Introduction
The discovery obtained by man is exercised in the natural environment from its origin in the condescending creation that awakens its uncertainty for the unknown. The crucial phase through which this inquisition is adopted for instruction begins from the first years of life, where it progressively awakens all its senses, passing through the optimal stage of effective learning with sensory and cognitive means until contact with language. Given the mention of this context, the theme is derived about the interests for which man fights for his subsistence and improvement to achieve progress in style and quality of life.
In the course of time, human beings present their evolutionary result through the changes visualized throughout history, either in a methodical way such as new techniques, tools, science, or manually as agriculture, art, technology., among other. Through all these means progressive thinking is expressed flooded with creativity, innovation, construction of new ideas embodied in what is now used in daily life. However, scientific and technological development does not suspend these improvements, continuity due to the encounter of the unknown remains afloat between people.
One of the characteristics that predominates in human beings is their ability to think, which is why it encourages the search for continuous improvement. As part of his evolution, man grows in a highly competitive environment in three relevant aspects: personal, professional and work. Within the business sector, this phenomenon is mostly notorious for what results in the beginning of the entrepreneurial movement, which denotes accelerated growth within society.
This is how the search for a new alternative to obtain business success arises, giving rise to the creation of a new method called Lean Startup. This tool not only caused the generation of a radical turn between all the methodologies and theories about success at the organization level, but also impregnated a new lifestyle among companies, where everyone who has the desire to achieve the achievement of their objectives by Through an entrepreneurial attitude you will get it without a doubt.
The purpose of this article is to provide the reader with knowledge about the systematization of a tool such as Lean Startup aimed at people motivated to create, discover and innovate business projects. This new name is recently mentioned among organizations, however, some of the techniques that this methodology uses have been implemented over the years in different projects that have been a great success.
Concept and Background
The definition of Lean Startup is clarified as a methodology that promotes the creation and growth of companies and startups, but… is there a clear definition of what a Startup is? It is important to mention different terms like this one, since throughout this article there will be conceptualizations that go hand in hand with the Lean Startup method and that without a doubt should be clarified and familiar with the language that the reader adopts for the compression of it.
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Starting with the Lean method as indicated by the authors (Cooper & Vlaskovits, s / f), it is a term whose evolution has remained as a task for computer scientists. These authors mention the lean method as an approach to clients, but in practice the interaction with the client is not represented by this process. They also indicate that much of the data that the company takes as a reference on customer satisfaction is due to the results of business and marketing efficiency, so they do not really have direct contact with the product.
The history of the Toyota production system supports what the Lean method is since it was considered by the commercials that they carried out for the sale of their cars. As the authors mention (Womack & Jones, 2007), “Lean management has been present for years in the sector in which the automobile was born, the result of which is its high efficiency and competitiveness that must be transferable to other sectors, which is becoming a tangible reality ”. As defined by these authors, the lean method provides one more approach that the Toyota system was able to provide you with managing your operations and establishing continuous flow in your processes.
The lean method is directly oriented to customer satisfaction, which has a great impact on the methodology of startups. Its fundamental principle is found in value as defined (López, 2007), as this indicates that the product or service that the company offers must be highly adjusted to the customer's need. That is why lean thinking focuses on being directly related to the client in order to understand their need, and not only to satisfy their needs that they really want but to provide that service or tangible good at the precise moment in which they require it..
Startup
Analyzing the startup concept, there are different contextualizations about this topic. It is very given to refer to the entrepreneurship of any company, however, it is characterized by using IT (information technologies) as a means. With the entry of the internet to the world since the technological revolution, the turn of companies gave a surprising change where there are no borders for society and organizations. In the business world, the greatest demands on companies were visualized, creating a culture of innovation and technological development that led to the birth of startups.
The author (Fino Garzón, 2014) mentions that for Oliver Marty the technological revolution led to the creation of a new technology and startups, where “the Ministry of
French economy prefers the word jeunes pousses (young shoots) of the new economy to insist on its characteristic of a newly created company (…) Startups are small companies that work in a virtual environment: the Internet ”. These companies are usually recently created run by young entrepreneurs seeking innovation.
