The Lean Startup — Book Summary

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Introduction

The Lean Startup by Eric Ries contains instrumental lessons that can benefit any industry-breaking individual who is confident enough to learn from others first. It tells of successes, failures, and takeaways that are usually only experienced through firsthand life decisions. Learning from others is to be a step ahead of the game, and it is a hard and fast one to enter.

Eric Ries had the remarkable idea that success can be taught, but only to those that are willing to read, watch, and listen. He gives away many pieces of sage advice through the brief analysis of dozens of industries and case studies that are applicable across decades.

In this summary, discover those lessons in an easy to digest format with the essence of structured reading summarized in 10 minutes or less.

Interesting quotes from the book

Summary of the book The Lean Startup

The book is separated into three parts: vision, steer, and accelerate. In each, he details specific strategies and tactics that either failed or succeeded in the startups he has been involved in. Of his vast experience, he was able to piece together some amazing artifacts of advice that are usually taught by the cruel mistress of innovation—life. Instead of waiting years in education or on the job, some of the best experiences and creative problem solving are hidden within these pages.

"A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty," is how he defines a startup (Ries, 2011). Notice how he describes it as a "human" institution because it's remarkably like building a business with the main difference being a goal to combat bureaucracy. A startup can evolve into a business, but they strive to innovate every aspect of the process.

In "Part One: Vision", Ries stresses the importance of starting with the most informed decisions, defining your expectations, learning from everything, and experimenting with the data and product. The case studies emphasize the crucial steps apply not only to the launch but also for each major part of the startup.

He kicks off his endeavor immediately with entrepreneurial management. Without creating a culture suitable for creativity within the team like an entrepreneur, it will quickly snuff out the beauty of creativity and in its place will be content bureaucracy. There should be a managing discipline that enhances the morale and workforce instead of hindering as we see so often in everyday offices across the globe.

All through your endeavor, Eric Ries details you should always keep a true north in your business compass. He calls this your vision, but not quite the mission or vision statement you have in place. No, this is what every startup should have in common, but often fail to live up to the expectation. The goal is simple: to change the world with your team through your plans to be a successful group.

In this portion, Ries defines words like startup, institution, and innovation. The main takeaway is simple: you can't move forward without a very clear understanding of what it is that can help or hurt your process. Those words will determine many factors and facets of the path any entrepreneur sets on and it should be cared for as such.

Now, we learn about an interesting case study. SnapTax of 2009 attempted to streamline information found on a traditional W-2 in a simple way for filers, which would allow them to avoid hefty fees from tax stores. At first, they ran into mostly user error as people weren't regularly trained on how to use their home scanners and printers at the time (which is still a problem ten years later). In the first steps of testing and pivoting, they found that people were truly interested in completing their returns totally via cell phone applications.

That single, customer-based question allowed the startup to flourish after developing software that took all your W-2 information from a simple picture and compiled it into your 1040EX tax return. It was revolutionary after its official launch in 2011 and made it possible for even greater developments later. This startup was backed by Intuit, which allowed both the startup and the company to make major headway for the next few years.

Eric Ries has been an engineer and manager for several years before writing this book and he explains that "learning" is often an excuse. When we fail to meet our expectations for ourselves or constituents, especially in a startup, we can always blame the learning curve. However, it does nothing to persuade people to follow into the unknown with the only certainty being that you learned something from the process.

Such as the thinkers at IMVU of 2004, the IM market was becoming more and more important, but with little ability to cross over. You, your coworkers, and families probably all used the same IM network to keep you connected, making it nearly impossible to break past AOL and Yahoo! IMVU found that the stress people faced convincing their neighbors and friends to switch was one of the bigger issues. Instead of keeping to that norm of adding extra work for customers, IMVU switched gears to mass appeal through 3D video games with a corresponding virtual world.

They thought through the system and found not only a new strategy but tagged into a new industry and audience at the same time. Now, the customer could invite their friends without being forced to switch to a new network completely. It brought a whole new branch of creative and strategic thinking to the field which would inspire many similar virtual world startups.

There is no shortage of information on experimentation in any industry, but that doesn't make it any less important. This is the place to learn empirically from other studies, as well as beginning your own to enhance the quality in the long-term.

This is best expressed through the case study in India. The washing machine at the time was so expensive that only 7% of the population had access to one (Ries, 2011). So, they washed their clothes where they could: in the river. On top of using rocks and hanging them to dry in the harsh sun, it could take up to 7 days for the fabric to dry, but likely not be returned to the home very clean.

Akshay Mehra and Village Laundry Services began testing to see if people would pay to have their laundry cleaned rather than do it themselves. To do this, they put non-working laundry machines on the back of a simple truck and asked people if they want their clothes cleaned for a small price in less than a day. If so, they would take the clothes away and have them cleaned in an off-site unit. They didn't keep to the same location and moved to different street corners after a few days hoping to learn more about potential customers. There were tons of variables they wanted to address, so they continue the experiment to gather enough reliable data while they could.

