Launching new business/software is mixed baggage of opportunities to excel and risks taken which might or might not work.
Previously before launching any business or startup, a massive amount of time was spent on preparing a business plan, investment, gathering a team and so forth. The main flaw in this is a major amount of work was done even before any verification whether their business/software was going to make any difference to the customers or business who were being targeted.
This flaw is addressed in PDCA model.
Plan Big, Design Small, Test/experiment in real time and change it accordingly
This is ideal for any startup, a tech startup or small business and even for any experimenting initiative taken in any large corporation
Advantages of using this methodology are:
- Does not need much space, personnel, and planning
- Investment required is considerably less
- Risk factor is comparatively less
The Main criterion needed in this methodology is the Willingness to Adapt /Change as required with time.
The Lean Startup Methodology is an improvised version of PDCA. It is considered as a new strategy for the 21st century. It addresses the 5 constraints faced by startups earlier.
- Long development time
- High cost of finding the first customer or high cost for getting the wrong product
- Few people were willing to take risk to find and work with startups
- Investment in startups
- Expertise found in scarce
Firstly, when there is an IDEA to be developed and instead of writing a business plan, they summarize their hypotheses in a framework called a business model canvas. This is how a company creates value for itself and its customers.
Secondly, ‘Get out of the building’ approach to customer development is used to test their hypotheses. They go out and ask potential users for feedback on all aspects of the business such as features, pricing, distribution channels and customer acquisition strategies. With this customer’s input assumptions are revised and the cycle starts again redesigning, testing and checking in real time.
Thirdly, ‘Agile Development’ is adapted. Agile development works hand-in-hand with customer development. Product is developed iteratively and in increments thereby decreasing the wastage of time and resources
The main difference in Lean Startup is customer’s input is given first priority from day one of inception whereas before only beta versions were released to the customers.
The lean approach makes sure the products launched are as per the customer’s requirement in less cost and quickly than before thus making startups less risky. The combination of this is making people test themselves being entrepreneurs.
With internet boom, information is available at the fingertips compared to earlier times when information used to trickle down during conversations with people trying hands in new things. Now the task is sorting from all the information available to the ones which would be viable for you.
— Team SoS