The startup is usually characterized by the high level of risk that they present as a new company in the market. The authors (Martínez, Gómez, Rosés, & García, 2014) refer to startups as SMEs (Small and Medium Enterprises) where they are based on technology and indicate that the entrepreneurial partners are made up of no more than five members (something characteristic of an SME) and the risks they run make them aware of the implication of creating them.
One of the definitions that these authors give us about startups is given by (Blank, 2012), which says:
The author (Marty, 2002) defines start-ups as:
The contribution that startups generate towards society is the generation of jobs and the entrepreneurship of people. In the last two decades, most of the countries of the Organization for Economic Cooperation and Development (OECD) have deployed a wide range of instruments to favor the creation of new innovative companies. In fact, in Australia, Finland and Israel, support for startups is an integral part of national competitiveness and innovation strategies (OECD, 2013).
The origin
The circumstances that address the start of a new company bring challenges that people hardly manage to pass. The failure and life expectancy of a newly created business is not encouraging for most people who prefer to practice as professionals and work for an organization than start their own company. Despite deep dreams of "being your own boss" the choice a person makes after the resounding failure of starting a business is to abandon that idea.
Precisely the Lean Startup method arises as a result of the splendid failure committed by the businessman Eric Ries, who after a strong lag in his business is forced to search for new options that will encourage him to choose the path towards the full deployment of his monetary income. It was himself (Ries, 2012) who narrates in his book The Lean Startup method the birth of this methodology, noting that his perspective towards failure was to see it as a “technical problem that required a technical solution”, it was there that he had his first error.
After a series of ideas and based on the client development methodology by Steve Blank, businessman Eric Ries began his study of the industrial sector, where he realized that all management theories were derived from there. Similarly, Ries had studied about Lean manufacturing A process originating in Japan that had been favorable to the Toyota production system and that was created by Taiichi Ohno and Shigeo Shingo, for which he decided to adopt ideas about this system, adjusting and creating what is now called Lean Startup.
The principles that Lean manufacturing developed involved the design of the knowledge and creativity of the workers, reduction of batch sizes, just-in-time production and inventory control, and the acceleration of the cycle time "same as Ries adopted ideas from the context of entrepreneurship where it proposes entrepreneurs to judge their progress in a different way compared to other companies. And measuring this progress through validated knowledge in order to eliminate the sources of waste that monopolize entrepreneurial activity.
The Lean Startup method focuses on measuring productivity different from what has already been measured. It is expected that the learning obtained during a given time of work is the essential value in the effective measure of this period. What Ries wanted to project is the discovery of what customers really require, defining the objective of a startup to find out what should be produced. Compressing to what the lean startup method is the way of developing innovative products that interacts quickly with consumers, the vision and ambition that should be together.
However, the creation of this new method was not at first fully accepted by business society. Ries shared the success of his company with the application of this method from a blog created by himself in the hope of finding a process that would be capable of eliminating the waste that existed for startups: the elaboration of undesirable products, products taken off the shelves and countless unattainable dreams as this author relates, where he finally achieves the flourishing of this method worldwide.
The Lean Startup method
The Lean Startup method is approached by different authors, entrepreneurs and even businessmen who adopted this methodology as a tool to promote success within their organization. However, it is important to mention the clear definition best mentioned by its creator (Ries, 2012), who exposes it as "a set of practices that helps entrepreneurs to increase the chances of creating a successful startup", which handles a concept particular about what a startup is "human institution designed to create a new product or service under conditions of extreme uncertainty".
Based on the perspectives visualized above, two approaches that go hand in hand for the formation of a method that leads to business success and learning of the creation of a new business come together a definition about Lean Startup.
The Ministry of Economy, Innovation, Science and Employment (CEICE, s / f) based on the references of Eric Ries (creator of this methodology) defines as a lean startup the “way of approaching the launch of businesses and products that is based on learning validated, scientific experimentation and iteration in product launches to shorten development cycles, measure progress, and gain valuable customer feedback. In this way, companies, especially startups, can design their products or services to meet the demand of their customer base, without needing large amounts of initial financing or large expenses to launch a product ”.
The five principles
The lean startup methodology is founded on five principles that were taken from the author (Flores, 2013), which were extracted from the book by Eric Ries described below.
Entrepreneurs are everywhere.
