In this context of increased competition, companies have sought to find solutions to be more competitive to enable them to weather the successive crises. Young companies hitherto confined within the borders of their country outside of large groups have encountered a global market, easy to access. New lean methods to enable companies to become more efficient have flourished. Focus on lean start-ups.
This concept is all the rage in Silicon Valley where it is generally present in the high-tech field even if it remains applicable to many other products. Its aim is to maximize the chances of sustainability of a young company.
The origin of the concept
Eric Ries developed this method based on his experience as a consultant, employee and company founder. In analyzing the failure of his first creation, Catalyst Recruiting, he identified two problems. Lacking understanding of the customer’s needs and spending too many resources (time and energy) before launching their product. His subsequent experience in research and development confirms this intuition. He also notes that the product is not meeting the expected success with “early adopters” (editor’s note: “first users”). This proves to be unsuitable for demand. His thinking is then simple: many companies go bankrupt before having achieved success due to this inadequacy.
What exactly does this consist of?
Lean is first of all a scientific approach to business development which highlights the fact of modifying a product in particular based on customer reactions. This is an approach that believes that it is often difficult and more time-consuming to present a perfect product. Confronting your product with your customers is the best method to check whether or not it is suitable for the target customers. It is based on “Validated learning” (verification of the validity of concepts). A first version of the product is launched (generally quite quickly) and adapted based on user feedback, like a scientist who adjusts his formulas gradually based on the results obtained by these different experiments.
The objectives of the approach
This technique turns out to be relatively well suited to small businesses which are generally more reactive than large ones and which can adapt quickly due to the small number of hierarchical layers and rapid decision-making. This first makes it possible to obtain a product that fits as close as possible to customer expectations and the use they make of it in practice. Using this approach has the enormous advantage of reducing product marketing cycles but requires setting up different indicators in order to regularly measure the progress made. It also makes it possible to reduce the initial investment since the time to market is faster.
A not-so-natural method
This method, which might seem natural at first glance, often turns out to be the exact opposite of what the majority of entrepreneurs practice, who prefer to wait to produce a “perfect” product and thus delay its entry into the market. The fear that the product will not meet with the expected success and damage the company’s image often leads future managers to delay the launch by a few months or even a few years. This reluctance to offer a service or product with defects sometimes allows the arrival of new competitors and represents, from time to time, a reflection of the fact that the entrepreneur does not want to leave his “comfort zone”.
A change of mentality
The lean start-up actually represents a complete change in the design of a product since it involves constant questioning of the latter and learning from mistakes in the field. While this technique has proven its effectiveness, it remains difficult to implement in the case of products that cannot be subsequently adapted for fear of disappointing customers who may never repurchase it.
Successful pivots
The lean start-up process has the advantage of sometimes leading to knowledge of other needs, often related to the first product. However, when the start-up changes its product to respond to these, we speak of “Pivot” and the entire business model can be called into question. This is evidenced by the company Criteo, which began its activity in 2005 as a movie recommendation service, then pivoted a year later to sell products for commercial sites before moving into the targeted advertising market. Other companies have also experienced these changes which have allowed them to establish themselves in the landscape of successful companies like Restopolitan.
Some examples
Facebook uses lean management for, among other things, the continuous improvement of its products and services. It uses the agile method in the development of its software.
• Dropbox
The company uses lean management to optimize the different stages of development of its products and projects. Developers take an iterative approach and good communication is implemented seamlessly between teams.
• Amazon
The company uses lean management in its distribution and logistics operations. This allows teams to optimize storage, retrieval and shipping processes with the aim of reducing delays and improving efficiency. This organization also helps them minimize excess inventory and maximize customer satisfaction.