The Lean Startup: The Million Copy Bestseller Driving Entrepreneurs to Success

by Eric Ries

Entrepreneurs are everywhere. You don’t have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty.

Entrepreneurship is management.

Validated learning.

Build-Measure-Learn.

All successful startup processes should be geared to accelerate that feedback loop.

Innovation accounting.

Why are startups failing so badly everywhere we look?

The first problem is the allure of a good plan, a solid strategy, and thorough market research.

The second problem is that after seeing traditional management fail to solve this problem, some entrepreneurs and investors have thrown up their hands and adopted the “Just Do It” school of startups. This school believes that if management is the problem, chaos is the answer. Unfortunately, as I can attest firsthand, this doesn’t work either.

This book is divided into three parts: “Vision,” “Steer,” and “Accelerate.” “Vision” makes the case for a new discipline of entrepreneurial management.

“Steer” dives into the Lean Startup method in detail, showing one major turn through the core Build-Measure-Learn feedback loop.

I believe that entrepreneurship requires a managerial discipline to harness the entrepreneurial opportunity we have been given.

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 on time and on budget.

The goal of a startup is to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible.

In real life, a startup is a portfolio of activities.

The challenge of entrepreneurship is to balance all these activities. Even the smallest startup faces the challenge of supporting existing customers while trying to innovate. Even the most established company faces the imperative to invest in innovation lest it become obsolete. As companies grow, what changes is the mix of these activities in the company’s portfolio of work.

Entrepreneurship is management.

I’m consistently surprised that I meet people in the audience who seem out of place. In addition to the more traditional startup entrepreneurs I meet, these people are general managers, mostly working in very large companies,

The biggest surprise is that they are visionaries.

He is the leader of a division that recently had been chartered to bring his company into the twenty-first century by building a new suite of products designed to take advantage of the Internet. When he came to talk to me afterward, I started to give him the standard advice about how to create innovation teams inside big companies, and he stopped me in midstream: “Yeah, I’ve read The Innovator’s Dilemma.1 I’ve got that all taken care of.” He was a long-term employee of the company and a successful manager to boot, so managing internal politics was the least of his problems. I should have known; his success was a testament to his ability to navigate the company’s corporate policies, personnel, and processes to get things done.

Mark has all the entrepreneurial prerequisites nailed—proper team structure, good personnel, a strong vision for the future, and an appetite for risk taking—and

Thus, when I use the term entrepreneur, I am referring to the whole startup ecosystem regardless of company size, sector, or stage of development. This book is for entrepreneurs of all stripes: from young visionaries with little backing but great ideas to seasoned visionaries within larger companies such as Mark—and the people who hold them accountable.

A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.

Anyone who is creating a new product or business under conditions of extreme uncertainty is an entrepreneur

What allowed the SnapTax team to innovate was not their genes, destiny, or astrological signs but a process deliberately facilitated by Intuit’s senior management.

As Scott put it, “Boy, the amount of learning they get is just immense now. And what it does is develop entrepreneurs, because when you have only one test, you don’t have entrepreneurs, you have politicians, because you have to sell. 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. So we’re trying to drive that throughout our organization, using examples which have nothing to do with high tech, like the website example. Every business today has a website. You don’t have to be high tech to use fast-cycle testing.”

This is what working tirelessly should look like :)

Scott says, It goes against the grain of what people have been taught in business and what leaders have been taught. The problem isn’t with the teams or the entrepreneurs. They love the chance to quickly get their baby out into the market. They love the chance to have the customer vote instead of the suits voting. The real issue is with the leaders and the middle managers. There are many business leaders who have been successful because of analysis. They think they’re analysts, and their job is to do great planning and analyzing and have a plan.

I believe a company’s only sustainable path to long-term economic growth is to build an “innovation factory” that uses Lean Startup techniques to create disruptive innovations on a continuous basis.

Lean Startup, repeating my definition: an organization designed to create new products and services under conditions of extreme uncertainty.