Ries defines a startup as "an organization designed to create something new under conditions of extreme uncertainty." He focuses on technology, especially software startups. Our tools to handle engineering challenges have evolved significantly in recent times to build technology under conditions of uncertainty. For example Agile software development methodology allow you to build software in an iterative methodology without a big design upfront.
Our tools for product development and startup marketing haven't kept pace with our tools for software development. The Lean Startup methodology aims to fill this gap by introducing tools like customer development, minimal viable product and innovation accounting. This book is the go to source for learning about these tools to bring science to the art of product development and startup marketing.
If you are unaware of the terms.
- Customer Development: Customer development is a step by step method to find a product market fit by going out of the building and talking to real customers. (Ideally done before you start the development)
- Innovation Accounting: To improve entrepreneurial outcomes, startups need to keep track of their progress and setup milestones. In the early days, the most important metric is not revenue but the amount of validated learning you get. Innovation accounting is a framework to track this.
- Minimal Viable Product: A MVP is a minimal product you can build to get to the next step of customer development. In lean startup framework you are always working in the build-measure-learn feedback loop, and MVP is minimum build you need to do to get to the next learn.
One interesting thing Ries' book does is that it does not exclude large companies from the definition of startups. His only criteria for startup is "an organization designed to create something new under conditions of extreme uncertainty", and large companies can create an entrepreneurial culture and apply the tenets of Lean Startup. The book talks about example of these like Snaptax which was created by Intuit applying these principles.
The book is divided in three parts.
In vision the book lays out the framework, defines a entrepreneur and ask you to put down your hypothesis which will get you towards validated learning. In steer the book tells about you can get the hypothesis and learning to a MVP and puts a framework to measure progress. It also tells you how you can measure progress to decide on perverse or pivot decisions. In accelerate it talks about techniques to speed the build-measure-learn feedback loop, and how you can grow your startup faster.
So should I read this book?
If you are new to lean startup framework this book is the fastest way to learn how to do customer development and get to a product-market fit. However if you have been following the discussion overs the year a lot of the material will be old to you.
- Shabdaa Raj, Founder, Agiliq.com