The Lean Startup movement. Some of us may have heard it, some of us might be completely clueless when it comes to this topic. Eric Ries was the author of the book Lean Startup and has successfully helped guide hundreds of the best entrepreneurs before they started their journey to become millionaires and lead booming growth companies. Now, what exactly is the formula that entrepreneurs seem to be raving about? Before we can understand how it can impact a business of any size, let's take a look at how I first came across the topic, then jump in on what the Lean Startup actually is.
This summer I was lucky enough to be a marketing intern for one the fastest growing companies in the world - Main Street Hub. This startup was deemed the 73rd fastest growing company in the United States by INC Magazine in 2014. Needless to say, I was about to learn how a top startup does business. Under very fortunate circumstances, I had the chance to have one-on-one meetings with the CEO who was the mastermind behind the fun and laid back culture at Main Street Hub. Seeing as I am only twenty-two, it was rather daunting to learn lessons from a CEO who, in his mid-thirties, was leading a company valued at 100 million dollars. However, he instilled a great sense of calmness in the conversation and was incredibly friendly. Within a minute of our first conversation, he dropped a topic on me that had never crossed my desk. The Lean Startup. He mentioned the book, and the movement as a whole and how the entire West coast and Stanford are using its principles constantly now.
I will never forget him telling me how entrepreneurs typically start out having this vision, and they believe that is how their company will always be. With customers easily lining up outside their store or flooding the website with traffic ready to buy that vision. But he mentioned this typically is not how it works. The lean startup is a process, a method that should be applied do your vision of what your business does. It must be noted that the steps can be reoccurring, essentially like a never ending cycle. The method works in five steps.
- Develop your idea and decide whatever it is that you want to produce or sell to consumers.
- Build a minimum viable product with your own unique value proposition. A product can mean anything, whether it be car washing or manufacturing a new wheel.
- Get out of the office and test your product with various markets. It can be tough to tell who actually is your target market this early on.
- Measure your feedback properly.
- Learn from your feedback. If your idea/vision/assumption gained positive feedback or failed with potential customers, then you must make the call to pivot or persevere.
So why is this method so popular today? Doesn't seem like magic, does it? However, it creates this question that impacts everyone that is in business: "What is your number one assumption to prove true at the fastest speed and lowest cost?"
A great example is how Zappos, the massive online shoe seller ,got their start. In the early days of Zappos, the founders simply purchased shoes as needed from local shoe retailers, instead of stocking their own inventory. This allowed Zappos to test their idea fast and cheap, before investing in their own inventory.
I can't help but remember hearing a person once say, "business is no longer moving at the speed of execution. It is now moving at the speed of how quickly ideas can be produced.“ With any business and the swift deployment of technology across all sizes of business, this now more than ever is incredibly true.