World Literature

Estimated Reading Time: 17 minutes

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This book is organised into three key parts. In ‘Vision’ the book defines what an entrepreneur and startup actually are and articulates a new way for startups to measure their progress called ‘validated learning’. ‘Steer’ dives into the methodology of the build-measure-learn feedback loop. And in ‘Accelerate’ the book explores techniques to speed up the ‘Steer’ process and growth methods.

KEY PRINCIPLES OF THE LEAN STARTUP

• Entrepreneurs are everywhere. Regardless of industry, company size or your role, entrepreneurs are everywhere. You don’t necessarily have to be the founder to apply entrepreneurship.
• Entrepreneurship is management. A startup is an institution that needs to be managed.
• Validated learning. Startups exist, not just to make a product and make money, but to learn how to create a sustainable business. This is done using frequent experiments and testing to reach a vision.
• Build-measuer-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.
• Innovation accounting. Startups need to focus on measuring progress towards goals and prioritise work. This requires a new kind of accounting designed for startups.

Start

• The Lean Startup takes its name from lean manufacturing and adapts the ideas of just-in-time inventory management, small batch sizes and accelerated cycle times to the context of entrepreneurship and startups.
• Vision is defined, the strategy is the means to get there (changed by a pivot or persevere) and the product defines the strategy (and is constantly optimised).
• The Lean Startup model is designed to teach you how to drive a startup. Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustment with a steering wheel called the build-measure-learn feedback loop.

Define

• Entrepreneurs are everywhere. They’re in large established organisations as well as small startups.
• A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.
• This definition has nothing to do with the size of the company or the industry you’re operating in.

Learn

• If the fundamental goal of entrepreneurship is to engage in organisation building under conditions of extreme uncertainty, its most vital function is learning. We must learn the truth about which elements of our strategy are working to realise our vision and which are just crazy.
• Validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects.
• In other words, which of our efforts are value-creating and which are wasteful? This question is at the heart of the lean manufacturing revolution; it is the first question any lean manufacturing adherent is trained to ask.