This book review is part of #curatedbookshelf, a selection of business startup books by entrepreneurs for entrepreneurs, organized by The Formations Company.
All entrepreneurs start with big dreams but most end their startup ambitions in heartbreak. Eric Ries, author of “The Lean Startup”, is on a mission to save entrepreneurs from such a fate. Ries, a serial entrepreneur, co-founded IMVU, an online social network that made the Inc. 500 last year. Whether you are a business person or technologist, the book “The Lean Startup” is a must-read for any entrepreneur.
This bestselling book begins with a note that the lean startup method is for entrepreneurs and the people who hold them accountable. Throughout the book, author Eric Ries outlines five key principles for any successful lean startup business:
1. Entrepreneurship is everywhere and isn’t limited to people who work in startups.
In his definition, he broadened the definition to anyone who works within any human institution designed to create new products and services under conditions of extreme uncertainty, which implies that the approach he is advocating works in a company of any size of any sector or industry, and that includes multi-national enterprises.
2. Entrepreneurship is management.
This sets up the notion that the entrepreneur needs a different kind of management for an environment that is specifically geared to its context of extreme uncertainty.
3. Validated Learning.
Eric Ries argued that startups exist to learn how to build a sustainable business and the learning can be validated scientifically by running frequent experiments that allow them to test and find out how the market reacts to their products. In fact, that approach pervades the book.
4. Build-Measure-Learn.
This concept explains that a startup’s fundamental activity is to turn ideas into products, measure how customers respond and then learn whether to pivot or persevere, and how the lessons from all successful start-ups can be directed to grow the feedback loop.
5. Innovation accounting.
Ries strongly believe that the survival of a startup can be better enhanced by focusing on the boring stuff: How to measure progress, set up milestones and prioritize work. It provides a possible way for how investors and entrepreneurs themselves can evaluate the progress of a start-up.
The Lean Startup is an impactful tome due to the use of real-life examples scattered throughout the book. For example, Intuit demonstrated with Snaptax that they can build a good product even though they are a big organization. They found their own way to break the Innovator’s Dilemma – this thinking suggests that successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet customers’ unstated or future needs. Indeed, Snaptax which was created by Intuit, was able to solve an interesting problem of allowing users to finish their entire tax returns on a mobile phone.
Other success stories of lean and fit startups include Zappos, Facebook and Path.
The grim reality is that most start-ups fail. Most new products are not successful. Yet the story of perseverance, creative genius, and hard work persists. For everyone of us who have entrepreneurial dreams, The Lean Startup by Eric Ries is a big help in guiding us to tamper our startup ambitions with five relevant and applicable business principles that will go a long way in turning a lean startup into a success story.
