The Lean StartUp book by Eric Ries - Introduction

The Lean Startup is another blockbuster book which will be summarised in this blog. 

It was written by Eric Ries and as an entrepreneur himself, he claims to have developed a methodology/process in which entrepreneurs can use to quickly determine whether their startup idea is a hit or a failure. He continued to state that this process is one that anyone can learn. 

A lot of early mistakes that Eric Ries has done in a startup which he was co-founder, were the following: 'Instead of spending years perfecting our technology, we build a minimum viable product, an early product that is terrible, full of bugs and crash-your-computer-yes-really stability problems. Then we ship it to customers way before it's ready. And we charge money for it. After securing initial customers, we change the product constantly—much too fast by traditional standards—shipping new versions of our product dozens of times every single day.'

This is an important lesson provided by the author. The fact that he outlines his past mistakes, it is important for an aspiring entrepreneur to analyse these mistakes in order for him/her not to make the same mistakes and learn from them. 

Another critical tip: Get feedback from your customers and actually hear them to provide as much value as possible to them, since consumer demand should drive the product. 

The Lean StartUp method/process is outlined in five points in the book:

"1. Entrepreneurs are everywhere. You don’t have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my de!nition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry. 

2. Entrepreneurship is management. A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty. In fact, as I will argue later, I believe “entrepreneur” should be considered, I believe “entrepreneur” should be considered a job title in all modern companies that depend on innovation for their future growth. 

3. Validated learning. Startups exist not just to make stuff, make money, or even serve customers. They exist to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision.

4. Build-Measure-Learn. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop. 

5. Innovation accounting. To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. This requires a new kind of accounting designed for startups—and the people who hold them accountable."

Subsequently, the author pointed out why startups tend to fail, since the majority of them do. Accordingly, it is mainly because of a lack of a good plan. Therefore, one of the very first steps of a startup ought to be to create a solid business model which they can follow. Although as Jeff Bezos says, entrepreneurs should be flexible on the details, since it is advisable to pivot as consumer demands change. 

Additionally, another reason why startups fail is due to lack of market research. Consequently, entrepreneurs should be making both primary and secondary market research. Primary market research is when you ask one of your own customers for feedback on your own product and secondary market research is when you ask a person for feedback on the product of, most probably, a competitor, so that you can avoid their mistakes. 

Moreover, it is also emphasised that startups must do better in management to become successful, since it is the view of the author that chaotic, just-do-it startups that do not think things through cannot succeed.  

To validate, according to Henri Fayol, management functions through five basic functions: planning, organizing, coordinating, commanding, and controlling. 

In later Chapters, it will be identified how this book is organised. The main points of structure are 'Vision', 'Steer' and 'Accelerate'.