The concept of a ‘Lean Start-up’ challenges the widely prevalent conceptions about start-ups. Entrepreneurship as a field has been highly romanticised. An assumption made very popular by the content we consume through various mediums is that success inevitably follows when you have certain perfect elements. You just need the right idea, at the right time, find the right set of visionary investors, the right team to get the project rolling, the right technology and the right launch of the product, in order to be successful. And often when these new ventures fail, which is highly likely and actually what happens, we blame the absence of one of the above factors.
HOW LEAN STARTUPS ARE DIFFERENT :
The Lean Start-up proposes a very different approach. It is a means to convert your product insights into a great company. This involves focusing on the smaller decisions and details-the ones considered boring- that are made while running the company. This concept offers that entrepreneurship is not very different from management. This approach builds on the previous management and product development ideas like-
- Lean Manufacturing
- Design Thinking
- Customer Development
- Agile Development
There are five principles behind the concept of the ‘Lean Start-up’:
- Entrepreneurs are everywhere
There is no textbook definition of entrepreneurs. An entrepreneur is anyone who works in a start-up. A start-up is defined as ‘A human institution designed to create new products and services under conditions of extreme uncertainty’. This means that entrepreneurs are rampant around us.
- Entrepreneurship is Management
Start-ups consist not only of the institution but also the product being sold. They require a very specific kind of management tailor-made to fit their context of extreme uncertainty.
- Validated Learning
This management occurs through a system of validated learning. Start-ups exist not only to build products and make money but also to learn how to build a sustainable business. This learning must be validated by frequent experimentations that ensure that each element of the entrepreneur’s vision is tested.
This validation is carried out through the Build-Measure-Learn feedback loop. The primary goal of a start-up is to turn ideas into viable and user-friendly products, measure the responses of the customers and decide their approach thereafter- whether they want to Pivot or Persevere. All successful start-up mechanisms must be geared to accelerate this feedback loop.
- Innovation Accounting
This measurement is named Innovation Accounting. There is a need to focus on the ‘boring stuff’ to improve the outcomes of these ventures and hold entrepreneurs accountable. Questions like- How to measure progress? How to set up milestones? And, how to prioritise work? must be answered.
The fact that start-ups require a focus on management can be counter-intuitive. But in order to use our human resources, energy and vision well, we must bring the two concepts together.
This article is written by Halak Pandya for changemakers.space