Premium Essay

The Lean Startup

In: Business and Management

Submitted By BrianaMcL
Words 821
Pages 4
The Lean Startup

The Lean Startup is a methodology published by Eric Ries in 2011 intended to reinvent how we build businesses today. Since publishing the book The Lean Startup, the fundamentals behind the book have become a widely used process for many technology startups and has since progressed into curriculum of renowned universities and established businesses. The comprehensive idea behind The Lean Startup is to hypothesize, test, and refine your product or service as you build your business to ensure success with the least amount of resources. Although these ideas have recently become popular after the release of Ries’ book, the ideas and concept date back much further.
Many of the concepts adapted by The Lean Startup were derived from the familiar Lean Manufacturing views. Improving quality, eliminating wastes, reducing time, and reducing costs are all intricate adaptations from lean manufacturing. Ries began to formalize his knowledge of building businesses after several failed attempts at starting technology businesses. The cycle of lean startup practices were intended for businesses to reduce startup costs, test the market, and improve viability. Historically tech startups would begin with an idea, create the product or service, seek large amounts of funding, and then bank their entire company on one grand launch with hopes of instant success. With Ries’ model startups now create their minimum viable product, test various aspects of the product on a small portion of the target market, analyze feedback, and pivot their product accordingly.

On a macro level the lean startup teaches that entrepreneurship can be a personality trait but more so a characteristic that all humans posses. The desire to innovate, create, and experiment is something that is built into our very existence. Furthermore entrepreneurship is management, meaning that it must be a...

Similar Documents

Premium Essay

Lean Startup Summary

...mananagement discipline of some sort  Lean Startup comes from lean manufacturing at Toyota  Want cross-Functional teams to work across all functions  Henry ford = one of the great entrepreneurs ever and Automobile = Startup • Startups have an engine of growth: need to make adjustments to make your products better. • Feedback Loop: want immediate and automatic feedback that you don’t really think about. Steering is what must it different from other ways to get places. • Many startups are like rocket launches but they are no good.  First you have to have vision, then strategy and then a product.  Setbacks are a good thing and a learning experience.  Who’s an entrepreneur?  Internal innovators = entrepreneur • People working corporate America jobs can still be an entrepenur at their company, called intrapreneurs  What’s a startup?  “Startup is a humn insitiuition designed to create a new product or service under conditions of extreme uncertainty”  Starts and entrepreneurs come in different sizes and forms  Startups and innovation go hand & hand.  Learning  Validated learning: showing a team found valuuble truths about the present and the future  Find a combination of your vision and what the customer wants  Startup is an experiment to get validated learning  IMVU was an experiment • Had its up and down. They had to learn that the product the market wanted wasn’t the product they design and spend lots of time on  Lean thinking = anything......

Words: 804 - Pages: 4

Premium Essay

Product Management: The Lean Startup

...Eric Ries author of The Lean Startup, says that those working for startups are doing so “under conditions of extreme uncertainty.” In spite of this uncertainty, job satisfaction remains high. This may be because startups “stand for culture and fun, just as much as work,” with 93% feeling valued within their team and by company founders, according to this study. Employee satisfaction is considerably lower in more established businesses. According to a global Gallup survey, unhappy employees outnumber happy employees on a scale of two to one. A staggering 63% of workers are “not engaged,” with a further 24% being “actively disengaged.” Only 13% are “engaged” workers who enjoy their work. This means that a total of 87% of workers are emotionally disconnected from their workplaces and less likely to be...

Words: 1692 - Pages: 7

Free Essay

Ekonomi

...1. Methodology customer development The five principles of the lean startup Enterpreneurs are everywhere, my denition 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. Entrepreneurship is management, A startup is an institution, not just a product, and so it requires a new kind of management specically geared to its context of extreme uncertainty lean thingking It taught the world the diference between value-creating activities and waste and showed how to build quality into products from the inside out. The innovator dilemma Innovation is a bottoms-up,decentralized, and unpredictable thing, but that doesn’t mean it cannot be managed. Validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects. It is more concrete, more accurate, and faster than market forecasting or classical business planning. Lean Startup : Mulai Usaha Dengan Resiko Rendah… Published on Wednesday, 24 April 2013 07:41 Oleh : Muhaimin Iqbal Entrepreneur itu bisa belajar dari siapa saja, bahkan bisa belajar dari seorang petinju seperti Mike Tyson sekalipun. Melalui ucapannya yang terkenal “semua orang bisa ber-strategi, tetapi ketika pukulan lawan mengenai muka Anda – baru Anda......

