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The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses Hardcover – September 13, 2011
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Most startups fail. But many of those failures are preventable. The Lean Startup is a new approach being adopted across the globe, changing the way companies are built and new products are launched.
Eric Ries defines a startup as an organization dedicated to creating something new under conditions of extreme uncertainty. This is just as true for one person in a garage or a group of seasoned professionals in a Fortune 500 boardroom. What they have in common is a mission to penetrate that fog of uncertainty to discover a successful path to a sustainable business.
The Lean Startup approach fosters companies that are both more capital efficient and that leverage human creativity more effectively. Inspired by lessons from lean manufacturing, it relies on “validated learning,” rapid scientific experimentation, as well as a number of counter-intuitive practices that shorten product development cycles, measure actual progress without resorting to vanity metrics, and learn what customers really want. It enables a company to shift directions with agility, altering plans inch by inch, minute by minute.
Rather than wasting time creating elaborate business plans, The Lean Startup offers entrepreneurs—in companies of all sizes—a way to test their vision continuously, to adapt and adjust before it’s too late. Ries provides a scientific approach to creating and managing successful startups in a age when companies need to innovate more than ever.
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From the Publisher
Build-measure-learn Feedback Loop
The Build-Measure-Learn Feedback loop is at the core of the Lean Startup model.
Classic Product Chart
Startups have a destination in mind: creating a thriving and world-changing business. I call that the startup's vision. To achieve that vision, startups employ a strategy, which includes a business model, a product road map, a point of view about partners and competitors, and ideas about who the customer will be. The product is the end result of this strategy.
The Revised Chart
Products change constantly through the process of optimization. Less frequently, the strategy may have to change (called a pivot). However, the overarching vision rarely changes. Entrepreneurs are committed to seeing the startup through to that destination. Every setback is an opportunity for learning how to get where they want to go.
"The Lean Startup has a kind of inexorable logic, and Ries’ recommendations come as a bracing slap in the face to would-be tech moguls: Test your ideas before you bet the bank on them. Don’t listen to what focus groups say; watch what your customers do. Start with a modest offering and build on the aspects of it that prove valuable. Expect to get it wrong, and stay flexible (and solvent) enough to try again and again until you get it right. It’s a message that rings true to grizzled startup vets who got burned in the Great Bubble and to young filmgoers who left The Social Network with visions of young Zuckerberg dancing in their heads. It resonates with Web entrepreneurs blessed with worldwide reach and open source code. It’s the perfect philosophy for an era of limited resources, when the noun optimism is necessarily preceded by the adjective cautious." —Wired
“I make all our managers read The Lean Startup.” —Jeffery Immelt, CEO, General Electric
"Eric has created a science where previously there was only art. A must read for every serious entrepreneur—and every manager interested in innovation."
—Marc Andreessen, co-founder of Andreessen Horowitz, Opsware Inc. and Netscape
“This book should be mandatory reading for entrepreneurs, and the same goes for managers who want better entrepreneurial instincts. Ries’s book is loaded with fascinating stories—not to mention countless practical principles you’ll dearly wish you’d known five years ago.” —Dan Heath, co-author of Switch and Made to Stick
“Ries shows us how to cut through the fog of uncertainty that surrounds startups. His approach is rigorous; his prescriptions are practical and proven in the field. The Lean Startup will change the way we think about entrepreneurship. As startup success rates improve, it could do more to boost global economic growth than any management book written in years.” —Tom Eisenmann, Professor of Entrepreneurship, Harvard Business School
“The Lean Startup is the book whose lessons I want every entrepreneur to absorb and apply. I know of no better guide to improve the odds of a startup's success."
—Mitchell Kapor, Founder, Lotus Development Corp.
"At Asana, we've been lucky to benefit from Eric's advice firsthand; this book will enable him to help many more entrepreneurs answer the tough questions about their business."
—Dustin Moskovitz, co-founder of Facebook and Asana
“Ries' splendid book is the essential template to understand the crucial leadership challenge of our time: initiating and managing growth!” —Warren Bennis, Distinguished Professor of Business, University of Southern California and author of the recently published, Still Surprised: A Memoir of a Life in Leadership.
