The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
by Eric Ries · 13 Sep 2011 · 278pp · 83,468 words
your quest toward the new and unknown.” —Tim Brown, CEO, IDEO “The road map for innovation for the twenty-first century. The ideas in The Lean Startup will help create the next industrial revolution.” —Steve Blank, lecturer, Stanford University, UC Berkeley Hass Business School “Every founding team should stop for forty-eight
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hours and read The Lean Startup. Seriously, stop and read this book now.” —Scott Case, CEO, Startup America Partnership “The key lesson of this book is that startups happen in the
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word startup in the title confuse you. This is a cookbook for entrepreneurs in organizations of all sizes.” —Roy Bahat, president, IGN Entertainment “The Lean Startup is a foundational must-read for founders, enabling them to reduce product failures by bringing structure and science to what is usually informal and an
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and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc. Library of Congress Cataloging-in-Publication Data Ries, Eric, 1978– The lean startup / Eric Ries. — 1st ed. p. cm. 1. New business enterprises. 2. Consumers’ preferences. 3. Organizational effectiveness. I. Title. HD62.5.R545 2011 658.1′
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development ideas, including lean manufacturing, design thinking, customer development, and agile development. It represents a new approach to creating continuous innovation. It’s called the Lean Startup. Despite the volumes written on business strategy, the key attributes of business leaders, and ways to identify the next big thing, innovators still struggle to
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the world.1 My travels have taken me across countries and continents. Everywhere I have seen the signs of a new entrepreneurial renaissance. The Lean Startup movement is making entrepreneurship accessible to a whole new generation of founders who are hungry for new ideas about how to build successful companies. Although
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my background is in high-tech software entrepreneurship, the movement has grown way beyond those roots. Thousands of entrepreneurs are putting Lean Startup principles to work in every conceivable industry. I’ve had the chance to work with entrepreneurs in companies of all sizes, in different industries, and
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of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry. 2. Entrepreneurship is management. A startup is
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for deciding whether to pivot (changing course with one foot anchored to the ground) or persevere. In “Accelerate,” we’ll explore techniques that enable Lean Startups to speed through the Build-Measure-Learn feedback loop as quickly as possible, even as they scale. We’ll explore lean manufacturing concepts that are
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a colossal waste of our civilization’s most precious resource: the time, passion, and skill of its people. The Lean Startup movement is dedicated to preventing these failures. THE ROOTS OF THE LEAN STARTUP The Lean Startup takes its name from the lean manufacturing revolution that Taiichi Ohno and Shigeo Shingo are credited with developing at
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It taught the world the difference between value-creating activities and waste and showed how to build quality into products from the inside out. The Lean Startup adapts these ideas to the context of entrepreneurship, proposing that entrepreneurs judge their progress differently from the way other kinds of ventures do. Progress in
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Code and product features were tangible to me; I could see them, understand them, and show them off. Learning, by contrast, is frustratingly intangible. The Lean Startup asks people to start measuring their productivity differently. Because startups often accidentally build something nobody wants, it doesn’t matter much if they do it
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are significant lapses, yet new product development in our modern economy routinely requires exactly this kind of failure on the way to greatness. In the Lean Startup movement, we have come to realize that these internal innovators are actually entrepreneurs, too, and that entrepreneurial management can help them succeed; this is
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answer. My point? Mark is an entrepreneur just like a Silicon Valley high-tech founder with a garage startup. He needs the principles of the Lean Startup just as much as the folks I thought of as classic entrepreneurs do. Entrepreneurs who operate inside an established organization sometimes are called “intrapreneurs”
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because of the special circumstances that attend building a startup within a larger company. As I have applied Lean Startup ideas in an ever-widening variety of companies and industries, I have come to believe that intrapreneurs have much more in common with the rest
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it has recognized the need for a new management paradigm. This is a realization that was years in the making.3 A SEVEN-THOUSAND-PERSON LEAN STARTUP In 1983, Intuit’s founder, the legendary entrepreneur Scott Cook, had the radical notion (with cofounder Tom Proulx) that personal accounting should happen by
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because IMVU is a software company, a consumer Internet business, or a non-mission-critical application. None of these takeaways is especially useful. The Lean Startup is not a collection of individual tactics. It is a principled approach to new product development. The only way to make sense of its recommendations
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systematically breaking down a business plan into its component parts and testing each part empirically. In other words, we need the scientific method. In the Lean Startup model, every product, every feature, every marketing campaign—everything a startup does—is understood to be an experiment designed to achieve validated learning. This experimental
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employees’ willingness to take the time to volunteer, their level of commitment and desire, and the way to best reach them with her message. The Lean Startup model offers a way to test these hypotheses rigorously, immediately, and thoroughly. Strategic planning takes months to complete; these experiments could begin immediately. By starting
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start learning is waste, no matter how important it might have seemed at the time. To demonstrate, I’ll share several MVP techniques from actual Lean Startups. In each case, you’ll witness entrepreneurs avoiding the temptation to overbuild and overpromise. THE VIDEO MINIMUM VIABLE PRODUCT Drew Houston is the CEO
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enterprise sales background will recognize this funnel analysis as the traditional sales funnel that is used to manage prospects on their way to becoming customers. Lean Startups use it in product development, too. This technique is useful in many types of business, because every company depends for its survival on sequences
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of forward motion even though the company was making little progress. What’s interesting is how closely Farb’s method followed superficial aspects of the Lean Startup learning milestones: they shipped an early product and established some baseline metrics. They had relatively short iterations, each of which was judged by its