Words: 755 - Pages: 4

Premium Essay

Milk Delivery

...Supply Chain Management Workshop Series: Milk Run Delivery Nowadays, Supply Chain Management becomes a concern of many companies to success their improvement as there are several waste coming from these chains. By reducing all waste in these chains, company will get more benefit. These benefits are speed and responsiveness to customers, reducing inventories, reducing costs, improving customer satisfaction, and also Supply Chain as a competitive weapon. Supply chains that want to grow and continue to improve must adopt lean. Lean is a cooperative process for survival and for success. Lean concepts require an attitude of continuous improvement with a bias for action. A lean supply chain is proactive and plans for the unexpected by positioning all resources for effectiveness. Downturns in demand can be addressed without layoffs or significant productivity losses. A lean supply chain is one that produces just what and how much is needed, when it is needed, and where it is needed. Gaining visibility into your transportation operations all the way from raw materials vendors to your end customers will open the door for communication, process development, and management skills that can be leveraged in other areas like inventory management and procurement. A bonus is that many of the more advanced supply chain visibility tools gaining rapid acceptance in the marketplace are either part of a suite of applications that combines Warehouse Management System (WMS) and Transportation......

Words: 1266 - Pages: 6

Premium Essay

Diffusion of Innovations

...Startups live and die by their ability to drive customer acquisition growth. Of course many startups are doomed to failure and can’t grow because they never reach product/market fit. But even with product/market fit, traction is tough. Startups are under extreme resource constraints and need to figure out how to break through the noise to let their target customers know they have a superior solution for a critical problem. Breaking through the noise is very difficult when well-entrenched companies have the resources to dominate traditional channels. The best a startup can hope for in traditional channels is to siphon off a few early adopters that are always on the look out for the latest emerging solutions. This resource-constrained desperation is exactly the scenario that Malcolm Gladwell suggests leads underdogs to extreme innovation. Desperation Leads to Innovation For meaningful growth, startups must completely change the rules of traditional channels or innovate outside of those growth channels. They are too desperate and disadvantaged to adapt to the old rules of marketing. They have to dig deep creatively, and relentlessly test new ideas. If they don’t figure it out quickly, they will go out of business. Some people would just call this marketing. I call it growth hacking. And the best growth hacks take advantage of the unique opportunities available in a connected world where digital experiences can spread rapidly. Since most growth ideas fail,......

Words: 735 - Pages: 3

Free Essay

Open Innovation

... 3. QUESTIONNAIRE •72 Réponses •55 Grands groupes •18 Starups SOMMAIRE 1 CONTEXTE & THÉORIE 2 POURQUOI ? 3 COMMENT ? 4 DIFFICULTÉS 5 SYNTHÈSE & PRÉCONISATION CONTEXTE Grands groupes Taille : +5000 pers CA > 1,5 Miliards € startup “A startup is an organization formed to search for a repeatable and scalable business model” Steve Blank Nombre : 243 Nombre : 12 000 à Paris Bibliographie Joseph Schumpeter Economiste Autrichien (1853 – 1950) de façon simultanée disparition de secteurs d'activité économique conjointement à la création de nouvelles activités économiques 1 1942 Cycles de schumpeter 1967 Clayton M. Christensen Professeur à Harvard Business School 2 Eric Ries Entrepreneur/Auteur Phénomène psychologique au niveau d’un individu ou d’un groupe d’individus (équipe) qui engendre un rejet d’une innovation/solution venant de l’extérieur. 3 1997 DISRUPTION 2003 4 OPEN INNovation 2011 3 C’est un mode d’innovation basé sur le partage, la coopération entre entreprises, dans un climat d’échanges, d’ouverture et de confiance : Henry Chesbrough Professeur à UC Berkley LEAN Startup Pourquoi se rapprocher ? – Grand Groupe Veille marché Identifier les opportunités & menaces 50% Open Innovation R&D Revenu Optimisation Stratégie (NB : les chiffres correspondent aux résultats de l’enquête sept 2015) 85% Enrichir son......

Words: 527 - Pages: 3

Premium Essay

Approach

...The Petal Diagram I’ve always thought of my startups as the center of the universe. So I would begin by putting my company in the center of the slide. In this example the startup is creating a new category –  a lifelong learning network for entrepreneurs. To indicate where their customers for this new market would come from, they drew the 5 adjacent market segments: corporate, higher education, startup ecosystem, institutions, and adult learning skills that they believed their future customers were in today. So to illustrate this they drew these adjacent markets as a cloud surrounding their company. (Unlike the traditional X/Y graph you can draw as many adjacent market segments as you’d like.) Steve Blank Your startup at the center Then they filled in the market spaces with the names of the companies that are representative players in each of the adjacent markets. Ads not by this site Steve Blank Fill in the segments Then they annotated the private companies with the amount of private capital they had raised. This lets potential investors understand that other investors were interested in the space and thought it was important enough to invest. (And plays on the “no VC wants to miss a hot space” mindset.) Steve Blank Show capital raised Finally, you could show the current and projected market sizes of the adjacent markets, which allows the startups to have a “how big can our new market be?” conversation with investors. (If you wanted to get fancy, you could......

