Here’s The Lean Startup summary. Learn the scientific approach to creating and managing startups. Learn to test continuously and adapt appropriately.
The Lean Startup author Eric Ries explains how to avoid waste and reduce risks in creating startups. He also explains how companies can shift directions with agility.
The Lean Startup is about validating business ideas, testing, and continuous improvement. The principles are based on lean operations popularized by Toyota.
Lean principles from the manufacturing industry can also be applied to tech companies. Lean principles will help businesses save money, minimize risk, and get more profits.
About the Author
Eric Ries is the pioneer of the lean startup movement. This Silicon Valley entrepreneur and author has also helped companies use their resources more efficiently.
He has extensive experience in creating and managing startups. He learned the core principles that determine how startups become successful.
Main takeaways: The Lean Startup Summary
Let’s discuss the key takeaways from his book:
- Validate your business idea.
- Test and measure.
- Use feedback loop to improve fast.
Validate your business idea
It works this way. You come up with a business idea. You test it if it works in the real world. That’s it.
You can then invest more time and money once you know your business idea is valid. The goal of validating your business idea is to know if you’ll have paying customers.
Here’s a scenario. You want to create an app about investing for Pinoys. But it’s going to be expensive. You need an app development team for that. You’ll also need to create the whole concept.
It will take a lot of time and budget. What if it fails? Here’s how you can save yourself from a big failure. Create a simple web page first. On that page you list the benefits and features of your “app.”
Then you run ads that direct to your web page. You put up a signup or download button. But the app is not ready yet. The goal of this is to know if people will become interested in your app. It’s a form of simple testing.
In less than a day you can create a simple webpage. It’s your way to test if your business idea is valid. You didn’t spend much. But you’ve learned a lot about your market.
Test and measure
What if the webpage was a success? You’re now sure that you have a viable market. What should you do next?
Do further testing. Take small baby steps toward the larger goal. Create the most basic form of your product. Focus on a few essential features. Then start creating your product.
When your app or product starts gathering signups and downloads, measure. Look at the figures. Figure out what are your customers’ traits and demographics.
Listen also to feedback. What are the comments that keep coming up? That will help you determine what features to include next.
Also do split-testing. It works this way. You create at least 2 versions of your ads or webpage. You choose the one that performs better. You do this multiple times. The goal is to isolate that things that work.
Use feedback loop to improve fast
The goal of business idea validation and data measuring is to improve fast. You gain valuable data and feedback from your customers. Then you use the insights to improve your offer.
Anyone can come up with a cool business idea. The problem is execution. And there’s a need to execute fast to corner the market. That’s where fast improvement can help you.
Feedback and improvements accumulate. You can stay ahead of the competition if you improve fast. Yes competitors can copy you. But they won’t be able to catch up.
You win if you learn fast. You can achieve explosive growth if you adopt this strategy. Why? Because customers will be delighted. They will then talk about your offer to their friends.
Aside from business validation, measurement, and analyzing the feedback loop, you can also learn the following from The Lean Startup book:
- How to apply the scientific approach to startups
- How to do cohort analysis
- How to develop a Minimum Viable Product or MVP
- What is innovation accounting
- Pivot or persevere?
My personal takeaways
The Lean Startup principles are also applicable for small businesses and freelancers. The principles focus on about being lean and fast. People need to apply those traits if they want to thrive.
Lean operations means using the resources more efficiently. It avoids waste and focuses on improvement. That’s how highly effective people work.
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