You don't have to work in a garage to be in a startup. The concept of an entrepreneurial spirit includes everyone who works within the definition of a startup: a human institution designed to create new products and services in conditions of extreme uncertainty. This means that entrepreneurs are everywhere and that the Lean Startup approach can work with companies of any size, even very large companies, in any sector or activity.
Entrepreneurship is management.
A startup is an institution, not just a product and, therefore, requires a new type of management specifically oriented to this context of extreme uncertainty. In fact, the entrepreneur should be regarded as a qualification in all modern companies that depend on innovation for their future growth.
Validated learning.
Startups don't just exist to produce things, make money, or serve consumers. They exist to "learn" how to create sustainable businesses. This knowledge can be scientifically oriented by conducting frequent experiments that allow entrepreneurs to test all elements of their idea.
Create- Measure- Learn.
The core business of a startup is turning ideas into products, measuring how consumers respond, and learning when to pivot or persevere. All processes for creating successful startups should be aimed at accelerating this feedback loop.
Innovation accounting.
To improve business results and account for innovation, you need to focus on the boring aspects: how we measure progress, how we set milestones, how we prioritize tasks. This requires a new kind of accounting designed for startups, and those to whom they are accountable.
The three parts of Lean Startup
To outline the Lean Startup methodology, it will be divided into three parts: see, direct and accelerate, as Ries writes it in his book in order to expand the panorama of what its application consists of.
Part 1. View
Within the creation of a startup, the management application is generated. This term is taken by surprise for entrepreneurs since they adopt completely opposite meanings. This is usually taken cautiously so as not to fall into reprimand about creativity. However, the entrepreneurial spirit requires management discipline to seize the entrepreneurial opportunity that has been given to it.
The decline that startups tend to get is from the abundant thought of generating plans in bulk which seem to be designed to plan "how to launch a rocket rather than how to drive a car." This expression that Ries addresses is that entrepreneurs focus only on what will be launched to the market without taking into account what customers really expect. They generate a product launch plan by investing in infrastructure, sales, hiring when in reality they are planning the resounding failure of their company.
What lean startup does is teach how to run a startup where these complex plans are replaced through an adjustment called the Create-Measure-Learn feedback loop. Where through this process we learn how to know when and if the time has come to make a drastic turn called pivot or if we must "persevere" in the current trajectory. This clarifies the landscape of knowing where to go by creating an objective or also named vision, which requires the definition of a strategy that includes a business model, a product map, a focus on partners and competitors and ideas about who. will be the consumers. Resulting in a final product of this strategy.
However, this process will not remain fixed forever, products change through the implementation of innovation based on market trends, which forces the strategy to make a change called pivot, taking into account that your vision is the only one that it must remain as it was in the beginning.
Innovation as an essential part of a Startup
A main part by which a startup is characterized is the constant implementation of innovation. That is why it is important to define what it really contributes and how it works within the lean startup application. There are many kinds of innovation that startups count for: scientific discoveries, reusing existing technology for new uses, coming up with a new business model that unlocks hidden value, or simply bringing a new product or service to a site. new or a previously neglected consumer group.
As the author indicates, “innovation is at the center of success”. There is an important part about this, and that is that not all businesses empathize through this context. Startups are designed to deal with situations of extreme uncertainty where most management tools are not designed to thrive in the harsh soil of extreme uncertainty in which startups grow. The future is unpredictable, consumers have a growing range of alternatives, and the pace of change is constantly accelerating. Even so, most startups are still managed using standard forecasts, product milestones, and detailed business plans.
Learning on the path of entrepreneurship
Learning is analyzed as the result of the failure committed in the execution of a new project prompted by the managers. The uncertainty of what entrepreneurs are presented with is usually the reason why many entrepreneurs do not know where to go and that is where they fall into a low stage where learning comes to the fore due to the efforts made and becomes an important function for they.
Within the lean startup method model, learning has been rehabilitated with a concept called validated learning. Ries defines it as "a rigorous method to show where to go when one is stuck in the land of extreme uncertainty in which startups grow." Within this process, the results obtained from the discovery of high-value information about present and future possibilities of the business are empirically demonstrated.
In the experience that Ries went through with his company (IMVU), he recounts what they initially generated with the strategy of creating a product that combined the attractiveness of instant messaging for the great masses with a high income per customer through games and virtual worlds in three dimensions, the launch they planned lasted six months with high efforts and ended with its resounding failure when customers did not go to buy what they projected, leaving the learning obtained as "consolation".
