Startups operate in an uncertain and dynamically changing environment. Most of them fail. This is because the entrepreneurs initiate and manage them either in a conventional (rigorous and time consuming upfront market research, planning, strategizing) manner or in an adhoc “Just Do It !” manner. Neither of these extremes work.
To improve the success rate of startups, Eric Ries , the author of this book came out with a new approach called the Lean Startup . This approach is based on the philosophy of lean manufacturing, design thinking, customer development, and agile development.
In this book, Ries introduces the concepts of the Lean Startup and provides a framework for the entrepreneurs to successfully build and manage startups and launch new products or services through continuous innovation.
Ries defines a startup as a “human institution designed to create new products and services under conditions of extreme uncertainty”.
The Lean Startup method rests on the following five principles:
1. Entrepreneurs are everywhere. The concept of entrepreneurship includes anyone who works within a startup.
2. Entrepreneurship is management. A startup requires a new kind of management specifically geared to its context of extreme uncertainty.
3. Validated learning. Startups exist to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision.
4. Build-Measure-Learn. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot (change course) or persevere. All successful startup processes should be geared to accelerate this feedback loop.
5. Innovation accounting. To improve entrepreneurial outcomes hold the innovators accountable. We need to focus on measuring progress , setting up milestones, and prioritizing work for innovation efforts. This requires a new kind of accounting designed for startups—and the people who hold them accountable.
This book is organized in three parts:
Part I Vision: Presents a business case for a new discipline of entrepreneurial management. Identifies who is an entrepreneur, defines a startup, and explains validated learning as a new way to gauge a startup’s progress.
Part II Steer: Deep dives into the Lean Startup method by walking through one cycle of the core Build-Measure-Learn feedback loop. Talks about making leap-of-faith assumptions and explains how to build a minimum viable product and rigorously test these assumptions. Introduces a new accounting system for evaluating a startup’s progress and also a method for deciding whether to pivot (changing course) or persevere.
Part III Accelerate: Explores techniques that enable Lean Startups to speed through the Build-Measure-Learn feedback loop as quickly as possible, even as they scale.
The case studies in this book, several of them based on author’s personal experience as an entrepreneur and a consultant, bring out the nuances of the Lean Startup method very clearly. However most of the case studies are related to the IT.
The conversational story-telling style of the author though somewhat repetitive in content makes this book an interesting and easy read.
A very insightful and useful book by an entrepreneur for the entrepreneurs !
Links:
- Book Website
- Startup Lessons Learned – Author’s Blog
- Lean Startup Lectures - Videos and slides of lecture by Eric Ries and other Lean Startup experts. Free to view and download.
Book Details: Author: Eric Ries, Published:2011, Publisher: Crown Business , Paperback: 284 pages.
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