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Saturday, August 23rd, 2014


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Start-Ups Starting Smaller and Leaner, But More Aggressive

Silicon Valley has seen its lean start-up model grow elsewhere.When people ponder founding a new company, many might think about years of developing and perfect their product followed by the long struggle to gain a toe-hold in the industry. But The New York Times reports that start-ups need not necessarily follow this pattern to prove successful. Instead, a growing number of companies are taking the so-called lean start-up model that has come out of Silicon Valley.

Areas like Silicon Valley and Boston are well known as focal points of innovation and venture funding, making them popular places to start. But Silicon Valley has increasingly approached venture spending in a dramatically different manner, encouraging companies to dive into the market almost immediately.

Rather than perfecting a product over years, these companies will put together a working model and continue to fix and tweak as they speak with prospective clients, often incorporating comments and specific requests. Many take the same approach to business models, going through a process of constant testing and exposure to real-world conditions.

The approach has quickly gained interest beyond Silicon Valley as well, with Harvard Business School requiring students to start their own businesses over the course of the school year and the National Science Foundation developing its N.S.F. Innovation Corps grants on the idea.

“It’s all about how to apply the scientific method to market-opportunity identification,” Errol Arkilic, a program manager at the foundation, told the Times. “And that is exactly why this method is the one the N.S.F. selected.”

StartUpSmart notes that the concept has been around for at least three years, but has gained increased visibility with the publishing of The Lean Startup, written by venture investor Eric Ries. The book outlines a few other key ideas behind lean start-ups, including openness to potential ventures in any field and, importantly, the understanding that many such businesses will fail despite their founders’ best efforts.

“Over 70 years, this Valley has developed a culture that does not personalize failure,” Randy Komisar, of venture firm Kleiner Perkins Caufield & Byers, told the Times. “If you’re not corrupt, stupid or lazy, we see failure as learning — learn from it, and reapply it.”

While this seems like a positive approach to new businesses, the model still has its opponents. Xconomy‘s Jamie Goldstein notes that the companies that have grown fastest after the introduction of their product were those that tackled issues that they were unclear they could solve. The businesses focused on the product with the understanding that a big enough innovation would ultimately find clients.

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