The Lean Startup in Stoos

Oct 22, 2011 Derek Neighbors rated it it was amazing

Eric Ries breaks down what startup success can look like and furthermore how it can be learned and replicated. Bringing forth the following principles.

1. Entrepreneurs are everywhere.
2. Entrepreneurship is management.
3. Validated learning.
4. Innovation accounting.
5. Build. Measure. Learn.

Items 1 and 5 are critical to how we think about innovation. This was a quick read that has influenced a lot of thinkers in the software startup scene. Well worth the read.

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Apr 16, 2012 Torben Rasmussen rated it it was amazing

Ries coined the term "Lean Startup" back in 2008 to characterise the different trends in the startup community. Since then the ideas have ignited a movement that is dramatically changing the whole concept of start-ups with notable increases in success-rate and massive decrease in the size and risk of investment. Also the idea of entrepeneurship have spread from traditional start-ups and is now widely used to create start-up inside established cooperations.

In his recent book Ries gives an overvi Ries coined the term "Lean Startup" back in 2008 to characterise the different trends in the startup community. Since then the ideas have ignited a movement that is dramatically changing the whole concept of start-ups with notable increases in success-rate and massive decrease in the size and risk of investment. Also the idea of entrepeneurship have spread from traditional start-ups and is now widely used to create start-up inside established cooperations.

In his recent book Ries gives an overview of the lean startup approach and principles. There are several aspects of the approach that are important to mention, including the concept of validated learning and innovation accounting.

Validated learning is such a simple and powerful concept that it is difficult to understand why this is not always used in knowledge work where uncertainty is inherent.
Validated learning is for one as a principle to use an experimental approach, testing a hypothesis against real world data and taking appropriate action based on the result. The concept is very similar to Design thinking, agile, lean and many other approaches that has a focus on feedback loops, learning, and decreased cycle time have had this as an implicit concept. Ries takes the notion and makes it very explicit to the extend that it is the primary basis for measuring progress.

For startups there is an inherent issue of focusing first on learning, and then on scaling. Even if lean startup dramatically decreases the learning and even changes this phase to aim for profit early, there is an issue in that traditional accounting and associated evaluation of progress is focused on fast growth and measures that do not reflect the future value, many times at the expense of sustainable growth.

Innovation accounting solves this by measuring and demonstrating progress towards future value. It relies the validated learning feedback loop and uses a simple set learning milestones to steer and assess progress:
1) Establish a baseline: Build a minimum viable product (MVP) and establish baseline metrics. In the lean startup terminology this is the minimum product needed to validate the most critical hypothesis of the business model - is the business model sustainable?
2) Tune the engine: Using the validated learning loop, experiement to improve metrics from baseline towards ideal. Also use split testing to test the hypothesis.
3) Pivot or persevere: when experiments reach diminishing returns it is time to pivot, to radically change the course. Ries notes that it is most sensible to pivot with 'one foot on the ground' indicating that the pivot should be on one or a few dimensions, e.g. another target segment, another positioning of the product, a change of the product to zoom in on a certain feature, etc.
In order to reap the benefits of lean startup it seems crucial that investors understand and buy into this way of assessing the progress in the startup.

While Ries mostly targets startups and entrepeneurs in established cooperations setting up new businesses, I believe that the approach of validated learning and innovation accounting is will prove very valuable at the level of day to day work in companies where knowledge work is the dominant effort.

The book displays some excellent examples and case studies that alone is well worth the price of the book. On the down-side there is limited detail to be found and the book is mostly an introductionary book on lean startup.

Steve Blank's book, The Four Steps to the Epiphany, seem to come highly recommended by others to add additional depth to the topics. That will go onto my reading list ;-) ...more

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May 18, 2012 Daniel rated it really liked it

Shelves: lean, empreendedorismo

Expectativas para o livro:
- entender o método Lean Startup para implementar ideias e colocá-las em prática
- gerar insights sobre meios importantes pra empreender de maneira consistente e metódica

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