What is a lean startup?

By Ana Bacioiu3 min read · Posted Nov 25, 2024

238
Views

A lean startup is about getting to market fast, experimenting, iterating and learning, all with minimal resources. By using continuous testing and customer feedback, lean startups can adapt and pivot as needed, reducing waste and increasing chances of success. Lean methodology enables the type of supercharged, nimble venture that many beginning entrepreneurs yearn for.

lean start up presentation

Image via OpenVerse

Introduction

John Krafcik first used the phrase “Lean production” in 1988, to praise the virtues of efficient, low waste car manufacturing systems. Eric Ries’s 2011 book “The Lean Startup” evolved the idea. He went beyond “lean” principles of manufacturing cost cutting, to emphasize an adaptable product development process that systematically experiments and learns. Its nimbleness comes from its core principles: testing hypotheses, responding to customer feedback, rapid prototyping, validated learning, and iterative design. Eric Ries coined terms such as the Build-Measure-Learn feedback loop and the minimum viable product (MVP) and pivot.

leanstart up graphic

Image via OpenVerse

The Impact of Lean Methodology

Lean Methodology's top benefits are efficiency, adaptability, and speed. Moreover, its data driven learning approach and customer focus ensure that lean startups always aim towards product-market fit. Adoption of lean methodology varies by industry and company culture. Industries that emphasize efficiency (for example manufacturing, healthcare, and software) are among its greatest adopters and champions. However, adaptability stands out as the most powerful benefit of lean product development. Adaptability allows companies to reach success faster by “feeling their way” in the market through experimentation and learning. After their initial success, lean startups remain competitive by continuously adjusting. Last but not least, pivots are the larger, strategic moves needed in the face of significant challenges. For all these reasons, Lean thinking can be credited for the success of some of the most resounding names in entrepreneurship.

Examples

Dropbox, Airbnb, Mailchimp, Instagram, Netflix, and Youtube all illustrate the strengths of lean startups. They share some of the same ingredients: they started small, then continuously improved based on user and market data. Some had remarkable pivots, all expanded in a customer-focused way.

For example, Dropbox started as a demo video, Airbnb as a personal house-rental, Mailchimp was a side project. Instagram pivoted from a location-based check-in app to a photo-sharing platform, based on user interest. Netflix evolved from DVD rental by mail to a streaming service that disrupted home entertainment. Youtube switched from a dating site to video-streaming.

Steps toward success

  1. Get Started: Find a customer problem to solve. Build a minimal viable product (MVP) that does just enough for you to test hypotheses, adjust and get a foot in the market.
  2. Learn: Do it fast and in a customer-centric way: Collect feedback and act on it. Iterate continuously and, if needed, know to pivot.
  3. Take off - Build a Team: People matter so make sure to assemble a team who has the right mindset., dedicated team.
  4. Fund Your Startup: also benefits from an agile, lean approach. Lean startups often opt for bootstrapping, crowdfunding, and other creative funding options.

Additional Reading

Here are some seminal books and articles documenting the lean startup journey:

  • "The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses" by Eric Ries - contains a comprehensive guide to the lean startup approach. It lays out its core principles and leverages the author’s own experiences to illustrate its main points.
  • "Lean Startup: A Comprehensive Historical Review" by Rafael Fazzi Bortolini and Marcelo Nogueira Cortimiglia - This article weaves a historical narrative connecting the lean startup concepts with previous theories and business practices.
  • "Why the Lean Start-Up Changes Everything" by Steve Blank - contrasts traditional business planning and development with lean startup methodology, emphasizing its revolutionary contributions.

About The Author

Ana Bacioiu

7
Articles
3844
Total Views
18
Total Likes
0
Total Shares

See more posts by Ana Bacioiu

Comments

Loading...

Your generosity fuels innovation and drives success!

Our resources are assembled by a team of entrepreneurs who donate their time and energy to Pitch Labs to ensure that entrepreneurial resources are available to everyone. Unfortunately, we can't avoid major expenses such as website hosting fees. To ensure our resources remain free to access and use, we rely on donors who are able and willing to give back. Consider donating to be a part of the Pitch Labs mission today!

More in Basics


Basics » Business Plans

How to describe your product or service in your business plan

by Warren Patterson ·Apr 21, 2025

45
Views

A good product or service description is important in business as it helps drive traffic, generate leads, and build sales. This article looks at what’s included in a product or service description. Read to learn more. Read more

Basics » Business Plans

What is an executive summary and why is it important?

by Callie Leff ·Apr 11, 2025

124
Views

An executive summary is a brief summary of the important points in your business plan. Learn how to write one here. Read more

Basics » Business Plans

How to Find Your Target Audience

by Degreat Michael ·Oct 21, 2024

554
Views

Struggling to figure out your ideal customers? In 5 steps, you’ll discover how to attract your target audience– and the effective tools you can use Read more

Basics » Getting Started

How do I define my target market?

by Ana Bacioiu ·Oct 18, 2024

280
Views

Discover how to hit the bullseye by defining the target market for your business idea. Elevate your strategy from guesswork to precision art! Read more

Recent articles


Technology » Applications

Being Human in the Age of AI: Build These 5 Career Skills for the Future

by Tonya Parker ·May 12, 2025

8
Views

AI is coming to a workplace near you. Discover the human skills you’ll need for a future with AI. Read more

Marketing » Advertising

Products to sell? Explore platforms that could list your products.

by Zainab Anjum ·May 7, 2025

8
Views

This article helps you choose the right online selling platforms based on your business model, target audience, and products. Read more

Operations » Product & Service Management

From Concept to Customer: A Deep Dive into Product Management

by multiple authors ·May 5, 2025

7
Views

Product management is the strategic process of guiding a product’s development and success. Discover the key responsibilities and stages involved in bringing ideas to life. Read more

Technology » Applications

The Benefits and Drawbacks of AI in Learning

by Sunnie Souza ·May 2, 2025

56
Views

The AI boom of the past several years presents a set of benefits and challenges with regard to learning. While generative AI can greatly improve the learning process, there are concerns about integrity and bias. Read more

Join Our Community


Looking for something else? Get your questions answered in our free online learning community!

Entrepreneurial Resources


Jumpstart your next business with our free resource library.

Disclaimer


Our organization cannot give out official legal/fiscal guidance. All articles are written by volunteers and it may be beneficial to contact professionals to assist your understanding of the information and to guide your action. Pitch Labs bears no responsibility for the results of actions taken based off of article content or any other form of assistance given.