In this episode, I’m going to take you through lean start-up business basics.
Even if you already have an existing business, it’s a great episode for you to check in on whether you’ve achieved some of the key things that prove your business is going to scale and still be profitable.
If you’re just starting out, it’s a really sexy and effective business model that means you can save time and money and also build your business with less risk.
Let’s dive in!
What exactly is a lean start-up?
In a nutshell, a lean start-up is proving your business and your model before you significantly invest time and money.
Lean start-up, in particular, is focused on saving money. But as a model, it also saves you a lot of time in your business development journey.
What we’re talking about here is making sure that people are actually going to pay for the thing that you want to sell. AND we’re making sure you’ve got the messaging, price point, and all of the other parts of your advertising and marketing strategy sorted before you scale to larger audiences.
By doing things like small scale testing and getting proof of concept, you are able to ensure that when you do invest money to get large scale reach, you’re giving yourself the best opportunity for that investment to provide a return.
This is particularly sexy for online channels because these days, we have access to larger scale audiences organically without having to invest lots of money.
We have access to test audiences through social media and other online platforms, so we have an amazing opportunity to build lean businesses like never before.
Why would you want to build your business using a lean start-up model?
1. It is a really smart way of doing business
I actually started my business as a lean start-up out of necessity, rather than by design.
When I first started my business, I quit my job. Then we went overseas for three and a half weeks, and we maxed out our credit cards.
I had no money to invest in my business, and I was sitting at my desk like, “Okay, here’s day one. Now start a business.”
Because of that, I needed to learn how to get my products and services in front of audiences without investing significant money. I had to learn what was working really quickly and what wasn’t so that I could pivot, adjust and make sure that I was getting scaled profit as quickly as possible.
I really do believe that I was blessed to have no money to start my business.
It was very lucky that that was my journey.
I know that if I had a spare $15,000 lying around, I would have bought a fancy pants website that would have been quite pretty but not really say anything. I would have done a lot of work on all the bells and whistles in my business before I’d actually proven people were going to pay for my services.
On that first day when I sat down to start my business, I thought I was going to be a career coach for ambitious women in the corporate world.
If I hadn’t started my business lean, I would have invested all of that money that I didn’t have into a business that I didn’t follow through on.
It was after speaking to just three people who were in that target market about how I could help them, the types of strategies that I could help them with and what the problems were that they were facing, that I realised I had left the corporate world for a reason.
I realised I didn’t want to have those conversations anymore.
That was not the ideal model of business for me, and it definitely wasn’t the right target market.
Because my business was a lean start-up, I wasn’t attached to keeping on with that particular focus. But if I had built a website on career coaching, had gotten photos taken and graphic design done and invested in ads – all focused on career coaching for women in corporate – it would have been much harder for me to let go of that business.
In hindsight, moving into working with entrepreneurs was the smartest and most aligned way that I could have grown my business.
If you’ve invested a lot of money and time in a business idea that isn’t proven, you have a “sunk cost”.
Research has shown that sunk cost is perceived by us psychologically as higher than the actual cost. Having a lessening of that sunk cost is another great reason for lean start-up because you don’t have to stay attached to a particular pathway.
2. Lessening of “sunk costs” means you don’t stay attached to a specific pathway

Colourful cups of coffee – lean start-up basics for business start-up
There was this awesome experiment where they got people into a room, and they gave half of the room a coffee cup.
The people who had the coffee cup had to decide what they’d be willing to sell the coffee cup for.
The people who didn’t have a coffee cup needed to decide what they would be willing to pay for the coffee cup.
It ended up that the people who had the coffee cup valued it at $5.50, and the people who didn’t have the coffee cup valued it at around $2.50.
We can see that when we actually have something already, we value it way higher than what we would buy it for, or what we would put into it if we were starting from scratch.
This is one reason why I think that lean business and lean start-up is critical for women who are moving into the online space.
We can get so attached to that business we’ve been working on and all that we’ve put in before. We feel like we’re throwing that all out, in order to move into alignment with the business that is the right fit for us.
