‘The Lean Startup’ by Eric Ries

How constant innovation creates radically successful businesses.

Who should read this book?

A must read for all entrepreneurs or intrapreneurs.

Investors who are interested in startups.

Why you should read this book (or not)?

This is a classic, and a must read for entrepreneurs. The book explains how the best approach for growth might feel counterintuitive: the key focus for a startup is learning. And you learn by doing experiments, not by sitting in a meeting room working on spreadsheets.

The book is simple to read and contains plenty of anecdotes and real-life examples as well as some conceptual elements.

Even when you are already familiar with the core ideas of the Lean Startup, the book contains sufficient details and ideas to broaden your knowledge. Particularly, I find the sections about accepting imperfections, measuring success, pivots and the Five Whys very insightful.

The book could have been a bit more hands-on. Although it explains the big ideas and main steps, there will still be lots of unanswered question on how to apply the stuff you learned. At the end of the book, there is a list with various resources you can consult.

I believe it is a pity the book does not elaborate on the synergies between lean startup and design thinking.

Interesting extracts

“Many entrepreneurs take a “just do it” attitude, avoiding all forms of management, process, and discipline. Unfortunately, this approach leads to chaos more often than it does to success.”

“The point is not to find the average customer but to find early adopters: the customers who feel the need for the product most acutely. Those customers tend to be more forgiving of mistakes and are especially eager to give feedback.”

“Such businesses are engaged in what I call success theater, using the appearance of growth to make it seem that they are successful. One of the goals of innovation accounting is to help differentiate these false startups from true innovators.”

“A minimum viable product (MVP) helps entrepreneurs start the process of learning as quickly as possible.”

“The truth is that most managers in most companies are already overwhelmed with good ideas. Their challenge lies in prioritization and execution, and it is those challenges that give a startup hope of surviving. If a competitor can out-execute a startup once the idea is known, the startup is doomed anyway. The reason to build a new team to pursue an idea is that you believe you can accelerate through the Build-Measure-Learn feedback loop faster than anyone else can. If that’s true, it makes no difference what the competition knows. If it’s not true, a startup has much bigger problems, and secrecy won’t fix them. Sooner or later, a successful startup will face competition from fast followers. A head start is rarely large enough to matter, and time spent in stealth mode—away from customers—is unlikely to provide a head start. The only way to win is to learn faster than anyone else.”

“Only 5 percent of entrepreneurship is the big idea, the business model, the whiteboard strategizing, and the splitting up of the spoils.The other 95 percent is the gritty work that is measured by innovation accounting: product prioritization decisions, deciding which customers to target or listen to, and having the courage to subject a grand vision to constant testing and feedback.”

“The decision to pivot is emotionally charged for any startup and has to be addressed in a structured way. One way to mitigate this challenge is to schedule the meeting in advance. I recommend that every startup have a regular “pivot or persevere” meeting. In my experience, less than a few weeks between meetings is too often and more than a few months is too infrequent.”

In School of One, students have daily “playlists” of their learning tasks that are attuned to each student’s learning needs, based on that student’s readiness and learning style. For example, Julia is way ahead of grade level in math and learns best in small groups, so her playlist might include three or four videos matched to her aptitude level, a thirty-minute one-on-one tutoring session with her teacher, and a small group activity in which she works on a math puzzle with three peers at similar aptitude levels. There are assessments built into each activity so that data can be fed back to the teacher to choose appropriate tasks for the next playlist. This data can be aggregated across classes, schools, or even whole districts.

“A good Five Whys session has 2 outputs, learning and doing.”

“Those who look to adopt the Lean Startup as a defined set of steps or tactics will not succeed. I had to learn this the hard way. In a startup situation, things constantly go wrong. When that happens, we face the age-old dilemma summarized by Deming: How do we know that the problem is due to a special cause versus a systemic cause? If we’re in the middle of adopting a new way of working, the temptation will always be to blame the new system for the problems that arise. Sometimes that tendency is correct, sometimes not. Learning to tell the difference requires theory. You have to be able to predict the outcome of the changes you make to tell if the problems that result are really problems.”