The Lean Startup
by Eric Ries
The Lean Startup is a new approach to business that’s being adopted around the world. It is a movement that is transforming the way companies are built and new products are launched.
The 5 principles:
- Entrepreneurs are everywhere
- Entrepreneurship is not management
- Validate your learning
- Practice innovation accounting
Why Startups Fail
Startups fail because of uncertainty; forecasting only works when there is a long established pattern that can be relied on. But chaotic “just do it” doesn’t work either. Entrepreneurship must be managed.
Entrepreneurship requires managerial discipline, but we lack a coherent paradigm for dealing with innovative ventures. Lean takes its name from Taiichi Ohno & Shigeo Shingo’s “lean manufacturing” approach developed at Toyota.
“The goal of a startup is to figure out the right thing to build — the thing customers want and will pay for — as quickly as possible”1.
Important: we measure progress differently. “Individual progress” (e.g. programming 8-hours a day) doesn’t equate to venture-wide progress. Lean focuses on fast iteration, customer insight (feedback), huge vision and great ambition (i.e. BHAG).
More like driving a car (frequent small corrections and feedback) than launching a rocket (meticulous planning).
Entrepreneurs can be lots of things. Read: Innovator’s Dilemma
A startup is a human institution design to create a new product or service under conditions of extreme uncertainty2.
“As the chief technology officer, it was my responsibility, among other things, to write the software that would support IM interoperability across networks.”
Interesting that Eric was coding as CTO! (This is how it should be.) But plenty of stories like those from Steve Blank (The Startup Owner’s Manual).