then allow you to know exactly what type of video content your customers expect.
Usable metrics
Entrepreneurs who develop a new idea with the Lean Startup approach can measure a lot of things. However, the most important thing is to measure what you can really do. Thus, Lean Startup emphasizes the definition of usable metrics. Indeed, there is no point in thinking about the finish line while you are still on the way.
In fact, if your objective is to increase your productâs revenues by $2000 over the first half of the year, you will not be satisfied with this single metric. Indeed, it does not allow you to know where to focus your efforts to achieve this objective. You must then define usable metrics. Here, it consists in being able to break down precisely where your current income comes from in order to know on which customers you will have to concentrate your efforts to achieve the objective.
In other words, Lean Startup emphasizes that it is not enough to measure the growth of a product but rather how it happened!
âBuild-Measure-Learnâ iterative loop
As an entrepreneur, you have surely already realized that when launching a product, it is essential to act quickly. Reactivity is essential. Thus, Lean Startup emphasizes the iterative loop âBuild-Measure-Learnâ in order to shorten the traditional development process. Entrepreneurs who apply Lean Startup are able to build an MVP and then analyze the usable metrics to make the right decisions quickly and focus their efforts on them.
Iterative mindset with Lean Startup
On his website, Eric Ries offers several examples of companies and products that have successfully followed the Lean Startup method. The most famous example is undoubtedly that of Dropbox. Thus, the startup of file sharing and online storage clearly shows how Lean Startup has enabled it to achieve the success it is currently experiencing. However, Lean Startup can also be applied to individual entrepreneurs.
Although criticized by some who see it as a simple short-term hack, Lean Startup is a method that deserves to be tested. By making iteration a state of mind, Eric Riesâ Lean Startup allows entrepreneurs to bring the idea closer to their potential future customers as quickly as possible. This is essential because a product without customers is doomed to failure. Obtaining customer feedback as quickly as possible makes it possible to adapt the product to real needs, provided that a continuous improvement approach is followed.
Conclusion
Lean Startup offers an iterative approach focused on the idea, continuous improvement and the need to take into account customer feedback as quickly as possible. The aim is to detect as quickly as possible if an idea meets a need and if it can make a viable product. As such, the creation of a minimum viable MVP or product is an essential part of the Lean Startup method to which more and more entrepreneurs are joining.
If some people describe Lean Startup as a simple short term hack, I hope this basic guide for entrepreneurs has made you want to discover the method and apply it to your next product idea.
Lean Startup: A Basic Guide for Entrepreneurs was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.