Entrepreneurs

What is the ‘lean startup’ method about to undertake fast and with low investment

This strategy is based on learning and experimentation to create startups in less time and with less money.

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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Opinions expressed by Entrepreneur contributors are their own.


Before, the traditional model for starting a business was based on having an idea, developing a business plan, and about 12 months later launching the product in the hope that it would work. However, this strategy hinders the creation process and often ends in the entrepreneur’s discouragement and with thousands of pesos (and time) spent on unviable and failed projects, says César Salazar.

About five years ago the concept of ‘lean startup’ , engendered by Eric Ries, became popular. This refers to the fact that the development cycle of a product can be narrowed and businesses can be directed more efficiently by measuring processes and feedback.

Salazar, promoter of Startup Weekend affirms that this way of thinking is what is dictating the world of innovative businesses. Explain that the term ‘lean’ is often misused and related to a “chafa” methodology and of poor quality. However, the investor promotes the idea that lean ain’t cheap (lean is not equal to cheap) but, on the contrary, is a way to build startups in less time and with greater potential for success.

Lean thinking is the ideology that drives most entrepreneurs in Silicon Valley . It is a model based on experimentation and also on the acceptance of failure. In fact, failure is an essential part of achieving goals and growth, both personal and professional.

Cesar knows this from his own experience. He created his own company at the age of 17, which he had to close due to his lack of understanding towards certain issues such as cash flow control. After working at various software companies, he visited Silicon Valley where he learned more about this concept and about taking advantage of “cultural issues to develop every day”.

Lean thinking proposes that the disadvantage of the traditional model (developing a thick and static business plan) is that it is based on the assumptions of the entrepreneur. “Entrepreneurship is about bringing things that do not yet exist in a market,” says Salazar.

The specialist ensures that this new model is made up of five main axes:

Continuous learning

Lean is about learning. It is seeing things through learning; ask yourself before doing something what you will learn from it. For Salazar, in the world of startups, networking and surrounding yourself with mentors and people who can teach you something is essential. The investor recommends the entrepreneur to have well identified the most influential leaders in their field to connect with them and take advantage of their experience.

Experimentation

Many entrepreneurs mistakenly believe that everything is already defined. To create a lean startup you should start assuming you don’t know anything and be willing to experiment with your ideas to see if they work or not. For example, Facebook is constantly experimenting (always in ‘beta’ phase), releasing apps and updates. Based on the response of users, the social network decides whether to keep it, delete it or improve it. All at a very low cost.

At this point, Salazar highlights the importance of knowing how to design experiments to test our hypotheses.

Data driven

Undoubtedly, one of the great advantages offered by the digital field is the possibility of measuring and quantifying a large part of our efforts. “It is not just about qualitative observation, but also about quantitative results,” says Salazar. Measuring and evaluating your efforts will allow you to make changes in time and avoid putting all your effort into problems that don’t even exist.

Iterative

The lean process is about repeating over and over again; to return to the steps taken (and that we think are overcome) and find new opportunities in them. Again learning is the key. You must be open to change and aware that improvement is always possible. Lean is not only ‘slim’, it is healthy and efficient.

Speed

The world advances rapidly, as are technology and changes in consumer habits. For this reason, lean thinking is the one that best adapts to this structure: you have to move fast, launch fast to market, seize opportunities and quickly identify errors and failures.

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