Businesses grow via diversification of portfolio. What do we imagine when we hear the phrase “developing a product”? Producing in a different color, different shape, changed weight or minor external changes? Interestingly, a product needs to change in many important dimensions to get truly developed. This is where Lean approach kicks in. Lean approach answers the core question – why does one create a product? As a marketer, you don’t design or produce in hopes of being “the creator of that cool product”. You are not designing to use it yourself either. You want to sell your idea and get as much money as you can make out of it. Who gives that money? Customers. So, your sole focus should be on molding your product or service according to the preferences of your customers. In that regard, Lean strategy allows you to carry out measured experiments with periodic gaps for growth and evolution of your product, aiming for gold that takes over the market!
Cuts Back on Cost
Startups are not big business companies and the fact is, you can’t have a business model that can guarantee success. Legal and financial laws are often undermined by startups and small local businesses. This leads to unnecessary costs and unanticipated cases which, as Chicago Tribune points out, leaves to a severe damage or a massive failure in business. Lean startup strategy prevents wastage of investor’s money on plans that are not going to work in the end. It enables you to see how the implementation of your money is received externally. You can see the errors of your ways during early stages, backtrack and rewrite your business plan.
Cuts back on Risk and Uncertainty
This strategy makes sure you are doing everything you can to reduce risk and uncertainty. You test your product, take feedbacks from the potential customers and you spend less on these initial, highly uncertain phases. After operating test-runs for several times, you can identify risk factors properly, and cut them out from your system. You invest more as the risk and uncertainty decreases. We initially assume our idea will be a huge success but that I seldom the case. We can’t lose everything by banking on that assumption. This is a surefire way to reduce percentage of uncertainty in the business model.
Lean strategy involves creating MVPs or “Minimum Viable Products”. It’s the idea where development of your product happens in increments. You build an initial model of your product, you let the customers use it and you take feedback to correct that model. Listening to your customer is a must for future success of your business. So you must go out there and ask questions from the potential buyers – what they want, how would they like the distribution system to be, what prices are they willing to pay for what features, which parts of your plan they find to be redundant. You got to ask everything!
Diversification of Initial Idea
The best part of this strategy, according to many marketing gurus, is that it reprograms your attitude towards failure. As it happens with most start-up owners, one “Ureka!” moment to achieve clarity, you figure out your big idea and you keep thinking this is what the world needs. You become protective of the idea, and more often than not, this result into developers being stuck on one single idea which is boring, not preferred by the customers and an ultimate failure. Lean strategy mixes up the demands of the customers with your initial idea of the product or service that you are going to offer, thus bestowing you with the ultimate edge for your business.
Makes the Business Stay Afloat
Lean strategy advices constant research and upgrade of a start-up’s product. Each phase of the product should have a fixed trial period, after which the feedbacks will be reviewed to bring in a better developed version of the same product. What you want in a product might not align exactly with the customers want! And sometimes, customer demands create such amazing features that they become timeless. So, lean strategy helps your business grow even when you have passed the initial turbulent start-up phase.
Maximizes the Benefit
As we mentioned in the beginning of this article – earning and maximizing profit is the primary target for any kind of business. Lean strategy helps you invest money in a situation with decreased risk. It helps you meet customer demands and give a more than satisfactory service. Following this strategy helps a business succeed and flourish over time – reduced cost, reduced risk and prolonged stay in the market – certainly the most effective strategy for your startup. It will optimize you benefits to the max!