"The Lean Startup isn't just about how to create a more successful entrepreneurial business, it's about what we can learn from those businesses to improve virtually everything we do. I imagine Lean Startup principles applied to government programs, to healthcare, and to solving the world's great problems. It's ultimately an answer to the question 'How can we learn more quickly what works, and discard what doesn't?'"
— Tim O'Reilly, CEO O'Reilly Media
“Eric Ries unravels the mysteries of entrepreneurship and reveals that magic and genius are not the necessary ingredients for success but instead proposes a scientific process that can be learnt and replicated. Whether you are a startup entrepreneur or corporate entrepreneur there are important lessons here for you on your quest toward the new and unknown.” —Tim Brown, CEO of IDEO
“The roadmap for innovation for the 21st century. The ideas in The Lean Startup will help create the next industrial revolution.” —Steve Blank, lecturer, Stanford University, U.C. Berkeley Haas Business School
"The key lesson of this book is that start-ups happen in the present—that messy place between the past and the future where nothing happens according to PowerPoint. Ries's ‘read and react’ approach to this sport, his relentless focus on validated learning, the never-ending anxiety of hovering between ‘persevere’ and ‘pivot’, all bear witness to his appreciation for the dynamics of entrepreneurship." —Geoffrey Moore, Author, Crossing the Chasm
"If you are an entrepreneur, read this book. If you are thinking about becoming an entrepreneur, read this book. If you are just curious about entrepreneurship, read this book. Starting Lean is today's best practice for innovators. Do yourself a favor and read this book." —Randy Komisar, founding director of TiVo and author of the bestselling The Monk and the Riddle
“How do you apply the 50 year old ideas of Lean to the fast-paced, high uncertainty world of Startups? This book provides a brilliant, well-documented, and practical answer. It is sure to become a management classic.” —Don Reinertsen, author of The Principles of Product Development Flow
“The Lean Startup is a foundational must-read for founders, enabling them to reduce product failures by bringing structure and science to what is usually informal and an art. It provides actionable ways to avoid product-learning mistakes, rigorously evaluate early signals from the market through validated learning, and decide whether to persevere or to pivot, all challenges that heighten the chance of entrepreneurial failure.” —Professor Noam Wasserman, Harvard Business School
“One of the best and most insightful new books on entrepreneurship and management I’ve ever read. Should be required reading not only for the entrepreneurs that I work with, but for my friends and colleagues in various industries who have inevitably grappled with many of the challenges that The Lean Startup addresses.” —Eugene J. Huang, Partner, True North Venture Partners
"What would happen if businesses were built from the ground up to learn what their customers really wanted? The Lean Startup is the foundation for reimagining almost everything about how work works. Don't let the word startup in the title confuse you. This is a cookbook for entrepreneurs in organizations of all sizes." —Roy Bahat, President, IGN Entertainment
“Every founding team should stop for 48 hours and read Lean Startup. Seriously stop and read this book now.” —Scott Case, CEO Startup America Partnership
“In business, a ‘lean’ enterprise is sustainable efficiency in action. Eric Ries’ revolutionary Lean Startup method will help bring your new business idea to an end result that is successful and sustainable. You’ll find innovative steps and strategies for creating and managing your own startup while learning from the real-life successes and collapses of others. This book is a must read for entrepreneurs who are truly ready to start something great!” —Ken Blanchard, coauthor of The One Minute Manager® and The One Minute Entrepreneur
“Every entrepreneur responsible for innovation within their organization should read this book. It entertainingly and meticulously develops a rigorous science for the innovation process through the methodology of “lean thinking”. This methodology provides novel and powerful tools for companies to improve the speed and efficiency of their innovation processes through minimum viable products, validated learning, innovation accounting, and actionable metrics. These tools will help organizations large and small to sustain innovation by effectively leveraging the time, passion, and skill of their talent pools.”—Andrea Goldsmith, professor of Electrical Engineering at Stanford University, and cofounder of several startups
“Business is too important to be left to luck. Eric reveals the rigorous process that trumps luck in the invention of new products and new businesses. We've made this a centerpiece of how teams work in my company . . . it works! This book is the guided tour of the key innovative practices used inside Google, Toyota, and Facebook, that work in any business.” —Scott Cook, Founder and Chairman of the Executive Committee, Intuit
About the Author
Eric Ries is an entrepreneur and author of the popular blog Startup Lessons Learned. He co-founded and served as CTO of IMVU, his third startup, and has had plenty of startup failures along the way. He is a frequent speaker at business events, has advised a number of startups, large companies, and venture capital firms on business and product strategy, and is an Entrepreneur-in-Residence at Harvard Business School. His Lean Startup methodology has been written about in the New York Times, the Wall Street Journal, the Harvard Business Review, the Huffington Post, and many blogs. He lives in San Francisco.
