What is a Lean Startup ?

What is a Lean Startup?

  • Lean startup is a method used to build businesses based on the beliefs that the entrepreneurs must investigate experiment and test as they develop the products. 
  • It is basically Customer development + Product development. 

10 Important points about lean startup:

1. Lean startup uses validated methods and a hypothesis to assess consumer interest. This will help you to understand the needs and demand of the market. Hence, you can produce accordingly.

2. Lean startup gives a lot of importance to customer related information such as product popularity, Lifetime customer value (Profit attributed to the future relationship with a customer) and customer churn rate (Percentage of customers lost during a specific period).

3. In a Lean startup, experimentation is given more prominence than having a fixed plan. 

4. Lean startups will release their products in a small quantity in order to assess the customer reaction to the product. 

5. The Pivot – A pivot is not necessarily a failure. It means you will change one of the main hypotheses that you had implemented. There are different types of pivot. They are:

  • Zoom in pivot – A single feature in the product now becomes the whole product.
  • Zoom out pivot – It’s the opposite of zoom in pivot. A whole product becomes a single feature in something bigger. 
  • Customer segment pivot – The product was right but the customer segment targeted was not. Here, the product remains the same but the segment changes.
  • Value capture pivot – Changing how value is captured changes everything in the business. (Cost structure, product, marketing strategy, etc)
  • Technology pivot – A new technology can substantially reduce the cost, increase efficiency or performance and allow you to keep everything else the same. (value creation, customer segment, etc)

6. Small batches:

One of the biggest advantages of working in small batches is problems can be identified at a much lesser cost. 

For example – If there is a defect in the physical part, stopping the entire production line can be avoided. 

7. The Andon cord:

The key to the Andon cord is that it brings work to a stop if there is any big problem that requires it to be investigated. 

The activation can bring the production to stop if there is a big issue. This will help the management because it will help in reducing extra cost and increasing the quality too. 


8. Kanban:

Kanban is a visual system for managing work through a process. The goal of Kanban is to identify potential problems in your process and fix them so that work process can be smooth without any bottlenecks.

This is also helps in saving money as it helps in recognizing the problem at an initial stage.   

9. The 5 Whys:

Using the 5 Whys technique helps you get close to the root cause of the problem. It’s a simple and a powerful technique. 

This technique is particularly useful for startups, as it helps them to find the optimal time and speed for making improvements to the detected problems.

10. Minimum viable product:

A Minimum viable product is a product with just enough features to cater to needs of the early customers and this will help in providing feedback for future product development. 

These were some important points about lean startup. Hope you liked it. ☺  

Also read about startup india here-

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10 Benefits of Working in a Startup

When you think of working in a startup, do you think it’s fun or long hours of slogging? There is no correct answer to this. Both of them could be true. But it’s important to not overlook the benefits of working in a startup. 

Before taking a final decision, don’t forget to consider these benefits of working in a startup. 

1. You’ll get to work with passionate entrepreneurs:

If you work in a startup, you’re going to be managed by passionate and talented entrepreneurs who have gambled everything for fulfilling their dream. Working under them will teach you more than you could have ever imagined and their guidance will take you places.

2. Wear many hats:

As a startup employee, you’ll be designated with many other roles outside of your job description. Although this could mean more stress and long hours, the experience and exposure gained from doing this is cannot be experienced in a corporate. 

3. A unique growth opportunity:

Best of the candidates are not motivated and driven by money. They are motivated by the opportunity to learn and grow. They understand that knowledge is money. In a startup, they can develop new skills and do things they wouldn’t have the opportunity to do elsewhere. 

4. Experience the startup culture:

The startup culture is more chill compared to the corporate culture in terms of dress code, rules and employee hierarchy. Have a problem that is not resolved? At a corporate office, you would have to go to your boss, and he would report to his boss and so on. But in a startup, ideas and problems can be discussed with the boss directly. 

