On The Lean Startup
Deciphering the infamous Startup methodology of Eric Reis
It never ceases to amaze me how the language and conduct of business is shaped by a select group of successful entrepreneurs, corporate leaders, and academicians. Surely the same might be said of any field, but it is a lot more prominent in the realm of business. Listening to the way executives and managers talk about what they’re doing, you can tell which ones have been influenced by the work of Stephen Covey, Michael Porter, Tom Peters, Peter Drucker, Seth Godin, orClay Christensen, just to name a few.
I took this for granted until fairly recently. Over the past year, I’ve had the chance to meet with a variety of people who work in startups, and I began to notice that they had a tendency to use similar jargon. Terms such as “minimum viable product,” “Validated learning,” and the occasional story of how their businesses “pivoted” would find their way into our discussion, as if everyone were reading from the same script.
That script, it turns out, is The Lean Startup, the influential book on entrepreneurship written by Eric Ries that has taken on a life of its own.
The beauty of what Eric Ries has put together in The Lean Startup lies in the book’s ability to distill the important realities faced by startups and thereby provide a framework to help fledgling companies see their way through the early challenging years. What sets startups apart from established business is that the former must operate in an environment of extreme uncertainty, and as such, many of the guideposts that would otherwise be helpful for professional managers may not necessarily exist yet. It is for this very reason that there is no guarantee that a startup will succeed; however, by keeping attuned to market realities and by following a measured framework to proceed with purpose, any startup can drastically increase its viability—a lesson that is, perhaps, equally relevant to going concerns.
To simplify, the framework presented in The Lean Startup may be summarized as follows:
- Startups operate in an environment of uncertainty.
- Because resources are limited, startups should strive for rapid validated learning to “bulletproof” their business models and product offerings. As such, they should be prepared to make measured adjustments on the fly based on how their target market receives their products.
- It is therefore necessary for startups to zero-in on what metrics really matter for their business, and therefore not fall into the trap of relying on “vanity metrics” such as page-views or (sometimes) sales conversion.
- Based on such validated learning, every startup will come to a moment of truth where they will have to decide whether to persevere with their business model and product offering or to pivot to something new altogether.
Objectively, it is a sensible set of parameters to help startups along. Yet if we are to be honest with ourselves, we have to admit that these precepts are true, not only for startups but for business in general. To wit:
- There will always be an element of uncertainty in business.
- Unless a business listens to its market and adapts to its needs, it will not survive.
- As the saying goes, you cannot manage what you do not measure. Thus, it is incumbent for every business to identify and understand what the important things to measure are.
- Every business will reach a point where it will have to decide whether to stay the course or reinvent itself in order to survive.
Yet I find that even this amounts to little more than good science:
- When faced with problems for which there is no clear solution, we develop hypotheses.
- Hypotheses must be tested through experimentation.
- In order to experiment meaningfully, it is necessary to operationalize the variables under observation.
- We must be prepared to discard hypotheses that do not conform to empirical evidence, and be ready to proceed along lines of inquiry contrary to our initial hypothesis if this is what the evidence suggests.
To some degree, it may be said that The Lean Startup doesn’t really have anything new to say that we don’t already know. Yet it is fascinating that it has caught on the way it has. I can think of three reasons why the book seems to have taken on a life of its own. First, say what one will about The Lean Startup, there’s no denying that it is easy to relate to what Eric Ries has to say in it. A large part of this owes to how clearly Ries communicates throughout the book, methodically describing his framework and relating his own personal and professional experiences that led him to develop the lean startup concept. It is this latter characteristic, the book’s storytelling approach, which arguably makes it a real winner. Second, the book itself is targeted towards entrepreneurs, and to that end strikes all the right chords to catch their attention.
It presents a simple enough framework that genuinely captures the entrepreneur’s experience, and in that sense is a fuse just waiting to catch fire. Particularly in the West, where entrepreneurship is almost the default condition in certain circles (like Silicon Valley), it is evident that The Lean Startup is a book with a target audience that would be inclined to give its principles a go. Finally, and most importantly, the book itself is very helpful, which, at the end of the day, is the yardstick against which such books should be measured.
There is no denying that The Lean Startup manages to both capture the challenges that entrepreneurs and business professionals today face, and thankfully goes the extra mile by providing actionable advice on how to confront such challenges in order to give even the smallest venture a chance at success. Purists may have a case that Eric Ries doesn’t really say anything novel in The Lean Startup, and that what the book has going for it is in how it presents these ideas—a matter of form over substance. But if the book provides entrepreneurs, managers, and businessmen with a framework that helps them take their business to the next level, who is to say that the book wasn’t a triumph of substance over form?
Get the book here!
Posted 8th September 2014 by Brian L. Belen on brainbelen.blogspot.com
Edited by Bryan Troutt