This book is full of excellent ideas that I expect will be critical to running a startup. I feel that I'm much better equipped to take the plunge after reading this book. The fact that Eric's ideas are widely adopted nowadays — minimum viable product, pivot, metrics, and so on. Unfortunately, the book is hard to read, specifically the first half, which could be condensed to half its length, because there's too much repetition. The author leaves you to figure out what a term means from reading an anecdote spread over two pages rather than defining it explicitly and clearly defining it. Some chapter names are meaningless, like "Leap", and give you no indication of what to expect. Some case studies are not obviously connected to the point the author is trying to make — you scratch your head and try to figure out what it means, and what the point must have been, and what the moral of the story must have been. But, stick with it, and you'll be rewarded with a solid, well thought-out, evidence-based method on running a startup with less risk, stress, time, money and effort. Here's a summary of the book: Introduction: The lean startup method has five principles: 1) Entrepreneurs are everywhere. 2) Entrepreneurship is management, albeit a form of management that applies under the conditions of extreme uncertainty in a startup. If you think management is not cool and reject it, you'll have chaos and failure. 3) Validated Learning. Startups exist not to just make things, serve customers, or make money. They exist to learn how to build a sustainable business. 4) Build - measure - learn: Startups should go through this loop, as fast as possible. 5) Innovation Accounting is needed to measure a startup's progress, set up milestones, prioritise work, and for the people in it to hold themselves accountable. Chapter 1: - The lean startup draws from related fields like lean manufacturing and design thinking. - If a company commits itself to the wrong plan and executes that plan excellently at a big scale, it may not be able to pivot in time, because it has committed all its resources and time to the wrong vision. It will achieve failure. Chapter 2: - Startups can exist as islands of independence within big companies. Chapter 3: Learn: - Which actions are value-creating and which are wasteful? This question is at the heart of lean manufacturing as well. - Validate your assumptions more cheaply than building the entire product. - But not by asking people what they want — most of the time, they don't know in advance. - People who fail often give the excuse that they learnt a lot. - It's easier to raise money when you have zero revenue and users. Zero invites imagination. A small number invites questions about whether big numbers will ever materialise. - So, it's tempting to postpone getting any idea until you are sure of the success. But don't do that. - Early in a startup's life, revenue growth happens slowly. But the real progress is in validated learning. - Don't fall prey to vanity metrics, which are numbers that look good but are not the best indicators of your company's health. For example, if you have a web site that encourages people to download an app, page views on the web site is a vanity metric, because there are better metrics, like downloads of the app, signups, active users, etc. - Don't waste money on PR and buying media attention and getting written up in magazines. Focus on learning. Chapter 4: Experiment - The founder of Zappos first tested his e-store for shoes by fulfilling orders manually — going to a nearby physical shop, buying the shoes, and shipping them. After a month, a thousand orders were placed, validating his idea. - He observed real customer behaviour, interacted with them, and learnt about their needs, not asked hypothetical questions. - Customers react in unexpected ways, revealing information you might not have known to ask about, like returning shoes. - Startups have a value hypothesis and a growth hypothesis. - The value hypothesis is that customers derive value from the product or service once they start using it. - The growth hypothesis is about how new customers will discover a product or service. - Give your first few users wonderful attention, as if you're a concierge. - An experiment is actually a startup's first product, not just a theoretical enquiry. Chapter 5: - Startups have a build - measure - learn feedback loop. - The learning is how to build a sustainable business. - This learning is more important than revenue. - Minimise the time it takes for you iterate through this loop. - People are often trained and specialised in one aspect of this loop, like engineers trained to build. What matter is not one part, but how fast you can iterate through the entire loop. - Startups should use a scientific method. - To do so, they should know what hypotheses to test. - The two most important hypotheses are the value hypothesis and the growth hypothesis. - Every startup is based on assumptions, often not recognised as such by founders. - Some assumptions are validated by the existence of other products. For example, when Apple built the iPod, one assumption was that people want to listen to music in public places using earphones. But the popularity of the walkman validated that assumption. - "Leap of faith" assumptions are trickier, like saying that people want to pay $399 for a portable music player. - You want to validate them ASAP. - The riskiest ones first. - You do so by building one or more MVPs. An MVP lacks features that are needed later, but its purpose is to validate assumptions with as little time and effort as possible. - You should identify and list assumptions before, not after, building the MVP. Ideally give quantitative estimates like 20% of people will be interested in our service, and 5% will be willing to pay. That way, you can't claim later on that you succeeded, by defining the goal as what you actually achieved. - You actually run the build - measure - learn loop in reverse: start with what you want to learn (assumptions to validate), then think about what to measure to validate those assumptions, and then build that MVP. - Don't act as if your assumptions are true. Validate them. Otherwise your startup will fail. - You can look for analogs and antilogs. - An analog is a similar situation that validates your assumption, as with people listening to music in public using earphones. - An antilog is something that goes against your assumption. For example, an assumption behind the iTunes Music Store was that people are willing to pay for music, but Napster was an antilog. - Get out of the building and talk to users. Don't theorise. Chapter 6: Test - Start with a quick, crappy implementation. - Groupon began as a themed Wordpress blog with the coupons being PDFs mailed by Apple's Mail app to 500 people. - An MVP is not necessarily the smallest product to build, but the quickest to build. - It's hard for entrepreneurs to launch an MVP, because the vision they have of themselves is launching high-quality, polished products, not crappy ones. Overcome that hesitation. - If you don't know who the customer is, you don't know what quality is. - Users may be fine with what you think is low-quality stuff, and may actually find it better, disagreeing with your opinion as to what constitutes high or low quality. - Low quality is a problem only if it slows down the build - measure - learn feedback loop. - An MVP can also be a marketing pitch accompanied by a sign up page to gauge interest. - Or a video, in Dropbox's case. - You can have humans substitute for an algorithm. - Don't worry that an established company will copy your idea. Try pitching it to the managers there. They will do nothing, partly because they're already overwhelmed with good ideas. - MVPs often result in bad news. Or, rather, they bring it out. You're better off facing reality. Chapter 7: Measure - If you're making changes to your product resulting in more
