The Lean Startup


Eric Ries breaks down the "lean startup methodology", a process in which to come up with, execute and grow an idea from just that to a successful business.


Clear, actionable and effective ways of starting a new venture.


  • don't assume, measure
  • be explicit about value and growth assumptions and then build-measure-learn
  • progress should be measured with Validated Learning

Key Points

  • what is startup

  • how to startup

  • prioritize

    • systematically testing assumptions
    • connect tests with long term vision
    • everything that doesn't help with learning is wasted work
    • making progress means understanding value that product is actually providing users and figuring out the Engine of Growth
  • etc

  • startup should

    • know where they are now
    • figure out how to get closer to ideal
  • metrics

    • actionable
    • accessible
    • auditable


See Concepts



1 start

  • goal of startup is to figure out what to build (as quickly as possible)
  • startup is like driving a car, you want to continuously steer vs planning for a rocket launch where a single error could be a disaster
  • this process is the Build-Measure-Learn Loop
  • true north, strategy, product

2 define

  • a Startup is an organization that is building something in environments of extreme uncertainty

3 learn

  • Validated Learning is discovering truth about current and future prospectsl

  • real progress in a startup is learning what work created value for users (anything else is waste)

  • goal of learning is to find the point of intersectino btw startup vision and what customers want

  • EVERYTHING that a startup is doing should be in the service of validated learning

  • eg: IMVU had faulty assumptions about what users wanted (people did not want to learn new social network, people wanted to talk to their existing friends)


4 experiment

  • if you can't fail then you can't learn
    • eg. Zappos beginning, take picture of other people's inventory and try to sell online to see if there is demand
  • to experiment, hypothesize, predict, and then measure
  • two most important hypothesis

5 leap

6 test

  • create a Minimal Viable Product
  • early adopters will be suspicious if product too polished, time on polish can be waste of time
  • types of MVPs
  • when creating a MVP, don't waste time trying to fully solve problem
    • until you know your customer, you don't know what quality even is
    • #mw: doing things that don't scale
  • remove everything that doesn't contribute to learning

7 measure

  • startup needs to do 2 things
    • measure where they are now
    • figure out how to get closer to the ideal
  • most startups, when asked if they're making the product better, will say yes but have no data to back it up
  • begin process of Innovation Accounting
  • when testing, test riskiest assumption first
    • #MW: deploy in IAD
  • beware of Vanity Metrics
  • focus on Cohort Based Metrics and Split Testing
  • kanban
    • backlog, in progress, built, validated
  • story not complete until we have validated learning from it
  • have upper limit on items in any given stage #star
  • metric focuses
    • actionable: establish cause and effect
    • accessible: concrete units
    • auditable: everyone has access (ideally, team that owns product should also own this)
      • you should be able to spot check data (eg. talk to customers and see if user behavior confirms the data)


8 pivot

  • startup run rate is amount of pivots it has left
  • productivity is measured not in features released by the alignment of effort with value and growth
  • need clear hypothesis or can't decide about pivot
    • eg. potbelly sandwich shop began as antique shop in 1977
  • things to measures registration, activation, rentention, referral
  • types of pivots
    • zoom: focus on one from a whole
    • zoom out: expand feature
    • customer segment: b2b to b2c
    • platform pivot: change from app to platform or ice versa
    • technology: switch tech for same wndat
    • channel: direct vs cto
    • engine of growth: viral, sticky and paid
    • value capture: charge at diff point in chain
    • business architecture: high margin low volume vs opp

9 batch

  • small batch sizes help validate ideas quicker
    • do continuous deployment
  • same person during multiple function, take advantage of breadth of skills
    • corporate doesn't do this because of accountability hard
  • can't have too much work in progress, in manufacturing line, fills up all the machines but no visible signs of this with knowledge work #star
  • use hypothesis for what customer wants to work on batch and move forward

10 grow

  • sustainable growth: new customer come from actions of old
  • growth types:
    • word of mouth
    • side effect of using product (eg fashion)
    • funded advertising
    • repeat purchase (eg lightbulb)
  • startups don't starve, they drown #star
  • engines of growths
    • sticky: rate of customer acquisition should exceed churn rate, can increase retention
    • viral: customers spread product, aim for coefficient of 1 (every customer will result in 1 more customer)
    • paid: cpa (cost per acquisition) lt ltv (life time value of customer)
  • focus on only one engine of growth at a time
  • when making customer segment pivot, consider changing engine of growth
  • product market fit, Marc Horowitz, customers pull product into mainstream #star

11 adapt

  • adjust processes and performance according to problem

    • #MW: cross the bridge when we get there
  • small problems should have small response, large should have larger response

  • root of every tech problem tends to be human #star

  • use 5 whys

    • have everyone involved in incident present
    • avoid 5 blames
    • don't send baggage through system, tackle new prob
    • appoint 5 why master
  • mistakes

    • be tolerant of 1st mistake
    • no 2nd mistake
  • adopt Proportional Investment

  • failure is working on things that don't matter #star

  • small batch sizes, quickbooks waterfall anti-example

12 innovate

  • qualities of startup
    • scarce but secure resource
    • ind dev auth
    • personal stake
  • in org, how to protect parent org from startup? manager will feel threatened


  • frederick winsolw taylor's principles of scientific management #todo (Private)
  • see forest vanishing but can't see minds being wasted #analogy (Private)
  • nothing quite so useless as doing with great efficiency what should not be done at all, peter drucker #quote
  • 100 years, what techniques and believes will seem outlandish and stupid

  1. Concepts