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The Lean way of production that has completely changed the 80’s manufacture, is coming to change a new kind of industry known as the “startup industry”.

Build

Measure

Learn

In Greece today:

build-measure-learn

The term “Lean” was first used by John Krafcik in an article in 1988 called “Triumph of the Lean Production System.” Krafcik worked as a mechanical engineer at NUMMI, the joint manufactory of Toyota and GM in California, before taking his postgraduate diploma from MIT. He used the term “lean manufacture” to refer to a methodology for producing products and services. This methodology focuses on the elimination of waste and the improvement of consumer experience.

It is important to mention a term also associated with “lean manufacture“, which is even in our days popular in terms of design. The term Kanban emerged from the Toyota Lean project, and comes from a Japanese word which means soon. The main idea behind Kanban is to avoid starting more activities than those that can be accomplished.

The Lean way of production that has completely changed the 80’s manufacture, is coming to change a new kind of industry known as the “startup industry”.

The Lean Startup movement argues that the”lean manufacture” and Kanban principles can be used to improve business processes. The most prominent supporters of the movement are Steve Blank with “Customer Development Method” (2005), Eric Ries with “Lean Startup” (2001) and Alexander Osterwalder / Yves Pigneur (2009) with “Business Model Generation“.

The basic idea behind the Lean Startup movement is that innovation in business is associated with considerable uncertainty. Therefore, it is not the best move to use significant resources and becomes committed to a product or business model before testing the firm’s assumptions on the market.

To avoid wasting time and resources in order to create products that the market just does not need, Eric Ries suggests developing a minimal sustainable product (MVP). It’s a prototype that has enough functionality to be tested from the market, but it does not cost much to be grown. The prototype is then promoted on the market in order to test the fundamental prerequisites for its success.

Building on the “Build – Measure – Learn” methodology, Eric Ries argues that the final product that comes out on the market will be exactly what the consumer needs.

Build

By creating an MVP, a business can test its assumptions about the market that wants to launch its product. An MVP has only the necessary operating characteristics and is manufactured at the lowest possible cost. Many times, technology companies make more than one MVP to make more measurements in a shorter period of time and to promote an integrated product faster on the market.

Measure

It is very important for companies to give quality time to the process of measuring and analyzing the results. With this step, and with a lean process of developing a product, companies can really understand if their MVP has value and what they need to improve. They also need to focus on significant performance indicators, especially those that grow as demand for the product grows.

Learn

The final step in this recurring process is the step of understanding. The analysis of the results gives some conclusions on which future decisions about the product should be based. Sometimes, this is the most difficult step in the whole process, because the results may not be so encouraging. This fact leads to the effect of making a pivot change. By firmly maintaining the company’s vision and principles towards the consumer, the company will have to change its direction to meet the needs of the market.

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Many groups of people decide to start a startup project, not just to follow the trend but by necessity. Most of the time, financial resources are limited and time is running dangerously. The “Lean Startup“ methodology helps all these groups understand the market quickly and economically. This does not mean of course that all these teams will succeed, because we must not forget that startup projects are based on assumptions about the market. Most products that manage to survive are ultimately what the market needs. This is the main idea of ”Lean Startup“.

Changing the direction of a business route, whether this change is major or minor, involves great risk. But the risk is what often leads to the great success and overthrow of market data. With the right strategy and methodology, success is a step closer!

E.L. & A.P