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So Fresh And So Lean: Putting Startup Methodologies To The Test

Before I stepped foot in an office full of budding startups, I had no idea that startup methodologies even existed.

But, with copies of Lean Startup perched on the bookshelves and motivational pep talks of “fail fast, fail often” being bandied around, I soon picked up that this was a way of life for budding entrepreneurs.

‘Lean’, ‘disruptive’ and ‘agile’ are just some of the terms used to describe different approaches to starting and running a business. 

And whilst skeptical at first, I soon learned there was merit in some of the methodologies.

When I subsequently went into business for myself, I found putting them into practice saved me valuable time and money, on ideas that weren’t working.

That’s because many of the methodologies encourage you to stop wasting time on what you think will work and put your theories to the test. Just like a scientist would a theory.

This helps ensure you find what doesn’t work quickly so you don’t spend too long flogging a dead horse. You find what works fast and scale it up.

 

So, do you need to follow a startup methodology?

You might think that startup methodologies are just for the Silicon Valley types and not relevant to you and your business.

I wouldn’t blame you for thinking that.

There are buzzwords like ‘pivot’ and ‘MVP’ to get your head around, but, hear me out for just a second.

You might learn something that will help you avoid failure and scale your business faster. And that’s something worth paying attention to, don’t you think?

And, to make it a little easier to sift through the jargon and get to the juicy bits, I’ve dissected and disseminated the most popular methodologies for you, so you can delve deeper into those that resonate and pass over those that don’t.

 

Method 1: The Lean Startup

Based on the bestselling book by Eric Ries, Lean Startup is often lauded as THE startup methodology.

Reis was frustrated by the fact that so many businesses fail because they have not tested their assumptions before releasing a product to market. 

He encourages startups to eliminate uncertainty and apply Scientific Method principles to your business by following these 3 steps in a continuous cycle:

  1. Build a Minimum Viable Product (MVP) – a product that has enough features to satisfy early adopters.
  2. Test and measure – set your test objectives and quickly assess if your product meets them.
  3. Learn and iterate – take the learnings from your test and apply them to the next iteration of your product.

Eric Ries recommends moving as quickly as you can through steps 1-3 and starting over again, creating a continuous loop of learning.

“Rather than guess what consumers want, entrepreneurs should release new products in small, incremental stages in order to gain feedback and pivot the company’s vision when necessary”.

Businesses who used The Lean Startup Methodology: 

  • Dropbox
  • Tumblr
  • Airbnb
  • Copyblogger

Drew Houston, CEO and founder of Dropbox, is an advocate of Lean Startup and reading into startup methodologies.

“You’re not going to become a great salesperson just by reading a book any more than you would become a great basketball player by reading a book,” he says.

“But it still gives you context and these useful mental frameworks for thinking about different kinds of problems”.

Read the full interview.

 

Method 2: Agile Innovation

Often used by software development teams and businesses looking to break rigid project management patterns, Agile Innovation encourages you to develop and test your business and product in short phases, building on growth incrementally with significant customer input.

The 4 key principles of Agile Innovation are:

  1. Individuals and interactions over processes and tools – create a fun working environment for your team, who feel empowered and part of the business success.
  2. Working prototypes over excessive documentation – put ideas into practice fast so you can get feedback as quickly as possible.
  3. Customer collaboration over rigid contracts – frequently use customer feedback to inform what you’re creating and ensure they get maximum value from your business.
  4. Responding to change over following a plan – don’t get stuck in planning. Start doing and adjust as you go.

Something I learnt from the Agile Innovation methodology that has served me incredibly well throughout starting and growing my own business, is the Kanban planning process and working in sprints. 

 

 

As you can see, in its simplest form, you visually map out your planning using three columns: 

  • To Do
  • Doing
  • Done

You select one key goal to work on during 1-4 weeks (a sprint) and create a post-it note for each action required.

These sit in the To Do column until you move into Doing and eventually Done. 

This allows you to visualise your progress and motivates you to complete the actions in the time given. If your startup relies on a variety of people working together, this method will allow you to keep track whilst keeping pace.

Businesses who used Agile Innovation: 

  • Apple
  • Philips
  • Paypal
  • EA Games

Ben Cornelius, director of localisation at PayPal, is a fan of the agile approach.