Their conclusion was simple; faster service was wanted, and extra services were valued. They created a variation of their original product, which was a bigger mobile kiosk, and can claim up to 60% of their business in 2010 was thanks to repeating customers.

In "Part Two: Steer," Eric Ries makes it clear that knowing when to change is determined by open feedback and constant analysis/collecting of data. Building with a minimum viable product (MVP) is essential so you can move on to learning how to improve it as fast as possible. Once an MVP is ready, the measuring becomes possible to gauge progress and value-added changes.

While every good startup aims to push boundaries, nothing is a better teacher than willingly flinging yourself into a void in hopes of it working out. Especially when you base that decision on assumptions. These pseudo-facts we have compiled can't be proven true until they are tested vigorously and with speed.

Toyota uses genchi gembutsu to justify why understanding their customers is the single most important part of being an innovative company. This Japanese term means "go and see for yourself," and is a staple in lean manufacturing. Their defining story for this popularized word is from the 2004 Sienna minivan. The lead designer Yuji Yokoya was unfamiliar with the Americas market and trends but was unwilling to shy away from the challenge. To accomplish this massive undertaking, he petitioned a total road trip of the entire continent. Yes, seeing every state, province, and part of the USA, Canada, and Mexico was the goal to help him design the next generation of cars from Toyota. That leap was likely daunting considering how big of a project it would be, but Toyota approved.

He did this and experienced real people's opinions across the continent about various styles of popular vehicles. From the business professional to the soccer parent, every demographic was immensely important to Yokoya. The results after his firsthand experiment speak for themselves with his model having a 60% increase in sales compared to last year's model.

The company's motivations for customer satisfaction, verified learning, and sustaining innovation is exactly what sets the company from others and encourages its employees to leap to constantly improve themselves and their workplace.

In "Part Three: Accelerate," the entire portion is about trusting your gut in conjunction with the data. If you're the leader of a team or the entire project, everyone is looking for you to be an example. They aren't looking for your personality or opinions, but how you act to new information and your ability to help them move forward despite difficulties. The most relevant part of this portion of the book is stressing that you should take these challenges in stride.

By keeping yourself and others accountable, you can avoid some more embarrassing failures. But you must adapt to them as best as possible. A bad adapter causes the whole plan to falter and occasionally cause weeks of damage control.

This is the case when you rush through to the finish line and cause a sever build up too fast. The realm of Lean Startups changes dramatically with the rules ever-changing and full of confusion. It is no longer a science, but an art of careful consideration and strategy.

What can we learn from the book The Lean Startup?

Very briefly, these are likely the most important things to add to your notebook for future consideration. These highlighted lessons are going to be what makes a startup unique if done well and is always a welcome strategy in any industry.

Lesson 1: Feedback

In various case studies, we see the importance of a rigorous and thorough feedback loop. One of these is the validity of the Build-Measure-Learn feedback loop (Ries, 2011). It replaces the need for detailed plans and steps and backup plans that are based on tried startups that may have no relevance to your own for small changes in our path just like we do while driving a vehicle. To pivot, according to Ries, is making that small change when the time is right and reflect on it later to firmly grasp all the data possible. While its opposite is to persevere, meaning to continue down the laid road ahead at a speed determined by you that will lead you towards the end goal you desire.

Lesson 2: Metrics

Once you've gotten feedback, it's important to identify what are the specific metrics for your success. There should be dozens of questions for your future experiments and customers, and it's important to quantify those wherever able.

Lesson 3: Adaptation

As a leader in any respect, it begins with you. You set the rigidity or flexibility of your group with actions and words alike and that decision will either make or break any chances at success. Showing that you can adapt to change, problems, and sudden decisions will go a long way in terms of becoming the newest startup that catches the eyes of the world.

Review of the book The Lean Startup

The first time I read this book, I was a college junior in a manufacturing company learning about lean for the first time. I found the content simpler than most other business savvy tell-all, but it was still a difficult book to binge read. It truly requires the want to learn more instead of a forceful I-must-finish-this-book approach. If you have the drive to learn and the time to sit back and read it through, it has some great insights. However, it's not for everyone. If you're just vaguely interested in this article, you've gotten the biggest takeaways from the book, so congratulations!!

Conclusion

No matter what part of product development you are, The Lean Startup offers some valuable insights. There are no magic tips for guaranteed success because a startup is not a copy-and-paste business. It's a human venture intent on shaking up the industry because of an amazing opportunity few have seen and acted upon. There is an opportunity for great gain and loss, but it all comes down to the leadership and capability of every person who chooses to work towards that vision.

Without the right people who are flexible, questioning, and observant, there may be no hope of overcoming such adversity. But with heavy research like you're doing now, you could be off to a great start. No information is bad information, especially if you can learn from it.

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