How the ‘Lean Startup’ Methodology Can Help Grow Your Business

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How the ‘Lean Startup’ Methodology Can Help Grow Your Business

By Young Entrepreneur Council | Inc Magazine | Jul 31, 2024

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The lean startup methodology was originally introduced to help startups with new product development.   But since Eric Reis authored the book, The Lean Startup (Crown Currency, 2011), the methodology has driven large corporations to adopt a lean thinking mindset in regard to their service development as well. 

This allows businesses to iterate quickly, minimize waste, and create products and services that resonate with their customers.  So, how are businesses actually using the lean startup methodology? Here’s how eight business leaders think lean to produce big results for their businesses. 

1. Avoid things that don’t scale.  For this, according to Larue, who formerly directed product at companies like Zillow and SoFi and now is a co-founder of Deferred.com, a real estate tax platform based in Los Angeles, one needs to find ways to validate without building, using customer surveys, user interviews with design prototypes, or competitor research.
2. Creating minimum viable products.  For Garrett Nutgrass, a marketing content strategist at Destify, a destination wedding planning company in Chicago, creating Minimum Viable Products (MVPs) helped the company identify and address key pain points in the wedding planning process.
3. Pivot or persevere.  The principle “pivot or persevere” is when a business reaches a decision point on whether to continue, adjust, or stop with the direction of its product development. For Rene Ymzon, an engineer and marketing manager at Advanced Motion Controls, a motion manufacturing company in Camarillo, California, this principle allows the company to continuously test its servo drives and motor controllers in various real-world applications.
4. Conducting small-scale pilots.  At PRESS Modern Massage, a group of clinical massage studios in New York City, conducting small-scale pilots has enabled the company to effectively refine and expand its services while minimizing risk.
5. Testing before implementation.  Thomas Minieri, founder of Lemonade Maker, an entrepreneur coaching franchise based in Charleston, South Carolina, says that utilizing the lean startup methodology allows his company to test new ideas before introducing them to franchisees.
6. Refining products with customer feedback.  Refining products and enhancing customer satisfaction are the core principles of the lean startup methodology. That’s why Michelle Aran, CEO of Velvet Caviar, a phone case company based in Brooklyn, says that gathering customer feedback through surveys and social media enables the company to iterate quickly on designs to maximize sales.
7. Quickly test audiences and market fit.  While product design and iteration are a common use case, marketers have adopted the lean startup methodology to build markets and quickly test audiences without spending substantially. 
8. It depends on the type of startup.  Zain Jaffer, CEO of the investment management firm Zain Ventures in San Francisco, previously sold his technology startup to Blackstone for $780M and now focuses on real estate investments. For Jaffer, the lean startup methodology depends on the type of company.  “In the software world, it is quicker to simply create the website or app and see if people respond than conduct a due diligence study,” Jaffer shares. “On the other hand, in real estate, millions can be spent on a single project. If I do not conduct enough due diligence in a field like real estate, I could end up with a white elephant.”

3 key takeaways from the article

1. The lean startup methodology was originally introduced to help startups with new product development.   But since Eric Reis authored the book, The Lean Startup (Crown Currency, 2011), the methodology has driven large corporations to adopt a lean thinking mindset in regard to their service development as well. 
2. This allows businesses to iterate quickly, minimize waste, and create products and services that resonate with their customers.  So, how are businesses actually using the lean startup methodology? 
3. Here’s how eight business leaders think lean to produce big results for their businesses: avoiding things that don’t scale, create minimum viable products, Pivot or persevere, conducting small-scale pilots, testing before implementation, refining products with customer feedback, quickly test audiences and market fit, and remember that application of lean startup methodology depends on the type of startup.

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Topics:  Startups, Entrepreneurship, Creativity, Innovation, Market Test, Persevere, Pivot, Agility