The lean tech start-up is all the rage
Heralded as a new and better way to build a start-up, and based in the decades-old Japanese concept of lean technology, the lean start-up business process has become popular in recent years as a way to build a tech company.
The Japanese pioneered their concept to insure profitability in the manufacturing process, essentially eliminating any work or investment that didn’t produce value for customers, and thereby for the manufacturer. That idea was picked up by Eric Ries and Steve Blank, who applied it to the process of getting a start-up off the ground, especially in the tech industry. Thomas R. Eisenmann, a professor at the Harvard Business School, says, “If it works, it will reduce failure rates for entrepreneurial ventures and boost innovation. That’s a big deal for the economy.” The idea has been shown to work in Silicon Valley and is being adopted in other areas as well.
Most of the startups in which Ries and Blank have been involved are in the tech industry and have taken advantage of the tools available to move ahead inexpensively and quickly, such as open-source programming tools and internet-based marketing. This allows lean startup companies to spend just hundreds of thousands of dollars instead of the millions that were required several years ago, according to a New York Times article. The lean startup concept suggests the rapid development of what is called a “minimum viable product,” designed with the smallest set of features that will please a targeted customer type. When the initial product starts to sell, the company should keep tweaking its offering, then monitor the response of its users and changing the product accordingly.
All of these ideas will help a company get off the ground faster and cheaper, which will in turn allow more of them to survive and become larger, and still profitable, companies. A larger survival rate among such startups is obviously a good thing for business, and for the economies in which they operate. The lean start-up philosophy could be a major component of a reinvented U.S. and world economy, helping to lead the way to better times.
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