For Mr. Kringle, starting up a global manufacturing and distribution network in 2013 would be challenging. Looking back on his success, a nice instance of where success is not defined by income by the way, it is easy to imagine that Santa’s service emerged fully formed and streamlined. (If by streamlined we mean hand-delivering all toys from house to house the world over while relying on flying reindeer who are, no doubt, apt to get sick and / or just not fly.) Lean startups leverage a sophisticated understanding of how to start a company in order to get things done. Nowadays, no doubt, Santa would startup Lean.
Although Santa’s team has deep roots in history, the lean startup does not. The lean startup is a relatively recent phenomenon that conjures thoughts on a certain attitude, philosophy and tool set for how to start a business both effectively and quickly. Three of the most important tools of the lean start up include the business model canvas, the minimum viable product and an iterative approach to the business model along with number 4, customer development. These modern tools would have helped Santa quickly determine whether people liked his service & products. He would have learned quickly what to focus on even if his market changed.
Santa may have used the business model canvas and the concept of the minimum viable product. We spoke before about the business model canvas and we have also described the concept of the minimum viable product (which is a product offer that has the least amount of features a customer will purchase). Perhaps, for example, children would have accepted receiving gifts over two, three, or seven days instead of all in one night. This may or may not have made life easier for Santa. Again, do children need Santa to deliver everything himself? Who knows now, yet at the beginning Santa could have learned what people would accept and what he could create most easily.
Let’s focus on the idea of the minimum viable product (MVP) more closely. The MVP is a useful concept because it allows you to iterate the product quickly, it is usually more straightforward to build or create as it has less features, and it helps you test the market in a rapid fashion. Santa could have learned a great deal from his Lean experiment.
Before Santa built toys to spec and delivered them all in one night via reindeer (and often chimney), what child could have even imagined such a thing? There is a classic line from Henry Ford that is if he had “asked their customers what they wanted they would have said a faster horse.” This indicates that, sometimes, the market doesn’t know exactly what it wants until it sees it. Santa could have developed the demand for his service and perhaps spread across the world more quickly.
It is just that customers in the market have points of pain, issues, or other things they need satisfied. They will tell you soon enough if your product helps ease their pain. One of the functions of our team of angel investors is to give some guidance on some other unique tools that can really lean the process for you to get your business. We have a series of several steps that are changed depending on your unique business idea and model. We have both established and new businesses benefit from these steps, and we have mapped out certain tools that can also eliminate completely sources of overhead that can be barrier to your startup. Who knows if our experience could have helped Santa–after all he did very well on his own if we measure by market share alone.
In the end, Santa may have been able to utilize modern tools of the startup to great effect. Using a business canvas and MVP, he may have been able to learn that there is no need to push his reindeer so throughout one night once per year. Perhaps he would have used another service or independent contractors to help make deliveries. However, as historians will tell us, it is often unfair to use modern knowledge to criticize the ancients–after all they did very well with what they had. So it is with Santa: even though he may have a different model if he had used the Lean startup tools, he’s done very well for us all.
To read more about Lean startup tools: on the main home page, click the plus sign and select from the archives. If you have a moment and interest, go back and review the first blog entry in the series that highlights the business model canvas as an effective way to create and iterate your business model.