Lean Startup: Keys to Successful Product Development

As opposed to established medium-sized companies or large corporations, startups have little time, money, and resources to drive product development forward. The good news is this doesn’t necessarily have to be a problem. The Lean Startup method helps you, entrepreneurs, bring your products to market quickly and efficiently.

Product Development: Startups Biggest Challenge

Every startup will tell you that product development is one of their biggest challenges. No wonder – after all, a product idea is just the beginning. Finding suppliers, securing adequate funding, and hiring skilled staff are factors interfering with your product development. The actual production process also contains several hurdles that entrepreneurs can stumble over. Mistakes are expensive, and many years often pass before a product is ready for market launch.

Waterfall Model or Linear-sequential Life-cycle Model

Pioneer in software development, Winston Royce introduced the first process method known as the waterfall model with the idea to plan product development over time. At best, companies get prospects’ opinions at early stages and do not involve them later. The same applies to short-term changes to the production process or the product. Once the product is ready, Marketing and Sales work on the concept, and before a customer sees the product, the company has already invested a lot of time, money, and other resources. The product then must sell well and provide quick return on investment.

But what if the product doesn’t meet the required success and turns out to be nothing but costs? So many startups fail in their first year for this specific reason. By the time they launch their product, its functions are obsolete, the design outdated, the competition is faster, or there’s simply no market need for their product. Few startups survive such a crisis. Their secret? They look for new product development concepts, and The Lean Startup Method might be the one.

Who Developed the Lean Startup Method?

Is the American dream a cliché? Perhaps. Nevertheless, this is where the origin of the startup culture lies. Still today, new ideas are emerging there that inspire founders. One such idea came from the tech entrepreneur Eric Ries who was looking for a way to support companies in their product development with as little capital and lean processes as possible. The Lean Startup Model was created and, still today, is used worldwide.

What is the Lean Startup?

The Lean Startup is a model companies use to efficiently establish their foundations and plan their product or service development process. The aim is to go to market as quickly as possible while getting customers’ feedback. This then leads to further development of the startup or product.

Frequent testing of the product properties is just as much a part of this method as is the constant adjustment of prices, sales channels, or design elements. Secretly working on the product for years before launch is something you want to avoid, and involving customers, suppliers, or investors throughout all stages of the production process is key. As opposed to classic approaches, the Lean Startup is not about a finished creation but rather about a constant evolution that gradually perfects the product.

Lean Startup Principles

The Build-Measure-Learn (BML) concept is at the core of the Lean Startup model.

1. Build: Develop the product prototype. You may well have the courage to leave gaps. Perfection is not possible here, nor is it the goal.
2. Measure: Get your prototype tested by real users who should fall into your target audience.
3. Learn: Analyse customers’ feedback and gather valuable information that you can then use to optimise your product.

Note this is not a one-off box to tick. Run through these three phases all over, again and again. That way, you can continuously improve your product and adapt it to fit the needs, expectations, and wishes of your target groups. The Build-Measure-Learn concept is linked to the Minimum Viable Product (MVP), which we will explain in more detail.

Minimum Viable Product (MVP)

Another way to put the Lean Startup method into practice is to develop a Minimum Viable Product, a first simple version of the product with no sophisticated design elements or additional features. Add these gradually once your MVP has been on the market for a while and you have had enough customer feedback. The development of this basic product is very cost-effective, and its price-performance ratio is correspondingly attractive for customers. You can then add more complex unique selling points based on their feedback. Compared with the BML model, no prototype is developed here, but a simple version of the product. However, the advantages of this approach also lie in low production costs and targeted development tailored to the needs of potential buyers.

Advantages of the Lean Startup Model

You now understand what distinguishes The Lean Startup model from classic concepts such as the waterfall method. Surely you can now see why so many businesses succeed with this method, but in case of a doubt, here are some advantages.

• Fast product development: Startups often want and must bring a usable product to market as quickly as possible. It is the only way to ensure liquidity and further growth. With the Lean Startup model, you can focus on the essentials and, thanks to lean processes, develop and market your product in record time.
• Lower costs: The short development time reduces costs due to the simplicity of your product (less material).
• Targeted product development: You know which features your product must have based on customers’ feedback gathered over time. The risk of expensive mistakes is reduced, and your product undergoes continuous evolution. You can also increase your price and benefit from a better margin in the medium-long term.
• Real innovation advantage: Customers feedback helps you identify trends and developments before the competition. The analysis of customers’ needs and their influence on development ensures that your product is ahead of its time and correspondingly popular.

Gain Clarity with the Lean Startup Model

Another significant benefit of the Lean Startup model is the clarity you and your team gain. If implemented correctly, this concept should give you an early answer to crucial questions such as:

• What challenges does your target group face?
• What are the needs, interests, and wishes of your potential customers?
• How do these requirements change over time?
• Can your product meet these needs?
• How exactly do you need to customize your product?
• Are your Sales and Marketing concepts optimal?

Entrepreneurs who can answer these questions gain a significant edge over the competition, which is – ultimately – decisive for every company.

Who Is the Lean Startup Model Suitable For?

If you don’t have investors behind that can pump new capital into your startup or have to save on your resources, and so can’t test new options, then the Lean Startup Model is for you!

TECHNIA has years of expertise in helping startups from various industries. We believe we can provide and support you with innovative tools used to drive your product development forward. So, when do we start?