Principle of the Lean Startup Methodology

A startup is a temporary organization meant to implement a new and repeatable business model in conditions of extreme uncertainty. A lean startup efficiently searches for a valuable business model by iteratively validating hypotheses against real users, while committing the least amount of resources at all stages.

 The Lean Startup Methodology was conceived by Eric Ries and is defined as:

Lean StartUp

(1) Entrepreneurs are everywhere

(2) Entrepreneurship is management

(3) Validated learning

(4) Innovation accounting

(5) Build-measure-learn

The first two points show the growing understanding that entrepreneurs can exist everywhere and that it is possible to train people/organizations how to take advantage of this fact. This is imperative to understand for the enterprise. If this is accepted, there needs to be a complement to the classic R&D process, and good companies will have internal forces that can be utilized in the search for innovation.

The third point indicates that the startup should be in search mode instead of execution mode. The search may be for the product, the channel, or the customer. At each cycle of validated learning, the startup should “pivot or persevere” to minimize time wasted on a faulty approach.

A key idea of this third point is the minimum viable product (MVP). This is the minimal feature set necessary to validate an assumption about the product, market, or customer. The MVP can be used in A/B split testing to make path finding decisions.

Even though leanstartup is fairly new, especially within the enterprise sector, there are some use cases that can be valuable in creating context to the method. Each case is different in its execution and also point to different parts of lean startup.