HBS Case: Hypothesis-Driven Entrepreneurship: The Lean Startup

1/18/17

Lessons Learned:

This case study touched on a number of topics pertaining to the different methods taken by start-ups
when beginning their business endeavors. It also broke down different strategies for understanding your
market, customers, and the pros and cons of taking one approach versus another. As an entrepreneur
myself, I found this study compelling and took away a number of valuable learning points. The first of
which deals with MVPs. This concept is intriguing as it basically scales back the features of your product,
effectively creating a more limited item for customer consideration. The pros of marketing your product
this way would be making cuts to the overall overhead of the startup. However this method also has its
cons. Released a scaled down version of your product can put mental limitations of your business in the
minds of your customers. For example, releasing only the start menu of a video game, as opposed to a
video show casing all the features the game will have once it is released. Although this is a very unlikely
scenario, it helps to illustrate the cons of using MVPs negatively. The next logical question then,
becomes, what is the best way to select an MVP for public offering. The case study again touched on
methods taken by start-ups to help mitigate the effect of the cons. One method that resonated well
with me was using customer surveys. This method ties into the idea of the hypothesis-driven startup, by
creating a means to an end. By this, I mean to say that by using surveys, you can find out what your
customers are really looking for in a product. With this information you can release the product that
best fits their needs at a cost that won’t throw your startup into bankruptcy. Once a niche market has
been obtained you can then begin scaling your product and adding features that will attract other
customers who are willing to pay a premium for the services your provided free or for a very cheap price
with your MVP. An example of a company doping this would be google and the release of google drive.
Google drive initially was created such that files could be saved on the cloud and accessed from
anywhere. Once a steady flow of users was attained, new features were rolled out which some of which
include the ability to collaborate in real time with peers and colleagues. All in all this case study taught
me that it is less riskier to follow the lean startup approach, as this approach reduces time and money
wasted and is a model that allows for maximum scalability.

Key issues:

- The Just do it Method – method where the direction of the startup is solely dictated by the
vision of the founders of the start-up.

The issue with this approach is that often time a good amount of resources are wasted and ultimately it
can usually bankrupt a startup. The solution would be to use a more sure approach by conducting
research and finding out whether or not your product is marketable.

- Fear of Conducting Research – ideology that conducting research and releasing the idea your
startup intends to capitalize on is negative as it will cause competitors to commit idea theft.

In truth an idea that is not acted on is worth nothing. The case study tells us that it is important to
conduct research on the product you are trying to market in order to tailor your product or services to
the right crowd and use the least amount of capital while focusing on capturing your niche market.