The Lean Startup by Eric Ries

The Lean Startup puts the scientific method into entrepreneurship, forcing entrepreneurs to take a hard look at their product/service and the value it brings (or does not bring). Author Eric Ries promotes testing every product feature with the target audience as fast and as often as possible. Through cohort analysis (looking at the results of a targeted group of users rather than the entire customer base) entrepreneurs are stared in the face by the cold hard facts of their value offering and not deceived by vanity metrics.

Author Eric Ries states a few times that he is out to debunk the entrepreneurial myth that a good idea and hard work trump all. Calculated risks, A/B testing, and failing fast seem to be Eric’s equivalent for working smarter, not harder. It’s a notion that is completely counter-intuitive to the American way, but it is a necessary one. Everyone hears the success stories of the 0.1% of entrepreneurs who hit the jackpot due to what seems like magic (though they claim it’s the result of having the right idea, at the right place and time). The stories that don’t get mass acclaim are of the other 99.9% of ideas that waste time, talent, and money because they were built on unproven assumptions.

Another interesting piece of Ries’ book is his emphasis on instilling the entrepreneurial mindset in any organization, no matter the size. He recommends doing this through the use of MVPs (minimum viable products). MVPs emphasize building the smallest scale version of a product/service as fast possible, and bringing it to market to gauge adoption. MVPs can be all smoke and mirrors or completely inefficient at their initial scale. The emphasis of an MVP is not to accrue revenue initially, it’s to test if people care enough about what you’re building to use it/pay for it.

Some of these points seem like common sense, but I can see how they get pushed to the side amongst all of the other pressures an entrepreneur faces. Someone in the traditional startup setting could receive financial backing for an idea early on, and depending on the source of funding, they may receive pressure to monetize as fast possible without knowing whether their product is valuable or not. Feeling pressure by the bottom line and overall user base (vanity metrics), the entrepreneur completely ignores more meaningful data.

Eric Ries uses proven logic and reason to address crucial business flaws. The Lean Startup is a must read for anyone in the business of developing new business.