Document1 00:46:32Justin Souter Page 1 25/10/2012
Description of Lean Startup
"For those of you who haven’t read the
Lean Startupby Eric Ries, the basic concept behind it is that we have been going about the startup process all wrong.Instead of writing long business plans, raising early funding, and building initial prototypes over thecourse of a year, we need to foster startups that constantly learn and iterate around a minimal viable product.By constantly tweaking, or occasionally pivoting the product, service, and business model in responseto early customer feedback, startups can improve their likelihood of success or at least fail faster and cheaper." http://www.fastcoexist.com/1680269/smart-cities-should-be-more-like-lean-startups
.It is not a prescriptive set of answers, rather a framework for thinking through how to creating
somethingnew under conditions of extreme uncertainty
, with the primary goal being minimising 'time to learning'. I.e.get into the marketplace as quickly as possible, and get feedback from potential customers in order to"Build--Measure--Learn"in an iterative loop. It is a way to harness the energy of young businesses into small,
practical steps and create immediate feedback and momentum.A'minimal viable product'is often the most basic product offering that can be put together - in order gain
feedback from users and test the market. Ideas are less important than the ability to execute on them.A'pivot'is what to consider when market feedback suggests there is not a sustainable business model based
on the initial value proposition. In basketball, a player can change direction by keeping one foot on theground, and moving the other; in Lean Startup parlance, a pivot means keeping in mind the vision for thebusiness, and moving to a new way to realise that vision ("a structured course correction designed to test anew fundamental hypothesis about the product, strategy, and engine of growth", according to Eric Ries).
In many ways, using the Lean Startup approach is about building a 'machine' which continually tests theeducated guesses you have about your business, in order to find a sustainable customer base, marketoffering, and profitable business model.
This is in contrast to the “build it and they will come” model.
Customer Development and Business Model Generation
The Lean Startup is usually considered in conjunction with two other bodies of knowledge - around findingcustomers,and also creating the profitable business model above. Steve Blank,who invested in a business
Eric Ries co-founded, is a successful tech entrepreneur who lectures about how to create successful startupbusinesses.Steve's model, commonly known as'Customer Development'implores business founders to regularly meet
their customers in order to create a product these customers want to buy, rather than that which the