Home 10 Ways Lean Startup Methodology Can Impact Your Business

10 Ways Lean Startup Methodology Can Impact Your Business

Guest author Scott Gerber is the founder of the Young Entrepreneur Council.

Lean startup methodology—rapidly building and testing, iterating on your product and releases and validating what you’ve learned—can help you get to market quicker and avoid developing a product no one wants. That’s the goal, at least.

But what’s the impact on a real, functioning business? How do founders apply lean thinking in a practical way? Ten startup founders from YEC weigh in about how lean startup methodology impacted their businesses, for better or worse.

1. Helps Us Constantly Evolve

Build, measure, and learn are critical steps, though I often see startups overlook the “measure” and “learn” steps and instead do something like, “build,” “spend,” and “keep spending.” It’s critical to constantly evaluate your success and refine your processes and products. ZinePak is a service-based and product-based business—clients hire us to create products collaboratively with them—so it’s imperative that we’re constantly measuring our success and learning how to do things better. We have a formal debrief after every project to discuss what went right, what went wrong and what we can do better the next time around. Processes are like languages: In order to be most useful, they’ve got to be flexible enough to constantly evolve and change to meet an ever-changing environment. Brittany Hodak, ZinePak

2. Keeps Away the Pressure From Debt

We were lucky enough as a consulting company to launch our services with very minimal capital investment and zero debt. The good side is that we don’t have to look over our shoulders and worry about meeting payment deadlines. We don’t answer to anyone and are able to make decisions based on the long term goals of the business. The bad side is that we weren’t able to invest in new technology and grow as quickly as possible. However, the organic growth from reinvestment has allowed us to scale in a more controlled manner without sacrificing quality. Josh Fuhr, Auditrax

3. Prevents Us Being Stuck on One Idea

In a lean startup, everything gets tried and tested, and the possibility of the whole company pivoting is probable. If you get stuck on developing one idea, then you will hold the whole company back. Having a developer say they want something their way because that is the way the do things is not the right answer. You have to find a team that is willing to accept their failures fast and move on. Murray Newlands, Due.com

4. Causes Some Fragmentation

Small, independent experiments can often be hard to integrate into a broader perspective. With incorporating both lean and agile methodologies, we’ve often had to take some time to put the puzzle pieces together to paint a larger picture. Breaking down problems and creating discrete experiments has been really positive, but melding and prioritizing the solutions has been a challenge. Dan Pickett, Launch Academy

5. Helps Fend Off Risk In a Volatile Market

When I started my business, I vowed to do so with as few external resources as possible. I have a small office with little overhead and only a few essential employees. I employ only the technology I absolutely need and don’t implement anything unless there’s a clear business case for it. My sales levels have bounced around a great deal over the last few years, but my lean methodology means I haven’t had to worry that the business would go under. No matter what the market has thrown at me, I have been able to sustain a comfortable level of profit. I think if I had scaled up too quickly or had too grandiose a vision, I would have had to start over at some point, losing significant momentum. Alexandra Levit, Inspiration at Work

6. Keeps Us Tight

When I first started my journey as an entrepreneur and business owner, I was given two pieces of great advice by my mentors: 1) “Keep costs at a minimum and drive revenue,” and 2) “It’s always better to be on the revenue side of the business rather than the expenses.” These two tips have enabled us to grow into a million-dollar business within just a year, as we strictly focused on sales while keeping costs at the absolute minimum of what we needed to stay operational. Engelo Rumora, Ohio Cashflow

7. Doesn’t Help with Building Culture

We’ve kept operating costs low from the beginning by bootstrapping, and we’re continually focusing on improving our product, so lean methodology works well for us there. But there’s no way to quantify the importance of company culture within the lean startup methodology. Where does asking someone about their day or expressing concern for their well-being fit into discussions of efficiency and continuous improvement? However, team cohesiveness and employee morale are some of the most important assets for any company to have. That’s why I remind myself it’s important to step back from improving processes to consider the human element of my business. Investing time there might not seem efficient at first, but it’s one of the smartest long-term strategies for building a great team. Jared Brown, Hubstaff

8. Encourages Us to Be Agile

Because we have a strong product culture, we have adopted several techniques to help us build an agile marketing organization. Instead of long, involved plans, we challenge our team to keep it light and move quickly. We encourage testing, failing and iterating. And we use Trello, a kanban tool, to track marketing projects. It provides great visibility and allows us to reprioritize on the fly. Vivek Sharma, Movable Ink

9. Keeps Us Efficient

I always encourage my team to find the most efficient and simplest way to do everything and anything. This methodology allows you to avoid cutting costs and corners that may harm your business; instead, you are simply finding the best way from point A to point B. For example, when dealing with clients I have my employees do everything possible on their behalf before speaking with them. This saves time and money because they aren’t wasting hours calling our clients to get more information. Efficiency is a double win; it not only saves us time but also increases customer satisfaction. My customers are much happier when we are doing everything we can to help them. Elle Kaplan, LexION Capital

10. Helps Us Continuously Better Our Service

One way that this methodology has had a huge impact on Guzu is continuous validation and testing of new products, services, or features. We don’t have the time or money to take too large of a risk without testing and validating that it is a good fit for us. A large part of our risk comes in marketing our site, which is a challenge more startups face. We focus on small, concentrated trial periods on all marketing campaigns. If the campaign provides positive results, we’ll continue to scale that channel; if not, we’ll quickly eliminate it from our portfolio. It’s important to be cautious of your finances as a startup, and stretch your money wisely. —Hesam Meshkat, Guzu

Photo courtesy of Shutterstock

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