DIGITAL ASSIGNMENT-2

Name – Mohammad Samme

Reg. No. – 20BCB0046
Course – MGT1022 – Lean Startup Management
Faculty – Dr. Saurabh Gupta

1. What is the Minimum Viable Product (MVP), give detailed insights by

selecting a new product, and how does it play a significant role for an
early start-up?

Sol.:

A Minimum Viable Product (MVP) is a product that has the bare minimum of
functionality required to be usable by early adopters, who can then offer feedback
on how to improve the product in the future. An MVP is intended to test the
fundamental premises of your product concept and to gather as much information
as you can about the needs and desires of your target market.

A personalized meal planning service driven by AI MVP:

This MVP would be a straightforward web tool that leverages AI to assist
customers in creating custom meal plans based on their dietary requirements,
preferences, and spending limits. It might debut with just a handful of features,
like:
• User profile: The user would make a profile with information about their
dietary requirements, tastes, and spending limits. The AI would make use of
this data to produce customized meal plans.
• Meal planner: Based on the user's profile information, the meal planner
would create a customized food plan for them. The meal plan would contain
grocery lists, cooking directions, and recipe cards.
• All the ingredients required to prepare the meals on the meal plan would be
listed on the grocery list. The person
The team could solicit user input after the MVP has been released to learn more
about users' requirements and preferences. They might utilize this input to
improve the product and create new features, like:
• Users might monitor their advancement toward their nutritional goals using
the progress tracker. This can entail monitoring their calorie intake,
macronutrient intake, or weight reduction.
• Meal plans that users have saved and shared will be available to users. By
doing so, they would be able to reuse the meal plans in the future or
distribute them to friends and family.
• Connection with other health and fitness applications: The meal planning
service could be combined with other applications for tracking calories and
exercising.
The personalized meal planning service driven by AI For those attempting to eat
more healthfully or reach their dietary objectives, MVP has the potential to be a
useful tool. The service can help users stick to their diet and achieve their goals
by utilizing AI to develop customised meal planning.

Flow Chart:
2. Write a review on how the BMI is one of the most important aspects of
developing a business start-up based on the journal provided below.
Download the journal listed below and conduct a comprehensive review
to understand the significant contribution of the BMI approach to LSM.
Journal: The Business Model Innovation and Lean Startup
Process Supporting Startup Sustainability
Sol.:

Abstract:

Business Model Innovation (BMI) is a fundamental aspect of startup

development, driving sustainability and competitive advantage. This paper
explores the critical role of BMI in startups, drawing insights from relevant
literature. It discusses the theoretical underpinnings of BMI, its connection with
Lean Startup methodology, and its contributions to organizational, economic,
environmental, and social sustainability. Through a systematic literature review,
this paper presents a unified theoretical perspective on BMI and Lean Startup
processes, emphasizing their potential to enhance startup performance.

Introduction:
In today's dynamic business landscape, startups face intense competition and the
need for constant innovation. Business Model Innovation (BMI) emerges as a
pivotal strategy to navigate these challenges successfully. This paper aims to
shed light on the significance of BMI in startup development, drawing upon
insights from relevant academic literature.

The Core of Business Model Innovation:

Any startup's success depends on having a well-organized business model. It
offers a simple and unambiguous roadmap for how the business will produce,
transfer, and capture value. Startups can gain a competitive edge by using a
well-designed business model that enables them to quickly adjust to shifting
market conditions and client demands.

Although the idea of a business model lacks a thorough theoretical foundation

in traditional economic and business studies, its practical significance cannot be
understated. A business model is a dynamic framework that must react to
changing market circumstances rather than being just a static blueprint.
A business model is a summary of how an organization develops, distributes,
and captures value. It comprises the company's goods and services, target
market, business model, cost structure, and income stream.
A business model ought to be unambiguous, succinct, and simple to
comprehend. Also, it must be attainable and reasonable. When creating their
business model, startups should carefully consider their resources, capabilities,
and target market.

The importance of a Business Model for Startups:

A business model is crucial for companies for several reasons, including the
following:

• It offers a success road map: A well-designed business model gives

entrepreneurs a clear road map for achieving their objectives. It provides
information on the company's goods and services, target market, business
model, and cost structure.
• Investors are more willing to invest in businesses with a clear business
plan, which aids in attracting investors. Investors can tell that a firm has a
good understanding of how to produce and capture value by looking at its
well-designed business model.

