New businesses typically build a detailed business plan and work out all the specifics of their offering before they launch it in the marketplace, but that strategy might not allow for the nimbleness entrepreneurs need to react to changing markets. Even a well-managed startup with great ideas can fail if they’re unable to adapt quickly to changing conditions.
Running a “lean” business, on the other hand, takes a flexible approach that allows a dialogue between the startup and its potential customers, saving resources while helping to gradually hone the startup’s offerings. Use these steps to lay the foundation for a lean business.
Start with a flexible business plan.
Many businesses build a five-year plan with hard deadlines, but the market could undergo game-changing disruptions at any time. Lean startups are ready for the unexpected with a business plan that allows for testing and revisions. Create a timeline that sets milestones for the first year and goals for future years — for instance, you might set goals for when you should finish developing the beta version of your product, rough dates for testing phases and revisions, and other loose benchmarks for things like securing funding and establishing your business’s location and personnel. Revisit your business plan frequently (quarterly, for example) to recalibrate. If it’s helpful, construct scenarios for how you’ll react to different surprises.
Let your market refine your offering.
Creating a fully completed product can eat up much of your investment money and months of your time. And if you miss the mark, all that effort and cash has been wasted. Instead, let the market itself do the heavy lifting. Plan to get your offering “good enough” and test it out with your target customers. Be sure that the quality of your offering is high enough that customers will feel positive about your company, and be clear that it’s still in a testing phase. After each iteration, review your product and make necessary changes. You might have to make hard choices about the direction you need to take — if you’re still missing the mark after more than five rounds of feedback, you may need to drastically rethink your offering or abandon it in favor of something else.
Create a process for gathering feedback.
Develop customer surveys using free software such as SurveyMonkey®, or put a short survey directly on your website using a tool like Qualaroo. Tap large online communities of beta testers at sites such as Beta List or Erli Bird, where you can submit your products for testing and feedback from real-world users. In-person feedback takes more work to get, but can lead to even greater insights. Form a local focus group to get in-depth opinions, or set up a usability test where you allow participants to use and react to your product. Assemble these groups by asking friends or colleagues to recommend potential users — it’s best if you don’t know your focus group members personally.
Form a brand identity for your startup to help you stay the course.
The adaptive mindset of a lean business can have a downside if it leads to a lack of clarity with regard to your culture and mission as a company. While your product and brand will evolve to meet customer and market needs, the core of your business should remain intact. Determine what makes your product or service memorable, and flesh out a solid brand identity that will stick in the minds of your users. For instance, a startup that is developing apps to help families make environmentally friendly consumer choices might tweak its formatting and user experience over time, but it should maintain its brand identity with consistent logos and design. Its central mission should also be clearly spelled out to help its creators stay the course as the startup grows and changes.
Institute a lasting “lean” culture at your startup.
After your product leaves the beta phase and your startup is on more solid footing, it might be tempting to fall into the same habits that often afflict small companies: rapid expansion, lack of adaptability and a growing distance between the company’s offering and the demands of the marketplace. Conduct research before expanding or moving a business to make sure the timing is right and you have the resources available to support such a move. Followers of a lean business model are always learning and revising their product when necessary. Don’t get complacent. Continue to monitor the market and the competition, pay attention to customer feedback and be willing to evolve to address issues or new needs.
To maintain success in today’s business environment, you must be able to adapt as the times and your market change while never losing touch with the core values that attracted your customers from the start.
Print this article