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A lean startup has a flat management structure and makes use of its resources in a flexible manner. Such a startup will trade long, rigid and expensive development cycles for shorter, iterative ones that focus on three phases: build, measure and learn.
A lean startup will build a prototype quickly, get it to market to gauge success of the product without expending unnecessary resources and use the data generated by early marketing testing to influence the next build phase. In lean production, this approach is called kaizen. In programming, the approach is called Agile.
The term lean startup is often associated with author Eric Ries.