Eight years ago, Eric Ries introduced the world to The Lean Startup methodology. Since then, hundreds of thousands of entrepreneurs and innovators have utilized his recommendations to quickly build a lightweight product, launch it to users quickly and improve it based on their feedback. Companies such as General Electric, Dropbox and even Atlanta-based Social News Desk have used the methodology to increase the pace and success of innovation projects.
Gartner estimates more than 50% of established corporations will leverage lean startup techniques at the business level by 2021 to make better, faster business decisions.
But like most things in life, the lean startup methodology creates challenges for many businesses, particularly enterprise organizations. A simple Google search reveals plenty of entrepreneurs and companies that have attempted to adopt a lean startup mentality with little or no success. In many of those instances, the negative experiences stem from a misinterpretation of lean startup principles.
Many businesses, for instance, struggle with the core of lean startup: the minimum viable product (MVP). Large corporations struggle with launching a seemingly unpolished product, while others believe pivoting based on customer feedback will never produce big ideas or breakthrough innovation.
However, this criticism is most frequent among those who misunderstand the nature of an MVP really and how to properly measure its impact. Secondly, some entrepreneurs mistakenly believe the lean startup methodology teaches users to build products without any upfront user research. This can lead to building products for market opportunities that may not actually exist, resulting in false starts, misguided pivots and, in many situations, failures. However, these entrepreneurs fail to realize building a true lightweight MVP and accurately measuring feedback is actually a powerful user research tactic done early in the process.
Lean Startup’s 2016 Refresh
While the lean startup methodology has many more positive attributes than not, its time for a 2016 update to make sure all entrepreneurs correctly employ the methodology. These three updates can make lean startup more effective for today’s innovators and entrepreneurs.
- Clarify essential terminology
The goal here is to eliminate confusion around the definitions of essential methodology terminology, namely build, pivot and MVP.
- BUILD – As stated earlier, innovators who have used lean startup often interpret “build” too literally. Learning should always precede building. Moving forward, entrepreneurs should understand “build” does not necessarily mean building and launching a piece of technology. Build could simply mean writing a description of what you’re trying to do or creating a survey to gauge interest. Simply put, a lean startup build doesn’t necessitate engineering a tangible product.
- PIVOT – Many lean innovators struggle with the pivot; specifically, knowing when to pivot. The build-measure-learn feedback cycle sits at the core of the lean startup methodology – once you’re through, you’ll either refine your product or pivot to a new approach. However, startups often make the mistake of pivoting too early or too often, without giving an idea enough time to gain traction in the marketplace. Implementing one or two product releases may not deliver sufficient data to guide a smart pivot. Typically, this happens when a business tries to prove too much, instead of proving an entire business model, focus on a single metric that proves the viability of your product. Innovators should pay attention to the data, but make sure it’s significant enough to take a next step.
- MVP – A recent Innovation Leader survey found “showing products to customers before they are ‘baked’ or ‘polished’” created the largest barrier for large companies adopting a lean startup approach. While this may not be a huge drawback for early stage companies, it’s important for larger companies to understand a minimum viable product does not mean unpolished or off-brand. Minimum simply means, lean or lightweight in features and functionality – not devoid of value or brand identity. Simply put: don’t over-build, don’t over-plan and don’t assume you understand what your users want. Instead of spending months or years planning an innovation project based on assumptions, build in small increments and then react to user reception.
- Test the why, rather than the what
Although the methodology alludes to this, it’s essential to reinforce the importance of testing the “why” rather than the “what.” Instead of thinking, “How can we create a leaner version of the credit score?” for example, think, “Why are we trying to create a leaner credit score in the first place?” Instead of coming up with a product you think people want, use the lean startup methodology to build a product that focuses on a customer pain-point and backtracks to the solution. While this might present the appearance of a longer build cycle, researching the cause of marketplace pain will actually smooth your path to product/market fit in the long run.
- Add a fourth step: Amplify
Lean startup typically results in great products ready for marketplace adoption, but the build-measure-learn cycle does nothing to actually implement product success. In today’s competitive tech landscape, the “If you build it, they will come” mindset simply no longer applies. Innovators must add a fourth step to that cycle: amplifying the insights they learned through iterative development to acquire users, consistently generate new business and gain sustainable traction. Gabriel Weinberg and Justin Mares’ approach to traction marketing adopts lean startup philosophies and applies them to digital marketing in order to drive users to the product built using an agile approach.
Regardless the method you use, gaining early adopters, customers and feedback is crucial to the survival and ongoing sales of your product.
The agile approach introduced by the lean startup methodology has worked for many startups and corporate innovation projects over the last eight years. Moving forward, by truly understanding essential methodology terminology, testing assumptions and adding a fourth step to amplify the messages, lean startup can be even more helpful for entrepreneurs and innovators for many more years to come.
Geoff Wilson is the President and founder, 352 Inc, an Atlanta-based digital product development and marketing agency with offices in Tampa and Gainesville, FL.