Session 5. Lean Startup
- CEIBS MBA Entrepreneurship Bootcamp
November 11, 2016. Shanghai— While the rest of China was frantically trying to scoop up bargains on the country’s November 11 ‘Single’s Day’ e-commerce holiday, CEIBS eLab Bootcamp participants were hard at work, engaged in an inspiring discussion with Professor of Management Practice Gong Yan on the lean startup concept.
“Most startups today still use the push model,” Professor Gong explained. “They spend a long time developing the product in secrecy without getting enough feedback from customers.” He said this is a big reason why more than 70% of commercial launches will fail.
Prof. Gong suggested participants instead try the lean start up, or pull model. He advised the entrepreneurs to engage customers from early product development stages and employ shorter product development cycles. Instead of developing a product with maximum functionality, companies should employ the minimum variable product (MVP) as test tools to ensure timely feedback from customers. Professor Gong emphasized the importance of using lean startup thinking in both mature multinational corporations and young startups. By adopting this pull strategy, GE, for example, was able to develop ten generations of refrigerators within six months.
When asked how to select seed customers who are representative of real potential customers, Professor Gong recommended choosing innovators as the target customers. “There are three types of users: innovators, mainstream users, and laggards,” he said. “With the development of technology, the lag between the innovators and mainstream users has become shorter. Although innovators only constitute 5-10% of the total user base, they indicate the near future trend of the mainstream.”