Words: 838 - Pages: 4

Premium Essay

Advantages Of Going Digital In Banking Sector

...Going digital – transformation in banking sector Digital transformation in Banking sector has begun. In the process of going digital, established institutions are introducing digital platforms that could help their customers have a better experience. While, startups in this domain are coming up with an approach of having “digital platform” as the only way to function. Customers today are introduced to a digital platform that takes care of all their banking functions from opening a new account to handle issues relate to their existing account, and helps resolve issues associated with their debit or credit cards. Customers across the globe have been continuously demanding a digital medium that can make their banking functions simple. As per...

Words: 1216 - Pages: 5

Premium Essay

Importance Of Entrepreneurship

...When I went to the United States for the first time, I witnessed a business transaction that changed my life. An entrepreneur named Abraham Jou. He spotted the trend of the technology industry and chose to start his own business at an early age. So far he has opened a number of businesses and have achieved success. His visit opened my eyes to the world of entrepreneurship, especially with regards to innovation. Since then, I began to pay attention to domestic startups, as they are brimming with creative, innovative energy. Their successes motivated me to develop my own entrepreneurial qualities in preparation for the real world. However, I realized that in order to make more significant contributions to the field, I would need to gain...

Words: 781 - Pages: 4

Premium Essay

Strategy

...Acclaim for THE LEAN STARTUP Acclaim for THE LEAN STARTUP “The Lean Startup isn’t just about how to create a more successful entrepreneurial business; it’s about what we can learn from those businesses to improve virtually everything we do. I imagine Lean Startup principles applied to government programs, to health care, and to solving the world’s great problems. It’s ultimately an answer to the question How can we learn more quickly what works and discard what doesn’t?” —Tim O’Reilly, CEO, O’Reilly Media “Eric Ries unravels the mysteries of entrepreneurship and reveals that magic and genius are not the necessary ingredients for success but instead proposes a scienti c process that can be learned and replicated. Whether you are a startup entrepreneur or corporate entrepreneur, there are important lessons here for you on your quest toward the new and unknown.” —Tim Brown, CEO, IDEO “The road map for innovation for the twenty-first century. The ideas in The Lean Startup will help create the next industrial revolution.” —Steve Blank, lecturer, Stanford University, UC Berkeley Hass Business School “Every founding team should stop for forty-eight hours and read The Lean Startup. Seriously, stop and read this book now.” —Scott Case, CEO, Startup America Partnership “The key lesson of this book is that startups happen in the present —that messy place between the past and the future where nothing happens according to PowerPoint. Ries’s ‘read and react’ approach to this sport,......

Words: 86508 - Pages: 347

Premium Essay

Trend in Entrepreneurial Activity and Funding During Fluctuating Economic Cycles

...Trend in Entrepreneurial Activity and Funding During Fluctuating Economic Cycles Introduction Global capital markets have been greatly impacted by the current economic climate. This has created significant challenges in startup capital and infusions of capital from Venture Capital funds or other types of angel investment. 2011 was, indeed, a transitional year for small businesses around the world. The primary issue is that it has become clear that credit will remain less available and that many institutions will remain risk-averse. A simple assessment would be that there was a hope that credit would start flowing again and that investment would be less restricted and it has now become clear that this is not a short-term problem. There was a time when a solid business plan was enough, then having a background in startups became desirable, then having the ability to prove one’s concepts became more important. In order to better understand what an entrepreneurial organization, especially a small business, needs to do in this current economic cycle, this research will look at numbers and types of market entrants, initial public offerings, funding opportunities, and ways to enhance profitability. This research will also examine how the fluctuations of various economic cycles have an impact on funding sources. The funding sources of angel investment, venture capital, private equity, and bootstrapping will be considered, leading into an understanding of the perspectives of the......

