‘The Lean Start-up’ Book of the Month review March 2024
Whilst this book is written specifically with start-up businesses in mind, it is also a valuable read for entrepreneurs and business leaders of more mature businesses, particularly when launching a new product or service, to which much ‘start-up’ wisdom can be applied. Also, with much of the madness and uncertainty that is going on in the world right now, the theme of ‘being lean’ is one which is becoming more and more important for most businesses and their leaders.
Many of the books I’ve previously read and reviewed over the last 17 years have been written by inspirational entrepreneurs who are usually big picture creative thinkers and not necessarily people who ‘do the details’ unlike the author of this book Eric Rees who is a ‘details guy’ and a software engineer. Eric Ries most obvious strength as a business leader, illustrated by this book, are strategy and innovation driven by data and analytics! In May 2018, I reviewed a book called ‘90 Days to Profit’ (review is here … https://certainprogress.com/2018/05/05/book-month-may-2018-90-days-profit/) written by a data analytics driven innovator called Steve Shoulder, who helped to turn Tesla’s car production line around from loss to profit in 3 months, without his contribution I very much doubt Tesla would have survived as a business, at that stage of their growth. When these kinds of guys write books, they may not have the ‘entrepreneurial sexiness’ of books by the likes of Richard Branson or books written about Elon Musk, however if you are an entrepreneur, you ignore their flavour of wisdom at your peril!!
Having spent most of my working life dealing with entrepreneurs on a day-to-day basis, I would say one of the biggest challenges to success in growing a business is to have the balance in leadership between big visionary creative thinking and detailed analytical thinking, possibly making this book the perfect companion to a book like ‘Screw it let’s do it’ by Richard Branson.
Eric Ries is without doubt, an analytical thinker with his engineering background. His key role as a co-founder was as the CTO (chief technology officer) of IMVU a technology business was fundamental to the success of the business. In 2004 IMVU’s annual revenue was only around $100,000, just after Eric Ries stepped down as CTO to work on other projects, by 2009 IMVU’s annual revenue had increased to $35 million!
Whilst this book may be a slightly uncomfortable read for some entrepreneurs, particularly those who are visionary, creative, big picture thinkers, for such business leaders it is an essential read because ‘details and analytics’ is an area where most start-ups I have been involved with are most vulnerable.
The book came about from Eric Ries’ experience of frustration as working as a software engineer in a start-up company called ‘where.com’ that failed. Ries described this first business as ‘building things that people didn’t want’! When he co-founded his new company IMVU in 2004. He wanted to try something different, he was inspired by two key aspects of growing a business, one was ‘the customer development concept’ of start-up investor Steve Blank, which sets out a system and approach for developing the business and marketing elements of a start-up. He also took inspiration from the Japanese approach to lean manufacturing systems famously followed by Toyota.
One of the most important things in this book that all entrepreneurs should take note of, comes from a famous quote by Steve Jobs “Get out of the building!“. What this means in essence is that entrepreneurs need to really get out of their office / away from their desks and speak to real customers or potential real customers to find out what they really want.
Build, Measure, Learn!
The author explains how the key to building a successful business comes from the speed and effectiveness at which we are able to build measure and learn. Through his own experiences illustrated in the book the author explains how important it is that “first products are not meant to be perfect!”
Minimum Viable Product
Using examples such as the origin of the successful company Groupon the author explains the critical concept of MVP which stands for minimum viable products.
Critical to the success of all start-ups is that the founders quickly identify the assumptions on which the product and service is being developed. Some assumptions have already been proven and some not, an example Ries provides is that when sony created the sony walkman they had to do so on the unproven assumption that ‘people would listen to music wearing headphones in public places’, by the time Apple created the iPod, the Sony Walkman had proven this assumption, however, at ‘the start-up phase’ the business model of the Ipod’s unproven assumptions included the ‘People would pay to download music on their devices’. When a start-up can look at existing similar services or products already out there it can assess the ‘proven assumptions’ however all start-ups have some elements of their assumptions which are unique to them and their situation, and it is business critical that they identify and test these assumptions as best and as cost effectively as they can!
I will be recommending this book to all the entrepreneurs that I work with especially the big picture thinker, visionary entrepreneurs I work with. Some will enjoy the book and some may find it an awkward read, however, it will significantly improve their chances of leading a more successful business.