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Have you ever heard the phrase “fail fast, fail often”?
Well, it sounds daunting, but that is the essence of Lean Startup Methodology (LSM). It is a relatively new approach to launching products and services that help companies reduce their risk of failure and move faster toward success.
Today, we'll discuss what LSM is all about and how you can use it to innovate faster and smarter.
We'll also touch on the three core principles of LSM: learning, testing, and validation.
First, let's look at the main idea behind this methodology.
LSM is a practical approach to product development that focuses on rapid prototyping and iterative testing to validate whether an idea is worth pursuing.
It encourages a culture of experimentation and learning, allowing companies to move faster and wiser toward their goals.
This method reduces the time and money spent on product development by helping entrepreneurs validate their ideas and pivot quickly when needed. It also allows for more efficient use of resources, which is particularly important for startups with limited capital.
Instead of investing in costly market research, companies can use LSM to test their hypotheses quickly and either move forward or scrap the idea entirely.
Instead of blindly investing in a product that may not be successful, LSM helps companies focus on validating their assumptions and improving their products iteratively.
And that's the key.
To innovate, companies need to learn quickly, test their ideas continuously, and then validate their hypothesis before investing further.
In short, LSM is a process for entrepreneurs to quickly and efficiently turn ideas into successful products or services.
At its core, LSM is based on three fundamental principles: learning, testing, and validation.
The first step is identifying the riskiest parts of the business model and then conducting experiments to validate those assumptions. You can do this through market research, customer feedback, or user testing.
Once the riskiest assumptions have been tested and validated, the next step is to quickly test the product or service with a minimal viable product (MVP).
Doing so helps companies get early feedback on the product and make changes as needed.
Once the MVP has been tested, the company can move on to the next step in the process –– testing additional features and improving the product.
This is where companies can begin to iterate and refine their product or service to improve and make it more successful.
Finally, the last step is iteration and validation. This is where companies can continually test, refine, and validate their product or service to ensure it meets customer needs.
Now that you understand what LSM is and how it works, let's look at the five fundamental principles that make this methodology successful.
In short, the five principles are:
Let's explore each of these in more detail.
LSM encourages an entrepreneurial mindset, which is the belief that anyone can be an entrepreneur. To innovate faster, companies must embrace the idea that anyone can contribute new ideas, challenge existing assumptions and take risks to create something valuable.
Some of the most successful businesses in the world were born out of a culture of experimentation and risk-taking.
Instead of relying on one individual to come up with the next big idea, companies should encourage their employees to take risks and experiment.
You can do this through hackathons, workshops, or even just by providing the space and resources for employees to explore new ideas.
Some other ideas might include the following:
Ultimately, this philosophy encourages companies to find the entrepreneurial spirit that already exists in their organization and unlocks it.
It's not enough to have an entrepreneurial mindset; companies must put the right processes and policies in place to ensure success.
This means having a clear plan, setting achievable goals and objectives, monitoring progress, and adapting as needed.
At its core, LSM is about taking an iterative approach to product development and management. Companies should start with a minimal viable product, test it quickly and often, and then iterate on the product based on customer feedback.
This approach allows companies to validate assumptions quickly, identify problems, refine their product, and ultimately create something customers love.
LSM is all about learning from customers through experimentation and feedback. To validate assumptions, companies should use a variety of methods, such as:
The goal is to get customer feedback to help inform product decisions and ensure that the company builds something customers want.
To measure the success of a product, companies need to track metrics closely. This is known as innovation accounting and involves tracking key metrics such as customer usage, engagement, revenue, and churn.
By tracking these metrics over time, companies can gain valuable insights into the performance of their product, which can help inform decisions and drive innovation.
This is the core of LSM and involves testing a product idea quickly and cheaply, measuring customer response, and then learning from that feedback.
The goal is to find a working product-market fit as quickly as possible. You can launch a Minimum Viable Product (MVP) and gather customer feedback.
The key lies in moving quickly, testing often, and using customer feedback to refine and improve the product. This allows companies to innovate faster and more intelligently and ultimately create something customers love.
For example, Dropbox started with a simple video demonstrating how to use the product. This helped them quickly validate their assumptions and identify problems before they spent too much time and money on a product that wouldn't work.
Before implementing the Lean Startup methodology, one must understand some key concepts and principles. Here are some commonly asked questions about LSM:
No, the lean startup is not an agile methodology.
While both have similar goals of innovating faster and smarter, they differ in approach. Agile focuses on continuously adapting and refining processes.
At the same time, a lean startup quickly tests assumptions and learns from customer feedback.
The LSM approach allows companies to quickly validate assumptions and identify problems before investing too much time and money in a product that won't work.
Additionally, it helps companies create something that customers love by rapidly iterating on their products based on customer feedback.
The critical steps of LSM involve the following:
These steps will help companies quickly and effectively innovate faster and smarter.
The five whys is a technique used in LSM to help companies identify the root cause of a problem.
The idea is to ask “why” five times to get to the root cause of the problem. This helps companies quickly identify and address issues before they snowball.
For instance, if a company is having difficulty launching its product, the first “why” might be, “Why aren't we able to launch our product?”.
The subsequent questions would then be:
By asking “why” five times, the company can identify the root cause of the problem and take steps to address it.
Companies can create products that customers love by testing ideas quickly and cheaply, gathering customer feedback, and iterating on the product based on that feedback.
Additionally, by using tools like the five whys, companies can quickly identify and address problems before they escalate.
Ultimately, LSM is a great way to create successful products with minimal risk.
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