Startups - Ideas You Can Test

     In my last post, I provided a broad overview of how lean manufacturing principles are being applied to the process of innovation.  Lean thinking is ultimately about eliminating waste from a process and being as efficient as possible.  In the context of manufacturing eliminating waste means producing Toyota's with fewer and fewer defects.  In the early stages of a new business, eliminating waste means finding a sustainable business model quickly and efficiently.  All startups begin with an idea.  Here are a few examples:

• People will pay more for self-serve frozen yogurt sold by the ounce
• Let's make a digital version of a Sony Walkman that plays MP3s
• Let's make a digital Walkman, make it super simple to use and connect it to a digital music store
• We should gamify the job search process

These ideas may be good or bad or somewhere in between.  The goal of a lean startup is to quickly discard the bad ideas, optimize and scale the good ones, and figure out how to move the so-so ideas into the good or bad categories.

The FroYo Test

Lean Thinking and Entrepreneurship

With the release of Eric Ries' bestselling book The Lean Startup two months ago, the Lean Startup movement has received tremendous exposure in the business press and general media.

So, what are lean startups?

Lean startups use a scientific approach to creating and managing innovation and to get profitable products to customers faster.  The approach adapts concepts from lean manufacturing to reduce waste in the entrepreneurial management process and attempts to reduce the likelihood that a startup creates a product doesn't lead to a sustainable business (eg. a product that no one wants or that no one will pay for).  Of course, using this approach doesn't mean that lean startups won't experience product failures.  Rather, it allows entrepreneurs more opportunities to test their business hypotheses and learn from customers given the same amount of time and money.

Ries has five guiding principles for lean startups: