Regardless of the type of startup you're talking about, or even the industry that it's operating in, many organizations begin life in the exact same way: with an idea for a product that they think people are going to want. At that point, they spend months - and in some cases, years — perfecting that product internally without ever showing it to the people they hope will one day buy it. Then, when it's finally ready to be released to the public, a lot of these startups experience the same fate: They fail to make an impact because they didn't create a solution at all. They spend time, money and energy coming up with a solution in search of a problem, instead of the other way around.
A Lean Startup, in many ways, is essentially the exact opposite approach to this idea.
A Lean Startup is one that teaches you how to grow a business with maximum acceleration, all while making sure that you don't wind up in a situation like the one outlined above. It's a principled approach to new product development that is based on feedback and communication — and it's one that may just mean the difference between success and failure for the company that you're currently trying to get off the ground.
The Art of the Lean Startup Approach
Generally speaking, one of the key ingredients to the Lean Startup approach is a build-measure-learn feedback loop. This may sound complicated, but in reality, it's quite straightforward.
First, you begin by figuring out what problem needs to be solved — what issue your audience is facing that you alone have the answer to. Then, you develop what is called an MVP, or "Minimum Viable Product." By design, it's not perfect — it just has to solve the problem you identified at the start of the process.
Once that Minimum Viable Product exists, you then spend time fine-tuning it and developing it further and, slowly but surely, turning it into that perfect product that you (and your customers) want over time.
All throughout this process, you continue to measure actionable metrics that demonstrate cause and effect and you learn from that insight to make your product better. You release an MVP, you give it to your customers, you find out what they like and don't like by asking them. You then take that information, make changes, and repeat the process by continuing to run experiments that allow you to test (and validate) each element of the core vision you founded your business on in the first place.
All of this is important because it essentially changes what we know about startups to begin with. According to the "old-fashioned way" of starting a business, the first thing you need to do is create an objectively perfect business plan — a document that's written in stone that outlines what you're going to do, how you're going to do it, and how long it's going to take.
The problem is that you don't have the type of crystal ball that this document requires. It's a "best practice" based on the idea that it's possible for you to not only identify the unknown challenges that you're going to face over the next five years ahead of time but also figure out solutions before you find yourself in those situations.
The other core issue with this method is that, once again, your business plan is put together without ever talking to the people who matter the most: your customers.
The Lean Startup changes all that, giving you access to everything you need to get off the ground and start engaging with the people you're actually trying to help as soon in the process as possible. You're acknowledging that your idea didn't begin life in perfect form but, together with your customers, you're going to eventually make it perfect regardless of how long it takes. It emphasizes nimbleness and speed and a dash of humility as well and, make no mistake, more startups could stand to learn from all of the lessons that this modern-day approach to running a business can't help but bring with it.
Frank Jenkins, CPA writes for CountingWorks, an accounting news and advice website. Reach him at [email protected].
About Frank Jenkins Jr
Frank Jenkins Jr. CPA is the managing partner of Adams, Jenkins & Cheatham, a CPA practice based in Midlothian, VA. Frank specializes in Consulting services, tax planning, audit & assurances. "I genuinely care about our clients because I have a personal connection with them." He is active in the community and belongs to the AICPA and the VSCPA.
