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What is Lean Startup Model : Definition with Details
Startup 101

What is Lean Startup Model : Definition with Details 



f you have the interest to know about startups or involved in the startup world, then learning about “Lean Startup” is a must for you. So, what is lean startup model?

What is Lean Startup Model?

Most importantly, “Lean Startup” is the name of the label which is an integral part of today’s business landscape and vocabulary. So without making any delay, let’s get to know the core of lean startup.

History of Initiating Lean Startup

In 2008, Eric Ries proposed the methodology of Lean Startup for the first time. He analyzed his personal experiences about adapting lean management and development principles and then described to use them to build successful high-tech startup companies. Eric Ries later wrote a book named “The Lean Startup”, which was published in September 2011.

He said that his first company “Catalyst Recruiting” wouldn’t fail if he would understand the importance of lean startups way back then. However, the success of his bestselling book made lean startup a hot topic later on. 

Benefits of adopting Lean Startup Model

Most of the startups have chances to fail, but lean startup techniques are such that can prevent them from being lost projects. Briefly, the methodology that lowers the risks of the process to start a company or launch a product, is called the lean startup model.

Many people say that a lean startup is a movement that means transforming the systems of new products being built and launched. Or more specifically, “Lean Startup isn’t about being cheap, but is about being less wasteful and still doing things that are big.”

Mainly entrepreneurs adopt this model to ease the difficulties of establishing a startup or launching a product. Some people believe and say, “Lean startup is not something all about creating a more successful entrepreneurial business, rather it teaches us to improve our every virtual work”.

Chances of Failure in Lean Startup Model

While following the old formula of decades to launch a startup, you can fail or suffer a fatal setback at any point. But in the case of lean startup models, the chance of failing is quite lower. Some of the entrepreneurs think that many of this world’s great problems can be solved easily if lean startup principles are used to solve them.

Lean startups prefer using different financial reporting metrics than focusing on income statements and balance sheets. Their targets are to value customers for the lifetime and making their products viral. 

Photo of startup process

Principles of Lean Startup Model

Like every other form of startups, lean startups have also some principles, like “Entrepreneurs are everywhere” or “Entrepreneurship is management”. They have formed some more solid methodologies – 

  • Start anywhere 
  • Be accountable 
  • Validated learning
  • Build, measure and plan 
  • Innovative accounting 
  • Eliminate uncertainty 
  • Work smarter, not harder

Facts About Lean Startup Model

Also, there are some certain key areas of Lean Startup which you must know about. They are given below –

  • Irrelative product releases with extremely faster cycle times
  • Validated learning to focus on customer’s needs and better quality feedback from customers
  • Finding the right business model first and only then, executing it
  • Continuously re-assessing the direction of the business
  • “Getting out of the building” to speak to and observe real customers and stakeholders
  • A scientific approach to decision making, which means making decisions based on evidence and data 
  • More flexibility about making changes to ideas as they progress from concept to “Minimum Viable Product” to finished product.

Lean startups do not follow traditional businesses and make business plans. Rather they focus on business models based on hypothesis and put them on rapid testing. Before proceeding, the data need not be completed but needs to be sufficient.  It identifies the problems at first, then gets them solved before the development of a minimum viable product.

After that only, it allows the entrepreneurs to present the products before customers and receive feedback from customers. This entire process doesn’t only work on the fast track but also ensures less loss for the entrepreneurs. 

Sections of Lean Startup Model

People most often get confused about the classification of lean startup model. Mainly, all of the lean startups have three stages –

  • Problem/Solution fit stage: It is very necessary to detect the problems and solving the right issues in the right ways. Only then the startup idea becomes cost-effective.
  • Product/Market fit stage: Product’s trustworthiness must be checked, tested so that they can be purchased by customers repeatedly. 
  • Growth stage: Focusing on increasing the scope of the business model. The goal to combine marketing, sales, and selection must be achieved to increase the value of the product.

Contribution of Lean Startup Model

Lean startup has started it’s a journey very recently, but words like “Pivoting” and “Minimum Viable Product” have come to people’s minds just because of this startup. Even after being a buzzword,  it hasn’t gone mainstream yet, but many entrepreneurs have started strongly grasping this methodology. Not only that, but their curriculum is also already being adopted by many startup schools. 

An estimate of Gartner says that by 2021, 50% of established corporations will apply lean startup techniques to increase the pace at the business level and ensure the success of the business. Bruce Robertson, the vice president and distinguished analyst of Gartner quotes that

Business must change how they change-they must enhance and rebalance their transformation capabilities to handle uncertain environments as well as certain situations.”

Lean startup models give experimentations more importance than elaborate planning. Also, customer feedback is more important to them than intuitions. Their main focuses are to make an early-stage startup eliminating wasteful practices and increasing value-producing practices.

These lean startup strategies pave the way for startups to turn into successful startups. Even if the startups fail after adopting this method, the loss will be comparatively very less as the lean startup models don’t require huge initial funding. So picking up the “Lean Startup Model” as a choice can never be a wrong choice.

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