Lean Startup Methodology: Dropbox and Wealthfront Case Study Analysis

This report provides a comprehensive analysis of the lean startup methodology, examining its core principles through case studies of companies like Dropbox and Wealthfront. It explores the benefits of this approach, such as reduced risk and faster iterations, and delves into the challenges of implementation, including difficulties in launching products and adapting to continuous deployment. The report also discusses mitigation strategies for these challenges, emphasizing the importance of Minimum Viable Products (MVPs) and feedback loops. Furthermore, it highlights how lean principles can be applied beyond startups to enhance the competitiveness of enterprise software companies, promoting practices like automated testing and continuous integration. The document concludes by emphasizing the importance of continuous learning and adaptation within the lean startup framework.

Running head: LEAN STARTUP METHODOLOGY
Lean Startup Methodology
Name of student
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Author’s Note

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1. Principles of the lean startup methodology:
Dropbox has used the principles of lean startup to showcase the created product that are
reliable. Based on the iterative testing of the product Dropbox has signed 5000 subscribers
before it offer a product. Dropbox has provided a service to almost 500 million users to transfer
file worldwide (Díaz et al., 2014). Dropbox have achieved high-quality feedback from all those
customer that were targeted. By using the principle of lean Startup Dropbox registered user went
over 4,000,000 from 100,000 user within 15 months. It has help customer to transfer files
worldwide. Dropbox uses three major aspects for a lean startup.
- Leveraging the stack of commodity technology
- Know and develop the needs of the customer
- Use of agile startup methodology
Millions of developers and users leverage highly to reduce the development time of the product
for low cost by using free software and the concept of open source.
The second and the third aspects are the parallel process of lean startup. Development of the
customer is an interactive method and development of the product is a adaptable process for an
unknown problem and their solution.
Wealthfront as a lean startup that have access to investment manger through investors.
The company uses five components to achieve success with the principle of lean startup
methodology.

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-Ideal culture and management : Wealthfront focus mainly on the culture of the quality by
hiring worker with skill and enforcing testing that has automated. The company motivates the
employees to learn continuously and to improve the process of development.
-Continuous Deployment: Continuous deployment is releasing software throughout the day.
Continuous deployment is a lean technique to boosts the productivity by rearranging the
manufacturing process. In software, Continues deployment flow has applied to eliminate the
waste. For a small team it was incredibly wasteful to dedicate 20 % of the week for releasing
software (Prechelt, Schmeisky & Zieris, 2016).
-Development of Test Driven (TDD): Testing drives the development where developer will
start writing the tests and then the code of the product will be written to pass the test (Despa,
2014). To integrate everything properly, testing occurs to multiple people and across various
domain. During the cycle of build-measure-learn, TDD occurs for the development of the
product at Wealthfront (Markerink, 2014).
-Immune System: With the constant monitoring at wealth front, immune system able to quickly
detect ineffective features and the problems (Chen, Abdelwahed & Erradi, 2014). All the new
issues are checked regularly by the automated system. This make the business ensure that their
products are very reliable. The cycle of built-measure learns is very important for the immune
system for an appropriate development.
-Continuous integration: Developer is able to change quickly to things that have gone wrong
by integrating continuously a well-tested component (Paternoster et al., 2014). In addition to this,
businesses see the useful part of the new product. Wealthfront use the lean process to learn the
quick changes that is working to get the best possible version of the product.

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2. Benefits accrued by the application of lean startup methodology:
Use of traditional process of software development needs a technological
interference for the problem and solution requirement of the customer. However, in
the development of the lean product, the problem and the solution are unknown but
it is necessary to learn and implement the product to bring up.
Dropbox has accrued benefits with the application of lean startup methodology by
utilizing the marketing of social media and search engine, the user will generate
content into the process. In the process of traditional innovation, the external source
uses the idea and work force to collaborate with other companies (Saebi & Foss,
2015). For a startup, such process is not possible. Therefore, for that they use
content as an external source that is user generated.
With the continuous implementation of the lean startup process, Wealthfront
has succeeded a lot. The benefits of continuous deployment are
- It reduces risk and allows a quick iterations
-It obsoletes the need of processes such cutting a release, manual queue,
synchronization and various scheme.
-it forces everybody to be aware of productions. Engineers have to understand that
there code is actually going to run on the website. Therefore, it forces to take into
consideration how the system going to run within the production environment.
- No engineers will be able to throw their codes over any department.
- It exposes 24x7 operational requirements.