- ASIN : 0307887898
- Publisher : Currency; 1st Edition (September 13, 2011)
- Language : English
- Hardcover : 336 pages
- ISBN-10 : 9780307887894
- ISBN-13 : 978-0307887894
- Item Weight : 1.09 pounds
- Dimensions : 5.9 x 1.17 x 8.45 inches
- Best Sellers Rank: #11,982 in Books (See Top 100 in Books)
- Customer Reviews:
About the author
Reviewed in the United States on November 30, 2021
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This is he Build-Measure-Learn process. He goes on by explaining why start-ups fail:
1- The first problem is the allure of a good plan. "Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. Startups have neither."
2- The second problem is the "Just-do-it". "This school believes that chaos is the answer. This does not work either. A startup must be managed".
The main and most convincing lesson from Ries is that because start-ups face a lot of uncertainty, they should test, experiment, learn from the right or wrong hypotheses as early and as often as possible. They should use actionable metrics, split-test experiments, innovation accounting. He is also a big fan of Toyota lean manufacturing.
I loved his borrowing of Komisar's Analogs and Antilogs. For the iPod, the Sony Walkman was an Analog ("people listen to music in a public place using earphones") and Napster was an Antilog ("although people were willing to download music, they were not willing to pay for it"). [Page 83] Ries further develops the MVP, Minimum Viable Product: "it is not the smallest product imaginable, but the fastest way to get through the Build-Measure-Learn feedback loop." Apple's original iPhone, Google's first search engine, or even Dropbox Video Demo were such MVPs. More on Techcrunch [page 97]. He adds that MVP does not go without risks, including legal issues, competition, branding and morale of the team. He has a good point about intellectual property [page 110]: "In my opinion, [...the] current patent law inhibits innovation and should be remedied as a matter of public policy."
So why did I feel some frustration? There is probably the feeling Ries gives that his method is a science. [Page 3]: "Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught." [Page 148]: "Because of the scientific methodology that underlies the Lean Startup, there is often a misconception that it offers a rigid clinical formula for making pivot or persevere decisions. There is no way to remove the human element - vision, intuition, judgment - from the practice of entrepreneurship, nor that would be desirable". I was probably expecting more recipes, as the ones Blnak gives in The Four Steps to the Epiphany. So? Art or science? Ries explains on page 161 that pivot requires courage. "First, Vanity Metrics can allow to form false conclusions. [...] Second, an unclear hypothesis makes it impossible to experience complete failure, [...] Third, many entrepreneurs are afraid. Acknowledging failure can lead to dangerously low morale." A few pages before (page 154), he writes that "failure is a prerequisite to learning". Ries describes a systematic method, I am not sure it is a science, not even a process. Indeed, in his concluding chapter, as if he wanted to mitigate his previous arguments, he tends to agree: "the real goal of innovation: to learn that which is currently unknown" [page 275]. "Throughout our celebration of the Lean Startup movement, a note of caution is essential. We cannot afford to have our success breed a new pseudoscience around pivots, MVPs, and the like" [page 279]. This in no way diminishes the traditional entrepreneurial virtues; the primacy of vision, the willingness to take bold risks, and the courage required in the face of overwhelming odds" [page 278].
