The Lean Startup Book Summary

Book Summary

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Brief Summary

A startup cannot be managed the same way as a company that is already established. It can’t refer to the past to find success in the future, so the best way to gain customers and revenue is to use a scientific approach. Build and test products as quickly as is feasible, experiment and learn as you go, then use what you learn to change course when it is necessary. Flexibility is key, as is the desire to learn and improve.

About the Author

Eric Ries is an American entrepreneur, author, and blogger. He attended Yale University and has founded multiple startup companies in addition to working in an advisory capacity for other startups, large businesses such as GE, and venture capital firms. He has held the position of entrepreneur-in-residence at Harvard’s Business School, Pivotal, and IDEO and is the CEO and founder of the Long-Term Stock Exchange.

Since The Lean Startup was published in 2011, Ries’ idea of a lean startup has spread around the globe, leading his book to the bestseller list. His strategy is used by both big companies and individuals starting their own businesses.

Ries and his wife live in San Francisco with their two children.

Topics

Entrepreneurship Management & Leadership

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Key Insights

Most startup companies fail. This is not something that entrepreneurs like to think about when they are starting a company, but it is something that can’t be ignored.

In The Lean Startup, Eric Ries gives entrepreneurs a roadmap to better navigate the winding, rocky path that is starting a new business. Whether your company was built in your basement or whether it has hundreds of million dollars at its disposal, Ries has come up with a method that can help startups grow into businesses that can really go the distance.

A startup can’t be run the same way as an established business can, with plans, milestones, and task delegation based on what strategies have performed well in the past. A startup has no past!

The key to Ries’ “lean startup” idea is flexibility. The manager of the startup should have a goal in mind, but should be able to quickly adjust and alter his or her original idea if it appears that it isn’t working. Perfection isn’t what the startup is striving for: growth is.

Ries bases his approach to business on an idea developed by the Toyota company referred to as “lean manufacturing.” Even if your startup isn’t in the field of manufacturing, the same ideas (such as learning and experimenting as one goes) are universal, and can greatly help a new company get off the ground.

Finding a Business Model that Works

If you want your startup to really, actually get started, you have to first come up with a business model that is sustainable in the long term. The faster you come up with this model, the better chance your business has of earning income.

The way to go about creating a sustainable business model is to come up with one single, overarching goal for the company. Find a product, service, etc. that people want, need, and would conceivably pay for and make it your goal to get it into as many people’s hands as possible.

There is a catch, though. Your product must actually be something that people would realistically purchase. You may have a great idea for something like kilt-knitting patterns, but can you honestly say that there is a big audience for this? How many people would spend money on this sort of thing? Maybe a few dozen, but not as many as you would need to be successful.

To earn revenue, you need to come up with something your target customers want and find out how your company can provide it for them. Every aspect of your company should be centered around this.

Validated Learning

Okay, so we know that the key to startup success is to find the right product for the right people, and then persuade them to buy it. So how does one go about this?

According to the author, the best approach is called “validated learning.” This process consists of learning as you go and testing out hypotheses about what does and doesn’t work, and about which products will and will not bring you success in your target market.

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