Courage to change: growth with scarce resources

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Text comes from: Lean Startup: Schnell, risikolos und erfolgreich Unternehmen gründen (2014) from Eric Ries, published by Münchener Verlagsgruppe (MVG), Reprints by friendly permission of the publisher.
Copyright:  Image material was created with a camera provided free of charge by our sponsor Olympus, which we checked as part of the test until it was unusable. . Photo Location: 1074 Berri Street, Montreal, Québec H2L, Canada.

Finally, we explore the metrics that startups should use to measure their growth as they gain new customers and enter new markets - and the drivers behind them.


Here writes for you:


Eric Ries 80Eric Ries has established the lean start-up method and made it popular.


From the author:


3 types of growth motors

There are three engines that drive sustainable growth: paid, viral or tough growth impulses. When a startup has identified its growth engine, it can focus its energy purposefully on building the business.

Each growth engine requires concentration on specific parameters to measure the success of new products and prioritize new experiments. If these are combined with the innovation balance method, one can recognize the risk of a source of growth at an early stage and initiate a corresponding change of course.

The toolbox Lean Manufacturing

We should talk about how to build an adaptive organization by keeping growing teams agile by incorporating them into the right set of structured processes.

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We should consider how tools from the Lean Manufacturing toolbox, such as the 5 Why analysis, will enable startup growth without bureaucracy or malfunctions.

The change from start-up to established Company

And we will see how lean practices pave the way for change from a startup to an established company that receives its growth impulses through entrepreneurial excellence.

At the end, the circle closes. As startups become established businesses, they face the same constraints companies are struggling today to find new ways to invest in disruptive innovation.

Entrepreneurial DNA

An advantage of the rapid growth of startups is that it retains its entrepreneurial DNA even when it matures into a “seasoned” company.

Companies that want to assert themselves in today's world must learn to manage a portfolio of sustainable and disruptive innovations. The view that startups go through different phases and leave behind earlier activities - like innovation - is outdated. Modern companies have to master various tasks at the same time with flying colors.

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A protected space for innovation

Therefore, we should look at methods to create a protected creative space for innovation teams within the structures of an established business.

We should also look at the broader implications of the success of the lean startup movement, put it in the historical context, and explore the possibilities for its future direction.

Innovation teams need supportive structures to be successful. Startups with risk capital in the back, which build a complex system step by step on the foundations of a simple system, have some of the necessary structural features as small, independent companies.

The advantages of small businesses

Company-internal startup teams need the support of management to create these structures. Whether internal or external, three structural features are indispensable:

  • scarce but secure resources,
  • Empowerment to develop the business model,
  • and a personal interest in the result.

Scarce but secure resources

These prerequisites are rare in established areas of the company. These structures are, however, only the starting point and not a success guarantee, but structural errors program the failure.

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Many divisional managers in large, established companies who are well-versed in corporate policy increase their budget through skillful tactics, knowing that it tends to be unpredictable; Therefore, they use it as high as possible and defend it against attacks by other departments.

Analyze company policy

Corporate policy means that they do not always win: if a crisis occurs at another point in the organization, their budget can shrink by a mere 10 per cent.

This is not a disaster yet; Employees just have to work harder and do more with less. Most likely, the budget has a cushion in the wise foresight of such contingencies.

Just not too big a budget

There are other laws in a startup: over budgeting is just as detrimental as too small, as countless dotcom companies can confirm, and they are extremely sensitive to budget changes in the middle of the race.

On the other hand, it is rare that a startup, which stands on its own feet, suddenly loses 10 percent of its cash reserves.

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Lighter in the race but difficult to control

This would be a fatal blow in many cases, since the fault tolerance is extremely low. As a result, they are easier to get into the arena, but they are also more difficult to control than classic business segments:

They have less capital, but this capital must be absolutely inviolable.

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  1. John

    LeanStartUps - I've always wanted to read something about that. I'm very happy, coincidentally via Facebook Having stumbled across your page and I am now very much looking forward to further contributions.

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