Let me mention here a video from Komisar. Together with Moore and Blank, he is among the ones who advise reading Ries' book. I am less convinced than them about the necessity to read this book. I have now more questions than answers, but this may be a good sign! I have been more frustrated than enlightened by the anecdotes he gives or his use of the Toyota strategy. In na interview given to the Stanford Venture Technology program, Komisar talks about how to teach entrepreneurship. Listen to him! To be fair, Eric Ries is helping a lot the entrepreneurship movement. I just discovered a new set of videos he is a part of, thanks to SpinkleLab. Fred Destin had also a great post on his blog about the Lean Startup and you should probably read it too to build your own opinion. Lean is hard and (generally) good for you. Fred summaries Lean this way and he is right: "In the real world, most companies do too much development and spend too much money too early (usually to hit some pre-defined plan that is nothing more than a fantasy and / or is not where they need to go to succeed) and find themselves with an impossible task of raising money at uprounds around Series B. So founders get screwed and everyone ends up with a bad taste in their mouth. That's fundamentally why early stage capital efficiency should matter to you, and why you should at least understand lean concepts."
Let me finish with a recent interview given by Steve Blank in Finland: "I have devoted the last decade of my life and my "fourth career" to trying to prove that methods for improving entrepreneurial success can be taught. Entrepreneurship itself is more of a genetic phenomenon. Either you have the passion and drive to start something, or you don't. I believe entrepreneurs are artists, and I'd like to quote George Bernard Shaw to illustrate: "Some men see things as they are and ask why. Others dream things that never were and ask why not." Over the last decade we assumed that once we found repeatable methodologies (Agile and Customer Development, Business Model Design) to build early stage ventures, entrepreneurship would become a "science," and anyone could do it. I'm beginning to suspect this assumption may be wrong. It's not that the tools are wrong. Where I think we have gone wrong is the belief that anyone can use these tools equally well. When page-layout programs came out with the Macintosh in 1984, everyone thought it was going to be the end of graphic artists and designers. "Now everyone can do design," was the mantra. Users quickly learned how hard it was do design well and again hired professionals. The same thing happened with the first bit-mapped word processors. We didn't get more or better authors. Instead we ended up with poorly written documents that looked like ransom notes. Today's equivalent is Apple's "Garageband". Not everyone who uses composition tools can actually write music that anyone wants to listen to. It may be we can increase the number of founders and entrepreneurial employees, with better tools, more money, and greater education. But it's more likely that until we truly understand how to teach creativity, their numbers are limited. Not everyone is an artist, after all."
Eric Ries wants to take the guesswork out of innovation. His method, featured in his seminal 2011 book, The Lean Startup, and in his website and consulting practice, is built around a technique well known to direct marketers: the A/B split test. In marketing, a mailer will test two variations of a mailing package, an offer or suggested gift, or two market segments, keeping all other variables constant. If the rules of statistics are carefully observed, the result, favoring either A or B, will in theory be replicable when mailing in larger quantities. Ries applies this approach, which he calls “experimenting,” in what appears to be a loosey-goosey fashion. (At one point in his book, he clearly implies that the tests he runs, comparing product features, market segments, positioning, or other testable elements, are less than statistically rigorous. Somehow, though, the companies he’s helped to start or advised seem to have made a lot of money with this approach, so he must be doing something right.)
In fairness, Ries’ Lean Startup method involves a great deal more than testing. He advocates a complete rethinking of the way business is organized and managed and the ways it collects and interprets data. Small, cross-functional teams formed to build and sell innovative products use testing on “small batches” of prospective customers to determine which tweaks on the product or its marketing will optimize sales — or whether the product itself or its use must be entirely re-thought. Systematic testing produces “validated learning” that enables each team to avoid waste such as the hundreds of work-hours that might be involved in producing a finished product by instead testing a “Minimum Viable Product” that will only be finished on the basis of repeated testing. In other words, Ries maps out his own route to the “learning organization” described by Peter Senge in his own seminal book, The Fifth Discipline, more than two decades ago.
Ries’ cross-functional teams are not modeled on the “skunk works” familiar to students of business history. Unlike the original unit of Lockheed that was sequestered in a secret location to design aircraft such as the U-2 spy plane and the F-22 Raptor, the cross-functional teams in a startup company — or themselves constituted as “startups” within a big business — are neither secretive nor elitist. What they have in common with Lockheed’s Skunk Works is independence, as they’re empowered to make all decisions on their own without consulting management.