“Agile contains the idea that we interact with our stakeholders frequently, in our case daily… getting feedback in a two-week iteration rather than a few weeks after a release that was in development for six months makes a significant difference.”

In an interview about how his team uses Agile, Ben goes on to say that when you don’t get feedback quickly from customers, you might end up releasing something they don’t even want or need. You end up spending money as you continue to market and maintain a product, service or feature over an alternative that would have been of more value to your customer.

Here’s a handy infographic.

Rather than guess what consumers want, entrepreneurs should release new products in small, incremental stages in order to gain feedback and pivot the company’s vision when necessary

Eric Ries Author, The Lean Startup

Method 3: Disruption Innovation

Clayton M Christensen, the Harvard Business School professor who developed the Disruptive Innovation model, describes it as “technologically simple innovation in the form of a product, service or business model that takes root in a tier of the market that is unattractive to established leaders in an industry.”

In other words, established businesses focus on upgrading their products or services to attract higher paying customers, usually by adding new features.

This leaves an opportunity wide open to disruptors who can jump in and offer a basic product or service that satisfies the regular customers who just want a simple low-cost alternative.

Disruptive innovators continue to improve that product or service to appeal to more people whilst the established business is busy adding bells and whistles to its range. By the time the established business notices the innovative new company, they’ve already started to dominate the market.

A recent example of this would be Netflix, which Christensen describes as “a classically disruptive model.” 

Netflix’s initial service wasn’t terribly appealing to Blockbuster’s mainstream customers who wanted instant gratification, but as its quality improved, so did its appeal to those people.

Those people eventually moved across, leaving Blockbuster high and dry and most likely feeling like they’d been snuck up upon from behind.

How can you apply the Disruptive Innovation methodology to your startup?

Focus on what problems or jobs customers in your market need to be solved – not how you can compete with larger established players. 

Businesses who used Disruptive Innovation: 

  • Netflix
  • Aldi
  • Skype
  • Waze

Jessie Moore of Idea Drop explains why Aldi disrupted the British supermarket industry: 

“Aldi tore up the rulebook of the established players and carved its own path. With a focus on high-quality produce at temptingly low prices…the modest size of their stores combined with their in-house distribution network and avoidance of 24-hour operation… Aldi has been gradually winning over the British consumer”

 

Method 4: Zero to One

Co-founder of Paypal, Peter Thiel, shared his own startup methodology in his best-selling book Zero to One, and in a nutshell can be described as this: create something new.

Sounds simple, but, as Thiel outlines throughout his book, it’s far more common for businesses to create more of the same thing than truly innovate and create something no one else has before.

We get caught up competing and trying to create a better version than the other businesses in the market, that we fail to dominate the market with something completely unique.

He explains the Zero to One methodology as this: “If you take one typewriter and build 100, you have gone from 0 to n. If you have a typewriter and build a word processor, you have gone from 0 to 1.”

Instead of worrying about your competition, Thiel argues you should be striving to ask yourself the question: “What valuable company is nobody building?” and go ahead and build it before anyone else does.

Businesses who used Zero to One: 

  • Facebook
  • Google
  • Spotify
  • Uber

Matthew E May, a commentator on strategic facilitation, explains why the above businesses (who weren’t necessarily the first to create their ‘thing’) became the Zero to One examples of our time:

“Going from Zero to One isn’t about being first in a technical sense. Actually, the most transformative companies are the last movers that come to define their industry. And you can’t get there by incrementally improving what already exists. Gates, the Google guys, and Zuckerberg didn’t merely tweak existing offerings; they improved on them by orders of magnitude”

 

 

Of course, with all these methodologies there’s much more to them than what we’ve outlined above.

So, if there’s one that piques your interest I strongly advise researching them, reading the books and then deciding if they’ll become a guiding star for your startup.

Or, instead, cherry pick from each method what fits with your own business ideologies.

My personal take is that no methodology, however smart, can replace an entrepreneur’s own intuition. After all, some of the leading entrepreneurs of our time didn’t knowingly subscribe to a system in order to succeed. So take inspiration and let them point you in the right direction but don’t forget that you’re the master of your own ship. 

 

Jen Smith is our resident email blogger. Sign up to our fortnightly newsletter to get more updates like this.  

 

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