The lean startup product cycle is a process that helps entrepreneurs bring new products and services to market quickly and efficiently.
It is based on the principle of iteration, or making minor changes to a product or service, then testing and measuring the results before making another change.
However, this approach might feel like you’re constantly playing catch-up if you’re a first-time entrepreneur.
Plus, this methodology sounds like a lot more work than the usual processes applied toward product development, which brings us to the question:
Why are many startups using the lean startup product cycle?
In this article, we will discover the four stages of innovation included in the lean startup product lifecycle and why this process is gaining popularity among companies.
What is the lean startup method?
The lean startup method is a type of product development that focuses on building something people want and then scaling it up through iteration and feedback instead of making a product and striving for market demand.
It is an approach to innovation that emphasizes speed, customer interaction, and learning based on customer feedback.
This approach is popular with startup companies and product developers looking to create a successful product and business.
In a way, the lean startup methodology is an illustration of customers deciding the kind of products they want from their respective markets as opposed to those markets defining the type of products they can have.
This way, companies can significantly reduce the risk of failure and increase their chances of success.
This concept was developed by Eric Ries, who wrote a best-selling book of the same name.
What does the lean startup method help with?
Utilizing lean startup concepts help product developers with two things:
- Evaluating user interest in a product and
- Identifying how they can develop and improve it
As such, you can think of the entire process in two ways:
As a method of verified learning
This principle prevents wasting resources in product design and development. In the lean startup method, if a concept is likely to fail, it will fail swiftly and inexpensively rather than slowly and expensively, thus the “fail-fast” phrase.
The lean startup approach entails testing each concept iteration, along with assessing and measuring its success and viability.
You can relate it to creating a minimal viable product, where only the most basic version of your concept is used to gain the most validated learning from consumers and the industry in general with the least amount of work and resources possible.
A way to regulate resource distribution
Using your resources in the most effective way possible is a basic principle observed in the lean startup methodology.
Since many start-ups do not have infinite funds, the lean business model supports the regulated distribution and application of resources.
In this approach, each stage can influence the proper use of their resources to get in front of their target consumers and gain the chance to test, assess, and enhance their product.
The lean business model allows start-ups to maximize profits when sales occur by lowering costs to an absolute minimum of what is necessary for the company to remain and function.
What are the product lifecycle phases in a lean startup?
The lean startup product lifecycle consists of four distinct stages:
1. Business modeling
The first step is where you strive to rapidly lay out and test the most important components of the business model.
Referred to as business modeling, the goal of this stage is to know and understand how your business will create and deliver business value to your customers. Traditionally, companies used to make a business plan at this phase.
However, because of the changing demands of customers and the need to save time, organizations had to switch things up and focus on distributing and capturing value instead. Business plans take too long to create.
And by the time you finish them, they become outdated with incorrect figures and assumptions, which almost always end in failure.
In business modeling, you already have an idea for a product or service. However, you are only yet to develop it as you are still researching the feasibility of the idea with your potential customers.
2. Problem/solution fit
The second stage is where you start to validate that your product or service solves a real problem for your target market.
Known as the problem/solution fit, this step is important because it will determine whether people are actually willing to pay for the products and services you make.
In this step, you are trying to validate the problem you’re aiming to solve and the product or service you have as the solution by talking to your target market and collecting feedback through surveys, interviews, or even focus groups.
The point is to get as much information from your target market as possible to help you validate your product idea.
A typical error for entrepreneurs at this step is to conduct interviews with the intention of persuading users, or consumers, that you have a good concept and that they should use it ASAP. You don’t want to manipulate your interview subjects.
What you want is to find out what they’re thinking without attempting to sell them something. As such, you have four end goals for problem or solution fit.
- To speak with your customers
- Verify your target problem
- Validate your solution, and
- Collect the information you need to effectively market your product as the ultimate way to address the issue at hand
Moreover, you want to approach this step with a scientific mindset because you want to be genuinely helpful to your customers instead of being brand-biased.
By the end of this stage, you should have also gathered enough data to start formulating your unique value proposition—the one thing that sets your product or service apart from the rest.
3. Product/market fit
The third stage is all about validated learning. In product/market fit, you need to substantiate that there’s an actual market for the product or service you’ve created.
This step is important because it will help you determine whether your product has what it takes to succeed in the long run.
The questions you need to answer in this stage are:
- Is there a viable market for your product?
- Is there enough of a call to support your business?
- Can you get traction in your market?
To validate that there’s a market for your product, you need to generate demand through marketing and sales activities.
In this stage, you can create the initial version of your product, known as the Minimum Viable Product (MVP), and put it on the market. Remember though that an MVP is only a starting point—you will continue to enhance your product as you go along.
The point of an MVP is to test the waters and see if there’s a market for what you’re selling. If there is, then you can proceed with confidence to the next stage.
If not, then it might be time to go back to the drawing board and either pivot or persevere. Pivoting means making a strategic shift in your business model while persevering means sticking to your guns and trying to make things work despite the odds.
When you’ve finished your MVP, you don’t give it to everyone. You begin by conducting MVP interviews where you meet with people face to face and show them the product because you want to observe how they respond and utilize it.
You leverage this initial onset to iron out any major faults, errors, or usability difficulties. You should also start testing your initial pricing.
In this stage, be careful not to fall into the trap of thinking that you need to create a perfect product before taking it to market. Remember, the goal is to validate the demand for your product, not to make it perfect.
The fourth stage is all about scaling your business. Once you’ve validated that there’s a market for your product, it’s time to start growing traction for it, which is the rate at which you extract monetizable value from your customers.
This is when you need to focus on building the systems and processes that will help you take your business to the next level.
In this stage, you might want to ask yourself:
- How can my business reach more people?
- What can we do to improve our processes?
- What systems do I need to put in place?
- What kind of team do I need to hire?
To scale your business, you need to focus on three areas: marketing, sales, and operations.
Marketing is all about getting the word out about your product and generating leads. Sales is all about converting those leads into paying customers. And operations is all about ensuring that your business runs smoothly and efficiently.
You also need to start thinking about ways to automate your processes so you can free up your time to focus on more important things. Automation will help you scale your business more quickly and efficiently.
When you have a successful product, you must accelerate growth in order to flourish in the market. This is where you can see how the types of tests you do early in the lean startup method vary greatly from those conducted later in the product lifecycle.
You started with the business modeling phase, where you could make substantial changes by simply deleting something off your canvas and replacing it with something new. These modifications came at a very modest cost.
In the scaling phase, however, you now have a working product that you are conducting tiny experiments with to grow your numbers slightly.
By the end of this stage, you should have a well-oiled machine that generates leads and converts them into paying customers.
Key takeaways: Lean startup product lifecycle
The lean startup product lifecycle has four stages, and each step serves a distinct purpose. In business modeling, you take an innovative idea and conduct your research on whether your potential customers would actually be interested in what you have to offer.
In the problem/solution fit, you validate that your proposed solution is indeed the right fit for the problem you’re trying to solve.
While in the problem/market fit, you create a minimum viable product to determine whether you can build actual demand. Lastly, in scaling, you need to focus on building the systems and processes that will help you take your business to the next level.
By understanding the lean startup product lifecycle, you can create a roadmap for your business that will help increase your chances of success.
Automate your entire innovation process with the most powerful innovation software in the market today. Design your product lifecycle phases with a demo of Accept Mission here.