By Karolina Rozmus, writing from Reykjavik Iceland
Over the years the business world has been revolutionized by new innovative approaches of running business such as innovative business models or big data. Business trends show that many new and functioning companies experiment with new theories and ideas in the hope that those innovative solutions will contribute to the success of the company. One method that has been gaining its popularity is the lean concept which focuses on quick product release by building a product with minimum features and functional benefits (minimum viable product,) good enough to meet customer expectations.
In early stages of new product/service development, the company has an idea, a vision of a product or service that it wants to create. However, the idea about the value that the product will provide can be seen quite differently from the perspective of the company and its customers. In order to avoid variability in product value, many companies design business plans, come up with great strategies and conduct market research, which are all thought to be determinants of success. However, in many cases, business plans forecast the success of the company which are set very far from the realistic results.
Based on the lean methodology, companies should experiment and test their products from the early stages of product development, rather than over-plan. The vision that the company has of a finished product is in fact, just a hypothesis. Therefore it is crucial to test these assumptions and verify them. Companies are encouraged to establish relationships with customers by offering a product, which will allow customers to provide a company with feedback information. These customers are innovators, early participants, which are less sensitive to the quality of the product in comparison with other customer segments. Experimenting with products/services allow the companies to collect necessary information and decide whether to continue the work on the offering, implement alternative modifications or completely change the product. After improving or continuing the work on the product the company should again take into account customer feedback which will reconfirm or reject the initial hypotheses. These experiments allow a company to track its progress. Also, they provide a chance to learn about the offer, its value proposition but most importantly, it allows the company to modify the product if necessary.
The lean method eliminates unnecessary steps in the process of product development. Also, it saves time, money and directs the company in the right direction. Instead of focusing all its energy on creating a perfect product, the company should start with a prototype. This process will help adjust the business model in such a way that it is relative to the value proposition of the product or service. Through continuous interactions with customers, a company creates a product that brings value for both the company and its customers.
Ries, E. (2011). The lean startup. 1st ed. New York: Crown Business.
Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review.