Entrepreneurs are fast. They embrace new thinking. They are geared for disruption and innovation through uncertainty. No matter if you are an entrepreneur, thinking about becoming an entrepreneur, or responsible for innovation within your organization - read this book! I would even go so far as to say that this book is the holy Startup bible.
Eric Ries' mission is to improve the success rate of new innovative products worldwide. How, you ask? By applying the Lean Startup approach - the application of lean thinking to the process of innovation. What's the best thing about it? The Lean Startup approach is suitable for any business, regardless of size or industry. As the author states, startup success can be engineered by following the right process, which means it can be learned and it can be taught.
Many years ago, Eric Ries began to describe this experience and learnings on a blog called Startup Lessons Learned. He started talking about it at conferences and with companies, startups, and investors. By defending his point of view and with the help of other authors, thinkers, and entrepreneurs, he succeeded in fine-tuning the Lean Startup theory and advancing it.
The Lean Startup is structured in three main chapters and every chapter helps to understand where to start and how to move forward. Therefore, I summarized my main takeaways for you:
VISION: START, DEFINE, LEARN, EXPERIMENT
The time is up for startups to move away from the "just do it" attitudes like avoiding all forms of management, process, and discipline. That's your sign to start focusing on the ability to progress and prevent failure. You must address all comprehensive functions within your company and test each of them empirically:
1. Vision and concept,
2. Product development,
3. Marketing & sales,
4. Scaling up,
5. Partnerships and distribution,
6. Structure, and organizational design.
While reading this chapter, you are going to realize that time, passion, and the skills of people are the most precious resources you have. You need leadership to create conditions that empower your employees to experiment, measure, learn and react to new information to make positive improvements (Don't forget: Think big, start small). As mentioned by Eric, by doing that we will discover whether we are on a path that will lead to growing a sustainable business (value vs. waste).
STEER: LEAP, TEST, MEASURE, PIVOT
"At the end of the day, customers are breathing, thinking, buying individuals. Their behavior is measurable and changeable."
While reading this chapter you will understand how valuable and cheap qualitative and quantitative customer feedback is. The author introduces you to the Build-Measure-Learn Feedback Loop: Turn ideas into a Minimum Viable Product (MVP), measure how customers respond (obtain real data on the current state of the company), and then learn whether to pivot or persevere. Using this framework, you can evaluate the interest of the customers. But as important, the long-term growth of your business must be considered. Another framework, Innovation Accounting, allows startups to objectively demonstrate long-term growth. It includes how to measure progress, how to set up milestones, and how to prioritize work. By using these frameworks, you will realize quickly if you're stuck and need to change direction (pivot) and when to persist.
ACCELERATE: BATCH, GROW, ADAPT, INNOVATE
In this third part, techniques are presented that will enable Lean Startup model companies to gain momentum while retaining their agility, learning attitude, and culture of innovation. First, the author stresses the great advantage of small-batch production. By starting with a small batch production (vs. mass production) the startup will be able to identify quality issues sooner, react faster, and save time, money, and effort at the same time. At the same time, it's crucial to evaluate where its growth is coming from. Sustainable growth relies on three types of engines: either paid, viral or loyalty.
Understand if your growth is coming from word of mouth, as a side effect of product usage, through advertising, through repeat purchase or use? But one of the most important things is that the startup needs to stay flexible along the way. An adaptive organization automatically adjusts its process and performance to current conditions. Each startup should have regulators that allow it to find an optimal rhythm. The fact is, companies become larger, and sometimes they inevitably lose the capacity for innovation, creativity, and growth. Therefore,
"A startup must constantly manage four main phases of activity: Research and development of innovative products, the growth of the product once it has found its market, product optimization through incremental innovation, and cost-containment".
The Lean Startup movement seeks to ensure that those of us who are building the next big thing will have the tools we need to change the world. Its approach has expanded globally within the last decades.
In the past the man has been first; in the future, the system must be first".
As mentioned before, this innovative method is for everyone who wants to start a business or develop a new project. By following the principle of continuous innovation, this approach makes it possible to constantly adapt one’s products and one’s business to customer needs and market developments.
Even if the structure of the book was not 100% clear (repetitive insights) I learned a lot new frameworks and approaches while reading this book and I can't wait to implement them in the workplace.
About the author:
Eric Ries is an American Entrepreneur, blogger and author. His book the Lean Startup has been sold over one million copies and has been translated into more than thirty languages. He is the creator of the Lean Startup methodology, which has become a global movement in business, practiced by individuals and companies around the world. He has founded a number of startups, including IMVU, where he served as CTO, and he has advised on business and product strategy for startups, venture capital firms, and large companies, including GE, with whom he partnered to create the Fast Works program. Ries has served as an entrepreneur-in-residence at Harvard Business School, IDEO, and Pivotal, and he is the founder and CEO of the Long-Term Stock Exchange.
Favourite quote:
Reading is good. Action is better.