Ola Sundell, CEO of Hub Helsinki, introduced lean startup practices for SID students in November 2013 and gave a few hands-on tips and advices on how to increase your odds on building a successful business. Ola Sundell’s message for startup entrepreneurs was to build the minimum to learn the maximum and hit the markets as early as possible. This can be achieved by following Lean thinking and Lean startup practices.
Ola Sundell explained to us that on today’s markets good ideas alone don’t matter anymore. It’s all about creating value for your customers by solving their problems. If you want to be a successful startup you have to concentrate on entering the markets fast and finding your customers.
“If there aren’t a market for you, you have to fail. And you have to fail fast!”
– Ola Sundell
The term lean was first introduced by a research team headed by Jim Womack, Ph.D., at MIT’s International Motor Vehicle Program to describe Toyota’s business during the late 1980s. Toyota’s production system (TPS) is well-known for its focus on reduction of the original Toyota “seven wastes” to improve overall customer value. Since the lean thinking is based on lean manner of manufacturing has caused some to think that lean thinking can’t be utilized with product or service development but isn’t true. Lean thinking can be adopted into any type of business or process.
The core idea of Lean thinking basically is to reduce waste and generate more customer value. By waste is meant everything that doesn’t create customer value and distracts you from focusing on generating and bringing more customer value. A lean organization is entirely focused on bringing value to their customers and they have crafted their all their processes to support this effort. To accomplish this, lean thinking changes the focus of management from optimizing something from here and there to optimizing the whole flow of service development through entire value stream.
Lean startup practices
Lean startup practices can be seen as one fit for all solution for startups and existing companies seeking growth in new businesses. Lean startup practices are processes to solve problems that new companies are facing with and finding your customers. Lean startups launch small and often and gather feedback from their early adopters and iterate.
Ola Sundell advised startups to work in small batches to learn faster. He stated that fastest way to do this is to skip business plans totally and enter the markets as early as you can and start building your real product – your dynamic business model – and build it iterative based on what you learn from your customers. You should launch minimum viable product (MVP) as soon as you can and start learning from early adopters.
Lean startup’s checklist:
- Base on hypothesis-driven business model instead of implementation-driven business plan.
- Concentrate on customer development instead product management.
- Always use agile development model.
- Form customer and development teams instead of departments of functions.
- Use metrics and measurement instead of accounting in financial reports.
- Expect failure and learn from those.
- Move fast.
Steve Blank: “Why the Lean Startup Changes Everything” (2013)
If you got interested more useful reading here:
Steve Blank: “Why the Lean Startup Changes Everything“
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.