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by
Eric Ries
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.
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Startups use many kinds of innovation: novel scientific discoveries, repurposing an existing technology for a new use, devising a new business model that unlocks value that was hidden, or simply bringing a product or service to a new location or a previously underserved set of customers. In all these cases, innovation is at the heart of the company’s success.
Out of a hundred good ideas, you’ve got to sell your idea. So you build up a society of politicians and salespeople. When you have five hundred tests you’re running, then everybody’s ideas can run. And then you create entrepreneurs who run and learn and can retest and relearn as opposed to a society of politicians.
measuring two things: the number of customers using products that didn’t exist three years ago and the percentage of revenue coming from offerings that did not exist three years ago.
“learning” is the oldest excuse in the book for a failure of execution.
Validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects.
Imagine a world in which you own the only telephone; it would have no value. Only when other people also have a telephone does it become valuable.
delay prevents many startups from getting the feedback they need.
our entire strategic analysis of the market was utterly wrong. We figured this out empirically, through experimentation, rather than through focus groups or market research.
they revealed the truth through their action or inaction
Customers kept saying, “I want to use it by myself. I want to try it out first to see if it’s really cool before I invite a friend.”
which of our efforts are value-creating and which are wasteful?
Lean thinking defines value as providing benefit to the customer; anything else is waste.
Is it possible that we could have discovered how flawed our assumptions were without building anything?
the true story of IMVU begins, not with our brilliant assumptions and strategies and whiteboard gamesmanship but with the hard work of discovering what customers really wanted and adjusting our product and strategy to meet those desires. We adopted the view that our job was to find a synthesis between our vision and what customers would accept; it wasn’t to capitulate to what customers thought they wanted or to tell customers what they ought to want.
working smarter, aligned with our customers’ real needs.
Positive changes in metrics became the quantitative validation that our learning was real.
we could show our stakeholders—employees, investors, and ourselves—that we were making genuine prog...
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The irony is that it is often easier to raise money or acquire other resources when you have zero revenue, zero customers, and zero traction than when you have a small amount. Zero invites imagination, but small numbers invite questions about whether large numbers will ever materialize. Everyone knows (or thinks he or she knows) stories of products that achieved breakthrough success overnight. As long as nothing has been released and no data have been collected, it is still possible to imagine overnight success in the future. Small numbers pour cold water on that hope.
one of the most important lessons of the scientific method: if you cannot fail, you cannot learn.
A true experiment follows the scientific method. It begins with a clear hypothesis that makes predictions about what is supposed to happen.
The value hypothesis tests whether a product or service really delivers value to customers once they are using it.
Do consumers recognize that they have the problem you are trying to solve? 2. If there was a solution, would they buy it? 3. Would they buy it from us? 4. Can we build a solution for that problem?”
“Success is not delivering a feature; success is learning how to solve the customer’s problem.”
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planning is a tool that only works in the presence of a long and stable operating history.
if we’re building something that nobody wants, it doesn’t much matter if we’re doing it on time and on budget.
The Lean Startup method builds capital-efficient companies because it allows startups to recognize that it’s time to pivot sooner, creating less waste of time and money.
Facebook launched on February 4, 2004, and by the end of that month almost three-quarters of Harvard’s undergraduates were using it, without a dollar of marketing or advertising having been spent.
The first challenge for an entrepreneur is to build an organization that can test these assumptions systematically.
perform that rigorous testing without losing sight of the company’s overall vision.
“Out of these analogs and antilogs come a series of unique, unanswered questions.
What differentiates the success stories from the failures is that the successful entrepreneurs had the foresight, the ability, and the tools to discover which parts of their plans were working brilliantly and which were misguided, and adapt their strategies accordingly.
Toyota, this goes by the Japanese term genchi gembutsu, which is one of the most important phrases in the lean manufacturing vocabulary.
translated as a directive to “go and see for yourself”
All successful sales models depend on breaking down the monolithic view of organizations into the disparate people that make them up.
Startups need extensive contact with potential customers to understand them, so get out of your chair and get to know them.
because customers don’t really know what they want, it’s easy for these entrepreneurs to delude themselves that they are on the right path.
Other entrepreneurs can fall victim to analysis paralysis, endlessly refining their plans. In this case, talking to customers, reading research reports, and whiteboard strategizing are all equally unhelpful.
most entrepreneurs and product development people dramatically overestimate how many features are needed in an MVP. When in doubt, simplify.
product development team was always focused on scaling something that was working rather than trying to invent something that might work in the future.
for more subjective questions, Google struggles. Ask, “What’s a good place to go out for a drink after the ball game in my city?”
MVPs designed to test a more important question: what would be required to get customers to engage with the product and tell their friends about it?
“Once we chose Aardvark,” Ventilla says, “we continued to run with humans replicating pieces of the backend for nine months.
Wizard of Oz testing to fake it. In a Wizard of Oz test, customers believe they are interacting with the actual product, but behind the scenes human beings are doing the work.
If we do not know who the customer is, we do not know what quality is.
Customers don’t care how much time something takes to build. They care only if it serves their needs.
As you consider building your own minimum viable product, let this simple rule suffice: remove any feature, process, or effort that does not contribute directly to the learning you seek.
The most common speed bumps are legal issues, fears about competitors, branding risks, and the impact on morale.
Part of the special challenge of being a startup is the near impossibility of having your idea, company, or product be noticed by anyone, let alone a competitor.
a competitor can outexecute a startup once the idea is known, the startup is doomed anyway.
