The Lean Start Up by Eric Ries

Every so often a business book comes along that changes how we think about innovation and entrepreneurship… The Lean Startup has the chops to join this exalted company. – Financial Times

Since the Lean Start Up was written in 2011, it has revolutionized the approach of entrepreneurs to start-ups.  The Lean Start Up methods are now being taught in some  Business Schools.  Some of the terms coined by Ries such as pivot, minimally viable product, and continuous innovation are now enmeshed in entrepreneurial circles.

The book, defines start-ups as “an organization dedicated to creating something new under conditions of extreme uncertainty.” Thus, he places start-ups in the realm of large corporations as well as small businesses.

The lean start-up model is based on the principles of Toyota including using small batch sizes, just-in-time production, inventory control and faster cycle times.

Startups often build things that no-one wants.  It doesn’t matter how quickly or brilliantly or cheaply we build something, if no-one wants it.  Ries wrote that the goal of a startup “is to figure out the right thing to build – the thing that customers want and will pay for as quickly as possible”.

Startups are more than the product, but an institution that requires management.  Thus, entrepreneurship requires a managerial discipline.  Ries, discusses in detail the role of the manager in a startup, to enable an environment in which experimentation and the lean startup principles can flourish.

The idea is to make a minimum viable product and then start testing with real customers.  Ries suggests that anything added above that which is required to make a minimum viable product that can be shown and tested with early adopters is waste.

Startups have what Ries terms an “engine of growth.”  Any changes to the product should drive the engine of growth.  The lean start up model uses a measure of progress called validated learning, where any change requires the formulation and then testing of an hypothesis. The results of the constant testing can then guide the entrepreneur as to whether it is appropriate to continue or pivot.  Ries refers to the as the build-measure-learn feedback loop.  The measurement must include actionable metrics based on the hypothesis and not vanity metrics which can be misleading.  In this way, waste of time producing items or features not wanted by the market can be avoided. He explains that this often involves one or more pivots of different types.

The lean startup model views problems and defects as an opportunity for learning.  Its method of root cause analysis is the five whys – simply asking why five  times.  This very simple technique enables the root cause to be identified, which is often hidden behind more obvious symptoms. Then all five levels need to be addressed.

However, the lean startup model is more than a set of techniques to be ticked off from a list.  It is a model that should be adapted to the business in question.

Pros: Many businesses have in the past spent months or even years in building their product before it is seen by a single customer.  Then, often, after months or even years of development, entrepreneurs learn the hard way that customers do not need or want either the product itself or most of the product’s features.  The lean start-up model reduces this waste.

Cons:  A lot of his book talks about teams and management, which makes the book appear less useful for the small startup with only one or two people.  The minimum viable product needs to be decided with care.  Some have used the Lean Startup model as an excuse to rush incomplete or mistake ridden products to market.  This can have consequences for how you are regarded in the market that can be difficult or impossible to overturn.  Finally the pace of innovation and testing can increase the workload beyond the point that it is useful.  In the book Ries gave the example of SnapTax, a part of Inuit.  SnapTax tested over 500 innovations during the two-and-a-half-month tax period, up to seventy in a week, or 14 a day.

Conclusion:  A longer book than necessary for the information that it contains.  It contains a lot of useful concepts and techniques such as minimum viable product and the five whys.  Interacting with customers from early on in development is important.  Understanding how to predict and measure is useful and being given permission to pivot is, well pivotal.  It deserves its place in the classics of business but must be taken with a good dose of common sense.

 

You can purchase a copy from:

Amazon.com

Amazon.co.uk

bookdepository.co.uk

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Comments

  1. Nice review! I’m actually just now finishing up the Lean Startup and would agree on a lot of the points you make in this post. I’m reading it on my Kindle Paperwhite and one of the drawbacks of the Paperwhite is that it lacks in terms of viewing tables and charts. Some of the charts and tables in the book don’t make sense but that’s due to the way it’s being viewed. Overall, I think the book is great and love the MVP mentality.