Although this consolation did not last long, the speed of the search for solutions was intense. In the first instance, they decided to determine an objective, where they opted to get closer with customers, even taking their main consumers to the offices and asking them personally if they liked it, which led them to generate changes in the product that was already in place. settled down.
As they researched their potential customers and made modifications to their product, Ries exhibited a feeling of despair and uncertainty as he did not know how much time and effort were needed toward an improvement that would achieve success. So he really wanted to know which activities really added value to the improvement and which were just waste. These last two conceptions are something very particular to the Lean Manufacturing method.
Within the industrial environment, the Lean method focuses on the production of products based on which customers find value in them. In a startup it does not work like that because it is merely in an initial stage of uncertainty without knowing what is of value for customers and what is not. However, it was concluded that learning is the essential unit to measure the progress of a startup. Failure in small amounts is a startup usually pays off in the future.
Experimentation
Lean Startup redefines a startup's endeavors as experiments testing their strategies to see which parts are brilliant. As is known, an experiment follows a scientific method, so it begins with a hypothesis where predictions are made of the assumptions that could come to pass. This is where the Lean Startup methodology adopts this experimentation guided by the vision indicated by a startup. Ries mentions that "The goal of each startup experiment is to discover how to create a sustainable business based on that vision." Usually many companies start their assumptions through a market study to analyze what consumers think they want, however, through the experimentation that lean startup offers it is different.
An example to define well the experimentation process is defined with the largest online shoe store: Zappos. What this company did was with a small test of experimentation was to expose its hypothesis about whether consumers that consumers were ready and wanted to buy shoes online, so it went to shoe stores and proposed to take photos of their shoes and upload them to the network, if the customer decided to buy them he would return to the store to buy them at the same price. This is how it started what is now a leading company "think big, start small" was what Zappos experimented by applying lean startup.
Part 2: Lead
Previously, the importance of learning in a startup, failure as a fundamental part for entrepreneurs, and in turn experimentation through the hypothesis that leads to the discovery of what customers really want was described. It is taken into account that through this experimentation feedback is generated that helps to strengthen the information and important data in order to improve the product launched on the market. However, within this context, it is essential to minimize the time spent in the feedback process.
Information feedback loop
This is where the Create-Measure-Learn information feedback loop is reinforced as the center of the Lean Startup method model as shown in Figure 1. Having as a first step to enter the construction phase as quickly as possible with a minimum viable product (PMV). The PMV is that version of the product that allows giving a
Full loop of the Create-Measure-Learn circuit with minimal effort and minimal development time.
During the create stage, not only will a reliability measurement be performed with a quality or design standard, but it will also be exposed to the customer to evaluate the reaction and thus sell the prototype. Once this is done, we proceed to the measurement stage, where the acceptance of the client's product will be quantified. A method recommended by Ries is accounting for innovation, although there are more measurements. And once the create-measure-learn cycle is finished, they must face the most difficult thing that the entrepreneur can get and that is the part of pivoting or persevering, that is, generating a change in the initial strategy or continuing with it.
The first products should not be perfect
Many highly successful companies such as Apple, Google and IMVU itself, contained various flaws in their first launches and yet they were sparking interest in the market and increasing the number of sales. As Ries puts it, “The first users use their imagination to fill in what the product lacks”, being they the key to what the world could accept.
For entrepreneurs, it can present some inconvenience since it represents a loss in invested resources and they tend to have a vision of providing quality in their products by offering the best they could generate for consumers. However, there are various PMV techniques that support the approach of this introductory product to the first consumer approach.
One of them was the one implemented by the Dropbox company, who after its beginnings and failed tests that clients argued made a three-minute video where they gave a demonstration of what this application was about, where in this case the video was a minimum viable product. Another is that of the concierge PMV carried out by Food on the Table, which through an app recapitulates what the customer wants and what he wants to eat, giving it a learning approach.
Measurement of startups
Startups can be a beginning rather than a paper model. Financial plans are usually made to make projections of accounting for consumers, expenses, income and profits, which is far from what a startup does, firstly. The job of a startup is to rigorously measure where it is at the present moment, facing the harsh truth that evaluation reveals and designing experiments to discover how to move the real numbers towards the ideal reflected in its business plan.
