In some cases, rapid prototyping under the now popular “lean startup” philosophy comes at the cost of sound product architecture. In order to test new features in a fast, low-cost fashion, it prioritizes short-term growth bursts over long-term scalability. Tech debt piles up…and as the product keeps building on rapid user feedback, the foundations crack.
Many start-ups expect success simply because their business can streamline something and get new customers without having to drastically increase costs. However research shows that premature scaling can lead to failed start-ups that burn a ton of cash in the process. One prominent venture capitalist Chamath Palihapitiya has even warned this “growth at all costs” mentality has turned into a dangerous ponzi scheme. However, on the other hand, start-ups that scale at the right time, with the right resources and research, can yield phenomenal growth that endures.
There’s no right or wrong here, just different approaches to different business plans. For example the Jeff Bezos method—growing slow but compounding gains over time, or the Mark Zuckerberg approach—growing fast and breaking things along the way, but learning from them. One example of “breaking things”: There was one point in Facebook’s history where they had to revamp its database and hiring practices. They had grown too fast, and onboarding new developers became chaotic and frought with miscommunication.
In lean startups, businesses can see a direct link between product changes and user behavior. Just make a change and voilà, observe the clicks to see user impact. Eric Reis talks about the lean startup as a methodology for building products and services under extreme uncertainty, which almost every founder faces.
Especially true for start-ups who try to create products that no one has ever seen before, lots of uncertainty. Basically, lean startup, you can think of as an entrepreneurial version of the scientific method that you have a hypothesis about a solution that hopefully will work to solve a particular problem. This method is sped up and repeated over and over for incremental improvements in the product or business process.
Navigating the Right Path
Your potential customers and investors are there on many platforms. To get them to know your startup, you need to have a website or application ready as soon as possible to begin the iteration process. In practicing bootstrapping by posting your products online without being really prepared, you can connect directly with your customers and offer cost-effective solutions according to your brand. From small businesses to public numbers to larger companies, everyone has an online presence.. How you interact with customers is key, they are the ones who will determine the success or failure of your business.
While making key decisions in ambiguous, high-pressure situations, it’s always preferable to have someone who can provide support and an alternative perspective. Former tech entrepreneur and early Facebook investor Ben Horowitz was a key resource when Facebook was running into scaling problems. Mark came to him with problems with poor performance of new I.T. employees. It was the first time he had to hire a large batch and had not set up any formal on-boarding process. After that incident, and to this day, no one is allowed to make changes without in-depth training on the Facebook database structure and code base.
Mark Zuckerberg turned to Ben Horowitz for advice during Facebook’s growing pains Credit Reuters/Stephen Lam
Rigorous market research and product or service research and existing competition analysis are very important before starting any business. After you get some confirmation that there is demand, you can more confidently create an MVP(minimum viable product). Build your MVP (if you are a startup) or make the fine adjustments needed to an existing product or Service. If you have goals that are achievable with business as usual or with some minor improvements to business as usual, there is no reason to take risks or innovate. The pursuit of vanity metrics can make us feel as if we were successful, take our eyes off the only ball that matters : a profitable and growing business .
Finding Your First Customers
Next, branding and marketing are both a lifeline for a company. You will spend a good time on marketing, even if you run a single campaign, make it an great one that will affect people so that any ads and time spent is efficiently used. The product launch is an important branding and marketing tool to use to kickstart your project. It can give you much needed access to media, granted you can make the business interesting to writers and influencers. Unfortunately, you can only launch your product so many times, so the lean, bootstrapped startup might cause founders to blow a key moment by diving in fast and head first.
Nothing is more annoying than a company that does not deliver what it promised – Don’t brag about anything that will lose your potential customers or investors in the long run, it could spot your reputation and, in a worse scenario, get you into legal problems. You should always present yourself and your product in the best possible light, without over promising.
Although the minimum viable products and iterative development were initially occupied by startups, today virtually all innovative technology organizations we talk to use the approach. Though as even Eric Ries, author of The Lean Startup, there are some startups that are better suited to a slower growth trajectory.