The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses [Hardcover]

 

 

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I selected this observation by Drucker (1963) because it continues to suggest caution when deciding what to do, how and when to do it, etc. Michael Porter also offers a helpful reminder: "The essence of strategy is choosing what not to do." This is especially true of those who are either planning to launch a start-up or have only recently done so. Given the number of Four and Five Star reviews of this book featured by Amazon as of this moment (136 of a total of 153), Eric Ries has clearly attracted and rewarded the attention of those who share his determination to "improve the success rate of new innovative products worldwide." He offers a method by which to achieve that objective, based on five separate but interdependent principles best revealed within the book's narrative, in context.

Ries suggests two primary reasons for the failure of most startups. One is trusting indicators of likely success that are either inappropriate or unreliable such as a good business plan, a solid strategy, and thorough market research. A startup is by nature and unknown quantity, Ries points out, as are its prospects. Also, many entrepreneurs and their investors become impatient, then frustrated, and abandon traditional management practices. I agree with him that all startups must be managed and only those that are managed well have a chance to survive. It is also important to keep in mind that, at one time, each of the "Fortune 500" was a startup, launched by one or more entrepreneurs who would not be denied.

Credit Ries with pursuing what Jim Collins and Jerry Porras characterize in Built to Last as a Big Hairy Audacious Goal or BHAG: To provide "a new discipline for entrepreneurial management" that takes into full account "the chaos and uncertainty that startups must face...I believe that entrepreneurship requires a managerial discipline to harness the entrepreneurial opportunity we have been given." Here's the BHAG: "change the entire ecosystem of entrepreneurship."

The Lean Startup movement's size and impact seem to be rapidly increasing as entrepreneurs worldwide embrace the tenets of a manufacturing revolution that Taiichi Ohno and Shigeo Shingo are credited with developing at Toyota. These tenets by no means preclude traditional functions such as vision and concept, product development, marketing and sales, etc. Rather, what Ries advocates (if I understand him correctly) is a new way of looking at the development of innovative new products by accepting a new way of looking at the management process by which that will be accomplished.

As I re-read this book, I realized that despite all the attention that Ries devotes to startups, much (if not most) of the material in his book is directly relevant to almost all organizations, whatever their size, nature, and birth date may be. This is what Jack Welch had in mind when explaining his reasons for admiring small companies. Here is a brief excerpt from his remarks at a GE annual meeting about 20 years ago:

"For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy."

As Eric Ries concludes his book, he wonders what an organization would look like "if all of its employees were armed with Lean Startup superpowers." What indeed.

I enjoyed this book for the back story of Eric Ries starting up IMVU but more importantly the reminder to foster a culture of learning. As Eric points out in the book, management tends to have a bias towards rewarding successful execution on projects versus learning towards success. This can leave teams playing safe and slow down innovation. The concept of MVP or Minimal Viable Product is not so common sense today and I think anyone can take this to heart and increase the innovation in what they do. Build just enough to make sure they will come...

5 stars.

In David Fincher's 1999 cult classic, Fight Club, there's a scene where Tyler Durden and the Narrator are cruising down the highway talking about the future of their boxing club (first fight's free, then you franchise out, etc). They're arguing about who's in charge, what's the goal of the group, how to deal with growth: they're entrepreneurs and they've both come up with something great, that seems to be catching on. And what does Tyler Durden do? He takes his hands off the wheel, and lets the car go where it wants. The car steers itself, and Tyler hits the gas.

This would be a great opening for my Lean Startup review, had Tyler and the Narrator not gone off the road. The car was destroyed, but the leaders survived, and got a little wiser. Was that a Pivot?

This book is not just about small tech startups, though if you've heard anything about it (the buzz has been building around the interwebs for about 2 years now, mostly on tech sites), you'd be forgiven for the assumption. Frankly, if this book was just about starting tech companies in Silicon Valley, it'd be pretty boring, aimed at a very very niche audience. It's neither.

The brilliance of this book is that it's ideas (admittedly borrowed somewhat from Lean Manufacturing) can be applied to almost any project, service, or company. It will make your venture faster, smarter, and cheaper. In fact, you can even use the principles in here if you want to keep your job (you're not an Entrepreneur, you're an Intrapreneur' I like that).

So why is Entrepreneurship (for example) so scary? Because we always hear about how 90% of small business fail within a year. No one doubts the numbers, or bothers to look them up. We just decide not to take the gamble. This book can actually pare down that 90% figure drastically, and help you learn and iterate your business fast. It's ok to get a little excited at the thought.

So why the Brad Pitt reference? Because a big reason of why so many small businesses fail is because they're just about what the designer, the entrepreneur, wants. And that's no way to run a business. The key should be to very quickly figure out what your customers want (also known as marketing). The Lean Startup will get you working on a quick and dirty 'version' of your company fast, so you know if the company has a chance, before you scale up and make a huge expensive mistake. When you let go of the proverbial steering wheel, the point is to let the customers design your products, your website, even your company logo.

Do you think Tim Ferriss named his own books, or picked the right color combinations for the cover art? Think again. He tested tons of different combinations (either using online tools, or 'physical' tests) before he nailed the NY Times bestselling combination. Smart. He replaced assumptions with results.

And when your car crashes, you shouldn't worry if your original plan was a bust. You learn. Learning is the point (more important even than money). You dust yourself off, and get started on a new revised strategy. Pivot. Hm. Maybe it wasn't such a bad metaphor after all.

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3.0 out of 5 stars Accelerate Learning Rather Than Just Executing the Original Business Plan
"Now Moses wrote down the starting points of their journeys at the command of the LORD." - Numbers 33:2 (NKJV)

Having taught entrepreneurs for many years and studied... Read more

Published 6 months ago by Donald Mitchell

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