The document summarizes key principles from Eric Ries' book "The Lean Startup" for running startups using an experimental "lean" approach. It discusses five main principles: (1) entrepreneurs are everywhere, (2) entrepreneurship is management, (3) validated learning through experiments, (4) building minimal products to test assumptions using the "Build-Measure-Learn" process, and (5) using "Innovation Accounting" to measure progress towards growth goals. The presentation provides examples of applying each principle and encourages the audience to consider testing ideas using the lean startup methodology.
Beyond the Five Whys: Exploring the Hierarchical Causes with the Why-Why Diagram
"Lunch 'n Learn" Deck on "The Lean Startup"
1. INTRO TO THE LEAN STARTUP
LUNCH & LEA(R)N - DEC 2015
2. WHY DO I CARE?
I’M A 3X “WANT-TREPRENEUR”.
▸ 2007: Online Social Language
Learning! #fail
▸ 2008-2010: Emotive Social Profiles!
#fail!
▸ 2012-?: Dance Online! (fail date TBD)
FOX INTERACTIVE MEDIA - 2006
QUIT GOOD JOB, 9 MONTHS SPAM & RICE,
$$$$ FAMILY LOAN THAT I’M STILL PAYING BACK
2 YEARS DEV OUTSIDE DAY JOB,
ALMOST LOST FUTURE WIFE
3 MONTHS DEV, $$ AD SPEND
LEARNED SOME THINGS!
7. A STARTUP: A HUMAN INSTITUTION
DESIGNED TO CREATE NEW PRODUCTS
AND SERVICES UNDER CONDITIONS OF
EXTREME UNCERTAINTY.
Eric Ries
LEAN PRINCIPLE #1: ENTREPRENEURS ARE EVERYWHERE.
8. I THINK WE’RE A STARTUP.
Me
LEAN PRINCIPLE #1: ENTREPRENEURS ARE EVERYWHERE.
10. 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.
Eric Ries
LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.
11. BECAUSE STARTUPS OFTEN ACCIDENTALLY
BUILD SOMETHING NOBODY WANTS, IT
DOESN’T MATTER MUCH IF THEY DO IT ON
TIME AND ON BUDGET.
Eric Ries
LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.
12. THE GOAL OF A STARTUP IS TO FIGURE OUT THE
RIGHT THING TO BUILD— THE THING CUSTOMERS
WANT AND WILL PAY (OR SIT THROUGH ADS) FOR
— AS QUICKLY AS POSSIBLE.
Eric Ries
LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.
13. GIVEN OUR COMPETITIVE MARKET AND LEAN
TEAM, I FEEL THE IDEAS WE IMPLEMENT SHOULD
BE MANAGED LIKE STARTUPS TO ACHIEVE
MEASURABLE RESULTS AS QUICKLY AND
EFFICIENTLY AS POSSIBLE.
LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.
15. STARTUPS EXIST TO LEARN HOW TO
BUILD A SUSTAINABLE BUSINESS.
Eric Ries
LEAN PRINCIPLE #3: VALIDATED LEARNING.
16. THIS LEARNING CAN BE VALIDATED
SCIENTIFICALLY BY RUNNING FREQUENT
EXPERIMENTS THAT ALLOW ENTREPRENEURS
TO TEST EACH ELEMENT OF THEIR VISION.
Eric Ries
LEAN PRINCIPLE #3: VALIDATED LEARNING.
18. THE FUNDAMENTAL ACTIVITY OF A STARTUP IS
TO TURN IDEAS INTO PRODUCTS, MEASURE
HOW CUSTOMERS RESPOND, AND THEN
LEARN WHETHER TO PIVOT OR PERSEVERE.
Eric Ries
LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.
19. ALL SUCCESSFUL STARTUP PROCESSES
SHOULD BE GEARED TO ACCELERATE THAT
FEEDBACK LOOP.
LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.
Eric Ries
20. LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.
THE LEAN WAY TO BUILD-MEASURE-LEARN
▸ Take your great idea (“Vision”) and identify
its Leap-of-Faith assumptions. Identify the
riskiest assumption.
▸ Devise the smallest thing you can build in
order to test that assumption (“MVP”).
▸ Release MVP and measure user engagement.
▸ Learn from the data whether your
assumption was validated.
▸ If so, great! Build and test the next
assumption of your Vision.
▸ If not, decide whether to change your
idea/strategy (“pivot”) or persevere.
21. THE LEAN STARTUP METHOD BUILDS CAPITAL-
EFFICIENT COMPANIES BECAUSE IT ALLOWS
STARTUPS TO RECOGNIZE IT’S TIME TO PIVOT
SOONER, CREATING LESS WASTE OF TIME AND
MONEY.
LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.
Eric Ries
22. WHAT IDEAS CAN YOU THINK OF THAT
COULD BE APPROACHED IN A “LEAN” WAY?
LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.
24. 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.
Eric Ries
LEAN PRINCIPLE #5: INNOVATION ACCOUNTING.
25. LEAN PRINCIPLE #5: INNOVATION ACCOUNTING.
ACCOUNT FOR INNOVATION WITH 3 LEARNING MILESTONES
▸ Learning Milestone #1: Choose your Engine of Growth and baseline
its key metrics.
▸ “Sticky” Growth Engine: Growth = (User Acq Rate >> Churn Rate)
▸ “Viral” Growth Engine: Growth = (Viral Coefficient > 1.0)
▸ “Paid” Growth Engine: Growth = (Rev per User >> User Acq Cost)
▸ Learning Milestone #2: Tune your engine with MVPs that actually
drive its metrics.
▸ Learning Milestone #3: Over time, see if your numbers are trending
towards Growth — If not, decide whether to Pivot or Persevere!