An Ultimate Guide to Lean Startup Methodology

Lean Startup Methodology was introduced by Eric Ries and is practiced by most of the startups in Silicon Valley, startups in India and businesses across globe, while testing a business model or any hypothesis a brand wants to make a decision on. 

The Background: 

The Lean startup methodology is inspired from Toyota’s agile approach to manufacturing known as lean manufacturing. Taiichi Ohno, father of the Toyota Production System, used different principles to create Lean Manufacturing Systems, which helped to reduce assembly waste, minimise inventory throughout assembly line, identify gaps or imperfections in assembly line and get finished product out as quick as possible to test in the market.  

Lean Manufacturing is a process that values the ability to change quickly. 

What is Lean Startup Methodology?

A lean startup method is a method used to found a new company or introduce a new product in the market, test it as quickly as possible, iterate it and discover if the product/business model is viable.  

The lean startup method advocates developing products that consumers have already demonstrated they desire so that a market will already exist as soon as the product is launched.  

Lean startup is a method which favors experimentation over elaborate planning, customer feedback over institution and iterative design/product releases over big design/product development.  

This methodology is not only applicable to companies who are introducing a product in the market, but it can also be applied to an established product/company to test different variants/features. 

Lean startup approach allows to learn quickly about your hypothesis, test it and iterate it from the validated learning & feedback. The concepts, “minimum viable product” (MVP) and “pivot” are practiced by many business to grow. 

What is Minimum Viable Product (MVP)?

A minimum viable product commonly known as MVP is the version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. In other words, it’s a product with enough features, to attract customers to validate a business idea at the early stage of development. 

The goal of MVP is to test fundamental business hypotheses and begin the learning process as quickly as possible and enhance it. 

What is Pivoting?

Pivot in startup world is is a structured course correction designed to test a new fundamental hypotheses about the product, strategy & engine of growth.

Example Groupon: When the company was started, it was an online activism platform called the point. 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. 

So know let’s go back to Lean Startup Methodology.

3 Stages of Lean Startup Methodology

Stages of Lean Startup Methodology

Let’s understand each stage in detail

Lean Startup Methodology