    • Christine says:

      Thanks Colin. Glad you found the book helpful. It was hard to do the book justice as I think it depends so much on where the reader is coming from what they will or won’t get out of it. I’m sure someone coming from the corporate sector would view the book very differently to me. Its interesting what you said about tables and charts, because I read it on the kindle touch and I think I tended to skip over some of the tables for that reason.

  2. Wow, I couldn’t agree more with the cons. I couldn’t pinpoint what it was about the book that kept me drifting every now and then. But yes, it’s more for those who’ve built small companies, not the solopreneur. That said, the concepts are golden to learn and apply.

    Great review!

    • Christine says:

      Paul, thanks for the feedback. Yes, I found he spent a lot of time talking about management of employees, with how the most senior people should respond to mistakes be more junior members of a team with the mantra “shame on us for making it so easy to make that mistake”, inducting them into the culture etc. I have not heard the same caveat about the book elsewhere, so its encouraging to hear that someone else agrees with this.

  3. This is a GREAT recap, Christine. I am glad you did this. I’m going to take some notes from it and save when I want to refresh my Lean Startup learnings.

    Thanks!

    • YoProWealth, I am glad that you liked the review. I think that The Lean Startup has so many different concepts and ideas that it is useful to have something written down. I am pleased that you are able to use what I have written. Hope it helps and all the best, Christine.

  4. Christine, this is an awesome review of The Lean Startup! I love that you got straight to point and included some of your personal opinions about the book. I always love to hear different points of view because every piece of information that someone takes away from a book is a new perspective on the ideas and concepts it contains. Thanks for writing this post – it was enjoyable to read!

    • Christine says:

      Thanks Kate. I am glad that you found the review helpful. I often find discussing books useful because of the different perspectives that people have and the different things that people notice. I discussed this book with a group of wonderful people and find that type of discussion always highly valuable. That’s why I love book clubs. Christine

  5. Great review Christine! I enjoyed the book too and just finished it as well. I would agree with your pros and cons. The concepts are helping me follow my goals and have helped me decide that I need to come up with my MVP and not wait to think of the perfect product. Thanks again for the post.

    • Christine says:

      Celest, I am very glad that you found the book helpful. The MVP was certainly something that changed how business in conducted and is particularly useful for people like me, who can be a perfectionist and would naturally wait. Well done, on making this decision and progressing with your business. I look forward to hearing that you have launched your MVP. Christine.

  6. Christine, I love that you are doing here! I also love that rather than just write about all the great stuff you are giving the cons of the book and your real true thoughts. I think you NAILED it! I actually started listening to the audio of the lean start up several months ago and got about 1/2 way through. Although you are absolutely correct about how there is no doubt this book has revolutionized the entrepreneur community and there phrases he has coined are now a natural part of every day communication, I also did find that the book (for my own ADD taste) anyway could have been MUCH more condensed and like Paul mentioned I found myself dosing off at certain parts 🙂 Overall definitely an incredible book, but just like most books you have to take from it what works best for you in your business 🙂

    Great review!

    • Justin, thank you for your very thoughtful reply. I definitely agree with you about having to take what’s best for you and your business in all the books that we read. Thank you for your encouragement and all the best in your business.

  7. What a spot review, thank you Christine! Really enjoyed going through you review to help me clarify some points in my reading of it. I especially appreciated your Pros, Cons, and Conclusion sections; a very good summary to help understand in a nutshell what the book is about and determine through the Pros and Cons if the book is a fit for the potential reader. Thanks Christine!

    • Thank you Dean. Pleased it helped you to clarify some points. The pros, cons and conclusions are of course just my opinion, so I really appreciate your validation of their value.

  8. Very much agree with you. While I had some great nuggets that I took away and a few great reminders, I concur that it was a lot of book for the message.

    • Thank you Amber. Glad you had some great nuggets to take away. I think comments like yours will help visitors to the site decide if it is worth reading or not. Thanks for sharing.

  9. Great review. Enjoyed your perspective on the book.

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