— “The only way to win is to learn faster than anyone else.”
A lot of people try to build profitable tech products but not many of them succeed. If you ever wonder why it happens and how to prevent failure, you’ll probably find a bunch of interesting insights in The Lean Startup.
The book was written almost a decade ago. At that time, the global tech landscape looked completely different. For example, Instagram was in its infancy, Apple had just launched iPhone 4S, and the corporate world still had to wait another two years for Slack. Yet, Eric Reis, an author of the book, managed to develop quite fundamental concepts that remain as relevant today as they were in 2011 when The Lean Startup was published.
To help tech entrepreneurs do all the things right when building their businesses, we’ve summarized the most essential ideas outlined in The Lean Startup in this review.
Traditional business practices are no good for startups
Many startuppers try to apply traditional business management practices to their companies. But Ries claims that it’s a slippery slope. Startups are dedicated to creating new products that haven’t been offered on the market before. It means that they exist in conditions of extreme uncertainty and cannot rely on long-term planning. For this reason, the approach that works perfectly for established enterprises may lead a young startup to a disaster.
Startups must strive to minimize waste
Being less wasteful is the basic concept of The Lean Startup. According to Ries, the waste is anything that requires additional work but that customers will not value. For example, it can be a feature that early adopters didn’t notice or don’t care about. The same is with the level of quality that goes beyond customer needs and expectations. All such things take time, energy, and money. But they don’t make a product better, more competitive, or more beneficial for customers.
Validated learning is a key
Reis claims that startups should rely on validated learning if they want to build products that customers will buy. According to The Lean Startup, entrepreneurs must take a scientific approach to the testing of their assumptions and show products to prospective customers instead of creating them behind closed doors. Otherwise, they can end up spending time and money on perfecting the solution that no one really needs.
To make sure that development is moving in the right direction, product creators should split the entire process into short spans. This will provide them with enough flexibility to consider customer feedback in every new iteration.
The MVP stage should not be skipped
Today, a “minimum viable product” is a widely used term in the tech community. But not all people know that it was Eric Reis who started popularizing it almost ten years ago. The MVP concept is logically related to the necessity of verifying the ideas in practice and taking action instead of theorizing.
In The Lean Startup, Reis explains that a build-measure-learn cycle helps entrepreneurs reduce risks by turning uncertainties into knowledge. For this reason, startups should release an MVP as quickly as possible, adding to it only those features that are absolutely necessary to test the main hypotheses.
Innovation accounting will help you measure real progress
Innovation accounting is something most beginner entrepreneurs consider too boring to pay attention to. But Reis claims that measuring success and failures is vital to improve entrepreneurial outcomes and make the right decisions about product development. To track the real progress and achieve positive results, entrepreneurs should use actionable metrics, set specific milestones, and properly prioritize the work. This will allow them to eliminate chaos and focus on important stuff.
The Lean Startup is targeted mainly at startuppers who have brilliant product ideas but lack knowledge of how to implement them in practice. Yet, the concepts outlined in the book may also inspire mature entrepreneurs to unleash the growth potential of their businesses. Besides, Reis uses a number of case studies to illustrate principles featured in The Lean Startup. This makes the book even more captivating and interesting to read.