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How Established Companies Can Learn from Successful Startups

Michael Riley
How Established Companies Can Learn from Successful Startups

Many companies are looking for ways to optimize their business and explore new ways to grow.

Over the last few years a new trend has emerged called Lean Startup. It's behind the success of a range of old and new companies, and it just might help you grow your business smarter.

What Does "Lean Startup" Mean?

Lean startup is a method for developing businesses and products more efficiently. The goal is to shorten your product development cycles using hypothesis-driven experimentation, iterative testing and "validated learning." It simply provides a framework for businesses to reduce their market risks and sidestep the need for large amounts of initial project funding.

Basically, it prevents expensive product launches that end up being failures.

Where Did it Come From?

Steve Blank developed the Lean Startup methodology. He's a successful serial entrepreneur and a professor at Stanford University. His book, "The Four Steps to the Epiphany," was published in 2005, and it's a textbook for implementing the methodology. A student of his named Eric Ries then published a book titled "The Lean Startup" in 2011 that further developed the concepts  and coined the phrase.

What are Some Success Stories?

  • Citrix - Klaus Schauser credits Steve Blank with his success at Citrix Online (formerly Expertcity). Their products including GoToMyPC, GoToAssist and GoToMeeting now dominate their space. They used the customer development techniques from Lean Startup to validate their products early on.
  • Intuit - Eric Reiss has worked with Intuit over the years and included their story in his book. They use Lean Startup methodology to develop all their online products, like TurboTax. They have a rigorous testing program and are able to move quickly even though they are a very large and established company. More than $100 million of its 2012 revenue came from products that didn’t exist three years ago, a tenfold increase from 2010.
  • Dropbox - The founder, Drew Houston, got millions of signups before the first version was even completed. He did this by recording a YouTube video in his bedroom showing how a mockup of Dropbox might work. And this Lean approach allowed them to quickly build a $10B+ company with millions of paying customers. The key was showing something to real world customers and getting validation before investing more time and money.

Why Does it Matter?

The game has changed. The growth of the Internet and technology are both rapidly accelerating.

Companies need to adapt faster to changing trends or they risk falling behind. The old ways of doing things involve more risk of having a huge failure. Lean Startup includes the concept of pivoting. By testing each aspect of a project early on and only moving forward once validated, it ensures a successful outcome. It forces you to make the right decisions based on real world data.

How Can I Apply this to My Business?

Reading Steve Blanks and Eric Reiss' books is the first place to start. There's also a wealth of online articles and videos to learn from.

Lean Startup provides a complete framework, but to use it effectively you have to truly understand all the underlying concepts and how to effectively execute them. You can start learning the basic concepts fairly quickly, but it does take time to fully understand how the methodology can be practically applied to your situation.

What's Next?

The latest trend to come out of Lean Startup is called Growth Hacking. It's essentially a way of making business growth scalable and repeatable. The goal is to bake customer acquisition into your products or services, so you get more organic growth.

Lean Startup is a process to achieve product/market fit, and Growth Hacking is what can implemented after that is done. It's important to understand what problem needs to be solved and what tool is right for the job. Lean Startup is best used to get a new product or service off the ground.


Can Lean Startup help your organization? It's possible to try out certain aspects of Lean Startup or test it out on a small project. There's no need to make big changes to give it a try. Big companies like Intuit and Citrix made it work and small startups also find it useful, so maybe it's worth testing out at your company.

You simply validate it or pivot.

Image credit: Shutterstock image via Boxter account

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Michael Riley is a serial entrepreneur that also writes about tech and startups. He is co-founder of Boxter and previously founded the startup Simplpost. He is active in the local community organizing for TechGirlz, Philly Startup Leaders and founded Follow him on Twitter: @itsatechworld.
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Bais Naqvi
@Michael Riley i'm very thankful to you for sharing a wonderful blog post. thank you and keep it up.

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