The Lean Startup method is on everyone’s mouth and is described as the best practice. The inventor Eric Ries describes how a product with few chapters on the market can be tried out. The author gives practical examples such as Dropbox:

Dropbox had brought a landing page online. The founders bought several clicks via Google Adwords. Interested parties could enter their e-mail address in a mailing list to receive the beta version of the product when it was completed. The two founders collected 75,000 emails within hours. Only then was the Dropbox product built.

In my opinion, Lean Startup has three phases. While the first phase involves testing assumptions and building a prototype, Phase 2 looks for scale and Phase 3 looks for growth.

Phase 1: Test of the idea

Eric Ries recommends test cycles in an MVP (minimum product). This means that one should think: what do I have to do minimally to evaluate the idea. He talks about a problem-solution fit (Is the problem really present and is our solution the right one?).

An example is a button in the online shop with a dummy function. As soon as the user clicks, a system measures the number of clicks and the user receives a message: We are about to build the function. This allows the answer to the question: “Will the function also be used?”

Lean Startup has the following steps:

  1. Build: A first product version or dummy function e.g. prototype, landing page
  2. Measure: How can I measure success?
  3. Learn: What can I insinuate from the data for the next prototype?

In this step, therefore, numerous experiments and learning processes have to be started. Alternatives are also interviews and interviews in this step.

lean startup
Lean Startup Method – own presentation

Phase 2: Scaling

In this step, it is important to establish confirmed assumptions/functions or parts of the product. The author recommends that you draw up an innovation balance sheet in order to fine-tune the functions in the field test. The goal of this step is therefore to further build up each function and refine it in small increments using measurable numbers.

Important: Don’t pay like growth or conversion. The author recommends a cohort analysis and A/B tests. The goal is that the impact of direct changes can be carefully checked. Imagine walking on an ice sheet (frozen lake) and thinking after every step: Should I go further or rather slightly to the right/left because I break in.

A/B tests are to be understood as follows: “A/B testing is a method that compares two versions of a Web page or app to determine which one performs better. The two variants are called A and B and are displayed to users at random. Some of the users thus get to the first version, another part to the second. (Source Sampling). A cohort analysis means dividing customers into segments and looking at the behavior of each customer group differently, e.g. by age (teens, adults, pensioners) or by entry (adwords, organic, Facebook).

Phase 3: Growth

Phase 3 deals with the growth of the product. The author distinguishes three growth engines. The “Sticky Engine” means keeping customers who regularly generate revenue. The viral engine increases the awareness of the product from person to person by word of mouth, which can save some costs in marketing and the paid engine generates profits from existing customers, which in turn are used in the acquisition of new customers (e.g. affiliate marketing).

According to the author, these three figures must be measured and increased through marketing. The focus of this phase is therefore on the growth of the product and the increase in sales in three categories.

Conclusion

I find this method very useful and even quite academic. Science has long been working with hypotheses and variables. We have also built up our marketplace Projektify.de with this method and have achieved success in doing so! We also use this method in innovation projects with customers in my professional life. Take a look at the book by Eric Ries. Read also my article on agile product development.

Genderhinweis: Ich habe zur leichteren Lesbarkeit die männliche Form verwendet. Sofern keine explizite Unterscheidung getroffen wird, sind daher stets sowohl Frauen, Diverse als auch Männer sowie Menschen jeder Herkunft und Nation gemeint. Lesen Sie mehr dazu.

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I blog about the impact of digitalization on our working environment. For this purpose, I present content from science in a practical way and show helpful tips from my everyday work. I am a manager in an SME myself and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the chair of IT Management.

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