Intro to Lean Methodology

Intro to Lean Methodology

Once you’ve got your social lean canvas down you will want to work out if you can create a viable business based on it. At Ākina we recommend using the lean startup methodology  to assess the viability of your business and improve your business model.

There are three key stages to the process:

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Propose Business Model

The first step is to propose your business model which you have done with your business model canvas. Secondly, you need to identify risks and assumptions in your model. Once you’ve done that you can run test to remove or reduce those risks. Finally, you will learn from those tests and adjust or pivot your business model based on what you’ve learnt.

Identify Risks

Within an business model there are lots of assumptions and questions. For example:

  • Are customer willing to pay to solve this problem?
  • How much are they willing to pay?
  • Do they want to solve the problem this way or is there a better way to solve it?

You need to look at your business model and work out where you’ve made assumptions and which are the most important ones. These are the assumptions you need to investigate or test. For example, if you were opening a social enterprise cafe you’d visit all the local cafes to find out what they were charging for coffee and count how many coffees they sell during busy and quiet periods. If you were going to train young unemployed people you’d want to get out and find out how many people would be interested in gaining skills and experience.

In testing your assumptions you can go to different levels of investigation. The more critical the assumption the deeper you’d want to go. For example, asking people how much they would spend on coffee will give you a little bit of information, but actually setting up a temporary stall and selling real coffee to real people will teach you a whole lot more.

Learn, Change, Pivot

Once you’ve run your tests you will have new information that will inform the design of your business. Perhaps you can’t sell coffee for as much as you thought, or you learnt that rent is too expensive in the location you want. This new information will mean that you have to reconsider your original plan. At the bare minimum it might mean a slight change to strategy, or at the other extreme it might mean you realise a community cafe isn’t viable. In that case you would go back to your purpose and look for a new solution that still leads to the impact you want.

As you learn new things you will continue to review your business model until you are ready to launch with your minimum viable product.

If you want to learn more about lean start-up then visit theleanstartup.com

What next?

A core aspect of the lean methodology is the lean canvas. For more information on this, see our post here.

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