Product thinking
5 min read

What is Lean?

By
Louise Hill
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Overview

Build, measure, learn. An efficient way to validate, test and ship digital products. Learn more about the movement.

Eric Ries popularised the Lean movement through his book ‘The Lean Startup’, which was published in 2011. The Lean Startup provides a scientific approach to creating and managing startups by getting a desired product into customers' hands faster. It combines Toyota’s ‘Lean Manufacturing’ principles, Steve Blank’s ‘Customer Development Methodology’ and Agile software development practices.

The Lean Startup method teaches you how to drive a tech startup—how to lead, when to pivot, and when to keep going—to grow and validate a business at maximum speed. It centres around 'failing fast'—learning rapidly from customer feedback and iterating on products incrementally.

Business plans refreshed

The Lean Startup's core premise is that traditional business plans do not work for a startup. Business plans usually provide fixed projections covering today to around 3 years into the future. A startup, however, is still experimenting on where it will finally focus and needs to be able to pivot at any moment, adapting to new trends and technologies. Therefore, Ries recommends using a Business Model Canvas instead—a set of hypotheses (or ‘good guesses’) which you can update regularly as you learn more.

Business model canvas, showing each section a business needs to fill out - Key partners, key activities, key resources, value propositions, customer relationships, channels, customer segments, cost structure, revenue streams.
A business model canvas template

How can Lean methods help your team or business?

You can use Lean methods to:

  • Help validate a business model as a startup
  • Create new product innovations in a larger enterprise using the concept of a Minimum Viable Product
  • Run experiments and learn fast to optimise existing products or services
  • Work smarter, not harder and reduce waste and cost during product development

What does the Lean Startup methodology look like?


The principles
Entrepreneurs are everywhere

If you’re looking to save time and resources, using Lean methods could be ideal. You don’t need to be a startup or a small business, the methods can be applied to larger firms and departments too.

Entrepreneurship is a management role

A startup needs good management, but the style required might look different to overseeing a larger enterprise. People may wear a wide variety of hats, but entrepreneurs need to react in risky situations, manage investors and encourage experimentation, while checking the risks are well calculated.

Validated learning

This means conducting experiments, retrieving results, and basing all decisions on relevant data—either quantitative or qualitative. Does your product focus on solving a serious problem for your target customers? If not, how can you pivot and adapt to focus so your product addresses their real needs?

Innovation accounting

Traditional accounting techniques can prove unhelpful when you’re a new venture, as there are few metrics or numbers to benchmark against. Ries encourages: starting with a simple dashboard of customer-focused metrics (e.g. conversion rate, per customer revenue, etc.); then as you mature slightly LOFA (leap of faith assumptions) metrics to show your product’s potential long-term value (e.g. retention rates, referral rates); then finally NPV (net present value) metrics, which are more tailored to a specific business model (e.g. online marketplace—number of transactions, etc.).

Build, measure, learn

Last, but certainly not least, is the continuous discovery processes at the MVP (minimum viable product) stage of innovation. This is a loop of building a very basic version of the product, getting it into the hands of customers as quickly as possible and then improving and developing it based on feedback.

Six circles with arrows showing them spinning around. On the circles are "Measure, code, build, ideas, learn. data, measure".
The build, measure, learn loop

Where does Lean UX fit in?

Lean user experience, popularised by Jeff Gothelf and Laura Klein, is an off-shoot of the same work smarter philosophy. The focus is on outcomes over outputs. Instead of producing a lot of documentation and lengthy research, Lean UX is all about running hypothesis-driven design within product teams, testing assumptions and learning more and more through regular contact with customers. This means product managers, owners and developers all join designers to speak to and learn from customers. They are empowered to workshop solutions as a team. Designers will typically create prototypes to test out with customers, or the team will run, for example, A/B test experiments on 2 designs. There are many UX techniques which complement a Lean team's working style.

So, how can I help you with Lean practices?

At Futurelabs we work smart. I can help you set up better business model experiments for your ventures or departments, assist with testing ideas and prototypes with your customers or service users, advise your product and design teams on how to run fast research which integrates into Agile developer teams, or help your internal teams to define and build Minimum Viable Products.