{"id":1071,"date":"2019-02-21T13:00:21","date_gmt":"2019-02-21T09:00:21","guid":{"rendered":"http:\/\/cipr.am\/?p=1071"},"modified":"2025-05-13T19:21:42","modified_gmt":"2025-05-13T15:21:42","slug":"build-grow-startup-lean-methodology","status":"publish","type":"post","link":"https:\/\/cipr.am\/hy\/blog\/build-grow-startup-lean-methodology\/","title":{"rendered":"How to Build and Grow Your Startup: The Lean Methodology"},"content":{"rendered":"

Starting a business requires you going through several steps: registering your business, hiring a team, rolling up your sleeves and starting the hard work.<\/span><\/p>\n

As for the startups, the business-setting-up procedure is somewhat different if you want to succeed. In this article, I will discuss the <\/span>lean methodology<\/b>. Ever heard of it? Great!<\/span><\/p>\n

1. Lean Startup Methodology<\/h2>\n

It turns out that the<\/span> lean startup <\/b>consists of three components:<\/span><\/p>\n

    \n
  1. Business model design, <\/span><\/li>\n
  2. Customer development, and <\/span><\/li>\n
  3. Agile engineering.<\/span><\/li>\n<\/ol>\n

    And these three components help startups become incredibly efficient, reducing the amount of time required to get to the first product, as well as reducing the amount of cash necessary to build that product. <\/span><\/p>\n

    At the heart of lean methodology is the fact that you need to learn constantly. One of the most important things you will be doing as a lean startup is <\/span>getting out of your office and discovering your customers<\/b>. Drawing your customers on the paper doesn\u2019t work for startups. You need to take your product idea to people and learn what they think about it, if it solves their needs, if they have such a need at all, etc. <\/span><\/p>\n

    One thing to remember, as a startup owner, you’re not smarter than the collective intelligence of your potential customers.\u00a0Let them speak and provide feedback for the success of your business.<\/span><\/p>\n

    Did you know that you need some hypothesis? Brace yourself! <\/span><\/p>\n

    Going back to the whiteboard, come up with some hypothesis regarding your new ideas: is it useful, do they like your idea, would they pay for your idea, how they might use your product\/service, and more. Then, leave your hypothesis bias on the whiteboard and head out to your total addressable people (all of the people who could be potential clients). <\/span><\/p>\n

    Test your main ideas by asking people questions and collecting a lot of data.<\/span><\/p>\n

    In the end, gather your data and come to your whiteboard. You might be rejecting or failing to reject your hypothesis. Whatever happens, remember, you\u2019re learning! You don\u2019t want to prove your ideas right, you want to build a successful business.<\/span><\/p>\n

    Another thing you might prefer to do is use Alexander Osterwalder’s <\/span>Business Model Canvas<\/b>. It\u2019s a nine-box diagram that puts all the hypotheses about your business together: who are the customers, what are you building for them, what’s the channel, how are you going to reach them, and how are you going to make money. Putting all of these data on a single page will provide a framework, and then a scorecard for you to see how we’re doing. <\/span><\/p>\n

    \"BMCanvas_CIPR\"<\/p>\n

    Unlike big companies, you\u2019re not going to execute an initially developed strategy, just but you’re going to test each and every hypothesis you put out there.<\/a> Moreover, It will not be a random test but test with a formal process called <\/span>customer development<\/b>.\u00a0<\/span><\/p>\n

    Now let us understand how to do a formal customer development,<\/span><\/p>\n

    You need to design experiments, run the experiments outside the building, get the data and look for insights. To explain and present your ideas to people and get insights, is by showing customers either PowerPoints, wire frames, clay models, prototypes, at any stage we can. Gather as much feedback as you can! <\/span><\/p>\n

    Most of the times your hypothesis will turn out wrong. When happened so, <\/span>you shouldn\u2019t fire people but you fire the plan<\/b>. Change your hypothesis and move on! This procedure of changing the hypothesis is known as a <\/span>pivot<\/b>. \u00a0\u00a0<\/span><\/p>\n

    A pivot is defined as a substantive change to one or more of the business model canvas components. If it’s a minor change we call it an iteration.<\/b><\/p>\n

    Pivots are opposed to established and large companies. What you would normally do in the latter case, you would fire the VP of Sales if their assumptions were wrong. <\/span><\/p>\n

    In a startup we fire the plan. I would need to add, that this mindset works for some large companies as well. Moreover, it serves to their benefit.<\/span><\/p>\n

    Let us discuss a little case about f<\/span>iring the VP vs firing the plan in the large company.<\/span><\/i><\/p>\n

     <\/p>\n

    General Electric Case Study<\/h3>\n

    Let\u2019s look at General Electric (GE)<\/a><\/strong>, one of the smartest and biggest companies in the world. GE was about to commercialize some of its high temperature sulfur battery technology. It wanted to offer these batteries to other companies for industrial applications. They had done a great market research report and had pages of where the product should go.<\/span><\/p>\n

    \"General_Electric_Case_study_CIPR\"<\/p>\n

    The CEO was going to give the General Manager, Prescott Logan, $100\u00a0million to just go and build the factories, execute and hire the staff, and all that jazz. He had the technology and the report backed up with data.<\/p>\n

    However, Prescott luckily said that it didn\u2019t feel right for him to merely execute the plan.<\/span><\/p>\n

    \u201cThis doesn’t feel like an existing business, this feels like a startup and we ought to check our hypotheses\u201d, said Prescott Logan. <\/span><\/p>\n

    Thus, he and his customer development team flew around to almost every continent, in fact, every continent in the world, including Antarctica, and discovered that the requirements actually differed by industry segments. Substantially enough that if they would have had a standard factory making standard product, they would have sold none of them because different customers required different packaging, different cooling, and different connectors. None of this was visible from inside the building. <\/span><\/p>\n

    After 18 months, they figured out who the customers were and what they wanted. After that, they started building the factory. And now, a couple years later, they have backlogs for the next three years.\u00a0<\/span><\/p>\n

    ——————————<\/p>\n

    Now what we now know is that <\/span>no business plan survives first contact with customers<\/b>. That means we wouldn’t know whether we were right or wrong until we shipped the product and customers gave us feedback. Otherwise, you waste your time, run out of cash, and ultimately get out of the business. \u00a0<\/span><\/p>\n

    With lean methodology you have a process that allows you to quickly iterate and incrementally build the product, a piece at a time for each increment, as well as learn and discover whether you’re on the right track or not. <\/span><\/p>\n

    Some questions you might ask:<\/span><\/p>\n