The Lean Start Up by Eric Ries
If you take all your knowledge from traditional employment at an established business and apply it to your start-up business, you will surely fail. This is the premise of The Lean Start Up. Instead for a successful startup, you must acknowledge that there is no past to extrapolate the future from and no corporate tool is going to be useful when launching your startup. Flexibility is key and founders must be ready to respond quickly to opportunities and challenges.
Key Messages of the Book:
- Managing your startup as a startup and not an established company is key to your success. Find the balance of ‘flexible planning’ between ‘winging it’ and ‘fixed plans’.
- The one (and only) goal when starting your business is to find a sustainable business model as quickly and cost-effectively as possible. Your one focus should be growth.
- The questions you want to ask yourself are: How can I acquire customers? and How can I earn money by serving them?
- Understand that most successful entrepreneurs don’t get the recipe of ‘the right product for the right people and an understanding of how to sell it’ correct from the beginning. This is honed through a process of ‘validated learning’. You must be open to pivoting.
- ‘Validated learning’ is best when you are able to take your actual product or service to your real customers and see if they respond to how you want them to. i.e. buy
- In order to do this, create a minimally viable product. What is the least amount of money you can spend to get the best prototype possible? i.e. Zappos uploaded photos of shoes they couldn’t yet sell in order to see if people would buy shoes online. (You can read their story in the Book in a Page: Delivering Happiness)
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There are two hypotheses you need to test as quickly as possible:
- Value Hypothesis: Do your early adopters find value in your offering
- Growth Hypothesis: Can your product appeal to a larger market than your early adopters?
- Build - Measure - Learn. Execute this loop as many times as you need to in order to reach your sustainable business model.
- Split test any change you are going to make to your offer to see if it has value.
- Measure what matters and not just what looks good.
What assumptions need to be true in order for this business to work