The Lean Startup is Eric Ries’ theory on how to manage startups and launch successful product.
It is often considered The Startup Bible.
And I could agree with that: of all the (many) entrepreneurial and wealth creation books that I have read, I consider this one to be the best and most useful.
- Bullet Summary
- Lean Startup Summary
- Real Life Applications
- The Lean Startup Review
- Launch quickly (MVP)
- Change and iterate as quickly as possible
- Use lean methodology to move quickly and efficiently
Lean Startup Summary
Eric Ries says that too much effort and human capital is wasted in startups that fail to leave their mark and add any value to the world. He believes that a good chunk of that failure is because of a wrong methodology which many entrepreneurs use.
And he aims to fix the issue with The Lean Startup.
The Determination Myth
Eric Ries says that determination leading startups to success is a myth. It’s an appealing one, because it gives us the false belief that perseverance is the key and we can all be perseverant.
But it’s not true, and it’s an unhelpful myth.
We heard a few stories of people who won without ever giving up, but we don’t hear about the many more who kept wasting time beating a dead horse.
Methodology Leads to Startup Success
Eric Ries says that success doesn’t happen because you’re in the right place at the right time. And it’s not the flamboyant stuff that makes success, or the dogged determination.
It’s the boring stuff that leads to success. It’s processes and methodoloty.
Startup success can be engineered following and taught.
Entrepreneurship is a Type of Management
The Lean Startup acknowledge most people in startup and entrepreneurship circles see management as dull and boring. The opposite of entrepreneurship, which is daredevil and exciting.
But that’s wrong.
Entrepreneurship needs management. A specific kind of management geared towards uncertainty
What’s a Startup
Eric Ries defines startup as: a human institution to create a new product and service under conditions of extreme uncertainty.
Startups often build products that nobody wants. And they find out too late, when they spent all the budget and there’s no more time to pivot.
The solution is a new way of looking at product development. A new way which emphasizes fast iterations, customers’ insights, huge vision and great ambitions all at the same time.
Here’s how you do it:
#1. Minimum Viable Product (MVP)
Some entrepreneurs can fall victim to analysis paralysis: talking to prospects, white board strategies and research reports.
There’s no point in spending too long in the research phase: you can’t predict the future on a whiteboard.
The perfect mix between no analysis and over-analyzing, says Ries, is a minimum viable product.
The quickest, simplest product you can assemble to start testing your assumptions right away,
An MPV is the bare minimum you can ship so that the first users -usually the innovators– can give you that early, precious feedback that will help you steer your development.
What if Someone Steals Your MVP?
Eric Ries says that one of the biggest push-back against an MVP is that other companies will steal your ideas.
This is something Jay Samit also discussed in Disrupt You, with the core concept being that nobody cares about your lousy idea.
And if the competitor can out-execute you once the idea is out there, you’re doomed anyway. The push behind a successful start up is to accelerate that build-measure-development feedback look faster than anyone else.
Keeping your product under wrap, away from the feedback it desperately needs, will only make your failure more likely.
# 2. Test Hypothesis (Measure)
Marketing and product experiments must follow scientific methodology.
It starts with a clear hypothesis based on your visions and makes predictions on what’s supposed to happen.
You need hypothesis because if you “just do it” and see what happens you will always succeed, even when you fail.
# 3. Change
Based on the feedback you get, keep testing and refining your product and marketing as quickly as possible.
If you don’t see results or if the feedback leads you somewhere else, consider pivoting.
# 4. Use Lean Methodology
The last part of the book was mostly focused on the lean methodology, a product development system born in Japan with Toyota.
Here are a few techniques Eric Ries discusses:
- The 5 WHYs: ask “why” five times to go at the roots of the issue
- Small batch sizes: the idea of repeating sequentially the same tasks over and over instead of assembling the final product one by one won’t allow you to spot the mistakes early
Real Life Applications
Get everyone in the room when brainstorming issues
If you don’t get everyone involved in the room, says Ries, the one not present is usually the one everyone will blame.
And if it’s a junior employee most will assume the fix is to replace him; if it’s the CEO most will assume you can’t fix the issue. Both assumption are often wrong.
Reading is good, action is better
I totally agree with this one. To save time on knowledge absorption check my metasummaries.
It’s more tailored towards software development than on physical products.
Less interesting Lean Methodology
I found the part of the book discussing lean methodologies a bit less interesting.
Not so great examples
I found the examples that were supposed to confirm how awesome the Lean Startup method is to be somewhat lacking.
The Lean Startup not only introduces an awesome methodology for launching successful startups, but also shares awesome and empowering mindsets.
- if a new employee breaks the product environment, it’s no shame on the newbie. The senior developers should focus on building an environment that’s not so easy to break;
- if something goes wrong always ask yourself: how can I prevent being in the same situation ever again (which the founding idea of Principles by Ray Dalio)
There’s a good reason why this book has become so popular: the idea was groundbreaking. And groundbreakingly useful.
The Lean Startup Review
Years ago a former boss of mine sent me this book.
I had no intention of reading it though because back then I was fully focused on people and social skills and had no time for entrepreneurship.
But I played along pretending I was going to read it.
A few weeks later I had to confess though I hadn’t even started it, and he exclaimed:
Oh my God, how can’t you not read the startup Bible!
LOL, cheers Sebastian :).
I did read it now, and it’s awesome.
I personally put The Lean Startup ahead of Zero to One.
This is a must-read for anyone interested in entrepreneurship, startups or launching a product.