Frequently Asked Questions About Lean Startup

This is the second post in our 13-part Lean Startup Co. Education Program series. A curated collection of pieces designed to cover topics ranging from cross-functional teams, to embracing failure, complete with real-world stories from our diverse roster of clients and insights from our Lean Startup Co. Labs Faculty.

The education team at Lean Startup Co. gets a lot of questions about how Lean Startup methods are used, why it’s even important, and who it benefits. This framework for entrepreneurial management continues to grow in popularity while being applied to new sectors and different size companies. Below is our attempt to respond to some of your most pressing questions.

Who uses Lean Startup?
Entrepreneurs and innovators of all kinds use Lean Startup methods. These techniques are used in large corporations like GE to redefine product development processes and departmental functions. Lean Startup principles are used by inventors to transform brilliant ideas into marketable products. It’s used by the federal government to deliver services by breaking through the long-standing barriers of bureaucracy.

Is it only for startups?
Not at all. In a world changing at unprecedented rates, companies have realized they must keep up with an evolving market. As Eric Ries says in his latest book The Startup Way, “In today’s marketplace of uncertainty, whoever learns fastest wins.” The principles of entrepreneurial management can be applied across many sectors and different size companies. While the Lean Startup methodology was developed in an entrepreneurial setting, the process is at least as applicable to ongoing innovation and product development efforts in mature companies. In fact, the gains to be realized in this setting may be far greater as the path to the customer may be obscured by far more waste, bureaucracy, and distance than in a new entrepreneurial effort. For a growing startup company or corporate project team, Lean Startup provides the framework to maintain the entrepreneurial spirit in the face of rapid growth.

Is it just for making products?
An emphatic no! In fact, Lean Startup is less about building products than it is about defining and supplying exactly the right value through those products in record time. Lean Startup takes advantage of the entrepreneurial energy of a new idea and spreads that energy to internal process design. Lean Startup usually finds a foothold in product development, but a fundamental tenet of the methodology is that innovation is the key to business process improvement at all levels.

What industries use Lean Startup?
It would be far easier to list the industries where Lean Startup cannot apply. There are none. Your business might be in IT, engineering, healthcare, energy, management, construction, consumer goods or defense, but any business that supplies something of value to a customer (and that would be every business) can use Lean Startup.

What about hardware?
The concepts of Lean Startup were developed in a Silicon Valley startup. But just as the methodology goes beyond that company, so too does it go beyond technology products. From jet engines to jigsaw puzzles to transformative new business processes, the method provides a new way of supplying customer value without the risk and expense of the traditional product development process.

How is Lean Startup different from agile and design thinking?
It would be easy to answer this in a “Lean Startup vs. Agile vs. Design Thinking” format, but it would give the wrong idea. Lean Startup may obviate the need for certain portions of one or the other, but the goals and much of processes are not incompatible with one another. As defined in Lean Startup, a startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. It is the condition of uncertainty that Lean Startup seeks to resolve. Once a customer has been identified and value defined, you’ll have conditions wherein production can proceed with reasonable certainty and confidence of success. What that course of action looks like or is called is less important than the fact that the team can now deliver a focused product, with a ready customer. That’s a far better culture to work within.

Is Lean Startup specifically for B2B or B2C?
The only real difference between business to business and business to consumer in Lean Startup terms is that B2C has a larger pool of customers for experimentation and measurement of the value proposition. The whole reason Lean Startup works, however, is that it uses a small group of customers to gauge value, i.e. if I build this product, will my customer buy it?  Similarly, customers can be defined very broadly and maybe an internal department or function group within an organization.

Can we just dip our toe in?
It’s natural to want to test drive a new program before making a full commitment to what can amount to functional and organizational change. Depending on your situation, we might even recommend that you do. What we caution against is the implementation of Lean Startup (or any other program) without clear measurement to gauge success or without visible regular communication of goals and progress to all stakeholders, particularly to executive leadership. We can help define the metrics of your test drive to ensure it has the support it needs.

Who needs to be bought-in?
Lean Startup will be new to most of your team. You’ll want to learn the responsibilities of each functional group and what the expected benefits and responsibilities will be. People tend to fear change less than reprisal, so it’s important for everyone involved to understand that there will be hiccups in the learning phase. When senior leadership makes it clear that mistakes, also known as learning, are just as expected as participation, this liberates support and creative input at the operational and middle management level. That’s the ideal environment for Lean Startup to thrive.

What is a cross-functional team? Why is it important?
No business function would exist on its own and each is supportive and interdependent of one another. To begin the Lean Startup journey, it’s best that business functions must be aware of that relationship and prepared to devote resources to the program. It’s critical that every department and function (hence “cross-functional”)  to understand their role in the new way of working.

Can we do a training and be done with it?
There may be one member of your team who is so charismatic, such a champion of Lean Startup, and who has the ultimate authority to see it through. However, bureaucracy and momentum tend to work powerfully against even the most enthusiastic of such leaders. For many, it seems easier, and safer, to be a settler than a pioneer. Advanced training and ongoing coaching is a tremendous catalyst to getting the whole team to see that the new territory is rife with meaningful opportunity. Rarely would we recommend going it alone but we also understand that “being there” for you shouldn’t mean always being there with you.

What is training, vs coaching vs consulting?
Training is informational. It’s to get your team aware of new terms, new tools, new accountabilities, and new possibilities. Training presents new concepts in a hands-on and interactive forum, training isn’t about change, it’s about learning. Consulting is, in part, where a consultant learns about you, your challenges, your goals. The better a consultant knows you, the better able they’re able to help you target training sessions and design a Lean Startup program that’s synchronous with your company and culture. Your team will learn by doing and a coach’s role is to ask the right questions to help your team see the purpose behind these actions. Coaching is like holding your hand and keeping you accountable, but does not mean you’re given all the answers. There needs to be accountability in order to change behavior.

Have more questions? Email us. We’re here to help.

Written by Heather McGough and Don Scott. Last week we covered Taking a Leap with stories from Marilyn Gorman’s time at Fastworks. She maintains that chocolate is a wonderful companion on an innovation journey, find out what else Marilyn learned during Eric Ries’ early days a GE.

If you seek to bring the entrepreneurial spirit to your large, complex organization, Lean Startup Company can help. We offer live and virtual training, coaching and consulting to empower people and companies to solve their own problems using entrepreneurial management, no matter their industry, size company, or sector of the economy.