How 3 Businesses Thrived by Applying Lean Startup

Lean Startup aims to shorten product-development cycles and rapidly discover if a proposed business model is viable. It really works. Meet these successful organizations that deployed Lean Startup.

Popularized by writers and entrepreneurs like Eric Ries and Steve Blank, Lean Startup was conceptualized as a way for new ventures with limited resources to tune into customer needs and to develop and launch new products and services. The methodology aims to shorten product-development cycles and rapidly discover if a proposed business model is viable. This is achieved by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.

Lean Startup has many advantages. According to a poll from HBR, the top 5 benefits of the Lean Startup approach mentioned most frequently by their corporate respondents were:

• Making decisions based on evidence and data rather than executives’ instincts;
• A faster cycle-time for developing ideas;
• Better-quality feedback from customers and stakeholders, often because you’re asking them to actually buy something rather than just spout opinions in a focus group;
• “Getting out of the building”: speaking to and observing real customers and stakeholders;
• More flexibility about making changes to ideas as they progress from concept to minimum viable product (MVP) to a finished product.

Of course, the proof is in the pudding. To demonstrate the feasibility of the Lean Startup approach, below I will describe 3 inspiring case studies. Note how different these organizations are, while they still benefit from the same method.

In 2007, David Binetti launched Votizen, a platform that organizes US voters online, as an MVP. As Eric Ries described in his classic book The Lean Startup, Binetti’s first MVP was not a big success. In the initial user cohorts, only 5% signed up for the service, and only 17% verified their registered voter status. “It was time to start iterating,” Ries wrote.

“David spent the next two months and another $5,000 split-testing new product features, messaging, and improving the product’s design to make it easier to use. Those tests showed dramatic improvements, going from a 5% registration rate to 17%, and from a 17% activation rate to over 90%. Such is the power of split testing. This optimization gave David a critical mass of customers [.]”

This whole process of building, iterating, and measuring is the core of Lean Startup. It was the beginning of a success story. In September 2010, Votizen announced it had raised $1.5 million in funding. Three years later, Votizen was acquired by Causes, an online civic-engagement platform founded by Sean Parker.

As a 125-year-old company, General Electric is by definition about as far away from being a startup as you could get. However, they are often cited as a successful example of a large organization employing Lean Startup.

FastWorks, the program developed by GE and Eric Ries, employs Lean Startup principles and other disruptive strategies across its ecosystem in order to combine the speed and agility of a startup with the scale and resources of a large enterprise.

In this program, customer-centricity is crucial. GE begins by asking customers questions about what outcome they are trying to achieve. Subsequently, the team working on an issue comes up with a hypothesis for a solution, after which the underlying assumptions are tested.

FastWorks has been a success for GE. The process has resulted in shorter product cycles, quicker IT implementation, and faster customer responses.

At RevelX, we try to become a little better in what we do every day. The Lean Startup approach is one of our guiding lights, specifically the build-measure-learn feedback loop. We have instated our own growth team, working in 3 weeks sprints, continuously experimenting.

For instance, we experiment continuously with our website to obtain further activation and new acquisitions. The site regularly undergoes small improvements based on what appears to work.

Another example is that we launch many of our ideas as a minimum viable product. Take for instance our growth.directory. A place where you can find the best and latest curated tools for running your growth experiments.

The Lean Startup approach can take many forms. The MVP is the most well-known method, but certainly not the only one. The most important thing is to work in short cycles, to be flexible, and to be customer-centric as Hell!

My experiences with Lean Startup at RevelX proved to be very fruitful. What is your experience with this approach? I would love to hear your stories. Please reach out to me or leave a comment below!