Growth

Rich and Co.

A ‘Lean Startup’ Strategy — HBR

Most startups fail because they waste too much time and money building the wrong product  Key concepts include: 

  • Rather than spending months in stealth mode, a lean startup launches as quickly as possible with a “minimum viable product” (MVP), a bare-bones product that includes just enough features to allow useful feedback from early adopters. The company then continues hypothesis testing with a succession of incrementally refined product versions.
  • Lean startup executives do not invest in scaling the company until they have achieved product market fit (PMF); that is, the knowledge that they have developed a solution that matches the problem.
  • In lean startup lingo, “pivoting” refers to a major change in a company’s direction based on user feedback. 
  • Adhering to a lean startup strategy is especially challenging for companies that require a great deal of time to launch a workable product

the lean startup launches as quickly as possible with what Ries calls a “minimum viable product” (MVP), a product that includes just enough features to allow useful feedback from early adopters. This makes it easier for the company to speed to market with subsequent customer-driven versions of the product. And it mitigates the likelihood of a company wasting time on features that nobody wants.

 

“Pivoting simply means making a major change of some sort

  • “In lean startup logic, it’s something you do, ideally, after you’ve run some decisive test to disprove a hypothesis
  • It can be changing the target customer segments by narrowing or broadening them. It can be changing the product itself, either by adding features or by taking features away. It can be a dramatic change: ‘We were going business-to-consumer, but we should be going business-to-business.’ Or it can be a change in business model: ‘We were doing transaction-based pricing, but we’ve realized we should be doing subscription-based pricing.’
  • The notion of a pivot is to make a change, and ideally, after you pivot, you have a new set of assumptions and hypotheses that you’re going to test. And what we’re learning in the course is that pivoting is really hard.”

 

Full article — http://hbswk.hbs.edu/item/6659.html

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Written by Rich and Co.

April 19, 2011 at 8:35 am

Posted in Uncategorized

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