Startups face many challenges and only the best go on to become successful companies. One issue that holds traditional startups back is that they often start with a product idea and then build it without making sure there is a market for it. Often, a startup will fail because it does not deliver something that people actually want.
A lean startup attempts to solve this problem scientifically by using specific principles and processes. The idea of a lean startup comes from Eric Ries, who has written extensively on it in a book and a website. According to him, there are five main principles for creating lean startups:
1. Entrepreneurs are everywhere
There are many types of entrepreneurs and startups. Tons of opportunities exist that entrepreneurs can take advantage of to build a successful business.
2. Entrepreneurship is management
Startups need management just like any company. However, lean startups have a unique type. Having flexible, learning oriented management makes for a successful lean startup.
3. Validated learning
Lean startups primarily serve customers with their products. They adapt to the needs of the target market by learning exactly what it is that customers want. Through experimentation, they find what works best.
4. Innovation Accounting
Lean startups keep detailed records of tests and analysis to figure out what works best. They gauge progress on the amount learned about the innovation rather than the amount of new work created.
Lean startups hit the ground running by building the simplest product that does what it should, called the Minimum Viable Product (MVP). This goes through rigorous evaluation through tests and user feedback to collect data on how targeted users accept the product. If it works, then they learn from the feedback and make it better in an iterative process.