The business world is full of uncertainty. Many managers cross their fingers, build the planned addition to their business or their start-up then launch it and pray. The most common outcome from this approach is - failure or, at best, mediocre success. Starting with the auto industry and then moving to the start-up industry, smart managers are dramatically reducing their risk by doing a series of experiments that let them "fail fast" and cheaply if their idea does not have legs. This approach, substantially speeds up the migration to a profitable new avenue for the business. This is a Yellow Belt (Introductory) article.
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Lean Start Up Theory
Fortunately, there is an increasing body of very useful knowledge on how to most effectively, efficiently and with the least risk, start up a new business activity.
This is known as Lean Start Ups.
The Lean comes about from the science of lean manufacturing and is designed to get from position A to position B as rapidly and effectively as possible.
Most interestingly, Lean has adapted the Plan/Do/Check/Adapt (PDCA) Cycle to operate for a Start Up activity.
They call this process developing a Minimum Viable Product (MVP).
Essentially it says that rather than start the entire business from top to bottom and then see if it works, you start the absolute minimum you need to test the viability of that business and then you go out, effectively door knocking, to see if people are prepared to buy the product. If too few potential customers are interested in your MVP, you are very unlikely to be able to sell a full-blown business with the same offering. So you “fail fast” before you spend too much time and money on something destined not to work.
This is very sound advice, and highly recommended, not only for Start Ups, but for any new avenue that an existing operating business is thinking of engaging in.
It is a thorough approach to testing the feasibility of an activity before getting to far immersed in it.
Military people say that all plans fall apart the moment the first shot is fired. Much better to have a small plan (your MVP) that you can launch and test in the market and then adapt to whatever circumstances come about. This process of adapting is very firmly entrenched in the Lean Start Up discipline and is referred to as doing a "Pivot".
A large number of very successful businesses started out doing something quite different and found that their MVP's weren't viable, then did a pivot into what has become a successful business activity for them.
If you decide to launch your own business, we strongly encourage you to read some of the Lean Start Up books and videos we list in the Profitable Startup article.