On Lean Startup, Business Experimentation and Data Driven Organisations


Entrepreneurs know that managing a business today isn’t anything like it was 10 years ago.

Business risks are still there but managing them got a lot harder.

New market realities and business risks

Lean Startup - Baker Marketing Today’s new market realities such as:

  • Break-neck speed technological progress (specially IP related)
  • Globalisation
  • Lowering of barriers to entry in most sectors
  • Exponential amount of available data
  • Plummeting costs of storing/processing/crunching data
  • Omnipresence of social media

Impact every aspect of running a business.

Burying your head in the sand and ignoring these new realities prevents you from hedging the serious business risks they represent.

Risks such as:

  • Inability to see new competitors coming fast enough to adjust
  • Having higher input/production costs than your competitors
  • Fast changing customer needs/habits/preferences
  • Developing and marketing unwanted/non optimal products or services
  • Sinking money into ineffective sales and marketing
  • Inadequate/useless employee training
  • Recruiting employees with the wrong skill set

Any of these situations, if not managed for long periods, can put you out of business.

Combinations of these risks managed badly, even for a short time, can have the same effect.

New management approaches to better manage risks

Lean Startup - Baker Marketing Old management approaches developed over 30 years ago are no longer suited to manage business risks effectively in current market conditions.

New management approaches, techniques and tools, developed specifically to deal with current market realities are much better suited to manage today’s business risks.

Lean Startup, business experimentation and management based on data (resulting in data driven organisations) are such management approaches.

In a nutshell, here are what they are about and how they can help you manage your business risks.


Lean Startup

Lean Startup - Baker Marketing Overall management approach, based on the scientific method, best suited for projects (including starting a new business) that involve market uncertainties or volatility.

It uses fast iterative business experimentation to gather data in order to prove hypotheses and lucrative market existence before launching a full product/service. It uses concepts from other management theories such at lean production, customer management, design thinking and agile development.

It also applies innovation accounting to reduce the financial risk associated with high risk projects.


Risk management aspect

It will help your organisation avoid or manage the following risks

  • Inability to see new competitors coming fast enough to adjust
  • Fast changing customer needs/habits/preferences
  • Developing and marketing unwanted/non optimal products or services
  • Sinking money into ineffective sales and marketing
  • Starting a company/organisation that isn’t viable in the market

Business experimentation

Lean Startup - Baker Marketing Business experimentation is simply doing small scale versions or parts of a project by testing it out first. You then gather data to support your original plan before going forward with your project.

The subjects taking part in these experiments can be any stakeholder in an organisation such as suppliers, employees, customers, etc.

It is often used to convince the purse holders in an organisation to invest in a project or idea.

Whenever possible, it is done with a scientific approach gathering solid data.

Risk management aspect

When done correctly, business experimentation can help to reduce, but not eliminate, almost all types of business risks.


Management with data (for data driven organisations)

Lean Startup - Baker Marketing Management with data consists of making all decisions, whenever possible, with data. This data can be of secondary (existing data) or primary sources (comes from analytics, accounting, connected objects or experiments). The data is both external and internal to an organisation.

                Risk management aspect

Just like experimentation, which is a necessary aspect of a data driven organisation, management based on data can help alleviate all types of business risks.

Many organisations, especially larger ones, have been using data for management purposes for decades now. This approach is now accessible to small organisations thanks to significantly lower costs of gathering, storing and treating data so it can be useful for decision-making. It does however require a skill set that is not yet prevalent in the workforce.


As you can see these approaches are not distinct from one another. Data driven organisations that fully apply management with data need to be experiment based to gather primary data. Experiment based organisation that apply the approach to new product/service or existing ones, that they wish to keep pertinent in the market, will need a Lean Startup approach.

Lean Startup, business experimentation and management with data are, by far, the most prevalent new management approaches helpful to reduce business risks in current market environments. They are not the only ones.  Although many business schools teach (sometimes badly) some or all of these new approaches, many still don’t. Hence you’re mostly on your own to research and learn about them.

A good place to go learn about new management approaches are local Meetups and conferences such as; Lean Startup Circles, Data Driven Meetups and business conferences (such as the Lean Startup Conference, the Intrapreneurship Conference, C2 Montreal or C2 Melbourne).

Transforming your business to use these management approaches is a long term project. In many cases, it requires a shift in the corporate culture. Hence, you should start now.

If you are just starting your business, start it on the right foot by using a management approach that will enable you to properly manage the risks of doing business in today’s fast-paced environments.