By taking the following actions, startups can create a well-structured

business model:

• Describe the issue: Identifying the issue that the startup is attempting to
tackle is the first step. What are the wants and needs of the intended
audience?
• Make a resolution: After the issue has been identified, the startup must create
a solution. This could entail creating a brand-new good or service or altering
the way an already-existing one is provided.
• Determine the target audience: The startup must decide who its target
customer is. Who are the clients most likely to require or desire the good or
service?
• Create a revenue model: A revenue model needs to be created for the startup.
How will the business make money off of its goods or services?
• Create a cost structure: A cost structure needs to be created for the startup.
What are the expenses incurred in creating and providing the good or
service?
It is critical to test the startup's business model with clients to determine its
viability after it has been created. The startup should also assess and adjust its
business model on a regular basis to make sure it is in line with shifting
consumer demands and market conditions.
Examples of Well-Structured Business Models:

• Amazon: The foundation of Amazon's business strategy is the online sale of

a wide range of goods. Sales commissions, advertising costs, and
membership fees are how Amazon makes money.
• Google: The sale of online ad space is the foundation of Google's economic
strategy. By charging advertisers to display their advertising on Google's
search engine and other websites, Google makes money.
• Netflix: The foundation of Netflix's business strategy is the provision of a
subscription service that grants users access to a library of streaming TV
series and films. Netflix receives money from subscribers' dues.

The Competitive Environment and the Need for Innovation:

Startups operate in highly competitive environments where innovation is the

linchpin for survival and growth. BMI, as highlighted in various studies, is a
response to this escalating global competition. It involves the quest for new
business logics and innovative ways to create and capture value for
stakeholders, including customers, suppliers, and partners. BMI aims to
discover novel revenue streams and redefine value propositions, making it an
indispensable element of startup development.

For several reasons, BMI is significant for startups:

• To adjust to shifting market dynamics: new product and service markets

are always evolving. To stay ahead of the competition, startups must be able
to quickly modify their business models.
• To satisfy consumer needs: Preferences and needs of customers are ever-
evolving. To adapt to the shifting needs of their clients, startups must be able
to modify their business models.
• In order to gain a competitive edge: An effective business plan can provide
startups an edge over their competitors.
• To entice investment: Startups with novel business concepts are more likely
to attract investors.

Examples of startups that have successfully implemented BMI:

• Airbnb: Initially, Airbnb was just a straightforward website where users

could rent out their air beds to tourists. In order to test their business strategy
and determine what clients desired, Airbnb's founders used BMI. They
improved their business strategy and entered new markets, like the rental of
 full houses and apartments. One of the biggest travel companies in the world
today is Airbnb.
• DVD-by-mail service: Netflix began as a DVD-by-mail service. The
creators of Netflix used BMI to design a new business model, which was a
subscription service that offered users access to a streaming library of TV
series and movies. A new market that Netflix entered was original content.
Currently, one of the most widely used streaming services worldwide is
Netflix.
• Amazon: Online bookstores were Amazon's first business ventures. BMI
was used by the Amazon founders to diversify into other product categories
like groceries, apparel, and electronics. Other business models were also
created by Amazon, including Amazon Prime and Amazon Web Services.
One of the biggest merchants in the world right now is Amazon.

Integration of Sustainability:

Sustainability has emerged as a critical consideration for startups in recent

years. The ability to innovate sustainably, whether through incremental steps or
radical changes, is crucial for long-term success. BMI is now recognized as a
mechanism to integrate sustainability into business operations, aligning with the
growing interest in sustainable business models. These models seek to
transform companies into agents of positive change within the economic
system.

For several reasons, sustainability is crucial for startups:

• To live up to consumer expectations: More and more consumers are

looking for sustainable goods and services. Startups with a track record of
sustainability are more likely to draw in and keep clients.
• To get investors: Sustainable startups are becoming more and more popular
among investors. Well defined sustainability strategies in startups increase
their appeal to investors.
• To cut costs: By employing sustainable practices, startups can cut costs.
Startups, for instance, can lower their energy usage and trash generation by
implementing sustainable technologies and procedures.
• Startups can reduce risks by putting sustainable procedures into place. For
instance, implementing sustainable practices can help companies lower their
chance of suffering effects from the climate change.

