It began three years ago, when Eric Ries posted a blog he called "The lean startup," in which he outlined a new way to build a company: cheaply, efficiently and, above all, quickly. Now it's a full-blown entrepreneurial movement, with thousands of devotees, hundreds of monthly meetings, a big annual conference and an official book, The Lean Startup.
The methodology is a real crowd-pleaser. "You're not born with innate entrepreneurial talents, and success isn't about being in the right place at the right time," says Ries, who has founded several tech companies and is currently serving as Harvard Business School's entrepreneur-in-residence. "Executing a great vision has more to do with being taught the science behind efficiently managing risk and failure."
We talked to him about new models, waste and why failure can be OK.
Related: Pivot or Persevere? The Key to Startup Success
What's the old way of starting a company?
The traditional model is to look at great entrepreneurs and try to emulate them. We have the brilliant idea, the smartest people. But you know, I've lived the first two-thirds of The Social Network, and then things would fall apart. It's a great story, but a terrible business plan, because if we fail, there's a built-in excuse that we were unlucky, or the timing was wrong.
And that's wrong.
Well, think about Facebook. It wasn't the first social network. It wasn't even the first college social network. But when you look at the specifics of how it was built, Mark Zuckerberg really did a lot of things right with the process.
So what is the lean startup process?
Think big; start small. A lean startup looks around for anything to help build the "minimum viable product" and immediately begins learning and building with customers, so you can fail more quickly and move on. It's a great moment for this, because there's an abundance of open-source and low-cost tools available, and the time it takes to get a product out keeps falling.
So failure is OK as long as it happens quickly?
It's speed in the service of long-term value creation, so no idea is ever completely doomed. PayPal's first version, Groupon's original software--these were bad ideas that didn't work at the founding of great companies. You have to discover which elements work and which are crazy so you can find the flaws sooner, pivot and correct them.
You equate the process with science?
The principles are based on the scientific method. Every marketing strategy, every feature added is an experiment and an opportunity to learn what customers care about. Constantly test, adjust and iterate. And do it as quickly as possible.
Is there anything entrepreneurs should fear?
Waste. For every Facebook, there are too many failures. If you look at the total amount of human capital, talent, potential and creativity poured into the failed startups over the years and ask yourself what return society got, I think it's staggeringly bad. We have big pressing problems, and we need our talented people working on stuff that matters.
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This article was originally published in the October 2011 print edition of Entrepreneur with the headline: Efficiency Expert.
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Comments:
Very excited about "The Lean Crossroad" event in Vancouver that showcases Lean Startup, Lean Financing, and Lean Entrepreneurship. Vancouver is lucky to have such an high profile panel of speakers appear in one place: Dan Martell, Boris Wertz, David Ulevitch, Stephen Jagger, and a special appearance by Eric Ries himself! Detail at http://www.meetup.com/Lean-Startup-Vancouver/events/63916122/
This "Lean" startup stuff is just more garbage JARGON. Of course, you want to build something for the least amount of $$, and if it fails move on to the next idea or learn from the disaster. People have been doing this in business forever. The phrase "No-duh" comes to mind when I hear Lean Startup.
You have "real" expeirence. I could write a book about the number of startups that I have seen that failed for non-business business.
Lean has been my passion since I got (by chance) a copy of "The Machine that Changed the World" in 1991. Ever since lean thinking, thinking about doing the process in a way, that I as a potential customer would have really joy buying it. Over the years the view has extended into learning about an opera house, and in which way this can be a helpful role model for lean startups. Thanks a lot Eric for promoting and getting the word out on LEAN STARTUP!
At http://www.kickofflabs.com we LOVE the concepts of lean. The product, itself, came from the idea that we had to be able to quickly publish and test ideas with real customers in the form of signup landing pages. 1,500+ customers later the tests have become the product. :)
Yes, that sounds reasonable. Lessons learned quickly, with the least amount of loss or damage, mature adjustments made going forward, has benefits in other non-financial applications also such as marital relationships, client relationships, etc...
The Nike Slogan "Just Do It" comes to mind when I read the article. Baby steps all the way as long as your doing something. http://moneypirates.blogspot.com
Jason are wrong... oh and read the book.
I know he is an icon and all that, and has made millions from his beliefs and thoughts and conferences, but the statement that "right time, wrong place" (and all the other conurbations of it) isn't relevant is wrong. Luck plays a big part in business, as does hard work, and as a small business you need that little bit to proceed further than market-stall memories.