The core concept behind the Lean Startup approach is that a newly launched enterprise exists only “to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments [i.e., tests] that allow entrepreneurs to test each element of their vision. . . The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere.” A pivot, in Ries’ lexicon, is a shift of course away from the entrepreneur’s original vision — for example, deciding that a company’s core strengths can be more productively and profitably employed in a business-to-business enterprise rather than marketing directly to consumers.
The Lean Startup (the book) is, in a fundamental sense, an introductory guide to Ries’ thinking. However, his prescriptions are often vague — for instance, he writes about the importance of testing in “small batches” but never specifies how small, which is a significant question in statistics — so a real-world entrepreneur would be hard-pressed to apply this method without help. That, it appears, is the function of the many meetups, blogs, online communities, and a wiki that have sprung up around the world for entrepreneurs to share their experiences with the Lean Startup approach. Of course, if you can afford him, you may be able to hire Eric Ries himself.
Ries draws much of his inspiration from the Japanese Lean Manufacturing method pioneered at Toyota — if anything, the “secret” of Toyota’s successful rise from a small company to the world’s largest automobile manufacturer. He has also read widely in the management literature, delving into the work of Frederick Winslow Taylor (The Principles of Scientific Management), W. Edwards Deming (quality control), Alfred Sloan (My Years with General Motors), and Peter Drucker (The Practice of Management) as well as contemporary writers such as Steve Blank (customer development) and Clayton Christensen (The Innovator’s Dilemma).
The Lean Startup is strong on content but weak on presentation. The author appears to be too much in love with his own jargon — there seem to be dozens of proprietary words and phrases he repeats over and over — and his writing style is less than compelling. He even makes occasional grammatical errors. Nonetheless, I recommend this book to anyone who is starting, or even thinking of starting, a new business. The Lean Startup contains a great deal of wisdom.
Top reviews from other countries
I really appreciated the book’s celebration that you don’t have all the answers and you shouldn’t if you’re a startup with an innovative solution. The major point, however, is that you shouldn’t pretend or act like you do but embrace the uncertainty and develop an experimental approach to delivering a Minimum Viable Product – build, measure, learn.
I found The Lean Startup not only great for advice, techniques and the analogous stories to help reinforce the approach, but it is an inspirational book that dares you to challenge everything and rationalise with customer validation that your vision is viable and scalable. When a book affects me it starts a chain reaction in my thought process so that I either gain a better understanding of where I need to go or may enable me to articulate what has been sitting just out of reach in my mind. This is one of those books.
Other books that reinforce this new startup environment and are worth reading include:
• Business Model Generation – Alexander Osterwalder
• Four Steps to the Epiphany – Steve Blank
• The Startup Owner’s Manual – Steve Blank
• Running Lean – Ash Maurya
Most important is the idea that you must prove your product or service innovation out in the market quickly.
There is so much uncertainty involved with developing an original product idea that traditional management techniques evolved in established businesses are inadequate in start-ups.
Instead, develop a minimum viable product (MVP) to test key elements of your business idea and get it out to potential customers. See what their response rates are compared with your expectations. Keep learning and innovating until you have a product that is proven and a marketing method that works effectively.
While I've spent more than 30 years studying marketing, I'm an accountant by training. I found the section on innovation accounting and cohort analysis to be an eye-opener.
This is an outstanding book. While its origins lie in software application development, the concepts have been proven in a vast range of different industries. In some ways, it echoes ideas in Michael Masterson excellent book "Ready, Fire, Aim" that also emphases the vital importance of early validation of a business idea in the market.
This is very highly recommended.
Paul Simister is a business coach who helps business owners who are stuck, get unstuck.
Im looking to eventually start my own business, and this was recommended to me by a friend who is a CEO of a big company as something that really helped him
Whilst it is slow to get started, its good because it used lots of contextual stories etc
Overall sso far a really interesting read but definitely a challenge to follow in its footsteps
I reckon it'll be 5 stars but seen as ive not yet got through it all yet which is why ive given it 4 at the moment
It is slightly biased towards tech companies, partculalrly the product refinement and testing, but there are some nice non-tech case studies that he works through methodically to demonstrate how the lean principles can be applied to any type of startup.