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Module -3
"Introduction to Lean Start-up"

From:
Dr.Mohan N.
Asso.Professor
CMRIT-MBA
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• Syllabus:
• Lean Start-up Methodology
• Introduce to the Principal of lean start up methodology,
• Emphasizing iterative development, Customer Feed back, Rapid prototyping in digital ventures.
• Digital Entrepreneurship Funding & Finance
• Exploring Funding Options & Financing strategies specific to digital Entrepreneurship, including
Crowdfunding, Venture Capital, & bootstrapping.
• Legal & Ethical Considerations
• Address Legal & Ethical considerations in digital entrepreneurship, covering topics such as
intellectual property, data privacy, & ethical Business Practices.
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"Lean Start-up"

• Setting up your start-up is difficult when there are so many

entrepreneurs in the race.
• It is also a confusing and challenging task for startups to decide
where to start? And what to choose that ensures less risk and a
high chance of success.
• However, by adopting a lean startup methodology you can increase
the chances of your startup’s success.
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What is Lean Start-up?

• Origins: Coined by Eric Ries in his book "The Lean Startup.”

• Definition: A methodology for developing businesses and products that
aims to shorten product development cycles by adopting a combination of
business-hypothesis-driven experimentation, iterative ( Repetitive) product
releases, and validated learning.
• A Short history of the lean startup
• First lean approach movement was started in Japan back in the 1950s,
• Lean startup approach today, there are only two names that come to mind:
Steve Blank & Eric Ries.
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A Short history of the lean startup

• Steve Blank was first set out to understand the world of today’s startups,
looking for discovering patterns that contributed to successful startups’
success.
• He then published all his findings in his books namely ‘4-Steps to Epiphany’
and ‘The Startup Owner’s Manual’.
• Later, Eric Ries, one of the students of Steve Blank, applied the same
findings to his own startup. When he succeeded, he wrote the book – The
Lean Startup
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Five Key principles of lean startup

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Five Key principles of lean startup

• Entrepreneurs are everywhere: That means you! You could be anywhere and create a startup. The only
key in successfully doing it is thinking big, beginning small, and scaling super-fast!
• Entrepreneurship is management: With a shiny product idea and want to establish a successful startup
based on it, you need to hold yourself accountable and exercise highly-effective management skills.
• Validated learning: Address the key risks that are involved in your product or idea and make
appropriate adjustments to position your business correctly.
• Build, measure, learn: The main aim of your startup is to transform ideas into different versions of a
product, measure the metrics based on customer feedback, and learn whether you need to steer (make
modifications) or persevere (continue same).
• Innovative accounting: Entrepreneurs accountable for the actions taken by them and its outcome through
their description of milestones, measurement of progress, and prioritization of work.
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Three stages of lean startup

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Three stages of lean startup

• Problem/solution fit stage: A startup basically tries to identify whether the

problem it is trying to solve is worth solving or not.
• Product/market fit stage: Startup basically tests the reliability and attractiveness
of its product or solution for sales.
• Growth stage: Lean startup is growth in which the startup primarily focuses on
increasing the scope of its business model.
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Agile or lean? - I’m confused!

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Iterative Development
(Build-Measure-Learn Cycle)
which aims to create efficient, adaptable, and customer-focused businesses.

• Build:
• Minimum Viable Product (MVP): Start with the simplest version of your product that allows you to
test your hypotheses with the least amount of effort and resources.
• Rapid Prototyping: Develop quick prototypes to test specific features or functionalities. This
allows you to iterate on individual components before integrating them into the larger product.
• Measure:
• Metrics and Analytics: Identify key metrics that align with your business goals and track them
meticulously. Use tools like A/B testing, user analytics, and customer feedback to gather data.
• Customer Feedback: Engage with your customers early and often to understand their needs,
preferences, and pain points. Surveys, interviews, and usability testing can provide valuable
insights.
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Iterative Development
(Build-Measure-Learn Cycle)
which aims to create efficient, adaptable, and customer-focused businesses.
• Learn
• Validated Learning: Analyze the data and feedback collected to validate or invalidate the initial
assumptions.
• Pivot or Persevere: Based on the learning, decide whether to pivot to a new strategy or
persevere with the current plan.
• Advantages of Iterative Development
• Risk Mitigation: By testing assumptions early and frequently, you reduce the risk of investing
heavily in a product that may not meet market needs.
• Flexibility: Iterative development allows you to adapt quickly to changing customer needs and
market conditions.
• Resource Efficiency: By focusing on MVPs and rapid prototyping, you use resources more
efficiently, avoiding waste on unnecessary features or over-engineering.
• Customer-Centric Approach: Continuous feedback from customers ensures that you build a
product that truly solves their problems and meets their needs.
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Practical Steps for Implementing Iterative Development

