Understanding Lean Startup Model In The Context Of Bangladesh: Q & A with Bijon Islam, Director, LightCastle Partners

Since 2008, the idea of the lean startup model has been changing the landscape of starting and building a company all over the world. Originally developed in Silicon Valley by Eric Ries, today the idea has expanded out of its birthplace and taken over the world of startup. Although Eric Ries developed the model with high-tech companies in mind, his brilliant book The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses has expanded the lean startup philosophy to apply to any individual, team, or company looking to introduce new products or services into the market.

We spoke to Bijon Islam, Director, LightCastle Partners, one of the most vocal personalities in promoting the lean startup movement in Bangladesh, regarding how our startups & companies can better adapt lean startup model, lean startup model in the context of Bangladesh, and more. We believe Bijon's insight will inspire you and will help you to work better at building your own startup. ~Ruhul Kader

Ruhul Kader: Please briefly tell us about the basics of the Lean Startup model.

Bijon Islam: The lean movement is about being less wasteful, doing things that are right, and discarding those that aren't achieving results. Lean thinking improves how your business will operate and innovate continuously in a highly competitive and uncertain environment.

What makes the Lean Startup Model special over a traditional model for building a Startup?

Bijon: The traditional model means that resources might not be utilized with the “Customers” in mind. There might be wastage, which is something a Startup really can’t afford. The Lean model gives maximum leverage in terms of building what the customer wants without too much invested lead time but rather based on continuous customer feedback.

What is the core proposition of Lean Startup Model?

Bijon: The core of the Lean Startup Model is to achieve focus on validated learning via a build-measure-learn loop and continuously iterate to pivot or persevere based on analytics. Suppose you have conceptualized a mobile application that allows you to register and reach out to blood donors with geographic segmentation. The product has a strong social selling point and you feel has a sizable market as well. These are then your leap-of-faith assumptions or hypotheses.

However, instead of building the whole application complete with user experience touch points (interactive websites, big data architectures, automated response algorithm, social media frontend, and what not!), the goal would be to build a minimum viability prototype (MVP) that allows you to test out your hypotheses or leap-of-faith assumptions. Once the MVP is developed with the minimum commitment of resources, you just simply test out the product in the market. Reach out to customers and after explaining the value proposition, ask them to register. If they are excited by the idea and the application usage rate is high, you are likely to be on the right track and can proceed to add other amenities.

Conversely, if the customers feel that they are not willing to get registered in such databases giving out personal contacts and medical histories, perhaps the product needs to be redesigned. This is the core principle of the lean movement.

Although the Lean Startup Model takes a lot from the idea of Lean Manufacturing but the examples that Ries used in his book are mostly technology focused where doing experiment is cheap and simple to some extent. But for a manufacturing startup, it is quite tough to experiment at a very minimum cost. In that case, how do you think Bangladeshi startups, that are non-soft tech or others, can take advantage of the Lean Startup Model?

Bijon: The principles discussed are not only applicable to tech startups or new businesses but can be applied to everything we do including the public sector, healthcare, and to solving world critical problems. The basic idea is simple once you conceptualize a product just build a prototype – suppose you are making a car, so the prototype might be a plastic model. If your core concept is a new type of phone like Phonebloks, the prototype might just be a video (now this is being taken up by Motorola).

The execution model is simple just develop a structure/outline/model of your product and reach out to customers (even if it’s just one) and ask them if they are willing to buy this. If yes why and if no why not and what changes would be necessary?

Why one should build an MVP in the first place? How validated learning help a startup to move ahead?

Bijon: You are suddenly struck with a brilliant “Idea”. You think to yourself this is a truly disruptive innovation. Next, you put together a team and round up investments (possibly via bootstrapping using friends and family networks). Say that takes around three months. The obvious next step is to build the product. Since you are a perfectionist, the product has to be just right and you with your prized team spend the next six months on R&D. After nine months when you enter the market with a ‘big bang’, you suddenly find out that customers do not like your product and the actual finances do not match your forecasts.

The customer is always right and you have just committed nine very important months and significant resources to a product that may not achieve results or will require further investments. So is there a way out of this cycle that reduces investments in terms of both time and money? The answer lies with MVP which is a way forward to break this loop and make your iterations faster and to the point.

If we look through the lens of the Lean Startup Model what are the major flaws you see in the way we look at and operate Startups in Bangladesh?

Bijon: The Startups in Bangladesh underplay the power of being frugal. If companies like Google can start at a garage and move on to become the world’s most coveted brand, there is no reason why we can’t. So if the businesses keep customers at their center, instead of the product, and then build their value proposition from there- then resources would be best utilized and you will have a product that the consumers desire.

Have you come across any Bangladeshi startups that successfully applied the Lean Startup Model?

Bijon: Yes, several. One of the recent examples is Singularity and their project Lifeline.com.bd. They made the prototype with the optimum architectures which is being tested on customers and made a video on YouTube to establish their product.

Is there any drawback to the Lean Startup Model?

Bijon: There are several. One is that your innovation team might have burnout because of the continuous product iteration model. Second, if the customers chosen to be tested don’t provide the right feedback then things get more difficult. Lastly, the Lean model means staying frugal or bootstrapping for a long time- that hurts morale and you might make wrong decisions on whether to persevere with the current product or pivot (change) your value proposition.