5. Work that matters:

Working in a corporate in the initial stages of your career means you’ll probably be stuck doing some work that doesn’t really have any significant impact on the mission of the company.  But each startup employee is important and has a crucial role to play in the success of company. 

6. There will be ping pong and foosball: 

Obviously this is not guaranteed but usually the startup office atmosphere is a world away from the corporate office atmosphere. And if you happen to join a startup without a ping pong table, a few e-mails and a bit of money pooling among the colleagues can do the trick. 

7. Learn how to be an entrepreneur: 

Do you have a dream of starting your own company someday? Working at a startup will help you get closer to your goal because startup employees work together. This will help you understand and evaluate the decisions that are taken at the top level, middle level and lower level. Not only that, you also learn how to deal with all types of clients and understand how day to day business matters are handled. 

8. Working in a startup can be the equivalent of doing an MBA:

In MBA, you will be learning all the concepts but not implementing it practically. In a startup, you will be implementing it practically. You will be dealing with real money and real clients. Of course doing an MBA has its own perks but working in a startup can really increase your knowledge. 

9. Flexibility:

One of the main advantages of working in a startup is flexibility. The option of work from home, option to do their work on their own schedule and find a balance so that they can spend more time with their family, friends and their hobbies.   

10. Stock options:

Many startups offer stock options along with regular salary. This is a cool option because it will make you feel like an owner of the company. This can add as a motivational factor to work harder and learn more so that you can contribute to the growth of the company. 

So, these are some of the benefits of working in a startup. Hope you liked it.  


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Top 10 Reasons Why Startups Fail and How to Avoid Them

Starting a startup is not child’s play. The fact that a majority of them fail in the first 3 years makes it even more terrible. Smart entrepreneurs always learn from their past mistakes and learn from others mistakes too. This is what helps them to hustle! After analyzing and examining why startups fail, we identified the top 10 reasons why startups failed. 

Here is the list of reasons for failure and methods to avoid them:

1. No market need:

Startups fail when they are not delivering the goods and services that the market needs. 

It’s of no use if you have a lot of money, a good idea and good reputation but not fulfilling the needs of the people. 

How to avoid:

  • Essentially, customers should be interested in the model you are pitching. 

Lawyers want more clients. Not a swanky office.

2. Running out of cash:

Cash is like fuel to your business. If you are running out of cash, then your business is in trouble and you will not be able to take it any further. 

Cash flow helps in keeping the business alive. No matter how passionate you are or how great your idea is, you still need to pay your bills, clear your dues and pay your employees. 

Many startups run into problems when they have insufficient funds to run their operations resulting in loss for the company. Or the exact opposite scene is also possible, when a startup receives massive funding and they misallocate the funds. 

How to avoid:

  • Keeping a track of cash inflow and cash out flow. 
  • If funds are required, work well in advance to explore all the funding options and not delay it to the extent that it’s too late.  

3. Market problems:

Every company is driven by the market. It is essential to identify the correct market and find the right solutions for the needs of people. 

The success of a product also depends on the timing of it. 

The e-commerce industry wouldn’t be booming in the early 2000’s like today because the internet speed was really slow and the smartphone industry was still picking up. 

How to avoid:

  • Go out, talk to people and understand the market needs and demand before building a product. 
  • Research and understand your industry properly. It is easier to make changes in the initial level. This will help you save money too. 

4. Business model failure:

Business model is the backbone of every business and it contributes to the commercial and economical success of a business. 

Some companies are so involved in the idea implementation process, they overlook the business model.  

Lacking the skill to analyze and strategize business model is a major drawback. A bad business model can reduce the life span of a business drastically.  

How to avoid:

  • Analyze if your customer acquisition strategy is expandable. 
  • Analyze and estimate your sales and return on investment. 

5. Poor marketing:

Good marketing is understanding your target market and knowing how to get their attention. 

A great product can fail if it is not marketed well.

Knowing how to convert them to leads and ultimately into customers is very essential for the success of a business.

How to avoid:

  • Marketing should start at the initial stage of a product and not wait till it is completed.
  • Hire a good marketing agency that understands your vision. 

