3 Ways to Cut the Fat – Get the Skinny on Lean Startup Methods for Your Business
The “lean startup” is a trend in the business world that’s growing rapidly. Lean startup methods encompass a way of doing business that focuses on gaining customer feedback in real-time, allowing businesses to make more informed and successful decisions.
Lean Startup Methods vs. Old School
Many years ago, AKA old school, the only way to start a new business was to write a lengthy business plan, get an expensive business loan or pitch to investors, then start it up and work as hard as you could to make it work!
However, the high level of financial obligation involved with this method makes it risky, and often unaffordable for most people. In fact, research by Harvard Business School’s Shikhar Ghosh shows that an astounding 75% of all startups fail. With this in mind, the idea of starting a business in the traditional sense can be overwhelming and risky.
When Spending Less Can Pay Off More…
However, times are changing, and the business world is changing constantly too. It’s no surprise that many people are moving away from the riskiness of an expensive business loan and more towards the benefits of a lean startup.
Many new startups are adopting lean startup methods to initially test the product, with low-cost testing and implementation methods. Outsourcing for startups is another effective way to get the work done initially at low cost (if done the right way!).
Before Spending, Test First
When I started WebsiteFix, I adopted some lean startup methods by launching my website first to test the market. Rather than renting a big office and investing a huge chunk of money, I tested the idea first. To offer SEO consulting, I first decided to get my own site to page 1 of Google to prove the point that if I can do it for myself, I can help others, too.
I started doing SEO on my site, and the site got on the first page of Google for my target keywords. After two years, it still ranks top of first page of Google for “SEO Services Brisbane.” This gave me an advantage over others, and I started getting inquiries from potential clients. Further, it was a low-cost investment start – I was only working from home in the initial stage, and all the inquiries were originating from the website – no office was required! I took the customer feedbacks on board and improved things in my business before I started the SEO consulting work full-time.
A Tale of Two Businesses and Their Lean Startup Methods
There are many well-known organizations that have achieved success with this model. Here are two of them.
As many are aware, Dropbox is an online “cloud” storage system for documents. Instead of initially spending a large business loan on developing the platform, they used real-time testing to see whether or not the business would succeed. They did this by initially developing a short screencast that illustrated to customers what the potential program would achieve.
Potential customers responded to the product by signing up on a waiting list, which allowed the Dropbox creators to identify demand. This not only confirmed viability of the product, but also ensured an initial customer base when they launched.
Airbnb is one of the largest accommodation companies in the world, yet it doesn’t own any property. It has changed the way that accommodation is viewed, and also brought more change into the “sharing economy” industry. Airbnb also started using this business model, and their idea came from developing a solution to a personal problem they had.
The founders had a problem. How could they pay the rent on their San Francisco loft? They looked around and then realized that a major design conference was scheduled in San Francisco, and all the hotels were booked solid! Their solution achieved instant success and provided validation for their idea.
3 “To-Do” Lean Startup Methods for Businesses Today
Thankfully, there are many ways that people who want to start a business can learn from successes such as Airbnb and Dropbox.
1. Rethink the standard business plan.
Bulky business plans leave plenty of room for unnecessary information. Lean Stack is an online platform that changes the way business plans are made by allowing users to develop modern one-page plans.
2. Real-time customer research.
Have an idea for an awesome product? Make a few, and take the idea to your local markets, within your chosen target market, and test the response from customers in real-time. This will allow you to get an idea of the potential success of your product before you continue.
3. Use customer feedback.
Make notes of all the comments for change you receive from people who interact with your products, and take these into consideration when you proceed with your business.
Lean Startup Methods Let You Build What People Want
From the Lean Stack website, this quote sums up everything concisely: “Life’s Too Short to Build Something Nobody Wants.”
Keep this quote in mind, because it sums up the importance of the lean startup – it allows for real-time testing and validation of a product or service before too much commitment is made. It can be predicted that as the business world continues to evolve, this business model will increase in popularity.
Ready to turn the key with these lean startup methods? Share your thoughts and experiences in the comments!