For startups, the thing that worries them most is probably the questions: where does a startup start? What expertise is needed to start a business?... and there have been many cases where startups did not go as expected. Based on Saigon Liberation's article, according to the Deputy Director of the Center for Application of Science and Technology Advances in Ho Chi Minh City in 2023, up to 90% of startups will not be successful in Vietnam, and 75% in the world - 90% of startups that step into entrepreneurship fail, causing great damage to themselves. Therefore, a new startup model is increasingly popular, tested by many people and has been successful, which is lean startup - a lean startup that you have probably heard of. Let's learn more about this startup method with WOWUP!

What is Lean Startup?

Lean Startup or lean startup is a method that focuses on creating and managing new businesses and new products in a flexible and effective way. This method encourages businesses to start with simple product versions (MVP - Minimum Viable Product), then quickly gather feedback from the market and adjust business strategies based on collected data. Okay. In this way, businesses can minimize risks, save time and costs, and optimize the product development process. The Lean Startup approach also focuses on creating user value and minimizing waste in every aspect of the business.

Compare Lean Startup with traditional startups

While traditional startups will start with market research from macro, to micro, product research, analysis to find competitive advantages... lean startups mainly focus on creating products. fastest way with small quantity and lowest resources. That's why Lean Startup brings many advantages, especially lower risk.

Here are some comparisons between Lean Startup and traditional startup methods:

Product development criteria:

- Lean Startup: Focus on developing simple product versions (MVPs) to quickly bring to market and collect feedback from users.

- Traditional startups: Often require a long and detailed product development process before launching to the market.

Working process:

- Lean Startup: Use iterative methods, experiment and adjust based on market feedback.

- Traditional startups: Usually follow a linear and predictable product development process.

Risks and costs:

- Lean Startup: Minimize risks and costs by developing products in an agile way and optimizing time and resources.

- Traditional startups: Often require large investments and high risks in the product development phase before knowing the market response.

Focus on users:

- Lean Startup: Create products based on feedback from users and solve their problems.

- Traditional startups: Often focus on product development based on assumptions about market needs.

Development speed:

- Lean Startup: Focuses on quickly bringing products to market to test and adjust business strategies.

- Traditional startups: It often takes more time to develop a complete product before going to market.

Flexibility:

- Lean Startup: Flexible and able to adjust based on feedback and new information.

- Traditional startups: Often less flexible and difficult to change once the strategy has been determined.

In short, while traditional startups often focus on developing a complete product before bringing it to market, Lean Startup focuses on quickly bringing products to market to gather feedback and make adjustments. business strategy based on real data from users to get the optimal product as quickly as possible.

Advantages and disadvantages of Lean Startup

Advantage

Because of the innovations and creativity, Lean Startup can bring startups the following outstanding advantages:

Minimize risk: By using MVP to test and determine whether a business idea has potential, businesses can minimize financial risk and time invested in products or Service is uncertain.

Save time and costs: Instead of developing a complete product before bringing it to market, Lean Startup focuses on developing small product versions and quickly gathering feedback from the market . This saves development time and costs.

Product Optimization: By continuously gathering feedback from users and the market, businesses can quickly adapt and improve their products to accurately meet customer needs. body.

Enhance flexibility: The Lean Startup method encourages flexibility and innovation in businesses, helping them quickly adapt to changes in the market and business environment.

Create User Value: By focusing on solving customer problems and providing real value, Lean Startup helps build a loyal user community and increase customer loyalty row.

Enhance competition: By quickly adapting and improving, Lean Startup businesses can keep themselves ahead in today's fiercely competitive environment.

These advantages make the Lean Startup method a useful tool for developing and managing new businesses and new products.

Challenge

Although Lean Startup has many advantages, there are also some disadvantages to keep in mind:

Market risk: The Lean Startup method places emphasis on gathering feedback from the market and customer reactions. However, it may happen that the product does not meet market needs, leading to failure.

Lack of stability: Because Lean Startup often continuously experiments and changes, sometimes leading to instability in business and product strategies. This can cause loss of trust among employees and investors.

Reduced product quality: Applying Lean Startup can lead to focusing too much on quickly developing products, without ensuring quality. This can reduce customer satisfaction and affect brand reputation.

Difficulty in collecting accurate feedback: Collecting and analyzing feedback from customers may not always be easy or accurate. This can lead to wrong decisions or inaccurate product reviews.

Difficulties in project management: Managing Lean Startup projects requires flexibility and strict control. This can cause difficulties in managing resources, time and budget.

In summary, although Lean Startup brings many advantages in product and business development, it is also necessary to consider and address the disadvantages to achieve the best results.

How to execute a successful Lean Startup

Lean startups focus on experience and innovation instead of having to make detailed plans and then execute. Although different from traditional startups, in order for Lean Startup to be successful, you also need certain conditions, even higher requirements than traditional startups.

Multitasking personnel

Normally, multitasking personnel will find it difficult to achieve efficiency, so this is an extremely important step for a lean startup. A start-up business has weak potential, so paying for human resources will be very expensive. With Lean Startup, there is so much work to do, so multitasking and versatility is an important requirement for personnel.

Use the right business model

Instead of detailed, lengthy business plans like traditional startups, lean startups boil down to business models that are easy to grasp. Business models are often refined and researched from market realities, so they are more effective when applied.

Ability to make quick adjustments

For a traditional business, changing a policy takes a long time. However, with Lean Startup, quick adjustment is the way to grow and help create new opportunities for Startups.

If customers respond unsatisfied with the product, Lean Startup quickly adjusts to limit losses and begins to change the product according to consumer requirements.

Fast application process

As a late-born business, Lean Startup wants to catch up and disrupt traditional businesses and needs to shorten its operating process. Therefore, Lean Startup will always have to find the fastest way but must be the best method to get the highest efficiency.

The above article contributes to clarifying what Lean Startup is and why Lean Startup is the trend of choice for entrepreneurs. Hopefully WOWUP's above sharing will help entrepreneurs change their processes, operations as well as create suitable products for successful startups!