6. Poor management team:

Management is like the brain of the company. Having a diversely skilled group of people is essential for the success of a company.

Poor management can represent poor strategic decisions, communication gap between the top management and bottom level employees and bad hiring system.  

It is important for the team to be united and agree around a common vision and long term goals of a company.   

How to avoid: 

  • Communicate well with your employees.
  • Decisions should be backed by statistics and not experience always.

7. Loss of focus:

Founders are usually idea oriented and they mostly get carried away with ides. This could make them lose focus on the other key aspects of the business. 

There should be a fine balance between micro management and macro management as this could also be a reason for the employees to lose focus. 

How to avoid:

  • Don’t get carried away with new ideas. First concentrate on achieving the main goals of the business.  
  • Have a “To do list” and “To not do list”. This will help in eliminating the unnecessary things that are making you lose focus. 

8. Legal challenges:

Sometimes a startup could be doing really well but a legal complication could be the cause of shutting down the company. 

Every field can have different laws and it is important for startups to at least be aware of them. 

How to avoid:

  • Consult an experienced lawyer if required. This will save you a lot of time and money in the future.
  • Make sure your company and employees are compliant with the laws.

9. Disagreement among team members:

Conflict among team members is the last thing any startup would want to see. 

Everyone have their own opinions and their emotional behavior could lead to conflicts. This can destroy company culture and ultimately lead to the failure of a business. 

How to avoid:

  • When it comes to making a business decision, you should make decisions that are best for the growth of the business and rely on the collected data rather than going with the majority.   
  • Shareholder agreement and employee agreement should be in place to handle the matter professionally.

10 Burnouts:

Doing a startup is not easy. Even the most ambitious people burnout in the process. 

Because of the hectic schedule, they don’t have a good work-life balance. Hence, the risk of burning out is high.

Watching your buddies making good money in corporate jobs, posting pictures of family outings and parties could make you rethink about your decisions. 

A majority of the founders cannot take these burnouts and eventually quit.

How to avoid:

  • Make sure you have a good work-life balance.
  •  Health should be your first priority. 

Bad health = No peace of mind = Bad decisions = Downfall of company. 

A startup can experience several challenges presented above. However, it is better if the founders keep an open mind and learn from the failure of others. This can help them save a lot of money and time. 
So these are some of the reasons why startups fail. Hope you liked the article. ☺   


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What is Startup India?

Do you have an innovative idea that you want to pursue as a startup? Then Startup India is the right platform for you!

Startup India is a plan of action that is aimed at promoting and financing startups. It is an initiative of the Government of India. The campaign was first introduced by our Prime Minister Narendra Modi on 15th August, 2015. 

The Indian government has introduced over 50+ startup schemes in past few years. Each Startup scheme is aimed to promote the Indian startup ecosystem. 

India is expected to reach over 12,000 startups by 2020.

If you’re wondering “How Startup India is helping businesses?” Here is the answer to your question. 

  1. Easy access to funds

The Government of India has set aside Rs 10,000 crores to fund the startups as venture capital. 

The government is also giving guarantee to banks and other financial lenders for providing capital. 

2. Exemption from tax for 3 years

Startups will be exempted from income tax if they get a certification from the Inter Ministerial Board. 

3. Reduction in cost

Startups will enjoy 80% reduction in the cost of filing patents.

4. Easy process

Government of India has launched a website and a mobile app for registration of startups. Anyone interested in Starting a Startup (Provide link to How to start a startup) can fill a simple form on the website and upload the required documents. The full process can be completed online.

5. R&D Facilities and opportunities

New research centres will be set up to provide facilities and opportunities for startups in the R&D sector.

6. No time-consuming registrations

Numerous compliances have been simplified to save time and money for startups. 

7. Apply for tenders easily

Startups can apply for government tenders. They are exempted from the criteria of attaining a particular turnover. 

We have written a very interesting article about lean startup .

Follow the link to read that

http://liftmystartup.com/what-is-a-lean-startup/

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