During my last semester at the Isenberg School of Management, University of Massachusetts, I will be a Teaching Assistant for “New Venture Creation”. A new course which will be part of a proposed minor in Entrepreneurship. As part of the course, students will be assigned to read “The Lean Startup” by Eric Ries. Eric Ries guides aspiring entrepreneurs about how to minimize waste and maximize success, by applying lean manufacturing practices to startups.
Below is an excerpt from the book.
The Lean Startup Method
The five principles of the Lean Startup are as follows:
1. Entrepreneurs are everywhere. You don’t have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry.
2. Entrepreneurship is management. A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty. In fact, I believe “entrepreneur” should be considered a job title in all modern companies that depend on innovation for their future growth.
3. Validated learning. Startups exist not just to make stuff, make money, or even serve customers. They exist to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision.
4. Build-Measure-Learn. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop.
5. Innovation accounting. To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. This requires a new kind of accounting designed for startup — and the people who hold them accountable.
Click here to learn more about the Lean Startup movement!