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Seven Features of a Lean Startup

The founders of lean startups don’t begin with a business plan; they begin with the search for a business model. Only after quick rounds of experimentation and feedback reveal a model that works do lean founders focus on execution. On the left are features of a lean startup. On the right are features of a traditional startup.

Lean

Traditional

Business model

Hypothesis driven

Strategy

Business plan Implementation

Customer development

Get out of the office and test hypotheses

New Product Process

Product management Prepare offering for market following a linear, step-by-step plan

Agile development

Build the product iteratively and incrementally

Engineering

Waterfall development

Fully specify the product before building it

Customer + agile development teams

Hire for learning,

nimbleness, and speed

Organization

Departments by function Hire for experience and ability to execute

Metrics that matter Customer acquisition cost, lifetime customer value, churn, viralness

Performance

Accounting

Income statement, balance sheet, cash flow statement

Expected

Fix by iterating on ideas and pivoting away from ones that don’t work

Failure

Exception

Fix by firing executives

Rapid

Operates on

good-enough data

Speed

Measured

Operates on

complete data

Source: Blank, Steve. Why the lean startup changes everything. Harvard Business Review.




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