Eisenmann teaches the concept of the "lean startup" developed by HBS Entrepreneur-in-Residence Eric Ries and entrepreneur Steve Blank. In this case lean does not mean a shoestring budget but rather avoiding wasting of resources, saving time, and creating maximum flexibility.
The object of the lean starup methodolgy is to get a product into the hands of consumers as quickly as possible and to course correct depending on what they tell you about it.
As Eisenmann tells HBS Working Knowledge:
"Most startups fail not because they can't build the product they set out to build, but because they build the wrong product, take too long to do that, waste a lot of money doing that, and waste a lot of money on sales and marketing trying to sell that wrong product. It takes a lot of time, time equals money, the money runs out, and the start-up fails painfully."
So an early step is to create a "minimum viable product," something that isn't full of bells and whistles but provides enough features to elicit customer reaction. As the feedback flows in, the company keeps iterating both the product and overall strategy until it arrives at the correct "Product Market Fit" -- a solution that matches the problem.
According to Ries, the three drivers of lean startups are:
- The use of platforms enabled by open source and free software.
- The application of agile development methodologies that dramatically reduce waste and unlock creativity in product development.
- Ferocious customer-centric rapid iteration, as exemplified by the Customer Development process.
What do you think of this hurry up and launch strategy? Would it work for you?
Related Reading:dierken, CC 2.0)