The innovation led by lean start-ups

For many years, the idea of launching a new product from scratch is highly methodological. First, a brilliant idea hits a person. He or she then writes out a business plan, pitch it to potential investors, create a team and push the product out into customers’ faces. However, a research done by Shikhar Ghosh from the Harvard Business School states that 75% of all start-ups fail. Then, it came along motivational speeches and books that push people to continue doing the same thing until they land on the 25%. Fortunately, the theory of lean start-ups began to get some exposure. The first fundamental idea of a lean start-up is that it is not a smaller version of a big enterprise. Lean start-up is a method to start-ups that favours more experimentation, customer feedback and dynamic product designing. Lean start-ups are more about producing for the people and not about bringing to life one person’s idea.

There are 3 key principles in becoming a lean start-up. Firstly, you have to sketch out your hypothesis. Have a general idea of what you want to do. An example of a hypothesis goes something like ‘To increase efficiency and save time for housekeeping in hotels’. Then, you have to go out there and receive feedbacks from potential customers in a number of points; product features, pricing and distribution channels. These inputs by the customers are taken into consideration and used to modify your hypothesis and product. Your hypothesis now could be ‘To provide a quick alternative to bedroom sheet washing’. This process is repeated again and again with testing and small adjustments until the product is completed. Lastly, a lean start-up has agile development. Different from the traditional ways, agile development is the process by which start-ups create the minimum viable products they test. This eliminates wasted time and resources.

This idea of lean start-ups is beginning to get traction and there are signs.

“In 2011 the U.S. National Science Foundation began using lean methods to commercialize basic science research in a program called the Innovation Corps. Eleven universities now teach the methods to hundreds of teams of senior research scientists across the United States.”

Why the Lean Start-Up Changes Everything

by Steve Blank, 2013

MBA programs are taking up this idea too. For far too long they have been teaching about large-companies approaches.

An example of someone used lean start-up to sell a product is GE’s Energy Storage. Prescott Logan has developed a new battery that could create a stir in the industry. However, instead of launching huge development plans to build factories and a marketing campaign, his team met potential customers face-to-face and receive feedbacks on the product. They create a deep understanding on how and why customers use batteries. They were able to eliminate one of the target markets they initially chose and pinpoint their focus on cellphone providers in developing countries. Subsequently, GE built a factory and started mass producing with a clear idea of the product and target market in mind. They were highly successful.

Lean start-up, being a fairly new idea, has not got the recognition it deserves. Many people will still tend to stick to traditional and safe methods until the ones who dare to take up this great opportunity proves them wrong. Unfortunately, by that time, the latecomers will be running a race that has already finished.


Han Teng

Han Teng

Ever heard of the story of the rice crop? The older and riper it gets, the more it bends downwards. Living by this principle I believe that life is a never-ending learning process and the more I learn the more I'm humbled by it. Keeping my nose low and helping others are my priorities. I'm no successful entrepreneur nor an excellent sportsman. However, I do aspire to reach for the stars and when I do; it is of utmost importance to be grateful to everyone around me.


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Eric Phuah

Eric Phuah , Director at Hystericalz Pty Ltd

Will be interesting to see how successful lean start-ups become, thanks for introducing the concept!