Waste is bad for business. Lean entrepreneurs succeed because they have figured out how build businesses with minimal waste. The alternative is a waste of time, money, and resources. A failed business.
Lean business requires laser focus. Henry Ford was able to build a lean factory because he only produced one car. Ford famously said that “you can have any Model T as long as it was black.” This is important because you can’t do lean business without focus. If you want to be everything to everyone you will build your business on waste and you will fail.
Whether you have a product or service business the more focus you have, the less wasteful you will be. For example, adding more features to software is a common mistake. The features often make the application more complicated. They will require more development time and additional costs. The worst part is that the new features are often unnecessary. Often, they only serve the insecurities of the team or the ego of the developer.
Fooling ourselves that we can predict what the market wants results in wasteful practices. According to Brant Cooper, New York Times bestselling author of The Lean Entrepreneur, stated that “successful entrepreneurs can engage with their customers in order to learn whether their idea has any value in the marketplace.” This is a crucial step to take prior to spending time and money on a project. Spend as little time and money as possible before you have a proven concept.
Uncertainty in the marketplace helps drive the lean movement. It allows for experimentation. It is essential to get real customer understanding. According to Brant Cooper, this is “not asking customers what they want and then doing what they say.” It is more about understanding pain then expecting customers to articulate what they want from you. Cooper said “the more you understand what the day in the life of your customer is like the more likely will you understand how much change they will accept in their lives.”
Observe your customers. Don’t sell. Watch them as they interact with your product, staff or environment. Ask them why they do what they do. Forget about pitching your idea. Entrepreneurs, wrongly, want their customers to agree with them instead of providing real useful feedback. They want the customer to become their own private cheerleader instead of creating products they want.
Why do you need the Lean model? Because it enables you to make small iterations. It is creating through evolution instead of revolution. The lean model enables you to quickly get something in front of your customers so you can validate what the customer will do instead of what they say they will do. Make small adjustments based on customer feedback.
Crowdfunding sites such as Kickstarter are the ultimate lean enablers. Prior to building a product the market has an opportunity to give you feedback. People are willing to pay you even before you have manufactured the product. It proves whether or not you have a market. If people don’t buy, you have either the wrong product, timing, price, or market.
The lean model worked for Zappos. The company started out with zero inventory. Once they have received an online order, they would buy the shoes at a brick and mortar store, then ship them to the customer. The model enabled Zappos to test the market with minimal investment. The lean model helped Zappos save money because they did not have to have an inventory. It also saved them time.
If you believe in the lean model, premature automation is your enemy. Many entrepreneurs place too much emphasis on automating processes too early. It is wasteful to try to automate too soon. There must be a proven model in place prior to automation. Entrepreneurs often worry about how to sell a million of something before they sold the first one hundred.
So, why is there a resistance to the lean model? It is really hard to figure out how to iterate?
It is not as sexy as the alternative. It is much more exciting to guess right and create a huge success, than making small iterations. When you go lean, you test, experiment, and communicate your way to success. Lean success is feet on the ground hustling in order to get the first few customers.