The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries
In this book, Ries focuses on a variety of entrepreneurial situations from traditional, physical businesses to those only existent on the web. If you are operating a business or thinking about starting one, chances are Ries has addressed your situation in some capacity within the book's 290+ pages.
The Lean Startup is filled with technical information, but also interesting stories that back up the author's assertions.
In short, the lean startup model focuses on getting a minimum viable product to the market, then receiving customer feedback along the way to improve the product and pivot (take a new approach) if necessary. This, of course, is in contrast to the old way of doing business where a product is launched fully functional backed by extensive market research. This method can be successful, but it costs a lot of money, pivoting is difficult, and failure can harm the bottom line (think Microsoft Vista).
Eric Ries in his book explains that startups cannot use traditional planning an management tools because their product and customers are unknown.
So, what else? Here he comes up with his Lean Startup Methodology - which is a scientific approach for creating and managing startups. Since the product and customer are not known, startups needs to develop a process of "validated learning" through which they can learn to build a sustainable business. This is different from learning through failure - which is a very expensive and wasteful process. Startups need to have a "Build-Measure-Learn" process and get continuous feedback from the market, so that they can decide whether to continue with the current plan or `pivot' into other directions. Eric shows the various ways a startup can pivot: Zoom-in pivot, Zoom-out pivot, Customer segment pivot, Customer need pivot, Platform pivot, and so on. Eric also explains how the normal metrics which he calls `vanity metrics' fail to show how a startup is performing and he comes with solutions of defining new metrics for the startup which takes into account the continuous innovation that a startup should perform.
So, what else? Here he comes up with his Lean Startup Methodology - which is a scientific approach for creating and managing startups. Since the product and customer are not known, startups needs to develop a process of "validated learning" through which they can learn to build a sustainable business. This is different from learning through failure - which is a very expensive and wasteful process. Startups need to have a "Build-Measure-Learn" process and get continuous feedback from the market, so that they can decide whether to continue with the current plan or `pivot' into other directions. Eric shows the various ways a startup can pivot: Zoom-in pivot, Zoom-out pivot, Customer segment pivot, Customer need pivot, Platform pivot, and so on. Eric also explains how the normal metrics which he calls `vanity metrics' fail to show how a startup is performing and he comes with solutions of defining new metrics for the startup which takes into account the continuous innovation that a startup should perform.
