Business Plan

Basics of the Lean Startup

lean start up
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The ideas behind the lean startup model are excellent tools for financial planning and forecasting for all startup businesses, not just those who are developing a new to market product. Using actionable metrics at each stage in product or business development, businesses can make small, incremental changes and develop the agility to change course midstream or adapt to new technologies or market forces.

For startups concentrating on new product development, the first idea is the minimal viable product. When a market need is identified, the minimal viable product that can meet that need is developed. And then the product is further refined and developed by using crowdsourced feedback.

Gathering actionable metrics means the product is tested in small ways by a wide variety of people, and their feedback is solicited. When the Drumi was being perfected, after their successful Kickstarter campaign, they gave prototypes to people doing their wash. Detailed interviewing after use showed that the majority really liked the machine, but suggested a carrying handle. When people across the world, in Africa and Canada, both suggested a carrying handle would make the machine easier to use, the developers went back to the factory and redeveloped the prototype to include a handle. This change delayed shipment of their first production run by nearly six months, but they detailed the process and the changes on their website, so those who are eagerly awaiting their new Drumi will probably check out the new handle as soon as they open the box.

The goal of a startup is to develop a sustainable business by developing a product, making money, or meeting a service need. In the current business environment, agility is the key to this sustainability. Using metrics to measure feedback early during product development is the first step in startup development using the lean model.

 

 

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