Posts Tagged ‘business model’

By Mark Zimmerman

Lean start-up: Not a mantraOver the last couple of years the “Lean Startup” movement has taken the start-up world by storm.   It’s rare now for me to meet with a web or mobile client who isn’t at least using the jargon; they are all building a minimum viable product, “getting out of the building” and are prepared to pivot.

As I get to know these founders and their businesses better I find that some of them have missed what I think is the key insight of the model. A start-up is a series of experiments.  Or, as Eric Reis more elegantly put it, “The ultimate goal of a lean startup is to identify where its vision intersects with what reality can accommodate.”

These founders have built a prototype, they are showing it to potential customers and they are prepared to change the prototype based on customer feedback.  What they haven’t done is design an experiment that will yield “validated learning“.  In order to achieve that they need to borrow from the scientific method and break their business idea into a series of hypotheses and experiments to test them.

One effective way to do this is to use Ash Maurya’s Lean Canvas (a variant of the Business Model Canvas) to document a business hypothesis and then design experiments to test the assumptions in each box.

Until a start-up has a documented model to test, “Lean Startup” is more mantra than method: A bunch of tactics instead of a strategy.  Don’t get me wrong, getting outside the building and talking to customers is a good use of time for most founders, most of the time.   Talking to customers to test a key business model assumption is a great use of time.

Mark advises entrepreneurs in the information technology, communications and entertainment practice at MaRS. He specializes in B2B enterprise software, SaaS business models as well as security and privacy.

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