5 Ideas from “Lean Startup”

Lean Startup written by Eric Ries is one of the most influential books in the startup world. The ideas presented in the book are very popular among the software and startup community but likely utopian for most startups. It is similar to many self help books. It makes sense. A lot. And obviously it has worked for the authors and the example companies covered. But implementing the strategies is hard and it is the details that matter. Here’s 5 ideas that stayed with me after reading it recently on Audible.

Startups are in the Uncertainty Business:

Eric Ries defines a startup as a team of people that came together for the objective of creating something new under conditions of extreme uncertainty. Extreme uncertainty is difficult to operate in a linear fashion to achieve a startup’s vision. Ries strongly suggests that startups should explore and experiment heavily with getting feedback from real users and customers as fast as they can. Without a fast feedback cycle the risk of working on something that nobody wants is too high.


Fooled by Randomness

Exploration vs Exploitation in genetic optimization

Minimum Viable Product(MVP):

You cannot go a single day without hearing this term “Minimum Viable Product” or its acronym “MVP” in any type of software and technology organization. This is the book that coined the term. It is the simplest and cheapest form of an idea or a product that can be used to collect feedback from customers. It is one step above a prototype and many steps below a fully developed product. For any new product or an idea getting to an MVP as fast as possible and measuring the performance and collecting feedback from customers is one of the main methods for dealing with uncertainty.


HBO’s Silicon Valley Pilot

Very Early Versions of some websites

Lean Manufacturing → Lean Startup:

The book gets its name from the manufacturing concept developed by Japanese automobile industry. Lean manufacturing vision is to eliminate waste from the production systems. And the worst kind of waste is rework and quality issues. This led to the development of ideas like cycle time reduction, decreasing inventory levels, reducing batch sizes and utmost focus to quality. These methods are credited for Japanese auto and manufacturing industry advancing way beyond the US auto industry in the 70s and 80s.

Our book argues that startups operating in extreme uncertainty are threatened by the worst kind of waste. Building a product that is not used by the customers. In that case All the effort however well intentioned pr sophisticated is complete waste. To avoid complete waste startups need to work in small batches and reduce the cycle time and control inventory. Small batches mean smaller and simpler features where the scope is reduced to the minimum levels just enough to start collecting feedback from real customers. Reduction of inventory in the startup world working on fewer things at the same time. Reducing cycle time is the result of these efforts being able to add small changes into the product in less time. This flywheel accelerates learning in the face of certainty for the startup.


The Goal (Probably the first business book written in a novel/fiction format)

The Project Phoenix (Follows almost the same format of The Goal for devops and IT organizations)

Vanity Metrics vs Actionable Metrics:

Under extreme uncertainty rules financial projections means little for startups. All the forecasts made depend on many assumptions. Rather than focusing on high level metrics of hit counts, page views and monthly revenue, Ries suggests metrics should be directly tied to learning by experiments. High level metrics are called ‘vanity metrics’. There’s many factors that influence them. When those are improved teams get credit When they go bad or stagnant there are many other factors to balance. Instead of those metrics that measure the key factors that drive the growth of the company should be measured through cohort analysis.


Learning through accelerated experimentation enables startup to make progress in reducing uncertainty about the problem that needs to be solved and if the startups vision is the correct way to solve that problem. After this approach we might be on the right oath or we might see mroe clearly that the vision needs to change. Here the book suggests a concept pivoting which means changing the vision in light of learnings and current capabilities of the team. This might be changing the customer segment or the product platform or the customer acquisition channels. The key thing the new vision is built on top of what we have learned so far and has a much improved chance of success under the reduced levels of uncertainty. After the pivot the cycle of experimentation learning goes on for the hypothesis in the new vision.

5 Ideas from "Lean Startup" 2020-08-10