Lean Start-Up Management

Submitted by

Ayush Maria

16BCE0400

Entrepreneurship is an act of remodeling worthy ideas into merchandise that are helpful and
flourishing within the marketplace. Elton Musk is a good example of a prosperous enterpriser.
He is a creator, investor, and the founding father of Zip2, Paypal, SpaceX, ceo of Tesla, and
Chairman of SolarCity. Entrepreneurship is additionally the vital driver of innovation,
responsiveness and productivity in today’s dynamic market with vigorous changes in offer and
demand. Therefore, these days’ entrepreneurs work on additionally risky and unsure business
surroundings than usual. However, the combination of a robust need to launch associate degree
enterprise and well thought new plans besides comprehensive designing and team effort will
result in achieving tremendous monetary rewards.

George Deeb has studied over five hundred startups throughout the past few years listed out
thirteen unlucky reasons of startup failures: lack of funding, wrong market positioning, no-go-to-
market-strategy, not focus, no flexibility, no patience or persistence, wrong or incomplete
leadership, causeless team, no mentors or advisors, no revenue model, less capital then needed,
unhealthy luck or temporal order. Twitpic, pic hosting service, provides an honest example of a
corporation who didn't fulfill client expectations and manage its resources. The founder, Noah
Everett remarked that they didn’t have the resources to avert a large company like Twitter to
maintain their mark. Another unsuccessful startup, Dijiwan, a digital marketing firm closed
down inside six months because of terrible hiring and management, reckless expenses,
unbalanced partnerships and contracts ratios, and ignoring issues. The founder stressed that “a
smart product plan and robust technical team don't seem to be a guarantee of a productive
business.”

Different analyses of startup failures may mislead our opinion towards welcoming the
generalized assumption of Howard Stevenson on startup failure. However, conventional
entrepreneurs, investors and professors of entrepreneurial studies take into account
entrepreneurial startups as replacements to directorial corporations. There are innumerous startup
success stories worldwide that are unbelievably extraordinary. Those startups have currently
become the market leaders and innovators and setting the standards of value, quality and repair
in international markets. A non-public transportation firm founded by Travis Kallanick and
Garrett Camp, UBER Inc. is a vital example of flourishing entrepreneurial institution. Today, at
the age of four years Uber has reached forty five countries and operates in two hundred cities
worldwide and has recently been valued at over U.S. $18.2 billion.
The author of "The Lean Startup" and entrepreneur Eric Rees proposed a different approach to
the causes of startup failures. He stresses that new ventures fail because they build a product that
no one wants to buy, no matter how big the technology, the biggest waste of new startups.
Therefore, before the establishment of a new venture any entrepreneur should examine the
strengths of small businesses and seize those competitive advantages, especially compared to
large enterprises in the market. He criticizes the existence of departments in new ventures and
suggests the creation of two separate teams:

 Problem Team
 Solution Team

As in lean manufacturing, the lean startup eliminates the waste in processes, creates order and adds
extra value to the product to exceed customer expectations in possible minimum time. In lean
startup, ventures generate ideas, collect relative data and develop minimum viable product (MVP)
to start the learning process. Startups use special investigative method called “Five WHY’s” to
solve emerging problems during learning and measuring stages of lean startup and eventually,
product is built if the MVP is sustainable at all stages. Overall, the lean startup is an inexpensive
approach to starting a new business achieved by maximized use of existing resources. “By the time
that the product is ready to be distributed widely, it will already have established customers” states
Eric Ries.

In his methodology, Ries established three stages to build a successful entrepreneurial venture.

The primary objective of Customer Discovery stage is finding a problem that is worth solving and
establishing hypotheses to evaluate the feasibility and viability of proposed solution.

In Customer Validation phase the startup constructs the minimum viable product that fits the
requirements, wants and needs of potential customers based on the learnings from customer
discovery stage.

At the last stage, the main objective of an entrepreneur becomes to scale. It will be the time to raise
more capital if necessary because the investors recognize the progress and growth of the venture
and will be ready to offer additional funding to.

According to many well – known entrepreneurs such as Jessica Mah, Cofounder and CEO of “in
Dinero”, timing of setting up a new business and traits of an entrepreneur are highly significant
factors. Personal characteristics, skills and knowledge of entrepreneur are as significantly
important as business characteristics of a startup to be prosperous. Moreover, she remarks that
startups must wait for the right time to launch the product even though the investors put pressure
on launching the product faster and the competitors launching their product. “Rushing too early to
startup is more likely to end up in failure” says Jessica Mah.