What’s lean about a Lean Startup?

The idea of a lean organization was first publicly known in ‘The triumph of the lean production system’ by Krafcik in 1988.

To put it simply, Toyota invented a unique production system that proved way more effective and cost saving than any other automobile company in Japan. Noting a threat to the US economy, the International Motor Vehicle Program (IMVP) launched an MIT-based research in 1979 to draft the future of automobile industry. The idea has since spread, and was adopted by startups.

The problem is, as time passed has-beens and wannabes diluted the principles of the original idea, and created a mystique around the other simple story. In case you want to get to the bottom of this, read Taiichi Ohno's Toyota Production System’. It’s the Bible for anyone willing to understand the lean model.

Today’s budding entrepreneurs are often misled into thinking a lean business model is basically a business on steroids. Big mistake. It’s got nothing to do with moving fast, raising funds quickly and copying products or services of competitors. It’s also not about developing a customer-centric product at the lowest production cost within least time.

Minimum Viable Product (MVP):

Imagine a product. It can have 10 different great and unique features. That may take 5 years, and a lot of money to develop. How do you survive that many days without investment? You don’t. You never wait until all 10 features are developed to get into market. Prioritize a couple of features, launch into the market at the right time and address a customer’s immediate needs.

This helps in:
• Creating revenue, giving you a longer runway
• You gain customer feedback and improve
• The product will be a perfect market-fit as all features come on-board

Minimize Uncertainty:

Nobody is offering you customers before you build the product. Here’s why a lot of business plans are written.

• An individual is facing a problem
• The founder is a techie and wants to build a product
• He/she wants to be a millionaire entrepreneur

Many people dream of a target customer-base just for the sake of charting a business plan. Build your product based on solid inputs, improve the design while in development and don’t work on flimsy enhancements that take lot of effort to produce a market fit.

Validate Learning:

We all make mistakes. However, in the journey of entrepreneurship, learning from your mistakes is critical. Don't make a product you like, but one your customers like. Validate your learning, and don't repeat them ever again.

That’s what a real lean startup is.