• Identify Assumptions: Clearly define the assumptions underlying the business idea. These
could be assumptions about customer needs, market size, or the feasibility of your technology.
• Develop MVPs: Create MVPs to test these assumptions. Focus on developing just enough
functionality to gather relevant data and feedback.
• Gather Data: Use analytics tools, customer feedback, and other methods to collect data on how
users interact with your MVP.
• Analyze and Learn: Regularly analyze the data to understand what works and what doesn't. Use
this learning to refine your product and strategy.
• Iterate Quickly: Implement changes based on your learning and launch updated versions of your
product rapidly. The faster you iterate, the quicker you can adapt and improve.
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Customer feedback
• Validates Assumptions
• Hypothesis Testing: Lean Startups operate on a set of assumptions or hypotheses about the
business model.
• Real-world Evidence: Instead of relying on theoretical ideas, feedback provides real-world
evidence on what works and what doesn't.
• Minimizes Risk:
• Reduces Waste: By continuously iterating based on customer feedback, startups can avoid
building features or products that customers don’t want, thereby reducing wasted resources.
• Informed Decisions:** Feedback allows startups to make data-driven decisions, reducing the risk
of failure by aligning product development with customer needs.
• Enhances Product Development
• Iterative Improvement: Continuous feedback allows for iterative development, enabling startups
to refine and improve their product in response to user needs and preferences.
• Feature Prioritization: Helps identify which features are most valuable to customers, allowing
startups to prioritize their development efforts effectively.
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Customer feedback
• Boosts Customer Satisfaction and Retention
• Customer-Centric Approach: Engaging with customers and incorporating their feedback ensures
that the product is designed with their needs in mind, leading to higher satisfaction and loyalty.
• Builds Trust: Actively seeking and acting on feedback demonstrates that the company values its
customers, fostering a sense of trust and partnership.
• Facilitates Market Fit
• Product-Market Fit: Feedback helps in understanding whether the product meets market needs,
facilitating a better product-market fit which is crucial for startup success.
• Market Insights:** Provides insights into market trends, customer behaviors, and preferences,
which can be pivotal for strategic planning.
• Accelerates Learning and Growth
• Rapid Learning: Enables startups to learn quickly from mistakes and successes, accelerating the
overall learning process.
• Scalability: Helps identify scalable elements of the business model, allowing startups to grow
efficiently based on what’s proven to work.
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Implementing Customer Feedback in Lean Start-ups

• Customer Interviews: Conducting interviews to gain qualitative insights.
• Surveys and Questionnaires: Collecting structured feedback through surveys.
• Usability Testing: Observing how customers interact with the product to identify pain points and
areas for improvement.
• Beta Testing: Releasing a beta version to a limited audience to gather feedback before a full
launch.
• Analytics and Metrics: Using data analytics to track user behavior and feedback patterns.
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Prototyping in digital venturing

Lean startup framework involves quickly creating and iterating on minimal versions of a product to test ideas and
validate assumptions.
• Understanding Rapid Prototyping:
• Rapid prototyping is the process of quickly creating a preliminary version of a product or feature
to explore ideas and gather user feedback.
• Various tools such as wireframes, mockups, and MVPs (Minimum Viable Products) are used to
build these prototypes.
• Digital Venturing
• Digital venturing involves exploring new business opportunities using digital technologies. It often
requires innovation and agility.
• In the lean startup approach, digital venturing focuses on creating and validating digital products
or services in a fast-paced environment.
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Prototyping in digital venturing
Lean startup framework involves quickly creating and iterating on minimal versions of a product to test ideas and
validate assumptions.
• Lean Startup Methodology
• Build-Measure-Learn: This cycle is central to the lean startup approach. Startups build a
prototype, measure its performance with real users, and learn from the results to make necessary
adjustments.
• MVP (Minimum Viable Product): The MVP is a basic version of the product that allows the team
to collect the maximum amount of validated learning about customers with the least effort.
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Steps in Rapid Prototyping in Digital Venturing

• Idea Generation: Brainstorming and identifying potential solutions to a problem.

• Sketching and Wireframing: Creating basic sketches and wireframes to visualize the concept.
• Developing the Prototype: Building a functional or semi-functional prototype that can be tested
with users.
• User Testing: Presenting the prototype to a target audience to gather feedback.
• Iterating: Using the feedback to make improvements and refine the prototype.
• Scaling: Once the prototype has been validated, it can be scaled into a full-fledged product.
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Benefits of Rapid Prototyping in Lean Start-up

• Speed: Helps in quickly bringing ideas to life, allowing for fast feedback and iteration.
• Cost-Effective: Minimizes resource expenditure by focusing only on essential features.
• User-Centric: Ensures that the product is built with the end user in mind, leading to higher
satisfaction and usability.
• Flexibility: Allows for continuous improvement and adaptation based on real-world feedback.
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Challenges and Considerations

• Quality vs. Speed: Balancing the need for quick iterations with maintaining a reasonable level of
quality.
• User Feedback: Ensuring that feedback is actionable and representative of the target audience.
• Team Collaboration: Facilitating effective communication and collaboration among team
members.
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Tools for Rapid Prototyping

• Design Tools: Sketch, Figma, Adobe XD for creating wireframes and mockups.
• Prototyping Tools: InVision, Marvel, Axure for building interactive prototypes.
• Development Frameworks: React, Angular, Vue.js for quickly developing front-end MVPs.
• Feedback Tools: UserTesting, SurveyMonkey, Typeform for gathering user feedback.