Lean Start-up sets the framework for lean, successful new product development

and business creation. This can be achieved by fast and multiple iterations and
validations of the initial business model. The approach includes the implementa-
tion of customer orientated products or prototypes. Product development with
Lean Start-up strongly focuses on the target customers and their challenges.

Lean Startup
It uses early market testing and continuous learning.

Understand customer‘s
problem
“ Your business model
A concise description of your customer’s problems is half of the solution. Work hard
to fully understand the customer’s problem, and only then think of the solution.

is your product!” € € Approach:

1. Identify the problem: Observe situations, perform interviews and tests, etc.
2. Understand the problem: Use methods like the “5 whys root cause” analysis

Design Build your (answer the question “what is the problem?” five times) or the “jobs to be
done” method (“what job needs to be done by the product or service the

“ How could we solve business

customer hires?”).
3. Describe the problem: For example by telling a user story:

the problem?” business

“As a _____________ I need _____________ in order to _____________.”

Design solution
Design solution model Once you fully understand the problem, draft solutions. A solution describes how
you create benefit for the customer. If necessary, your outline of the solution can

“ Find a problem
already include details.

Approach:

worth solving.”
Ideation, creativity techniques, analysis of how customers solve the problem
today, etc.

Understand Describe your business

ark d
model

o-m oa
No: Pivo

et
customer The product is not the solution, but a working business model is the product.

go-t t: Br
At the beginning, you may have assumptions in the description of your business
model. Likewise, the business model can be incomplete at first.

problem Approach:
• Identify your target group. Is the target group too large, perform further
segmentation and pick the most attractive sub-group.
• Fill out the business model for the target group, e.g. the Business Model Canvas

c
by Alex Osterwalder or the Lean Canvas by Ash Maurya. Several target groups

e
are possible. For example, in multi-stage business models with partners.

Perf
“ Let‘s look at the hard things first.”

t!
Select critical risks
Choose most
In order to guarantee the success of your business model, systematically identify

el viab
and evaluate all included risks. Start with the risks that are most critical for busi-

od
ness success. Formulate each risk as a falsifiable hypothesis. Only this allows you to

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learn and to receive distinct test results.

critical risks s le
Yes: I
Approach:

s
1. List the most critical risks (hypotheses) of the business model

mp
2. Group the risks by

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a. Product risk: understanding of the problem, the biggest pain points

rov

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ne

?
b. Customer risk: testing the target customer segment
c. Market risk: existing alternatives, critical competitive advantages

? e!

Busi
3. Prioritize the risks

Build the minimum viable

? ? product (MVP)
To build an MVP, start with a product vision. The vision always remains the same,
! even though you may adapt the MVP later. The MVP includes the smallest possible

Learn

el
amount of functions that allow validated learning. It does not have to look like
the final product. You use the MVP to detect and test risks before the product
development has progressed too far.

od
Build
Approach:
Paper-based prototyping, smoke test (advertisement without an existing product),

“ Build something that

m
concierge MVP (full-service contact, in which you perform all the tasks for the

pd

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customer that the product would do, if it already existed).

the customer wants.” ate s s

b u si ne Test with customers
Build minimum viable Communication with other people is key to continuous learning. With help of the
MVP, you perform experiments to test the critical risks that are essential for the

Measure
success of your product vision. Design every experiment to be falsifiable and time-

?
boxed. The scope of risks that you test within a single experiment should be small

product to test critical risks actions

in order to allow fast Build-Measure-Learn iterations.

✓ Approach:
• Define your success ratio: Focus on a single KPI. The selection of your KPI
depends on the development stage of your product (see Dave McClure’s

✗ Referrals
Pirate Metrics).
• Prepare your experiment: Define the risks to be tested, falsifiable
hypotheses, the expected result and the set-up (duration, number of
participants, etc.).
• Test with your customers: Do not ask your customers directly. Instead,
observe how they react to the MVP and whether they are willing to pay for it.

“ What did we learn?” Analyze feedback

Analyse Learning is the true measure of progress! There are no failed experiments,
just unexpected results. The faster you generate validated learning out of an
experiment, the faster your progress towards a successful business model.

feedback Approach:
Document and analyze your conversations and the given feedback.
Draw conclusions for your product and your next steps.

“ Get out of Update the business model

the building!” Test with customers Live the culture of continuous improvement. Whenever necessary, change your
direction or pivot your business model. Quickly convert the reaction of the market

Customer Retention into improvements.

Approach:
Adapt your business model and critical risks based on the results of your
experiments.

CC

BY

Problem / Solution Fit Product / Market Fit Scale

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Did I identify a problem, that is really worth solving? Did I build something, that my customers really want? How do I enter the market? How do I scale?
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