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- Trunk is stable.
3. Implementation challenges faced while applying lean methodologies:
Dropbox did not know how to or when to launch. They had to faced competitors. So
later, they thought to target the audience and speak with them to know whether it is likeable to
them or not. Later Dropbox presented MVP to the audiences whom they targeted based on their
feedback with a 3-minute snapshot video. Thus, let the customer to understand the process early
and has published through Digg. With the MVP connection Drop-box could capture interest
potentially and gain buy-in user before they officially launched the product (Haines, 2014).
When the video got released, the list of beta sign-up blew from 5000 to 75000 in overnight. This
lead the engineers to be sure of with the full release before proceeding. Following with their
launch, the Drobox has quickly acquired almost 1 million users in 7 months (Hui & See, 2015).
There was a continuous improvement, which include business dropbox, collaboration, and
Microsoft office integration, uploading of photos and videos automatically. Currently, the
company valued at $10 billion of which they have users for 500 million with a cumulative
savings of 1.2 billion files every day (De Prato & Simon, 2015).
Continuous deployment that has applied for continuous flow in software aimed to
eliminate the waste for the Wealthfront (Sedano, Ralph & Péraire, 2017). In the software, the
biggest waste that has created is waiting to move the software from one place to another. This
was the key success to Wealthfront to reduce or eliminate the wait to a faster iteration (Brummer
& Gorfine, 2014). They have created a technique to build the principle of lean startup. While
adopting the continuous deployment, the company could release the software that is schedule
weekly. For example, they were able to identify the code to be updated on Monday, cutoff of the

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official code on Thursday and Friday was slotted to release the big event. It usually takes almost
half a day or even full day to release the process. For a small team it was incredibly wasteful to
dedicate 20 % of the week for releasing software (Prechelt, Schmeisky & Zieris, 2016). This was
not helping in the coordination efforts that were need to release the ever-changing content of the
week to discover the new critical issue. Even after all this challenges, they fought to move a
monthly or bi-weekly cycle to response to the customer. Later with the use of continuous
development, they were able to manage to release weekly. It was found that continuous
development is the best practice to release any process. By adopting, the continuous Deployment
there was able to bring flow to get every possible benefit with the release. With the smaller
release of built-measure-learn loops the user Activation flow optimizes and also eliminate the
features which no one uses.
4. Mitigation of the Challenges:
The principles of lean startup are not only for startups, it can in fact help the companies
of enterprise software to move faster and it will make them more competitive. In a business,
incorporating the practice of lean startup depends on the software (Paternoster et al., 2014). The
method of lean startup brings an idea to test quickly on customer with minimum cost that can
fund the experiment. The model of lean startup will quickly release the cycle and test constantly
against the customer to identify the market opportunity.
As an entrepreneur two things can be done. One is the MVP and the other is the
feedback-loop to build-measure-learn (Miski, 2014). The MVP is the simplest form of product
that can deploy the users earlier. Features are not been added until the MVP is validated. The
feedback-loop to build-measure-learn enables the entrepreneurs to implement the reactions of

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MVP to make an informed decision. Both of them are challenging. This will help to cut the
development time to minimise the failure risk. By using the lean methodology, the thinker can
improve and achieve quality, lead-time, and productivity through kaizen to eliminate the waste
(Lacerda, Xambre & Alvelos, 2016). When the consumers get connected to MVP, the
entrepreneur can understand and have an authentic conversations to resonate with the customer.
Delivering an MVP means releasing a lean product to solve the problem of the customer by
using a best practice of the design. It allows the self to make some changes gradually to the
design and features of the feedback of the real user. By using the MVP, the ideas will be
validated and later it will get expand.
To adopt a continuous development would be a new challenge for a user. No one would
like to bring the system production down. As a user, functional test would be allowed to make
the changes in the test. The user can identify the set of event that will indicate when something
get terribly wrong and then built a real-time alert for multiple changes for monitoring and testing
the scripts. With the continuous iteration, the fear of releasing the process gets lower (Shahin,
Babar & Zhu, 2017). All may say that there are mistake still made and commit bad codes.
However, this will not make the system down. It can be taken as a process short come where the
user gets an opportunity to build a cluster immune system.
The enterprises that effectively wanted to compete can apply the principle of lean
technology. They can aim for the continuous delivery. The features viable has shipped faster,
embraced the automated testing and integrating the system continuously. All these enable a close
collaboration between the IT operations and the development team to get an enterprise larger
with the agility to startup. One of the most interesting suggestions of Donelan’s can be used
where the emprise can provide a portion of their code in open-source (Stol & Fitzgerald, 2015).

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This will provide an opportunity to developers to get engage with the open-source code and will
be then able to even learn from smart people about the technology and what it can do. The teams
continuous integration will be sharpen by dealing with the pull requests from the community of
developers.
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