The Lean Startup – by Eric Ries

The Lean Startup – by Eric Ries

‘How constant innovation creates radically successful businesses’

If you’ve ever created your own business, or tried to, you will probably see in hindsight that you wasted a lot of resources, be that time, money, or energy and effort. ‘The Lean Startup’ is a different approach to building a business. In every idea, you have ‘leap of faith’ assumptions. Rather than assuming you’re right, you should build a ‘minimum viable product’. This MVP is the smallest and simplest thing you can make that replicates the features of your desired end product that will allow you to TEST your assumptions before committing to the project. If you’re right, you ‘persevere’ and continue to build out your offering ad test the next phase. If you’re wrong, you can ‘pivot’ and make changes before it’s too late.

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Here is a dot point summary of the book!


How constant innovation creates radically successful business



  • Build a minimum viable product, full of bugs and crash your computer stability problems
  • Eric applied it to software development


Lean startup method

  1. Entrepreneurs are everywhere – ‘a human institution designed to create new products and services under conditions of extreme uncertainty’
  2. Entrepreneurship is management
  3. Validated learning
  4. Build measure learn
  5. Innovation accounting


  • Startups first problem is the allure of a good plan, a solid strategy and thorough market research


Part 1 – Vision

Lean Startup takes it names from the lean manufacturing revolution that Taiichi Ohno and Shigeo Shingo are credited with developing at Toyota

Key points:

  • Drawing on knowledge and creativity of individuals
  • Shrinking of batch sizes
  • Just in time production
  • Inventory control
  • Acceleration of cycle times


  • Too many start business plans look more like they are planning to launch a rocket ship then drive a car


Chapter 2 Define

  • Entrepreneur – anyone making changes under uncertainty
  • Startup – a human institution designed to create a new product or service under conditions of extreme uncertain

Chapter 3 – Learn

  • Usually if we wound up taking a wrong turn, we take comfort in the fact that at least we learned something important
  • Unfortunately, learning is the oldest excuse in the book for failed execution
  • Validated learning is a vigorous method in demonstrating progress. Discovered valuable truths
  • Learning is cold comfort for employees who are following an entrepreneur into the unknown


Eric at the start was launching IMVU

  • They had a horrible product when they launched, scared shitless
  • If they delayed , it prevents them getting the feedback they need
  • Each days customers were a brand new report card to see how they were doing
  • It turned out they built a product that customers refused to use
  • It turned out their whole strategy was floored and they learned it quick


  • Learning to see waste and systematically eliminate it has allowed lean companies such as Toyota dominate entire industries


  • It is easy to kid yourself about what you think customers want
  • It is also easy to learn things that are completely irrelevant
  • Thus, validated learning is backed up by empirical data from real customers
  • True startup productivity is systematically figuring out the right things to build


Chapter 4 – experiment

  • In the Lean Startup model, an experiment is more than just a theoretical inquiry, it is also a first product
  • Question
  1. Do customers recognize they have a problem you are trying to solve?
  2. If there was a solution, would they buy it?
  3. Would they buy it from us?
    Can we build a solution for that problem?


  • Business plans are good, there will be statements that are facts, and statements that are assumptions
  • Test the  assumptions with the MVP
  • Have a MVP up on a micro scale to test
  • Focus all energy on validated learning


Part 2 – Steer

 How vision leads to steering

  • The riskiest elements of a startups plan are the leap of faith assumptions
  • Once clear on the leap of faith assumptions, enter the build phase as quickly as possible with a MVP
  • Get it out and try to sell it and interact with customers
  • Do innovative accounting, allows you to create learning milestones
  • The pivot, on completing the Build Measure Learn feedback loop, you decide whether to pivot or persevere
  • If you discover your hypothesis was false, it’s time to make a change



Chapter 5 – Leap

  • At Toyota they use the term Genchi Gembutsu, most important phrase in the lean manufacturing vocabulary
  • It is the firsthand understanding of customers
  • Test critical assumptions about what your consumers actually want


Chapter 6 – Test

  • Contrary to traditional product development, the goal of the MVP is to begin the process of learning, not end it
  • Its goal is to test the fundamental business hypothesis
  • At IMVU, the gross numbers were small as they were selling to the early adopters. They accept, and in fact prefer an 80% solution. You don’t need a perfect solution to capture their interest
  • Somewhere in the business model, buried in  a spreadsheet there will be something that says 10% will sign up after the free trial
  • This is actually a leap of faith question and should be in big red font


  • Drew Houston started dropbox
  • It is extremely technical to sync with everything. He thought once you experience the solution you will never believe how you lived without it
  • Rather than build the whole thing, Drew made a 3 minute demonstration of the tech as it is meant to work, targeted at early adopters
  • Hundreds of thousands of people were driven to the website, their waiting list went from 5K to 75K over night
  • The video was the MVP, the MVP validated his leap of faith assumption that customers wanted the product he was developing, because they actually signed up


  • Another example Max and Damon were testing the chatbot
  • They told customers it was a bot, and they actually were the ones responding


  • MVP’s require courage to put ones assumptions to the test
  • When building the MVP, remove any feature that doesn’t directly contribute to the learning you seek
  • With the MVP you need the right balance to perseverance and flexibility


Chapter 7 – Measure


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