But as they say, just because you’re running a marathon in the wrong direction, doesn’t mean that if you keep running, you’re going to get there faster.
You need to stop, pivot and realign.
If you are reading this and wish you had done a lean start-up instead of investing money and time, that doesn’t mean that you should keep going in that direction.
Using the principles of lean start-up (even if you’ve already started), you can work out what your most appropriate pivot is from here and start playing with what it is that you’re working on so that you can ensure that you have proof of concept, proof of business model and proof of profitability before you then start to scale.
3. It allows you to get to profit earlier
In order to create that proof of concept using lean start-up, what we do is we actually go out and start making sales.
The people who embrace lean start-up and use this as part of their model often will get to profitability way faster than their counterparts because what you’re doing is nailing it first through making money… and THEN scaling your business.
Especially for women, the lean start-up model is particularly effective because it doesn’t rely on high-pressure sales or convincing styles of marketing.
Think about it. If you’ve invested $50,000 and two years of your heart and soul into creating a business before you’ve even got sales coming in, when you then embark on the sales and marketing process, it’s not just about inviting people to purchase from you, you really need them to purchase from you.
You need to recoup those startup costs.
You need to recoup all that time and energy that you’ve invested.
What you end up doing is feeling this pressure to make the sale. That pressure can be reflected in the sales and marketing tactics that you use.
For women who find those pressure-based sales and marketing tactics particularly abhorrent, the lean start-up model is a really beautiful way for you to ensure that you aren’t feeling the pressure and therefore feeling like you need to convince anyone and everyone that they should be working with you.
There’s also none of this “fake it till you make it” stuff either.
When you embrace a lean start-up model, it can be a little bit confronting because you’re not embarking on and engaging in those behaviours such as trying to convince everyone you’re already successful when you haven’t even started.
The lean start-up model of business can be quite vulnerable because you need to be open with people that you are just starting.
You actually make that proof of concept by designing and testing what it is that you’re selling, and letting people know that it’s in the early stages of business.
On the one hand, it can be a little bit hard because you don’t want to come across as human. You want to keep up that front of “I don’t want you to look at me trying, I want you to look at me succeeding”.
But on the other hand, it’s a huge sigh of relief because you don’t need to fake it till you make it. You don’t need to put up that front. You don’t have to get all those perfectly manicured photos taken and have that perfectly amazing website and all of that sort of stuff before you’re allowed to earn money in your business.
Instead, you can start making sales immediately, simply by reaching out and connecting with people on the platforms that you’re already on.
What are the steps to a lean start-up?
1. Design
You need to come up with some form of concept, idea or service that you want to get out there and start selling and serving people with.
You need to start with your theories and ideas around what it is that you want to exchange for money (you might even decide that you want to use your modality).
Let’s say you’ve studied kinesiology, or you’re a graphic designer, or you know that you’re really passionate about life coaching.
You need to come up with some initial designs on what your business is going to look like, what services and products you’re going to offer, what your pricing and your niching will be, and what your messaging will be.
You need to start with something.
A lot of people invest months and months in this phase of business… No great business is built on theory.
The way that you actually create momentum in your business and start refining and pivoting it to be able to get to the point where you can scale quickly, is by getting it out in front of other people.
2. Test it
In lean start-up, you don’t test it by doing focus groups and asking people if they’d buy X for $Z, or telling them what your product is and asking how much they think it’s worth.
That’s actually crowdsourcing, it’s not testing at all.
The way that you test whether that’s valuable to people, what’s working and what’s not working, and whether you’ve got that proof of concept, is by putting the minimum viable product together, and then getting out there and starting to sell it.
If you’re selling one-to-one services, your minimum viable product is simply your time.
You can offer up a six week VIP intensive worth $1,000, explain what you’re going to cover in those six weeks and ask who wants it.
By actually getting out there and making the offer to see if people would be willing to invest in your process/product/service, you are proving whether people will pay for the product or service or not. This is way more than any theoretical focus group or test or free pilot will ever prove.
