Lean Start-Up PDF

WHY THE LEAN START- UP CAN CHANGE
EVERYTHING?
GROUP 4
INTRODUCTION ON LEAN STARTUP
The conventional approach has a rigid structure.

The founders are expected to write an elaborate business plan before interacting with any
customers, pitch it to score some investors, build a massive team upfront to execute the plan, let
the team spend months if not years to come up with a product. and after all these steps finally
start selling as hard as they can.
But as history showed us, 9 out of every 10 startups are doomed to fail. So putting this much
effort, money, and time into a startup upfront sounds less than reasonable.
Lean Start-up aims to minimize risks while improving the chance of success. The lean
startup methodology achieves that but ditching the traditional “big design up front”
development over a process where experimentation, customer feedback, and iterative
design is integral.
This methodology introduces crucial concepts like “minimum viable product” and
“pivoting.”
Lean Start-up
FALLACY OF THE PERFECT BUSINESS PLAN STEALH MODE'S DECLINING POPULARITY
CREATING AN ENTREPRENEURIAL, NEW STRATEGY FOR @!st-CENTURY

INNOVATION-BASED ECONOMY CORPORATIONS
FALLACY OF PERFECT BUSINESS PLAN
The Traditional business plan mainly consists of a Problem

statement, a solution that the venture provides, and a 5-year
plan.
Using Traditional Plans, entrepreneurs learn the hard way
that customers do not need or want most of their
services/products.
LEAN APPROACH ON BUSINESS PLAN
Execute a temporary business model which is scaleable and

relatable.
Use Customer development by getting feedback and
analyzing potential customers and analyzing their
requirements.
Using Agile development eliminates wasted time and
resources by developing the product iteratively and
incrementally.
STEALTH MODE'S DECLINING POPULARITY
Exposing Prototypes to customers only during highly

orchestrated "beta" tests
Lean is making old Stealth mode "beta" prototypes
obsolete
Customer feedback matters more than secrecy
Constant feedback yields better results than cadenced
unveilings
CREATING ENTREPRENEURIAL ECONOMY
In the past, growth in the number of start-ups was constrained by five factors in
addition to the failure rate
The high price of acquiring the first client and the even greater price of designing
a flawed product.
Long technology development cycles.
The small number of individuals who are willing to take the risks involved in
starting or working at a start-up.
The way the venture capital business was set up, wherein a select few companies
had to invest big sums in a small number of start-ups in order to stand a chance
of seeing significant profits.
The majority of the real start-up-building knowledge in the United States was
concentrated on the East and West coasts.
LEAN's IMPACT ON ENTREPRENEURIAL ECONOMY
The constraint is lessened by the lean strategy, which makes start-ups less risky
and helps new businesses produce items that customers genuinely desire more
rapidly and affordably than traditional approaches.
It also came about at a time when other technological and business trends were
lowering the obstacles to starting a business. The entrepreneurial landscape is
changing as a result of the interaction of these forces.
Open-source software like GitHub and cloud services like Amazon Web Services
have reduced the cost of software development from millions to thousands of
dollars.
Lean start-up techniques were initially designed to create fast-growing tech
ventures.
NEW STRATEGY FOR 21st-CENTURY CORPORATIONS
• Lean start-up is not just to be practiced by young tech ventures.

• To ensure survival and growth corporate needs to keep inventing new business models
and it requires entirely new organizational structures and skills.
• Managerial experts like Clayton Christensen, Rita McGrath, Vijay Govindarajan, Henry
Chesbrough, Ian McMillan, Alexander Osterwalder, and Eric Von Hippel have suggested
how big companies can improve their innovation processes.
• Companies like GE, Qualcomm, and Intuit have already begun to implement the lean start-
up methodology
HOW GE ADOPTED LEAN-STARTUP METHODOLOGY
In 2010, Prescott Logan, the • Made major shift in their

general manager of the • Started searching for customer focus
Energy Storage division of business model • Eliminated one of initial
GE, recognized that a new • Engage in customer target segment, DC
battery developed by the unit discovery • Discovered new segment,
has the potential to disrupt • Explore potential new utilities
the industry. markets and applications • Invested $100 Mn to build
Rather than going for the • Listened to customers manufacturing facility in NY,
traditional launching process, issues and frustrations with which was opened in 2012
the went for lean-startup the battery status quo • GE was running in high
approach backlog due to such a high
demand
NEW STRATEGY FOR 21st-CENTURY CORPORATIONS
The first hundred years of management education mainly focused on building

strategies and tools that formalized execution and efficiency for existing
businesses.
Now, there exists a set of tools to search for new business models to avoid the
pressure of rapid changes in every kind of organization- startups, small
businesses, corporations, and governments.
The lean startup approach will help each kind of organization to innovate
rapidly and transform its business.

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WHY THE LEAN START- UP CAN CHANGE

The conventional approach has a rigid structure.

FALLACY OF THE PERFECT BUSINESS PLAN STEALH MODE'S DECLINING POPULARITY

CREATING AN ENTREPRENEURIAL, NEW STRATEGY FOR @!st-CENTURY

The Traditional business plan mainly consists of a Problem

Execute a temporary business model which is scaleable and

Exposing Prototypes to customers only during highly

• Lean start-up is not just to be practiced by young tech ventures.

In 2010, Prescott Logan, the • Made major shift in their

The first hundred years of management education mainly focused on building

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