THE LEAN STARTUP

The Lean Startup ■ Created by Eric Ries

– Silicon Valley entrepreneur – Yale graduate w/ a B.S. in Computer Science

■ Directs startup companies to allocate resources as efficiently as possible

■ Provides scientific approach to creating & managing startups and get a desired product to customers’ hands faster

■ Teaches you how to drive a startup– how to steer, when to turn & when to persevere – grow a business w/ maximum acceleration

The Lean Startup

■Principled approach to new product development■Provides tools to test a vision continuously ■About putting a process, a methodology around

the development of a product

The Lean Startup ■Every startup is grand

experiment that attempts to answer a question – Should this product be built?– Can we build a sustainable

business around this set of products and services?

■https://www.youtube.com/watch?v=_a3s0IXSuxY

Principles

#1 Entrepreneurs are Everywhere

■Don’t have to work in a garage to be a startup

■Concept of entrepreneurship – includes anyone who works within a startup– Startup = human institution

designed to create new products & services under conditions of extreme uncertainty

■Lean Startup approach can work in any size company

#2 Entrepreneurship is Management ■Startup is an institution, not just a product■Requires new kind of management

specifically geared to its context

#3 Validated Learning

■ Rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty

■ Startups exist to learn how to build a sustainable business– Learning can be validated

scientifically – running experiments that allow us to test each element of our vision

■ Once entrepreneurs embrace validated learning development process can shrink substantially

#4 Innovation AccountingIn order to improve entrepreneurial outcomes & hold innovators accountable, need to focus on:■How to measure progress■How to setup milestones■How to prioritize work

■Requires a new kind of accounting designed for startups

■Effectively helps startups define, measure, and communicate progress

#5 Build-Measure-Learn■Build-measure-learn

feedback loop – core component of Lean Startup methodology

■Fundamental activity of a startup – turn ideas into products, measure how customers respond, then learn whether to pivot or persevere

■Successful startup processes should be geared to accelerate that feedback loop

Develop a MVP – Minimum Viable Product ■ Version of product that enables full turn of Build-Measure-Learn loop

w/ minimum amount of effort & least amount of development ■ Lacks many features that may prove essential later on

– However, must be able to measure impact – Ex. Inadequate to build prototype evaluated solely for internal

quality by engineers & designers – must also get it in front of potential customers to gauge their reactions

■ Why waste effort building out a product without first testing if it’s worth it?

■ Get feedback from customers to learn what customer wants

1. Figuring out problem that needs to be solved developing MVP2. Startup can work on tuning the engine

– Measurement & learning must include actionable metrics that can demonstrate cause & effect question

Validation Board

■ Tool to test startup idea

■ Make faster decisions

■ Improve team accountability

■ Build better products

■ https://www.youtube.com/watch?v=HhoducyStMw