There are a number of ways that startups can implement sustainable BMI. Here
are a few examples:
• Develop sustainable products and services: Startups can develop
sustainable products and services that meet the needs of their customers and
reduce their environmental and social impact. For example, a startup could
develop a new product made from recycled materials, or it could develop a
new service that helps customers to reduce their carbon footprint.
• Adopt sustainable business practices: Startups can adopt sustainable
business practices throughout their operations. For example, startups can
reduce their energy and water consumption, minimize their waste
production, and use sustainable transportation.
• Partner with other businesses: Startups can partner with other businesses
to develop sustainable products and services, or to adopt sustainable business
practices. For example, a startup could partner with a supplier of sustainable
materials, or it could partner with another startup to develop a new
sustainable product or service.

Lean Startup Methodology:

The Lean Startup methodology complements BMI by advocating a lean and

agile approach to entrepreneurship. It rejects long-term planning in favour of
experimentation and iterative learning. Lean Startup principles encourage
startups to pivot when necessary, aligning with the concept of BMI's ability to
adapt and alter fundamental aspects of the business model.

The Lean Startup methodology is a framework for developing and launching

new products and services quickly and efficiently. It is based on the idea of
building a minimum viable product (MVP), testing it with customers, and
iterating on it based on feedback.

The Lean Startup methodology is based on the following principles:

• Start with a hypothesis: Before building a product or service, startups

should start with a hypothesis about what customers want and need. This
hypothesis can be based on market research, customer interviews, or
personal experience.
• Build an MVP: An MVP is a basic version of a product or service that
includes only the features that are essential to test the hypothesis. The MVP
should be built as quickly and cheaply as possible.
• Test the MVP with customers: Once the MVP is built, startups should test
it with customers to get feedback on their hypothesis. This feedback can be
used to improve the MVP and to refine the startup's business model.
• Iterate on the MVP: Startups should iterate on the MVP based on customer
feedback. This means adding new features, removing unnecessary features,
and improving the overall experience of the MVP.
• Pivot if necessary: If the MVP is not getting the desired response from
customers, startups should pivot to a new hypothesis. Pivoting means
changing the product or service, the target market, or the business model.

The Lean Startup methodology complements BMI in the following ways:

• It emphasizes experimentation and iterative learning: The Lean Startup

methodology encourages startups to experiment with different business
models and to learn from their mistakes. This is essential for BMI, which is a
process of continuous innovation and adaptation.
• It promotes a lean and agile approach: The Lean Startup methodology
encourages startups to build MVPs and to iterate on them quickly. This is
important for BMI, as it allows startups to test new business models and to
adapt to changing market conditions quickly.
• It supports pivoting: The Lean Startup methodology supports pivoting,
which is the ability to change the business model if necessary. This is
important for BMI, as it allows startups to adapt to changing market
conditions and to find the business model that works best for them.

Examples of startups that have successfully used the Lean Startup

methodology and BMI:

• Airbnb: Airbnb started out as a simple website where people could rent out
their air mattresses to travellers. The founders of Airbnb used the Lean
Startup methodology to test their business model and to learn what
customers wanted. They iterated on their business model and expanded into
new markets, such as renting out entire homes and apartments. Today,
Airbnb is one of the largest travel companies in the world.
• Netflix: Netflix started out as a DVD-by-mail service. The founders of
Netflix used the Lean Startup methodology to develop a new business
model, which was a subscription service that gave customers access to a
streaming library of TV shows and movies. Netflix also expanded into new
markets, such as original programming. Today, Netflix is one of the most
popular streaming services in the world.
• Amazon: Amazon started out as an online bookstore. The founders of
Amazon used the Lean Startup methodology to expand into new product
categories, such as electronics, clothing, and groceries. Amazon also
developed new business models, such as Amazon Prime and Amazon Web
Services. Today, Amazon is one of the largest retailers in the world.
These are just a few examples of startups that have successfully used the Lean
Startup methodology and BMI. The Lean Startup methodology and BMI are
powerful tools that can help startups to develop and launch successful products
and services.