Accounting is usually attributed as a necessary evil for companies, however, for startups accounting for entrepreneurs is not useful since they are usually really unpredictable so it must be directed to a new conception: accounting for innovation. Growth accounting works in three stages: First, use a minimum viable product to collect real data on where the company is at the current moment. Second, try to fine-tune the engine to go from the starting point to the ideal. step three: pivot or persevere
How do you know whether to pivot or persevere?
Up to this point, entrepreneurs have a significant advance, however, there is the uncertainty of not knowing if what is being done should really remain or if a change is necessary. A pivot requires keeping one foot anchored in what has been learned thus far, while making a fundamental change in strategy to seek further validated learning.
The amount of time left in which the startup has to take off or else it fails. It is important to mention that while people refuse to change, the longer the pivot will take, likewise, when an entrepreneur does not have a clear hypothesis it is almost impossible to experience total failure, and without failure there is usually not the necessary impulse to embark on the radical change that requires a pivot. "The decision to pivot requires seeing things clearly and having a goal in mind." Every time you need to pivot it is important to consider each of the team members.
There are different types of pivots, this word is closely associated with change, which, if it is, but it is a special change designed to test an initial hypothesis.
- Zoom-In: In this case, what was previously considered a product feature becomes the product. Zoom-Out: This is the reverse. Sometimes a single feature is insufficient to support the entire product. In this type of pivot, what was considered the entire product becomes a simple feature of a much larger product. Consumer segment pivot: The company realizes that the product it is creating solves a real problem for real consumers, but that these are not the type of consumers that initially had planned to serve. Pivot of consumer need: It is a case in which the hypothesis of the product is partially confirmed; the target consumer has a problem worth solving,but it is not what was initially anticipated. Platform Pivot: Refers to an application change on a platform or vice versa. Value Capture Pivot: There are many ways to capture the value that a company creates. These methods are often called monetization or revenue models. The implicit idea of monetization is that it is a separate element of a product that can be added or removed at will. Channel pivot: It is the recognition that the same basic solution can be delivered through a different channel more effectively. Technology: These are sustainable innovations, with incremental improvement designed to attract and retain an existing consumer base.There are many ways to capture the value that a business creates. These methods are often called monetization or revenue models. The implicit idea of monetization is that it is a separate element of a product that can be added or removed at will. Channel pivot: It is the recognition that the same basic solution can be delivered through a different channel more effectively. Technology: These are sustainable innovations, with incremental improvement designed to attract and retain an existing consumer base.There are many ways to capture the value that a business creates. These methods are often called monetization or revenue models. The implicit idea of monetization is that it is a separate element of a product that can be added or removed at will. Channel pivot: It is the recognition that the same basic solution can be delivered through a different channel more effectively. Technology: These are sustainable innovations, with incremental improvement designed to attract and retain an existing consumer base.It is the recognition that the same basic solution can be delivered through a different channel more effectively. Technology pivot: These are sustainable innovations, with incremental improvement designed to attract and retain an existing consumer base.It is the recognition that the same basic solution can be delivered through a different channel more effectively. Technology pivot: These are sustainable innovations, with incremental improvement designed to attract and retain an existing consumer base.
Part 3: Accelerate
The time to start a startup as it is commonly said "is worth gold" since the longer it takes to decide to launch the product, the more waste is generated. There are techniques that allow Lean Startups to grow without sacrificing speed or agility. Within Lean Manufacturing, Toyota discovered that small batches made its factories more efficient, for a lean startup, efficiency will not be sought but learning that was obtained quickly to know how to create a sustainable business. Working with small batches ensures that the startup can minimize spending time, money and effort that has ultimately been wasteful.
Sustainable growth
Initial consumers play a very important role in the growth of a startup. As Ries puts it, "new consumers come from the actions of past consumers." There are four ways of distributing the growth that customers transmit: Word of mouth, where consumer satisfaction is transferable and recommended to other people. Product side effect, where fashion and status provide knowledge of the product when it is used. Financed advertising, where it must be very clear that to be a source of sustainable growth, advertising must be paid for with income, not with sporadic sources such as capital investment. And finally there is repeated purchase or use, depending on whether the product requires repeated purchase.
