Book Resume - The Lean Startup BY ERIC RIES
New business ventures are both exciting and risky. New ventures are risky as the main idea may or may not work, yet the chances of success are much greater if there is a recipe for testing and validating said idea early on. Readers of this book will learn scientific approaches to building and managing a startup and how to get a product to market faster. The lessons in this book teach the fundamentals of product viability from organizing for fast learning to validating what works.
Readers learn the value of testing a product every step of the way to eliminate the wasted time and money that are associated with typical startups. Lessons here include the importance of getting customer feedback to create a product that appeals to customers before the product is launched. Readers will learn what to measure, how to measure it, and how to use valuable customer feedback to design a better product. The methods taught here showcase how to drive a startup, how to steer, when to turn, and when to persevere. All designed to grow a business as fast as possible, as lean as possible.
“A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”
The structure for using these methods of a lean startup is laid out in three phases: vision, steer, accelerate.
Most entrepreneurs have at least some sort of vision or goal in mind when launching a new venture. They use various strategies or business plans to reach that goal. Readers will learn here that one of the most important lessons is to avoid strategies based on untested theories. Testing theories means breaking down the larger vision into smaller pieces and finding the weakest elements. Readers will learn that experimenting while building a strategy is a better plan than waiting to release the “perfect” product to later find out there's no market for it.
The result of testing while designing is a product that has been refined based on feedback. The final product will have a better chance of success as it will solve direct customer needs. Readers will learn that by using this method, they will have a product that has a built-in audience before it's even launched. A clear, validated vision has the best chance of succeeding.
Once a vision is validated and under way, readers learn how to steer their plan for the greatest likelihood of success. Using the “build-measure-learn” feedback loop, readers will learn how to know when to turn (a.k.a: “pivot”) and when to keep going. The first part of this feedback loop involves creating a minimum viable product (MVP) based on what the book calls “leap-of-faith-assumptions.” The second part is getting feedback as quickly as possible from the market. The third part is to use that feedback to learn how to make the product more viable.
The goal here is to minimize the amount of time, money, and energy spent in getting the right product to market. By getting a product in front of customers as quickly as possible, perfect or not, a startup will be able to fine-tune their product and their strategy. Readers will learn that by measuring the results of their initial offering, they will know if they are on the right track. If not, then they will need to pivot their focus. If they are on the right track, they persevere and use the feedback to customize the product based on what customers want or need.
In keeping with the premise of a lean and fast startup, once a vision is being steered in the right direction, it's time to hit the gas. Readers will learn that this phase is designed to keep things moving while improving along the way. They will learn how to us the “small batch approach” to get through the feedback loop quickly. They will learn production methods like the “just-in-time” method that keeps innovation and design efforts efficient and effective.
Readers will learn how to find the right growth strategy for sustainable growth and how to keep the focus on moving forward. Other lessons in this section teach readers how to keep accelerating safely by building an adaptive organization that can regulate its own growth, at its own pace. Readers will also learn how to create an innovative environment that generates new startups as a part of the company's normal course of business.
“The only way to win is to learn faster than anyone else.”
Underlying these three phases are five principles that are the keys to a successful lean startup.
Entrepreneurs are Everywhere. This principle teaches readers that the entrepreneurial spirit is not just reserved for startups. It can be found in small companies, as well as large corporations. It can be found in new companies and established companies. A programmer in a big company who creates a more efficient solution is just as much an entrepreneur as a programmer creating a new app in his basement.
Entrepreneurship is Management. Readers learn here that the perception of being an entrepreneur is much different than that of being a manager. But this book teaches that entrepreneurship and management can be synonymous. The lesson here is that a startup is basically an organization that needs to be managed.
Build-Measure-Learn. This principle is all about creating a product that people want. Startups by their very nature are creating something new. Readers will learn the importance of getting that product into the market, seeing how people respond, and learning what works and what doesn't.
Validated Learning. This section teaches readers to validate all the results of the build-measure-learn process to be sure they are learning the right lessons. The key here is learning how to determine what feedback is valid before applying it to product design or a change in strategy.
Innovation Accounting. The lesson readers will learn with this principle is simple. Holding entrepreneurs accountable for their outcomes throughout the startup process is the best way to measure progress. Using checkpoints or milestones to measure results is the surest way to know if a startup is headed in the right direction.
“What if we found ourselves building something that nobody wanted? In that case what did it matter if we did it on time and on budget?”
Learning the Lean Startup methods enables readers to begin building a proven structure that works not only with startups but with any type of business at any stage. It's not about throwing something out there and seeing if it sticks or necessarily about saving money or time. It's a process with methods that are proven to help build a viable product with a waiting market.