What is a Lean Start-up and How does it Help a Business?

What is a Lean Start-up and How does it Help a Business?

The term lean start-up has been thrown around a lot in the last few years. It is a methodology for running a business and was first introduced by entrepreneur Eric Ries in 2008. He outlined it later in 2011 in his book, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation To Create Radically Successful Business?

But where does the term Lean Start-up come from?


At its core, the lean approach to running a business is all about creating a sustainable enterprise by using as little time and money as possible. The lean start-up methodology is characterized by a guidance system for solving a problem. Entrepreneurs who practice the lean start-up are encouraged to question everything – right from their idea, to product features and design elements.

The lean start-up methodology aims to shorten product development cycles and discover if the proposed business model is viable. This is achieved through iterative product releases, business-hypothesis-driven experimentation, and validated learning.

At the center of the Eric Ries’ lean start-up methodology is the assumption that with iterative product building or services to fulfill the needs of early customers, a start-up can greatly reduce market risks and bypass the need for large capital.

Key steps of the lean start-up methodology


Minimum viable product (MVP):

An MVP is a prototype of any service or product designed and developed within as less time and effort as possible. MVP is not expected to have all the bells and whistles of the finished product but must contain its key characteristics. The idea behind creating an MVP is to receive feedback from early adopters and make rapid adjustments.


Every single idea is tested and improved in the Lean methodology. Hence, start-ups often change their direction in favor of the new hypothesis – that is again tested for market success. This change is called Pivot and determines the success of a start-up based on its promptness and accuracy of implementation.

Benefits of lean start-up approach


  • Being a small business, you have the natural advantage of receiving direct input from your customers and the ability to implement those changes more quickly and efficiently. The lean approach helps you stay closer to your customers than the big multinationals.


  • Bigger business houses are not known for agility and nimbleness. The bigger an organization, the more it depends on processes and structures. Pivoting is not easy for larger businesses. However, if a small business follows the lean approach, piloting becomes easier and more favorable. You can turn on a dime and still reap benefits.


  • With a minimum viable product, you can create a product that’s near perfection. And the best part is, it will solve problems for your customers and bring in more satisfied customers. With the lean methodology, you can develop an intense focus on your target niche market.

So, as you can see, the lean start-up has a better chance of overcoming obstacles and achieving success down the line. Would you be willing to adopt it?

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