Managing start-ups

By Steve Blank

Launching a new enterprise —whether it’s a tech start-up, a small business or an initiative within a large corporation — has always been a hit-ormiss proposition. According to the decades-old formula, you write a business plan, pitch it to investors, assemble a team, introduce a product and start selling as hard as you can. And, somewhere in this sequence of events, you’ll probably suffer a fatal setback. The odds are not with you… 75% of all start-ups fail.

But, recently, an important countervailing force has emerged, one that can make the process of starting a company less risky. It’s a methodology called the “lean start-up”, and it favours experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Although the methodology is just a few years old, its concepts — such as “minimum viable product” and “pivoting” — have quickly taken root in the start-up world, and business schools have already begun adapting their curricula to teach them.

The lean start-up movement hasn’t gone totally mainstream, however, and we have yet to feel its full impact. It is roughly where the big data movement was five years ago — consisting mainly of a buzzword that’s not yet widely understood, whose implications companies are just beginning to grasp. They are turning the conventional wisdom about entrepreneurship on its head.

From “Why the Lean Start-Up Changes Everything”