Is Lean Startup Methodology Still Relevant in 2021?
The Lean Startup by Eric Ries has been considered the defacto playbook for launching a new product or company by the technology industry to many years. But is Lean Startup Methodology still relevant today? Let’s explore that:
If you’re not familiar with the Lean Startup by Eric Ries, it’s long been the book that aspiring entrepreneurs use to launch. It includes a methodology for quickly getting a product to market, exploring product-market fit, and rapidly getting to revenue. Times have changed since the book was written though, and the question on everyone’s mind has been – is the Lean Startup methodology still relevant? The answer is more complex than a yes or no, unfortunately.
The first step if you’re interested in launching a startup today is to educate yourself. The Lean Startup is a phenomenal way to start applying rigorous thinking to your startup idea. If you’ve never read it, we strongly encourage you to start there. The rest of this article presumes that you have read the book. If you’d like to read it, click the link below. It’s available in audio, digital and print formats.
When starting out in school, would you try to jump right to your final exams without first learning the material? Certainly not. The Lean Startup Methodology is the same concept – you shouldn’t jump to a final version of your product to see if your customers would actually buy it. The Lean Startup Method is essentially applying the scientific method to building a business. You build a minimum viable product, test the market’s response, then iteratively improve upon it. After each build cycle, you stop to collect user feedback. You ensure the product is solving the intended problem. You make sure that someone will pay you money for it.
The Lean Startup Methodology was invented by Eric Ries to help startups make use of their scarce resources to figure out what their customers will care about with as little time and money as possible. It’s much easier to gather customer feedback early and often, then integrate it as you build the startup than it is to launch a finished product, only to discover that it’s not solving the pain point of your customer.The Lean Startup is fundamentally about reducing risk when launching a new company or product. A huge percentage of new companies fail, and that’s commonly because they didn’t do enough research or testing before launch. Let’s look at the key arguments that Eric Ries makes in The Lean Startup which comprise
Lean Startup Methodology:
1. Launch as quickly as possible.
This is one of the core tenets of the Lean Startup methodology. The argument is that if you spend time polishing your product, you won’t get customer feedback soon enough. The product should essentially be as raw, and bare-bones as it can be to get someone to pay you something for it. This last point is key. If the product isn’t done enough to be salable, you’re not learning anything by “launching” just yet. That can mean actually putting some work into making the product look good, and operate smoothly, if and only if your customers demand that polish.
Is this thinking still relevant? Yes, but it depends on the product and industry. It’s a lot easier to get to a product that will be salable if you’re building software than it is for hardware. And, it’s a lot easier to get to a salable product in hardware than it is biotech. Ask yourself this question: is my product good enough to start showing off to customers? If the answer is yes, it’s probably also good enough to sell. Get your customers to pay you money for the product, or get them to tell you what it would take to get them to. That’s the most important piece of information you can have.
2. Build-Measure-Learn Feedback Loop
This exercise is the cornerstone of the Lean Startup Methodology. How could you know if your customers like your product without showing it to them and finding out. Some entrepreneurs are famous for building a generational product that is fundamentally new. Chances are excellent though that you’re not Steve Jobs building the first iPhone, or Henry Ford making the first production automobile. Assuming you don’t fall into that camp, you MUST find out what your customers think of your product. That’s fundamental to actually selling the product, and should not be put off.
The Build-Measure-Learn feedback loop posits that you should build an iteration of the product, show it to customers and collect their responses. Then, you need to learn everything you can from that experience – what did they like and what didn’t they like? What makes them happy about the product, and what do they wish the product did? Most importantly, what’s standing between where the product is now and getting to revenue? Do the work to understand these questions, and do it as early as possible. You’ll have a closer relationship to your target market, and you’ll never build something that people don’t want.
3. Quit what’s not working
Founders of companies are notorious for building products they love, and therefore they fall into the trap of being in love with their product or features of the product that the customer may or may not care about. The willingness to change based on customer feedback is one of the key takeaways of the Lean Startup, and it’s absolutely still relevant today. Spend more time on customer feedback, and less time building.
Fundamentally, founders need to put their egos aside and talk to customers with open minds. Feel free to help your customers understand the product or features if they don’t, but be sure you’re capturing that communication failure and finding a way to fix it. The best products and features are intuitive and don’t need training or an explanation. If you built a feature that customers just don’t understand, or a product that’s not the right fit for the problem, don’t be shy about killing it and trying something else. You can’t force product market fit.
4. Start with a Minimum Viable Product (MVP)
A minimum viable product (or MVP as it’s known in startup circles), is the simplest version of the product that you can build that solves the problem you’re working on. That means that it’s devoid of polish, that it’s bare-bones, and lacks many of the features that you’d envision for the final product. For software, that likely means that the user interface is still clunky, or buggy, and that only the core problem solving feature is built. For hardware, that means using a 3D printed rather than molded product, and generally hacking your way to functionality by any means possible. Do things that aren’t scalable to get to revenue, then figure out how to scale later. That can mean selling products at a loss, making personal sales calls, and holding your customers hand throughout the product sales cycle.
For most industries and products, the concept of an MVP is absolutely the most rational way to go about building and launching a product. If you’re building a product that lives will depend on, or that isn’t salable, you need to get it to a place where it is. The whole concept of a minimum viable product is essentially the minimum salable product – what’s the simplest thing that someone will give you money for. Get to that and you’ll have something that’s interesting to investors, and to your target market.
In chart form, the Lean Startup Methodology can be visualized as below.
This chart is particularly useful in understanding how the Lean Startup Methodology fits into Design Thinking and Agile development.
So, is Lean Startup Methodology still relevant in 2021?
The bottom line is that yes, nearly all the principals of Eric Ries’s Lean Startup Methodology are relevant and useful today. Not all of the recommendations are useful or even possible for all businesses, but that was never the point. If you read the Lean Startup, you’ll gain a clear understanding of the Lean Startup Methodology, and you’ll be able to apply those lessons to your business.
The book has aged extremely well, which is a testament to the foundation that Eric Ries built it on. If you’re starting a technology company, the Lean Startup should be required reading. If you’re starting a company in any other industry, it’s certainly recommended reading, and you’ll be able to make your company run better, and cheaper, while understanding what your customers want.
If you’d like to learn the Lean Startup Methodology, click the link below to buy the book on Amazon.