On 10 November 2013, Ola Sundell, CEO of Hub Helsinki, talked at Laurea University of Applied Sciences about one of the hottest topics of service design today: the concept of lean thinking. The basic idea of lean thinking is to produce maximum value to the customer with minimum waste. Ola gave us some guidelines on how to build up a start-up company by using this new approach.
Lean market entry and innovation paradigm change
In lean innovation the key to success is to find the right markets with the help of customers. The best way to enter the market is to start working with innovators and early adapters. Instead of expensive marketing campaigns, you can validate your ideas by using innovators and early adapters as a runway to the market. Ola Sundell even advised us to forget the open innovation paradigm where the keys to success are new ideas flowing in and out of the companies. Ideas are worth nothing if they aren’t selling.
A lean launch is a new way to enter the markets. In contrast to the traditional waterfall model, where you have different development phases from concept, development and testing to launching, lean launch means that you enter the markets right away with your product idea, targeting the customer with a minimum viable product.
Customer development methods – Learning is the core!
At the same time you can also forget about writing business plans, and use lean canvases instead! You can also learn faster working in small iterative batches together with your customers. The idea of using a canvas is to document your learning. Also this process takes place in iterative loops, where you learn by entering the market, making a strategy, testing and analysing the service concept. These loops are: Find the customer, Validate with the customer; Create the customer segment and Build up a company.
What is a start-up? Team is the core! What kind of business model?
In order to understand the new way, you need to understand what a start-up is. Although it’s a temporary organization working under extreme uncertainty, a start-up is also a team developing a new product and searching for a repeatable and scalable business model. It is a team searching for the right product-market fit. Building a business model for a start-up company is a market entry process.
This blog post was created as an assignment in SID course New Service Development and Innovative Service Systems.
More about Lean service development:
Erik Reis (2010) The Lean Start-up: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Business. Crown Business.
Ash Maurya (2012) Running lean – Iterate from Plan A to a Plan That Works. O’Reilly.
Steve Blank (2013) Why the Lean Start-Up Changes Everything. Harvard Business Review.