12 common misunderstandings from the Ekonomia blog compiled by Constantina Muston
Many people believe that lean methodology is applicable only to tech startups. In truth, it has been advertised by founders of tech businesses after the 2001 dot com bust. However, tech startups are not the only ones who can profit. Lean methodology has been proven to be is applicable to all kind of ventures that have a scalable and repeatable scope.
2. Lean methodology is used only in startups.
This is one of the most widely spread myths. In fact, every established company that attempts to launch a new product or is trying to reach new markets needs to follow lean methodology. Otherwise, they will be spending an enormous amount of money and time with doubtful results.
3. You can build a business in 48 hours.
Well, obviously you cannot build a business in 48 hours. It may take months or even years to achieve the optimal result. Instead, you could build an MVP in 48 hours. That is the reason of the existence of so many pre-accelerator programs in the US and now in Europe. 48 hours, in some cases, are enough to execute the first stages of an idea and start implementing it.
4. You need no money to launch.
Ideally you would not need any money to start a business. The fact is, though, that a little bit of money will take you a very long way. Lean practitioners are aware of this fact and, at the same time, urge you to restrain yourself from spending everything you have got. Money should be preserved for the next phase, the growth.
5. The MVP should be of low quality.
The quality of an MVP should not enter the debate in the first instance. An MVP should be a micrography of the end product. It should have one or more of the basic features, or it should represent more or less accurately the final result. Only this way, it can be tested for its appeal to the public.
6. You do not need anything tangible to start with.
First of all, you need to have an idea of where you are going. Then you should start implementing this idea in a practical way. If the result is not tangible one, the customer will not understand whether it will benefit him/ her or not.
7. Lean methodology does not use business plans
In the first stages of a business, the idea is sketchy and formed incompletely. It remains at that state, while the founder develops the business. There is no point in writing down a detailed business plan, until the customer base has been defined and the product has been formed. Only after product/ market fit should we consider seriously putting together a business plan. At that stage, it will prove itself to be invaluable.
8. Pivots should take the business in a completely different direction
Pivots may take the company seemingly in a new direction. However, the vision should not change as well. The vision is probably the most important aspect of the business that remains constant throughout the pivots. The only thing that changes continuously is the strategy.
9. The founder should follow all of the customer feedback.
In fact, customers are notorious for not knowing what they want or need! The entrepreneur should assess ALL of the comments but follow only the ones that are relevant to his/ her business. Only the founder could have a holistic idea of what customers need and how s/he can deliver it.
10. The only metric that counts is revenue.
Revenue is a great point for customer validation. However, in different stages of business building, different metrics should be taken into account. In some cases, even vanity metrics could be valid.
11. You should fail several times
Lean methodology is great in helping entrepreneurs deal with failure, which is inevitable in business. There is no reason, though, to pursuit failure. Instead, we should contain it and make certain that it does not undermine the existence of the business itself.
12. Lean is risky
New and innovative businesses that are aim at unknown markets are inherently risky. Lean methodology is an excellent tool for containing that risk, as any relevant decision is based on solid data and undeniable facts.