Are you tired of pouring time and money into a product that may not even work? One common mistake startups make investing heavily in a product idea before verifying its market viability or success. Don’t let this hold you back any longer – by embracing the lean startup approach, you can validate your product and make sure it has a solid foundation before moving forward. So what is the lean startup approach, and how can you use it to make a business plan for a startup?
What is the Lean Startup
A lean startup is an innovative business model that uses rapid experimentation and iteration to validate new ideas and approaches quickly. It allows startups to be agile and adaptable in an ever-changing market. By quickly testing and refining their ideas, lean startups can stay ahead of the curve and avoid the pitfalls of traditional business planning, which often involves a lot of upfront investment and long-term commitments to strategies that may not work out in the end.
Let’s use an example to understand this. Suppose you are the founder of Nutribar, a startup looking to create a new line of healthy, plant-based snack bars. Most founders spend several months/years on manufacturing, research & development, and packaging, launching it on the market, only to fail halfway through due to having a lack of funds for development or finding out that the snack bar doesn’t have the right product market fit. After all, according to a study by CB Insights, 38% of startups fail as they run out of funding, while 35% of all startups find that there is no market need for the product. Rather than spending several months/years building out a fully-featured product that may fail, Nutribar can quickly test and reiterate the idea until they achieve its desired results.
Essentially, this starts with a hypothesis – in this case, it is the need for healthier, plant-based snack bars that are convenient and tasty. Once a hypothesis is developed, Nutribar should look to develop a Minimum Viable Product (MVP), which in this case is a small batch of snack bars with just a few flavours and packaging options. This MVP should then be tested with a small group of potential target customers, enabling the company to gather feedback & data to see how well the snack bars solve the problem first outlined in the hypothesis. Once the feedback is gathered, Nutribar can tweak the recipe & packaging, adding or removing the flavours as needed. This rapid experimentation, testing & iteration should continue until Nutribar is confident that the snack bars are refined and ready for a wider launch.
Thus, by using the lean startup, Nutribar will be able to minimize waste and maximize efficiency. The company will also avoid risking the time and resources that go into developing a product that nobody may want or need and will be able to quickly pivot its trajectory based on the development of the current market.
To successfully apply the lean startup methodology, it is important to understand the underlying principles involved. Visit us to learn the five main principles of creating a lean startup.
