The Lean Start Up by Eric Ries

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The Lean StartThere’s a lot of waste in entrepreneurial efforts today. I should know; I wasted a lot. Wasted time. Wasted money. Wasted efforts. Finally, wasted dreams. The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses helps business owners see how to eliminate that waste and get to the essence of startups (tech and non-tech): getting a great product in the hands of your customers.

I learned of the book from an interview with the author on NPR (National Public Radio). The examples Eric intrigued me so much, that I ordered my own copy from Amazon. The author can be followed through twitter at @ericries. His website is Startup Lessons Learned.

Unlike some entrepreneurs, Eric Ries does not list his suggestions as a “color by numbers” book. His experiences are less a road map and more of a guideline that can be applied to any startup. His is a self described execution of the scientific method (Hooray for scientists and engineers!). The Lean StartUp company creates new products and services under conditions of extreme uncertainty. As you read the book, you’ll see how his methods are different than how most companies operate today. However, those differences will spur you on to read it and apply his principles

The Process Has Changed

Companies used to take years to manufacture products. Market research and development, factory construction, staffing and finally manufacturing. Startups (technology or otherwise) cannot operate in this slow, linear manner. They must be agile and operate in a constant “feedback loop.” The “Build-Measure -Learn” loop starts with this format:

  1. Have an IDEA and know how you will test its success. This is the foundation of your startup or company. In this step, the hypothesis is formed. Begin with the assumptions about the business. To whom will you market? What is your sales strategy? What will your finished product look like? Lots of people come up with good ideas. By reading this book, and following the process, business owners can learn what to do next.
  2. Build an MVP (minimal viable product). This is the PRODUCT or service that you can show your customers and get in their hands. As the author notes, prototypes or examples can be developed quickly and cheaply. Small batch production can be changed much more quickly than large scale production. More than a prototype, the benefit to the business owner is the MVP will be shown and sold to potential customers and it’s success will be measurable.
  3. MEASURE the results of the MVP using previously agreed upon data. This step is not just “Did it work?” You must be able to measure how well it did or did not meet your objectives. When business owners measure the success of their product or service, they will be able to decide if they should pivot (change the course of their actions) or preserve (keep doing what they are doing).
  4. As with all experiments, the next step is evaluation: what did you LEARN. As all researchers (and entrepreneurs) know, the knowledge gained is more valuable than dollars or press mentions. Because this is a circular process, LEARNING leads directly to IDEAS and the process continues. The business owners ideas are going to come from two sources: brand new, fresh ideas or the learning of the current project.

Although the BUILD-MESURE-LEARN process seem like it may take longer up front, it actually shortens the total time necessary for production and process improvement.

Why Read It

“Failure is a prerequisite to learning.” Failure, however, is not a stopping point. Failure is the beginning of the learning process. Failure tells you what you need to fix to reengineer and continue (pivot or preserve). Eric Ries uses examples of why his proposal works: Dropbox, GroupOn, Kodak and Intuit are small and large companies that have used this innovation model to change how companies manufacture goods and services.

The Lean StartUp model can be applied to beginning or existing companies – regardless of size. The best part about the model: it is circular. It is a never ending process. The engineer gets a product that is continuously improving (never perfect). The managers get a product to the customers (i.e. – start making revenue). Customers are part of the process and can directly offer feedback to the company. Read the book and learn how to improve your start up.

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Eric Anderson Eric Anderson is the brainchild behind Scientifically Speaking, a company that improves the presentation and communication skills of technical professionals. A native of Indianapolis, he is an award winning presenter and sales leader. Eric also trains companies on how to use mobile technology to improve customer relationships and maximize productivity. He blogs weekly at the SciSpeak Blog on technology and entrepreneurship.

5 Reactions
  1. I wish I had this thinking ingrained in me 8 years ago with my first startups. Eric’s work and book is invaluable.

  2. Eric,

    This is an excellent first review selection – one aspect I liked is the very first. Reid Hoffman mentioned at Social Media Week that we may be on the verge of too many entrepreneurs producing too much without solving the problem for the intended customer. This book is a real match for that critical thought. The quote that failure is Thank you for selecting to share it for the Small Business Trends community.

  3. One of the most inspirational and motivating books I’ve read to date.
    While thinking back on the book the other day, I realized it also points out the way in which working in small batches acts as the heartbeat of a company no matter what the size. Something that can easily be overlooked in our day to day operations.