The Rise And Success Of Lean Startups

Uber, Dropbox, Spotify, Airbnb… think of a brand that’s integral to modern life, and it probably didn’t exist ten years ago. In less than a decade, the global marketplace has been turned upside down by a tsunami of ‘unicorn’ brands that have not only challenged industry norms, but come to dominate them.

All began as startups, many with humble origins. So how did they sprint past their competitors to become multi-million pound businesses? For many, the answer lies in the lean startup model, a popular methodology that offers a fast-track to success for any tech-driven venture…

How times have changed

Every business starts with an idea, but not all are destined to succeed, at least in their initial format. Not recognising this is a crucial mistake; many entrepreneurs pour their time and money into perfecting a product or service that customers simply don’t want.

Once upon a time, this was standard procedure… new businesses didn’t have the technology and communication channels to test and measure a concept in development. But the last few decades have seen all of this upended for smart, responsive engagement with an emerging idea.

Entrepreneurs now have the tools to build and test their theories amongst the general public, meaning they can identify challenges and solutions before they get too far off the beaten track. Cue the rise of the lean startup, a methodology developed by Eric Ries in 2008, based on his experiences in the tech community.

Its origins lie in Japan, where the concept of lean manufacturing – identifying and eliminating waste – has been standard practice since the early 20th century. Ries carried this same principle into startups, to transform the way in which businesses are built…

The lean startup process

Lean startups democratise product development, using the tools at their disposal to measure and learn at each stage of the process. Rather than creating the finished article, they channel those initial ideas into a minimum viable product (MVP).

An MVP is a basic version of a product, designed to gather market feedback so that it can be validated and refined according to business objectives, cost per acquisition and other key performance indicators. A successful MVP can then form the basis of a proven business model.

One team of founders, for example, validated their concept by offering air mattresses in their homes to attendees of an over-booked conference in San Francisco. People paid, the model was validated, and Airbnb was born.

Validation gives you and potential shareholders confidence that a proposition is worth investing in. But it doesn’t end there; lean startups undergo continual innovation to ensure their product meets the evolving needs of their customers.

Uber is a perfect example of this: since its establishment in 2009, the app has undergone several redesigns, and has now expanded its services to include features (like Uber Eats) that respond to market demand.

‘Build, measure, learn’ is a continuous process that drives the success of lean startups.

What can lean startups teach us?

The lean approach can be applied to almost any business, idea or process, but it’s incredibly powerful when building products. The iterative process we take our clients through at Webantic complements this startup strategy, allowing us to make data-driven decisions and work with our clients to build, test and refine their product at key stages along the way.

It’s this willingness to learn and adapt that sets successful startups – and the entrepreneurs behind them – apart from the rest. So if you have a good idea for an app, product or venture, consider testing this idea as an MVP. You might just be sitting on a unicorn…