This leads to the creation of the three engines of growth:
“STICKY” GROWTH ENGINE: its characteristic is to make a product where consumers are tied to the seller for a potentially long time, achieving customer retention.
VIRAL GROWTH ENGINE: Online social media and Tupperware are examples of products in which consumers play the lion's share of marketing. Growth occurs automatically as a side effect of product use by consumers.
PAID GROWTH ENGINE: It is about increasing the income of each consumer or reducing the cost of acquiring a new consumer so that the company increases its growth.
The wisdom of the five whys
To accelerate, Lean Startups need a process that provides a natural feedback loop. If companies want to go too fast they can cause problems. Adaptation is an important part where you must take into account that you have to take acceleration naturally. It is important to maintain professional training for members of the organization, however, many companies do not. And others wonder if it is necessary to require a training program.
To solve this question, a technique that can help is that of the five why to make incremental investments and achieve that the processes of a startup evolve gradually. The core idea of the Five Whys is to directly link investments to preventing the most troublesome symptoms. The system takes the name of the research method of asking the question "why?" five times to understand what happened (the root cause).
The sandbox for innovation
The challenge is to create a mechanism that drives innovation teams openly. This is the path to a sustainable culture of innovation over time, as companies face existential threats. This is determined by creating a sandbox for innovation by working as follows:
- A team must run the entire experiment, from start to finish. No experiment can last longer than a specified amount of time (typically a few weeks for experiments on single items, a few months for more disruptive innovation). No experiment can affect more than a specific number of consumers (usually expressed as a percentage of the company's total consumer base) All experiments should be evaluated using a single standard report using five to ten (no more) actionable indicators. teams working within the litter box and all products that are created must use the same metrics to assess success.Any team creating an experiment should keep track of the indicators and consumer reactions (calls for support, reaction on social media, forums, etc.) while the experiment is in progress, and abort it if something catastrophic occurs.
It is worth mentioning that the litter box should initially be small and depending on the type of products that the company makes, the size of the litter box can be defined in various ways.
Say no to waste
Across industries, we see an infinite number of stories of big product launch failures, ill-conceived projects, and spirals of big-batch death. I consider this misuse of people's time to be a negligent and criminal waste of human creativity and potential. To do this we must change our collective mindset about how work should be done.
It is not enough to ask workers to try harder. Today's problems are caused by trying too hard on the wrong things. By focusing on functional efficiency, we lose sight of the real goal of innovation: to learn what is currently unknown (Ries, 2012).
Conclusions
The Lean Startup methodology makes an adaptation of different tools established in lean manufacturing aimed at recently created companies. This tool makes great contributions and breaks the paradigms that many organizations have faced. You do not need a secret formula, as the creator of this method indicates, the entrepreneurial attitude is in yourself.
Many companies tend to take failure as the worst thing that could have happened to them without really identifying that these failures are an area of opportunity that makes for the impressive growth that a startup can develop. The learning from these failures must be exploited, the approach with the client and the elaboration of a hypothesis that supports the assumptions are essential for the success of this methodology.
Organizations must learn that changes are good and it is necessary to identify the time in which you can make that change based on the hypotheses without losing the vision that you establish from the beginning. Nobody is born being great, the change is in yourself, do it, fail, learn and get up.
Thanks
To Doctor Fernando Aguirre y Hernández, professor of the subject Fundamentals of Administrative Engineering, who promotes the development of this article by providing technical knowledge and support for its preparation. To the Technological Institute of Orizaba who trains students of excellence and gives opportunities for professional improvement in different engineering areas. To the National Council of Science and Technology (Conacyt), which provides financial support for postgraduate studies promoting scientific development.
Thesis Proposal: Development of potential growth in a startup positioning it in the fixed business plane.
Objective: Position a startup within a safe level, enhancing its growth.
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1] It is defined as "the pursuit of an improvement of the manufacturing system by eliminating waste, understanding as waste or waste all those activities that do not add value to the product and for which the customer is not willing to pay" (Carreras & Garcia, 2011)
Of Latin origin (from manus = hand, to handle; the Italian manneggiare, the French management and the Spanish management). It is an executive function, that is, typical of the bosses or commanders (Jiménez, 2000).
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