What is Lean Startup?
Does the name Eric Ries ring a bell? Well, he came up with the whole concept of the lean startup pattern which can be implemented by small businesses just starting up to grow gradually from small capital investments. Organizations can reduce risks through progressive development which allows for better decision making using hard evidence as opposed to intuitions and gut feelings. Meaningful measurement of the performance of any startup requires the use of metrics that assess engagement or activation, acquisition of clients and referrals to carry out innovative accounting. Businesses can use this vital information for early risk identification and timely mitigation.
Management of new ventures has recently been based on this methodology that has gained attention for new entrepreneurs. Lean startup methods refines business hypothesis for entrepreneurs by providing normative guidelines to carry out systematic tests. Enterprises can meet challenges such as timely development of prototypes which can be attributed purely on physical distribution channels and the importance created by customer’s perception on product reliability.
Why are Startups Failing?
The main problem with startups is lack of concrete customer knowledge and what product to produce. They lack a good strategy, solid planning and proper market research because they function under a lot of uncertainties. Lean startup principles come in handy when dealing with all these uncertainties because it is hard to predict the future without an operating history. Startups have neither a static environment nor a stable history in operation, therefore lean startup allows appropriate time to collect customer feedback.