Words: 1675 - Pages: 7

Premium Essay

The Lean Start Up

...Acclaim for THE LEAN STARTUP “The Lean Startup isn’t just about how to create a more successful entrepreneurial business; it’s about what we can learn from those businesses to improve virtually everything we do. I imagine Lean Startup principles applied to government programs, to health care, and to solving the world’s great problems. It’s ultimately an answer to the question How can we learn more quickly what works and discard what doesn’t?” —Tim O’Reilly, CEO, O’Reilly Media “Eric Ries unravels the mysteries of entrepreneurship and reveals that magic and genius are not the necessary ingredients for success but instead proposes a scientific process that can be learned and replicated. Whether you are a startup entrepreneur or corporate entrepreneur, there are important lessons here for you on your quest toward the new and unknown.” —Tim Brown, CEO, IDEO “The road map for innovation for the twenty-first century. The ideas in The Lean Startup will help create the next industrial revolution.” —Steve Blank, lecturer, Stanford University, UC Berkeley Hass Business School “Every founding team should stop for forty-eight hours and read The Lean Startup. Seriously, stop and read this book now.” —Scott Case, CEO, Startup America Partnership “The key lesson of this book is that startups happen in the present—that messy place between the past and the future where nothing happens according to PowerPoint. Ries’s ‘read and react’ approach to this sport, his relentless focus on......

Words: 84997 - Pages: 340

Free Essay

Netflix Leading with Data

...Wissarut Issariyakul Newbury Cohort Netflix Leading with Data Company Overview Netflix was established in 1998 as an online pay-per-rent platform by Reed Hastings, and rapidly developed into the monthly subscription platform without any additional payment. They used the lean business model that is friendly and understand the customers with the Cinematch, the recommendation software that developed by Netflix, that collected the data from the audiences, analyzed, and generated the user-friendly content individually. In addition, the lean business model and their software helped them to reduce the amount of inventory and cost of shipping to individual stores, and replaced by the cost of mailing to each customers with big amount of R&D cost. With this high usage of U.S. Postal Services, Netflix had enough power to negotiate for the lower rate and became the potential competitors of the market within a short period of time. Netflix’s revenue was $270 million as 6% market share in 2003 and increased to $1,365 million as 18.2% market share in 2008.1 Industry Overview The video rental industry started when the VCR system was developed and in 2000, the DVD technology came in to play with the reduction of the VCR video in the market. Blockbuster was the dominant player with 1 (Hacking Netflix, 2009) Wissarut Issariyakul Newbury Cohort strong customer base before Netflix entered the market with the online system. They used their technology to build the sustainable......

Words: 658 - Pages: 3

Premium Essay

How to Raise Money

...Chapter 2 – How to Raise Money Lucas Bennett 3 Feb 2015 Do or do not, there is no try. Always talk with confidence in the success of your product. Attitude determines outcome. Investors will be more likely to invest. Determining how much money you need to raise will determine who you will be courting for seed money. All financial planning models that determine financial need will be wrong. Therefore, it is wiser to plan how long you want to operate your startup until the next meaningful milestone and/or how long to get users or expected revenue growth and/or what is your burn rate. Generally there should be real progress around a year. (approximate at best). When determining a goal for seed money never ask for more than is absolutely necessary, a VC may hold back investment because they believe you will not meet your necessary goals. Additionally, do not give a range of goals. For example, between 5 Million and 7 Million. Be precise. Things you will need before courting a VC: (1) A short description of your business also known as your elevator pitch. This is a quick description of your business. Typically between one and three paragraphs and describes the product, the team, and the business. Concludes with a very direct paragraph about whatever next step you want. (2) An executive summary is a 1-3 page description of your idea, product, team and business. This is your first impression with the firm and expect it to be passed around. Therefore it...

Words: 725 - Pages: 3

Free Essay

Teacher

...Business Plan Part 4: Organizational Plan and Financial Plan Let us begin by first identifying what the three of these forms are and what they mean to the process..The sole proprietorship is the one that catches the eye of our company Elite Productions presents. In this form of legal business the business itself has only one owner. This is listed as the most common of the four types of organizations compared to. In this form the owner and the business are considered as being un-breakable unless they both break… Elite productions presents will be considered the different name under my name that represents the business side of me…This also makes the owner responsible for all income and expenses that come thru the business and are included in the owner’s personal tax return... This can be a plus if and when the business takes a loss and the owner has the option of including such deductions to out-weigh the personal income generated… On the flip side of this the owner has to pay taxes on profits made in the name of the company… When looking to obtain a Sole Proprietorship all one has to do is have their business license and move forward in beginning operations… Unlike the rest of the organizational requirements needed for the others, a sole proprietorship is easy to form and operate as well… When dealing with a competitive edge over other soul food restaurants and the way WE are looking to do thing; this would be the best fit for our company for the long haul… When......

Words: 1484 - Pages: 6