The ‘Lean Approach’ to small business marketing: Build the right solution

A quick summary of the ‘lean start-up’ approach

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The ‘Lean Approach’ to small business marketing: Build the right solution
19/2/2019
The ‘Lean Approach’ to small business marketing: Build the right solution
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The ‘Lean Approach’ to small business marketing: Build the right solution
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The ‘Lean Approach’ to small business marketing: Build the right solution

The lean management concept was the brainchild of Toyota with their Kanban and Just In Time manufacturing processes.

But, for our purposes, we need to start with Eric Ries’ 2011 book, ‘The Lean Start-Up.’ Despite its title, it is not just for new businesses! It is of interest to any organisation dealing with conditions of ‘extreme uncertainty.’ Entrepreneurial start-ups clearly fall into this category but so, too, does any organisation developing a new product or moving into a new market. In fact, it applies to anybody faced with the question, “will people buy this?”

The core idea is very simple…

In a world of extreme uncertainty, the classic approaches to business planning or new product development don’t work. The usual linear ‘research, develop, launch’ approach is much too risky to be taken seriously and explains why the vast majority of new business ideas fail.

Instead, Ries advocates an iterative ‘build, measure, learn’ loop.  He argues that an initial business idea can never be more than an untested hypothesis, no matter how much effort goes into research. The only effective way to validate such a hypothesis is to test it in a live setting.

This involves building a ‘minimum viable product’ (MVP) and getting it to market quickly so you can observe, measure and learn from the reaction. The hypothesis is then refined and the MVP is modified and re-tested.

The key point here is that the MVP is a prototype, not a fully developed product. It must work well enough to test your hypotheses and be sufficiently adaptable to respond quickly to what the market tells you. Sometimes the feedback will encourage you to ‘persevere’ by evolving your product. In others you'll need to face up to a fundamental flaw in your thinking and make a radical ‘pivot.’

But, either way, you are reacting to how the market actually behaves, rather than how you think it should behave!

But how does it work in practice?

Well, my first suggestion is to read the book! In my opinion it's one of the very few business books that should be a ‘must read’ for all business owners and managers concerned with bringing new products to market (or existing products to new markets come to that.)

The key points of the 'Lean Approach'

  1. The lean method is a scientific management discipline. It is something that can be learned and is not the exclusive preserve of the ‘natural born entrepreneur!’
  2. The primary purpose at the start-up stage of any new business idea is to learn how customers actually respond to the product. Making money, serving customers and making product are all secondary at this stage.
  3. Learning is validated through frequent structured experimentation that is specifically designed to test each element of the product concept. This includes how it is ‘brought to market’ as well as what it actually does.
  4. The primary activity at the start-up stage is turning ideas into products (the ‘minimum viable product’ or MVP) and measuring how customers actually respond. The activity consists of a ‘build - measure - learn’ loop enabling rational decision making on whether to persevere with the idea or make a radical pivot.
  5. A structured, disciplined approach to measuring progress is key.  Decision making is evidence-based and not the result of ‘hunches,’ guess-work or in-grained attitudes.

For us, here at Priszm, it's the only approach to developing new business ideas that makes empirical sense. Speaking personally, it has informed my mentoring activities over many years and was developed in response to how I observed markets actually behaving.  That's why it's the cornerstone of our approach.

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