Lean vs Lean Startup - are they the same thing?
“Lean” and “Lean Startup” are often used interchangeably. However, while one refers to an approach to manufacturing or production, the other is more focused on customers and users. But is that all? Read on to find out the differences (and links) between the two.
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What is Lean?
To discover the origins of Lean, we need to travel in time and space to 1950s Japan. As the country fired up its manufacturing base as part of the post-WWII recovery, people began looking for more efficient production methods. One such avenue of exploration sought to eliminate unnecessary waste.
What do we mean by waste? Anything that detracts from the creation of value for the customer. In other words:
- Defects (e.g. due to poor quality or standards)
- Overproduction (making more than is needed)
- Waiting (downtime due to poor planning or problems)
- Under-utilized talent (underused skills, talent or knowledge within the team)
- Transportation (unnecessary moving things around)
- Excess inventory (to the point that supply exceeds customer demand)
- Excess movement (by workers or machines)
- Excess processes (unnecessary steps or actions)
With Lean manufacturing (also known as the Toyota Production System, or ‘just in time’ manufacturing), everything is measured, new ideas (experiments) are tested, the goal is simplicity and customer value, flexibility is valued, and the underlying principle is continuous improvement.
The original focus was on production lines turning out physical products, but the basic principles of minimizing waste and maximizing value to the customer also apply to intangible digital products. Digital product development in the twenty-first century was ready to have some lean ingredients added to create a new recipe. And that’s exactly what someone did…
What is Lean Startup?
Shifting the focus towards the needs of the market, Eric Ries’s 2008 book, “The Lean Startup” introduced and applied new principles to entrepreneurial, innovative digital business. Ries effectively asked the question, how can you improve a process if no process exists yet (i.e. you’re developing a completely new product). The answer was to focus on efficiency and reducing waste via a different lens.
Over the last decade and more, Lean startup has become one of the most widely used development methodologies. five main principles:
- Entrepreneurs are everywhere – not that this methodology is for entrepreneurs only, more that an entrepreneurial attitude is necessary, looking to solve a common challenge in a new and unique way.
- Entrepreneurship is management – the development process is actively managed; including the nature of the process and its goals and priorities.
- Validated learning – experiments are important; ideas, features, and functions are treated as experiments and tested with potential users to validate the users’ need for them.
- Innovation accounting – metrics are fundamental to success, measuring user engagement, project and product assumptions, and the product’s market fit.
- Build-Measure-Learn cycle – in a nutshell, it’s about building a minimal version of the product (i.e. a prototype or MVP), testing it against users’ needs, and gathering feedback and data. The collected information can be used to design the next version of the product.
Here, the focus is on the market and the needs of that market. Subtly distinct from providing value to customers, Lean Startup Methodology nevertheless does provide just that, albeit via a different route: by quickly and efficiently testing business idea(s) with representatives of the intended market.
That said, Lean Startup’s focus is still on minimizing waste. In a new product scenario (with no established customers or production processes) the waste you are trying to minimize is that of designing something nobody wants (or is willing to pay for). The goal is a good fit between the product and the market.
The key differences between Lean and Lean Startup
While obviously siblings (or cousins?) with elements in common, when comparing Lean vs. Lean Startup it’s easy to see key differences:
- The goal of Lean software development vs Lean Startup’s: former exists to build/manufacture better, the latter is there to be sure of what to build.
- Choosing between traditional vs Lean Startup methodology comes down to either focusing on the process and resources needed to build the product, or focusing on who will be using the built product (the users, the market).
- Main driver’s for Lean is to reduce or minimize waste and continually improve efficiency. Lean Startup methodology is driven by the need to continually (and incrementally) refine the product.
Lean is often implemented by large, established enterprise organizations to improve their current manufacturing operation – whereas Lean Startup is more often a tool of small, entrepreneurial businesses (or possibly an R&D department within a larger enterprise organization) developing new products.
See also our other article: Lean vs Agile vs Design Thinking.
Combining the two?: Lean and Lean Startup
Thanks to the ‘family’ relationship between these two concepts, Lean and Lean Startup can potentially both be applied to the same project. At the design stage, Lean Startup ensures the involvement of the product’s intended users (as representatives of the market) and establishes whether there is a genuine need and desire for the product.
Once past the design stage, Lean’s focus on efficient production can be applied to the processes used to manufacture the product for distribution and/or sale. In this example, Lean manufacturing principles would be applied following the product-market fit stage and during the scaling stage of full cycle product development.
This would require a particular business culture to be in place. By which we mean a specific leadership philosophy focused on developing an efficiency-conscious mindset and using that to drive product decisions, problem-solving, and client relations.
Lean vs. Lean Startup – different but not incompatible
When comparing Lean Startup methodology vs Lean you can see the differences in how these basic principles are focused and applied. With its application to the process of design and development, it’s Lean Startup that seems the most relevant. Lean manufacturing principles can be brought into play once the product idea has been fully matched to identified market needs. The common factors between the two are waste reduction, continuous improvement, and experimentation - things that are relevant to any business, regardless of industry.
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