What makes a startup lean?


The first mistake that people make when analysing lean startups is the assumption that they’re primarily designed to be cheap. While along the right lines, the key to lean startups is minimising waste. This can take many forms – from wasted capital to wasted time. The latter is commonly overlooked as both small and large companies alike often fail to recognise when time is being used ineffectively. A lean startup takes time to analyse each process to make sure that its output is worth the time it takes.  Which brings us onto our next point.


A lean business is an inherently self-reflective entity. It takes time to learn what works and what doesn’t and then take actions based on this analysis. For instance, if one part of the business is doing well it’s important to move resources accordingly. This is particularly applicable for smaller, leaner startups that, by their very nature, have the flexibility to accommodate this change. An example of this is Slipcase.com, which pivoted from a failing professional social network to a news aggregator that is now the go-to news source for the reinsurance industry. It took the parts of its site that did work, its news content and RSS feeds, and developed around them. It has recently received a £1m investment.


A common feature, although not a defining one, is that lean startups have a nonspecific location. Sanjay Parthasarathy, CEO of data analytics firm Indix that recently raised $15 million says about his start in business "I worked out of home, then at Starbucks and sometimes even Barnes and Noble". While taken to extremes, it’s important to bear in mind that location is something that you can save a lot of money on.


I don’t have to tell you that young businesses have a small workforce. So it’s important that lean startups use their available talent efficiently, meaning that one person may fulfil multiple roles. This may sound overly familiar to you but the key to human resources in lean startups is using peoples’ skills and experience effectively. To do this, ensure that staff are doing jobs relevant to their skillset and look to hire multitalented individuals.


Being lean, therefore, is more than just a one-dimensional business strategy. It’s a holistic approach, where you’ll get the most out of it if you apply the philosophy business-wide. It’s no surprise that startups are increasingly looking towards non-traditional means of setting up and cutting costs.


We use cookies to create the most secure and effective website possible for our customers. Full details can be found here