Contributions of BMI and Lean Startup to Startup Sustainability:

Business Model Innovation (BMI) and the Lean Startup methodology are two
complementary approaches that can make substantial contributions to startup
sustainability.

Achieve Competitive Advantage:

BMI can help startups to achieve a competitive advantage in a crowded

marketplace. By continually reevaluating and innovating their business models,
startups can identify and capitalize on new market opportunities, while also
remaining ahead of the competition.

For example, a startup that sells electric vehicles may initially focus on the
luxury market. However, as the market for electric vehicles matures and
competition intensifies, the startup may need to pivot to a new business model,
such as offering more affordable electric vehicles or developing subscription
services for electric vehicles.

Experiment and Learn:

The iterative nature of the Lean Startup methodology encourages startups to

experiment with different business models and to learn from their failures. This
can help startups to avoid costly mistakes and to find the business model that
works best for them.

For example, a startup that develops a new mobile app may initially test the app
with a small group of users. Based on the feedback from these users, the startup
may make changes to the app before launching it to a wider audience.

Align with Sustainability Goals:

BMI can also help startups to align their business models with their
sustainability goals. For example, a startup that is committed to sustainability
may develop a business model that focuses on selling recycled products or
offering services that help customers to reduce their environmental impact.
Ensure Long-Term Viability:

Both BMI and the Lean Startup methodology emphasize long-term viability. By
continually innovating and adapting their business models, startups can increase
their chances of success in the long term.

For example, a startup that develops a new social media platform may initially
focus on attracting users and generating advertising revenue. However, as the
social media market evolves, the startup may need to pivot to a new business
model, such as offering premium features to users or developing new ways to
monetize its user data.

Examples of Startups That Have Successfully Used BMI and Lean Startup to
Achieve Sustainability. Several startups have successfully used BMI and Lean
Startup to achieve sustainability. Here are a few examples:

• Tesla: Tesla is an electric vehicle company that has used BMI and Lean
Startup to achieve sustainability. Tesla has continually innovated its business
model, expanding into new markets, and developing new products, such as
energy storage systems and solar panels.
• Patagonia: Patagonia is a clothing company that is committed to
sustainability. Patagonia uses BMI to develop sustainable products and
services, and it has adopted several sustainable business practices, such as
using recycled materials in its products and offering a repair service for its
products.
• Impossible Foods: Impossible Foods is a food technology company that
produces plant-based meat substitutes. Impossible Foods has used Lean
Startup to test and refine its products before launching them to the public.
Impossible Foods is also committed to sustainability, and its plant-based
meat substitutes have a lower environmental impact than traditional meat
products.

Conclusion

Business Model Innovation (BMI) is indeed at the core of startup success, and
its close relationship with the Lean Startup methodology highlights its strategic
importance. The dynamic and ever-changing nature of today's business
landscape demands that startups continually reassess and adapt their business
models. BMI becomes not just a one-time activity but an ongoing, strategic
imperative for startups seeking to thrive in an environment characterized by
rapid shifts and uncertainties.
Startups are inherently positioned at the forefront of innovation, aiming to
disrupt existing markets or create entirely new ones. In this context, the ability
to innovate their business models is a potent weapon. BMI allows startups to
explore uncharted territory, identify novel sources of value, and redefine their
value propositions to customers, suppliers, and partners. This adaptability is a
key factor in their survival and growth.

The Lean Startup methodology further complements BMI by promoting a

mindset of agility and experimentation. Instead of relying on rigid, long-term
plans, startups embrace iterative learning and pivoting when necessary. This
aligns seamlessly with the concept of BMI, as both emphasize the importance of
being responsive to changing market conditions. Startups that can quickly
identify shortcomings in their business models and pivot towards more
promising avenues are better positioned for success.

Moreover, sustainability has emerged as a critical aspect of contemporary

business. Startups that incorporate sustainability into their business models from
the outset are not only more attractive to socially conscious consumers but also
better equipped to address pressing global challenges. BMI offers a framework
for integrating sustainability into the very core of a startup's operations, aligning
it with the broader trend of sustainable business models that seek to drive
positive change within the economic system.