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El blog de Mikel Niño
Industria 4.0, Big Data Analytics, emprendimiento digital y nuevos modelos de negocio

Understanding the "lean" in "lean startup"

When we talk about lean startup, what do we know about where this "lean" comes from? For example, in Spanish is quite usual to see the "lean" in "lean startup" translated as "ligero" (light) or even "esbelto" (slim, slender), but in my opinion the translation that best captures the essence of it is "magro" (nonfat, fat-free). To better understand this, I think it is really valuable to examine the origins of the expression, that was coined by Eric Ries based on an analogy with the practice of "lean manufacturing", the management philosophy that was born in the manufacturing industry world. If we analyze the fundamentals of lean manufacturing we will better understand what makes Eric Ries' methodology "lean" and what we should be looking for when we use it.

Lean manufacturing philosophy is derived from the quality management practices that were developed mainly by Japanese industry during the second half of the 20th century, with Toyota and its "Toyota Production System" as its epitome. The main key this management philosophy is built upon is the idea that everything that we do must be assessed according to whether our customer cares for it and gets value from it, therefore using resources to do something that does not contribute to that value creation must be considered a "waste" and thus eliminated. In this sense, when analyzing sources of "waste", lean manufacturing focuses on aspects such as overproduction, waiting times, extra costs derived from defects and rework, etc.

How does this philosophy connect with startup creation? To understand it, we must analyze the idea of "start up" as the phase of a company's creation process where our work must focus on searching, observing and experimenting in order to validate the repeatable and scalable business model, and the concept of the "minimum viable product" not as an end by itself but as a means to get validated learning via contrast and experimentation.

Thanks to those concepts, we can understand lean startup philosophy as the management methodology whose goal is the reduction/elimination of any waste in resources (time and money) while we are trying to build the solution that solves our customers' problem and gives them real value. Lean startup approach provides us with tools aiming at guaranteeing us that, if we are failing in our value proposition for our customers, at least we detect it as soon as possible thanks to those validation experiments and therefore we waste as few resources as possible "building something that nobody wants". Eric Ries himself, when highlighting those experiments as the tool used to identify the need for a "pivot" and speed as one of this process' strong points, states the following:
"If we can reduce the time between pivots, we can increase our odds of success before we run out of money."

In short, the use of lean startup methodology mainly aims at learning to fail fast, reducing as much as possible the "non-quality" overcosts that would arise from investing resources in something that does not contribute to building the product that our customer will want.

[Haz clic aquí para la versión en español de esta entrada]

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