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of assigning letter names to each variation.) Although split testing often is thought of as a marketing-specific (or even a direct marketing–specific) practice, Lean Startups incorporate it directly into product development. These changes led to an immediate change in Farb’s understanding of the business. Split testing often uncovers surprising
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course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth. Because of the scientific methodology that underlies the Lean Startup, there is often a misconception that it offers a rigid clinical formula for making pivot or persevere decisions. This is not true. There is
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Contrary to common belief, lethargy and bureaucracy are not the inevitable fate of companies as they achieve maturity. I believe that with the proper foundation, Lean Startups can grow to become lean enterprises that maintain their agility, learning orientation, and culture of innovation even as they scale. In Chapter 9, we will
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see how Lean Startups take advantage of the counterintuitive power of small batches. Just as lean manufacturing has pursued a just-in-time approach to building products, reducing the
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need for in-process inventory, Lean Startups practice just-in-time scalability, conducting product experiments without making massive up-front investments in planning and design. Chapter 10 will explore the metrics startups
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an established company. I have included an epilogue called “Waste Not” in which I consider some of the broader implications of the success of the Lean Startup movement, place it in historical context (including cautionary lessons from past movements), and make suggestions for its future direction. 9 BATCH In the book Lean
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develop. But without this foundation, efforts to encourage learning, creativity, and innovation will fall flat—as many disillusioned directors of HR can attest. The Lean Startup works only if we are able to build an organization as adaptable and fast as the challenges it faces. This requires tackling the human challenges
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development and find ways to be more innovative. They brought together their engineering, product, and design teams to talk through ways they could apply the Lean Startup model. This change initiative had the support of IGN’s senior management, including the CEO, the head of product development, the vice president of engineering
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updates online, Intuit can release software on a more frequent basis. Soon this program will see the QuickBooks team releasing to customers quarterly.3 As Lean Startups grow, they can use adaptive techniques to develop more complex processes without giving up their core advantage: speed through the Build-Measure-Learn feedback loop
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. In fact, one of the primary benefits of using techniques that are derived from lean manufacturing is that Lean Startups, when they grow up, are well positioned to develop operational excellence based on lean principles. They already know how to operate with discipline, develop
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these approaches have allowed me to increase my own learning and, more important, the productivity of the companies I have worked with. Many of the Lean Startup techniques that we pioneered at IMVU are not my original contributions. Rather, they were conceived, incubated, and executed by employees who brought their own creativity
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for endless numbers of bosses all act as a drag on efficiency. However, the individual efficiency of these specialists is not the goal in a Lean Startup. Instead, we want to force teams to work cross-functionally to achieve validated learning. Many of the techniques for doing this—actionable metrics, continuous
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. And yet in new product development, entrepreneurship, and innovation work in general we are still using an outdated framework. My hope is that the Lean Startup movement will not fall into the same reductionist trap. We are just beginning to uncover the rules that govern entrepreneurship, a method that can improve
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it to entrepreneurship will unlock a vast storehouse of human potential. What would an organization look like if all of its employees were armed with Lean Startup organizational superpowers? For one thing, everyone would insist that assumptions be stated explicitly and tested rigorously not as a stalling tactic or a form
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will also find links there to my blog, Startup Lessons Learned, as well as videos, slides, and audio from my past presentations. Lean Startup Meetups Chances are there is a Lean Startup meetup group near you. As of this writing, there are over a hundred, with the largest in San Francisco, Boston, New York
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and a comprehensive list of events and other resources is maintained by volunteers on the Lean Startup Wiki: http://leanstartup.pbworks.com/ The Lean Startup Circle The largest community of practice around the Lean Startup is happening online, right now, on the Lean Startup Circle mailing list. Founded by Rich Collins, the list has thousands of entrepreneurs sharing
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tips, resources, and stories every day. If you have a question about how Lean Startup might apply to your business or industry, it’s a great place to start: http://leanstartupcircle.com/ The Startup Lessons Learned Conference For the past
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sources for thoughts on viral marketing, startup metrics, and design: http://andrewchenblog.com/ Babak Nivi writes the excellent blog Venture Hacks and was an early Lean Startup evangelist: http://venturehacks.com/. He’s since gone on to create Angel List, which matches startups and investors around the world: http://angel.co/ Other
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John Mullins and Randy Komisar. http://ericri.es/GettingToPlanB Endnotes Introduction 1. For an up-to-date listing of Lean Startup meetups or to find one near you, see http://lean-startup.meetup.com or the Lean Startup Wiki: http://leanstartup.pbworks.com/Meetups. See also Chapter 14, “Join the Movement.” Chapter 1. Start 1.
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s entrepreneurial journey, see this Mixergy interview: http://mixergy.com/farbood-nivi-grockit-interview/ Chapter 8. Pivot (or Persevere) 1. http://www.slideshare.net/dbinetti/lean-startup-at-sxsw-votizen-pivot-case-study 2. For more on Path, see http://techcrunch.com/2011/02/02/google-tried-to-buy-path-for-100
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details of Wealthfront’s continuous deployment setup, see http://eng.wealthfront.com/2010/05/deployment-infrastructure-for.html and http://eng.wealthfront.com/2011/03/lean-startup-stage-at-sxsw.html 5. This description of School of One was provided by Jennifer Carolan of NewSchools Venture Fund. 6. For more on
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Perkins Caufield & Byers Floodgate Greylock Partners Seraph Group Acknowledgments I owe a tremendous debt of gratitude to the many people who have helped make The Lean Startup a reality. First and foremost are the thousands of entrepreneurs around the world who have tested these ideas, challenged them, refined them, and improved
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number of startups, large companies, and venture capital firms on business and product strategy, and is an entrepreneur-in-residence at Harvard Business School. His Lean Startup methodology has been written about in the New York Times, the Wall Street Journal, the Harvard Business Review, the Huffington Post, and many blogs.
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