There are many misconceptions about starting a business. Stories of college kids who shoot to fame after building the next great app from their dorm room are everywhere. The truth is, those are the exceptions to the rule. Starting a company is hard work, and it’s even harder to turn the initial buzz around a product into long term success. Fortunately, entrepreneur Eric Ries has developed a systematic approach to launching new companies. Called the Lean Startup, the method emphasizes constant learning and scientific decision-making. The approach has become a global phenomenon, and Ries is in demand as a speaker and business expert at conferences and companies around the world. Here are the 10 key insights he shared in his book about the method, The Lean Startup.
Everyone is an entrepreneur.
Yes, some entrepreneurs live in San Francisco and wear hoodies. But you don’t need to be the inspiration for the Social Network or HBO’s Silicon Valley to be an entrepreneur. Employees of more traditional businesses can still use the Lean Startup method to push their ideas forward and think more creatively about their work.
A game-changing idea can only take your business so far. Without strong management strategies to turn that vision into reality, a startup won’t be sustainable. Entrepreneurs need management strategies that allow them to test concepts and correct mistakes in real time, ensuring that their allegedly good ideas can become good products that people want — and continue to want long into the future.
Start with a Build-Measure-Learn loop.
So how do you create the product people want? Start with a Build-Measure-Learn loop. Build a version of the product, see how audiences react, and then improve your product based on that feedback. The goal is to complete the loop as fast as possible. Companies that can get user input more quickly have a greater chance of surviving and adapting to changing consumer preferences.
Keep your plans lean and stay ready to pivot.
What makes the Lean Startup lean? Traditional businesses rely on five-year plans and elaborate schedules. Not here. Instead, begin with a strong vision for the product but only a loosely defined idea of how to get there. Each time you complete the Build-Measure-Learn loop, be ready to pivot, altering your conception of the product or your strategy for how to get there. It’s important to be constantly learning (“validated learning”), and sometimes necessary to change course.
Start building as fast as you can…
Since your goal is to complete the Build-Measure-Learn loop as many times as possible, the quality of the iteration of your product you begin with is much less important, as you’ll be able to constantly improve upon it.
…and debut the Minimum Viable Product.
A Minimum Viable Product is a no-frills version of your vision that enables you to test the assumptions underlying your idea. When Zappos launched, its founder began with just a basic website and tiny, local inventory. He needed to confirm that people would be willing to buy shoes online until he proceeded to build upon the concept any further.
Begin with the big assumptions, then fine-tune.
Your debut MVP should test the biggest, most critical assumption you’re making. Don’t get bogged down in minutiae until much later in the game. You can’t let yourself get distracted by what font to use or what color your logo should be until you’ve proven that your product is actually something users will want.
Make every mistake only once.
The key to the Lean Startup model is that you will make miscalculations and wrong assumptions. But using the Build-Measure-Learn mode, you’ll also learn how you can fix those. The goal isn’t to avoid mistakes: it’s to use each mistake as a data-gathering experiment and make sure you don’t repeat it.
Use the metrics that matter.
Many startups boost their self-esteem by tracking data that makes them feel good but doesn’t result in validated learning. It’s not enough to know that your website has a certain number of unique visitors. How do those visitors get to your website? How long do they stay? Gather information purposefully and be honest with yourself about any potentially bad numbers.
When in doubt, keep it simple.
The heart of the Lean Startup is the pursuit of simplicity. Introduce the simplest version of your product first. Get rid of any unnecessary components in your organization. Fundamentally, startups are organizations that operate under conditions of extreme uncertainty. Your organization needs the flexibility to weather that uncertainty and rise above it.