Startup thinking not just for startups
It is hip nowadays to be or at least work for a startup. A startup is a starting company that is trying to turn a brand new idea into success under conditions of high uncertainty. Often with the objective to shake up existing competition. Dutch examples include Bunq and Crobox (2 years young) that recently succeeded attracting 1.1 million funding for its service persuasion-as-a-service.
Of course not all startups are successful. But what a lot of startups have in common is that they apply a systematic approach based on lean startup. This enables them to track whether they make sufficient progress.
The name ‘Lean Startup’ is confusing. Most people think it is ‘Lean’. This is “a management philosophy targeted on creating maximum value for the customer by reducing waste as much as possible”. (source sixsigma.nl). Others believe that the word “startup” means that it is only applicable for starting companies. Not true either.
Lean Startup is a method how to deal with real new ideas and increase their chance of success
I believe that startup thinking is extremely relevant for existing companies.
The advantages of Lean Startup for existing companies
The Lean Startup method is not just for Startups. On the contrary. The benefits for existing companies are potentially huge. It is not necessary to immediately set up an external incubator or change your office deco styling. By making Lean Startup part of your daily business, you are sure to revive spirits and promote an entrepreneurial mindset. Startup thinking will help to reduce resistance to change, because existing silos will be breached. And change is needed to survive in the long term.
With respect to innovation, applying Lean Startup will:
- Accelerate innovation
- Reduce innovation costs
- Increase your rate of success
Lean Startup is focused on finding out as soon as possible whether the idea that you have, is relevant at all for the customer. If this is the case, you will start building your product in small steps and iterations. You will define your assumptions, you will test this in real life and you will learn from the results. You will not run this cycle once, but sometimes even daily. As a consequence you will accelerate learning, and know what works and what doesn’t. Because of this you will be able to reduce the development cycle of new products and services.
Reduce innovation costs
Lean Startup makes you test your assumptions. If your assumption is not true, this is not failure, but learning. Maybe you are on the wrong track. It is then time to pivot or maybe to quit. Innovation is cheaper because non successful projects are killed earlier in their development cycle. The further you are in the development cycle, the higher the costs. So you are avoiding future costs by testing as soon as possible.
Increase your rate of success
Unfortunately still 9 out of 10 products fail. Often after the full development cycle has been completed, and a lot of marketing and salescosts have been made and the distribution channels have been set up. With Lean Startup you will only start to scale up after you have proven productmarket fit. You have to prove to management or investors that there is an actual demand for your product or service. This will increase your chances of success considerably.
Get started with Lean Startup
To actually start with Lean Startup, it needs to be organised. Often it is better to kick off with a limited number of teams, to assess how this will work in the context of your business. Plus it all starts with capturing and stimulating the potential of your employees to generate plenty of wonderful new ideas. I would urge you to seek some guidance in setting this up. If you are based in the Netherlands or Belgium, I can help.