Sunday, 30 September 2018

The Entrepreneurship: What is Lean Startup?

           Lean IT is the extension of Lean Manufacturing and Lean Services principles to the development and management of information technology(IT) products and services. In the context of Lean IT is the elimination of waste, where waste is work that adds no value to a product or service. Lean thinking spreads and using in all industries like logistics, distribution, retail, healthcare, construction, maintenance, IT etc., The traditional IT organizations still build the wrong products that customers do not like and after they release them too late, infrequently, with too many errors, time-consuming causes to costly process and accrues high amount of technical debt. The Dev's job is to add features and Ops job is to keep the site stable and fast. The conflicts generate lots of waste like organizational silos, different implementation, and mindset etc., So, every organization should assess its own downtime costs based on its own business model and architecture.

    Definition of Startup: The startup is the human institution designed to create something new under extreme uncertainty. Therefore, it is a management challenge. We don't know what the product and the customer at the initial stage. If you were in the situation of high uncertainty, find out what you don't know as quickly as possible. So, the learning helps you identify what is unknown and allows you to make progress with the product.
          In Lean Startup, there is a concept called Validated Learning. It is the process of using the quantitative methods to modify the end product in a way that becomes more successful. It is a proven method to yourself, your investors, and stakeholders that are getting better the product.  Metrics that provide useful information for the entrepreneur to modify the end product is called Actionable Metrics. On the other hand, Metrics that look very good but essentially useless to portray your success is called Vanity Metrics. Make predictions on metrics that are supposed to happen by avoiding the vanity metrics. When you go product iterations from pivot to pivot quantitatively, not only you learn from abstract, you can apply that learning to change the customer behavior. It is fundamentally the product is a tool for changing the customer behavior and changing the way the world works. In that way, you have the sustainable business.

     If you have the vision and innovative business idea to work on the project. Here are the steps to validate your idea without wasting time, budget, and building something that nobody wants,

Step 1: Write the User Experience Vision - It is the description of the initial setup with ending of High-Level Plan.
Step 2: Identify the Critical Assumptions - It will save a large amount of time waste and ensure that the target customer will actually buy the product. It is actually gathering the behavior of the audience, not the opinion.
Step 3: Build an Early Version to Validate a Critical Assumption: It can be done by Concierge MVP and Smoke Screen MVP. The Concierge MVP is a manual method to test the automated process and Smoke Screen MVP is marketing with a finished product. This helps you to measure the actual customer behavior.
Step 4: Release and Measure: Once the product is released, it is time to measure the number of pre-orders received, average watching time of your product ad on the social media etc.,
Step 5: Pivot or Persevere: If your ad gets trends or more people watching the video, you have the bit more time to tweak the product. The sign of the successful pivot is that this engine-tuning are more productive after the pivot than before.

Continuous Process Improvement: Continuous Improvement or "Lean" is a systematic approach to business management which uses universal principles and tools that are logic based and relatively simple to implement, The key to a Toyota way and what makes Toyota stand out is not only of individual elements. But what is important is having all the elements together as a system and must be practiced in a very consistent manner.

       Lean Startup is a field-tested philosophy that provides you the toolset to minimize the failures and increases your chances of success. Being Lean is the practice that considers any goal other than creating value for the consumer to be wasteful. Just having that plan is enough to the success. The business plan is serious of assumptions and guesses what might be happening in the future? The lean startup aims to quickly and quantitatively identify great hypotheses and the bad ones.
 TPS helps you answer these questions,
 * What do customers truly want?
 * When they want?
 * In the quantity they require without defects?
 * What is the path to the sustainable business?
 * How can you waste less time building a new startup?
The entrepreneur always has the vision. The vision is where you want to go but doesn't have to tell you how to get that. If you have an idea or strategy for the new product, the first step is to create a Minimum Viable Product(MVP). It is the smallest possible product we can possibly imagine. This helps you to figure out the right track or not. It could be a simple prototype or mere elements of the business and it is enough to learn on the right track. Learning is the most vital function of any startup.

What are Lean Principles: The important Lean Principle is that you are always moving from doubt to certainty. It specifies the value from the perspective of the customer. It does not focus on organizational and functional boundaries. It can define as,
    * Looks across the Value Stream and determining customer needs and ensure to make the value flow. Whatever the customer needs every day is most important in value flow without interruption making the customer happy and satisfied.
   * Pull of the customer that do only what the customer wants when they want it. It strives for perfection by continuously removing the successive layers of waste as they were uncovered.

     The Value Stream Mapping technique helps visualize customer value, differentiate value from the waste, and eliminate the sources of waste. Takt Time is the value stream metrics which is the heartbeat of the process. It is the meantime between the request. The pace of the process keeps in order to keep up the pace with demand. If the pace too fast, then the Resource remain idle. If the pace too slow then the work in progress(WIP) builds up. There are 3 types of wastes identified in lean that are Mudi, Mura, Muri ( in Japanese terms ) means as,

Mudi refers to Unnecessary Activities and NonValue
Mura refers to Variation, Variance in the process
Muri refers to Inflexible, Overburdening on the process.

        So, how the lean maximizes customer value by minimizing the waste. Determine the activities by removing those things which are non-value, the one that is necessary but not delivering value, and the one that is really value added. It can describe as,

        The value of the customer can be identified in the products and services. In the product, the factors to be considered are performance, features, timeliness, reliability, aspects, reputation, and completeness etc., The factors in the service to the customer value are competence, reliability, accuracy, responsiveness, courtesy, communication, credibility, understanding etc.,

Why Lean? How do we make sure that we are successful working in the right direction, satisfying the customer requirement, and providing outstanding flow?  By using the Continuous Improvement Methodology, you can reach those goals. Continuous Improvement measures waste in following types,

   * OverProduction - It is a production of what they need and when they need it and not underproduce. Also, it is very costly.
   * Inventory Waste - It is a material or information  that are not required for customer demands
   * Waiting - We experience waiting in a laboratory environment for the next business cycle before the process to be completed. Make sure that the information flow in and out as per the customer need.
  * Motion - It is the necessary movement of people and process. Every movement should add value to the customer and movement should not be impeded.
 * Transportation - An unnecessary movement of people between processes and internal links. Are you using the best value of the product distribution or material?
  * Defects - Anything that has to be redone are considered defects
  * Extra Processing - Process in the environment does not have any value or any extra operations are considered extra processing. The material should be delivered and consumed just in time and no stopping or stagging or inspection.
  * Unused Creativity -The goal is to eliminate waste and allow to think and improve the business.
        With the strategy in mind, the features and functions can be implemented in quick, good and useful to the customer. Here is an example of IT service Management Value Creation,

DBS Management System: It is a standard systematic way to manage the Continuous Improvement in Corporate Culture.  It works on all internet operating company and it has 3 critical components
  1. Daily Management(KPI) - How we serve the customer TODAY and meet current expectations. KPI involves delivering quality, inventory, and productivity. When you enter the new market, we have to think again the breakthrough or redesign through strategy. You need to go through the advance methodology for action planning
  2. Policy Deployment - What are the strategies or goals up to 3 or 5 years in advance and make sure working in the direction satisfied to the customer or business. It is also how we create a sustainable competitive advantage by striving for world-class performance.
 3. Problem Solving - It is everybody's daily work and really looking at improving the KPI. It is the iterative process to bridge the gap of performance which often exists between where we are and where we want to go.
    DBS System increases the productivity without compromising the quality. The Method in Lean is to simply identify the process or product to work online.

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