Lean startup
[1] Central to the lean startup methodology is the assumption that when startup companies invest their time into iteratively building products or services to meet the needs of early customers, the company can reduce market risks and sidestep the need for large amounts of initial project funding and expensive product launches and financial failures.
[10][11] The Toyota Production System pioneered by Taiichi Ohno combined flow principles that had been used by Henry Ford since the early 1900s with innovations such as the TWI programs introduced to Japan in 1951.
[14]: 12 Blank's customer development methodology proposed four steps:[14]: 16–19 In an article published in the Harvard Business Review in 2013, Steve Blank described how the lean startup methodology also drew inspiration from the work of people like Ian C. MacMillan and Rita Gunther McGrath who developed a technique called discovery-driven planning, which was an attempt to bring an entrepreneurial mindset to planning.
[16][17][18] The goal of an MVP is to test fundamental business hypotheses (or leap-of-faith assumptions) and to help entrepreneurs begin the learning process as quickly as possible.
[16] As an example, Ries noted that Zappos founder Nick Swinmurn wanted to test the hypothesis that customers were ready and willing to buy shoes online.
Swinmurn deduced that customer demand was present, and Zappos would eventually grow into a billion dollar business based on the model of selling shoes online.
"[16] The goal of a split test is to observe differences in behavior between the two groups and to measure the impact of each version on an actionable metric.
[2] After receiving almost no traction, the founders opened a WordPress blog and launched their first coupon promotion for a pizzeria located in their building lobby.
Steve Blank defines a pivot as "changing (or even firing) the plan instead of the executive (the sales exec, marketing or even the CEO).
"[22][23] This topic focuses on how entrepreneurs can maintain accountability and maximize outcomes by measuring progress, planning milestones, and prioritizing.
[34] Earlier publications by Osterwalder and colleagues had suggested how to adapt the Business Model Canvas for nonprofit enterprises that depend on raising revenue.
[43] Prominent high-tech companies have begun to publicly employ the lean startup methodology, including Intuit, Dropbox, Wealthfront, Votizen, Aardvark, and Grockit.
[44][6][45] The lean startup principles are also taught in classes at Harvard Business School and UC Berkeley and are implemented in municipal governments through Code for America.
The Federal Chief Information Officer of the United States, Steven VanRoekel noted in 2012 that he was taking a "lean-startup approach to government".
[48] Ries has worked with the former and current Chief Technology Officers of the United States—Aneesh Chopra and Todd Park respectively—to implement aspects of the lean startup model.
[59][9][5][44] The methodology has since been expanded to apply to any individual, team, or company looking to develop new products, services, or systems without unlimited resources.
[16][60][61] Ries' said that his first company, Catalyst Recruiting, failed because he and his colleagues did not understand the wants of their target customers, and because they focused too much time and energy on the initial product launch.
[62] Ries claimed that despite the many proximate causes for failure, the most important mistake was that the company's "vision was almost too concrete", making it impossible to see that their product did not accurately represent consumer demand.
[64][65][66][67][68][69][70][71] Trey Griffith, the VP of technology at Teleborder, stated in 2012 that the majority of backing for the lean startup methodology was anecdotal and had not been rigorously validated when first presented.
However, he went on to note that better support of the method comes out of a 2011 analysis of the factors of success in growth companies as described in the 2011 book Great by Choice.
[74] Other scholars, including Wharton's Dan Levinthal, argue that many of the insights of lean startup have already been anticipated by the technology evolution, organizational learning and other literatures.
