What's a Lean Startup & Is It Right for You?
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What is a Lean Startup?
How a Lean Startup Works
Lean Startup vs. Traditional Business Model
Plans. The first is the type of planning that’s involved. A traditional business typically creates a multi-year business plan and tries to stick to it. A lean startup plan is much more flexible. Employee Skills. Additionally, a traditional business may focus on hiring employees with specific expertise to help execute the goals of its business plan. Lean startups, on the other hand, try to attract employees who can easily adapt to changing circumstances. Metrics. The two types of businesses may also use different metrics. A traditional business may focus on financials from the beginning, whereas a lean startup is likely to focus on measuring customer-based metrics like customer acquisition cost, customer churn rate, and lifetime customer value.
Phases of a Lean Startup
Business Model Canvas
Pros and Cons of a Lean Startup
Pros of a Lean Startup
Enables you to quickly identify and create the best product for your customer Can save money and time, compare to a more traditional business model Builds in customer feedback from the beginning
Cons of a Lean Startup
Early feedback sessions may lead you to actually abandon an idea that could have been successful given more time Could delay your ability to earn revenue depending on how you approach those early feedback sessions (through either paid or complementary products) May make it more difficult to get small business loans early in the process than it would be with a more traditional business model
Is a Lean Startup Model Right for My Small Business?
Frequently Asked Questions
About the Author
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