The lean model favours delivery of the basic product with only the essential features

“BUILD IT and they will come” is a classic line of movie dialogue but is a flawed business plan. In a technology landscape littered with failed companies built on ideas that were too early or never found a market, a different approach is taking hold.

“We are at a time where we have so much power at our fingertips, where we can build more products than ever before, but the odds of success haven’t gone up,” says Ash Maurya, an entrepreneur and speaker on lean start-ups, and author of the book Running Lean.

The lean start-up philosophy goes against conventional wisdom. Instead of a killer product honed and hyped months or even years before launch, lean favours fast delivery of a stripped-down product with only the essential features in the earliest version.

Already the subject of plaudits from Wired magazine and a host of Silicon Valley luminaries, lean’s latest poster child is the file-sharing tool Dropbox which launched in 2007 through a video explaining the concept to potential users.

The clip went viral, proving the market for the then pre-release product when similar services were jockeying for position. Now Dropbox has 45 million users and recently raised $250 million in funding.

Another advantage of lean is that it’s a flexible model. Without having ploughed large amounts of time, effort and money into an unwanted product, start-ups can more easily adapt and survive.

“Most start-ups fail not because they fail to build the product they want but they fail to find the market in time,” says Maurya, who is presenting his ideas in Dublin today at a workshop for early-stage tech entrepreneurs organised by ThousandSeeds and the National Digital Research Centre.

Customer input is central to the lean approach. It starts even before product development begins and turns it into an iterative process, with regular feedback informing changes to subsequent versions.

Claudio Perrone, a Dublin-based software consultant, says this replaces an entrepreneur’s gut feeling with a more systematic approach. “Essentially you go out there to validate some assumptions that you have,” he says. “It uses the idea of the minimum valuable product – the minimum set of features without which you cannot go live. It’s the fastest way to get to the cycle of measuring, learning and deciding to persevere in one direction or pivot and change direction.”

The lean approach explodes the common myth about tech start-ups that secrecy is crucial to success. Maurya says it’s a more likely cause of failure, since by keeping ideas under wraps entrepreneurs could waste months refining a product nobody wants.

“Most entrepreneurs are in love with their solutions. They think: ‘if I build it, people will love it’,” he says. “Where that typically fails is, a lot of entrepreneurs are creative, like artists, and can be perfectionists. But if you keep adding features, pretty soon your minimal product is a full product.”

The lean approach originated at Toyota which pioneered the idea of removing unnecessary steps from its manufacturing operations to produce cars more efficiently and profitably. The philosophy is equally suited to start-ups where resources are scarce, says Maurya.

“The basic idea is one of eliminating waste and being efficient with resources and one of the biggest is money but the other is time. We can get money back, or people back but we can never get time back.”

According to Maurya, the model is gaining currency in Silicon Valley where angel investors such as the accelerator 500 Start-ups primarily fund early-stage tech firms that embrace lean principles.

For investors, appeal lies in reducing risk. “When you have a lean start-up approach, rather than saying – ‘here’s a million dollars, build the vision’, they can say ‘here’s a hundred thousand, go and test the idea’,” Maurya says.

Perrone says the approach is an ongoing process rather than a state to be reached. “You’re never finished with lean because a standard is current understanding of how to do things better, and it’s there to be challenged. If a customer takes five minutes to get to a purchase process on your website, you’re asking ‘can we do it in four’, ‘can we do it in two’ and what are the obstacles to doing that?”

Lean principles allowed software development consultancy Echolibre morph into the PHP software development platform Orchestra.io, and improved the firm’s cash flow in the process.

“Lean is a general framework. It’s less a checklist of criteria, it’s about changing your mindset,” says co-founder Eamon Leonard. “We came from a structure where we would finish a project and people owed us money, to where we were never owed money at the end of a project. It enabled us to make a product, from a financial perspective and because we had learned a better process,” he says.

With money in the bank, Echolibre’s founders headed to San Francisco a year ago to test some of their ideas, one of which would become Orchestra.io.

Returning to Dublin, the team began writing code to a minimum viable product specification and a rough version was ready within weeks. Leonard spent all of January 2011 demonstrating it to 50 people via Skype.

It was formally announced in February, followed by further refining over the next few months and a public beta in April. In keeping with the lean philosophy, “it wasn’t perfect but it was good enough to release”, says Leonard.

So quick was Orchestra’s rise that by August, US firm Engine Yard moved to buy the company.

Leonard insists acquisition was never the endgame, and he warns against entrepreneurs who make this a goal from day one instead of focusing on delivering a product that meets a recognised need.

Equally, he’s in no doubt that lean thinking brought Orchestra to where it is today.

“It would have taken longer and the opportunity would have passed us by.”