An Introduction to the “Lean Startup” Mentality and How To Apply It
Posted on 10/04/2018
In the years following an economic recession, owning a startup business can be precarious. The market is fickle, and revenue sources that existed yesterday may dry up tomorrow. The "sure thing" is now in the past. Take heart, entrepreneurs, for all is not lost. A sluggish economy is a great opportunity to trim the fat and make your operation run more efficiently. The Lean Startup mentality can help your business cut costs and meet profit targets.
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What Is the Lean Startup Mentality?
The Lean Startup mentality is a business strategy whereby entrepreneurs briefly narrow their focus and zero in on details. A company using the Lean Startup mentality will rotate product lines frequently in order to bring in new customers. The Lean Startup approach encourages a business to rapidly try multiple approaches in order to see what products and strategies work. It is founded on several core principles: the idea that anyone could be the next great entrepreneur, regardless of who or where they are; the importance of mentorship
and input from backers, partners, and investors; an emphasis on learning how to run a business rather than how to create a product; a new accounting system that counts achievements rather than money; and the ability to measure initial results and learn from them.
The Lean Startup mentality is about building a business that can weather any economic storm, and learning how to come up with a winning game plan. Rapid testing of new products is a core principle - the less time you spend trying to figure out why something doesn't work, the more time you will have to market a product that does work.
How To Apply The Lean Startup Mentality
The Lean Startup mentality doesn't just have to be for startups. Established small businesses can make use of this approach to maximize revenue and find great business strategies. To apply the Lean Startup mentality, first review your corporate vision. Lean startups regularly test their corporate vision to see how well it paints a picture of reality. They make use of market analytics to identify their unrealistic expectations, and invest more time and effort on what has already shown returns. Lean startups also have a long-term view of profitability. Forget about profit in the short-term. Drill down and focus on your products, your model, and your approach. Learn as much as you can about the people who are buying your products. For example, why did they buy your product? How much money did it cost to create the product? How much did the customer spend to get the product? Focus on product marketing and identify niches in your current customers' lives where you could create a new product to meet a need.
Lean startups practice validated learning. They identify an objective (for instance, discovering if a product is in demand), quantify a result that would mean the objective has been met (100 sales in a month means the demand is present), attempt to meet the objective (market the product to their target audience), analyze the data (did the audience have a need for the product), and improve upon their idea based on the results (why did or didn't the product meet the audience's needs?) By applying this learning method, startups are able to evaluate what worked and why, then replicate it.
The Lean Startup mentality can be a great tool for any business. The key is to be open to changing your approach when you receive poor results. The Lean Startup strategy embraces failure as an integral part of the learning process; after all, the best way to improve upon a product is to change the components that aren't working. By making use of the Lean Startup approach, business owners can learn how to make their operation run more efficiently - and that means a healthier bottom line.