Get out there and test, and test as quickly and as early as you can.
3. Start making consistent sales
Build a sales system and a marketing process that will allow you to bring in more and more people.
In this stage of lean start-up, I also recommend reviewing your prices regularly.
For the women that I work with, in most cases, when they first start their business and they get out there and start testing, their pricing is actually a little under the mark.
We want to make sure that you’re consistently moving your price point and reviewing your price point to really reflect your skills, experience and the transformation that you’re facilitating.
In stage three (which is to make sales on repeat and start to systemise the way that you do that), that’s where I recommend that you consistently review your prices.
If you need to do a price increase, I recommend checking out THIS episode of the podcast: Episode 147: How to increase your prices.
That stage of business is a really good time for you to be consistently reviewing your prices and making sure that you’ve got all the things in place to prove it (ie. messaging, marketing, reaching your audience, and making sales).
4. Scale
Once you’ve been able to make sales with organic and high connection strategies, then I would recommend starting to look at how you can scale to larger and larger audiences.
This is where you start investing money. This is where you start investing time in getting yourself out in front of as many of your ideal clients as possible.
For many people, when they first start a business, they do the design part, and then they do the scale part.
I have worked with people before who’ve paid thousands and thousands of dollars to online influencers to promote their products and services, and then had zero return on investment for that advertising and marketing strategy.
They thought the reason it didn’t work was that they’d selected the wrong influencer, or they needed to tweak their sales page…
But they’d never made a sale before!
All of those foundations of their business weren’t actually there for them to know what to change, what to work on, or whether the issue was the influencer.
They had no proof that anyone would ever pay for this product – especially at the price point that they were going for.
Rather than playing at the surface of the different marketing strategies, rather than making the assumption that you just need to get in front of hundreds of thousands more people, instead, go back and review and create some proof of concept through lean start-up processes.
With my clients what we did was we went into existing online communities (like my Heart-Centred, Soul-Driven Entrepreneurs on Facebook), and we started to pitch the offer there.
There’s an existing audience, it’s free for people to access, and you can get in front of a bunch of people and see if people will buy it.
We also used some high connection strategies because these people had access to a bunch of people who we would have assumed would have been their ideal client for these products and services, but even they hadn’t purchased anything.
We went right back to stage one.
What we did is we looked at the design and started to test really quickly with different price points/products/messaging.
We discovered that the critical issue they had misunderstood about this product and service was their niche.
They had assumed that the only people who would invest in this product/service were successful corporate women, because everyone makes the assumption that successful corporate women have lots of disposable income, so, therefore, they will make these luxurious, amazing purchases.
But actually, the products and services didn’t meet the needs of women in corporate roles. And the messaging didn’t really speak to that particular audience.
We started to look at re-targeting into working with women entrepreneurs, and all of a sudden we could speak to a much clearer value proposition.
People were actually looking for this particular solution, and they started to see their sales roll in.
Once that started to work, then we could look at creating sales coming in consistently, and then we could scale.
They selected different influencers to do the advertising with after that, and they also started doing advertising through Facebook ads, which previously they’d assumed wouldn’t work because they were trying to target women in corporate roles.
By getting really clear in the early stages, testing early, and proving that you’ve got something that people in your target market will be willing to pay for, then you’re taking away a whole heap of risk.
If these people had done this before they had invested in trying to get all of that ginormous reach, they would have saved themselves time, money, energy and heartache trying to tweak and change their marketing strategies, and still seeing no results.
If the lean start-up model is something that sounds particularly appealing to you, I’ve got a beautiful free resource for you.
It’s called Fast-Track your Start-Up.
In that free training, I go into the details of how you can get that design and testing phase working really quickly and effectively in your business, and start making more money quickly. Doesn’t that sound amazing?
Grab that free resource here: CLICK ME
Questions about this episode? Comments? Continue the conversation in the Facebook Group using #podcastaha and the episode number (194).
Until next time, I cannot WAIT to see you SHINE.