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The Lean Startup

How Constant Innovation Creates Radically Successful Businesses

By Eric Ries
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The Lean Startup: How Constant Innovation Creates Radically Successful Businesses by Eric Ries
Synopsis

The Lean Startup (2011) helps start-ups and tech companies develop sustainable business models. It advocates continuous rapid prototyping and focusing on customer-feedback data.

The method is based on the concepts of lean manufacturing and agile development, and its efficacy is backed up by case studies from the last few decades.

Key idea 1 of 12

Start-ups need to be managed differently from established companies.

In the first three blinks, you'll discover what the main goal is that a start-up should pursue.

Traditional management consists of two components: developing plans and overseeing the people executing them.

A manager creates a plan, sets milestones, and delegates tasks to her employees, guiding them to ensure they hit their milestones on time.

This management strategy works in established companies that have been around long enough to know what worked in the past and therefore what could work in the future.

Start-ups are different, though: they can’t predict their own future because they have no past, don’t know what their customers want, and don’t know which approaches are best for finding customers or creating a sustainable business. To find out what could work, they must stay flexible. To adopt fixed plans with set milestones or rely on long-term market forecasts would be to delude themselves.

Nevertheless, many founders do use corporate-management tools such as milestone plans and long-term market forecasts. They act as if they are preparing a space rocket for liftoff, tinkering with it for years and only launching it when they think it’s perfect. In reality, managing a start-up is more like driving a jeep across unstable and shifting terrain, where the founders must constantly change direction and respond quickly to unexpected obstacles and dead-ends.

However, start-ups shouldn’t abandon planning completely to adopt a chaotic “just do it” mindset either. Driving chaotically is not going to get you anywhere; someone has to be at the wheel to make intelligent decisions about which way to go.

A start-up’s management team should try to maintain an overview of their situation and keep their company steered toward its overall goal. Hence, they need to find the right metrics to measure whether their journey is leading them in the right direction.

Start-ups need to be managed differently from established companies.

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