REVIEW: The Lean Startup

Every organisation faces the need to create new solutions, processes, products and services better, faster and cheaper.  Often mislabeled as innovation, what firms need is a better approach to 'start up' new things.  This is the focus of Eric Ries's book The Lean Startup.  This book is an excellent resource for innovators looking to start something new - either a new company or a new capability in an existing company.

Highly recommended for anyone who wants to create something new, whether in their garage on the weekend or within their company, I suggest that this book is required reading for every CIO, product developer and business unit leader each of whom is charged with creating new solutions and revenue streams.

Eric Ries's book describes an innovative approach to starting a new business, based on his experience at a social media startup and consulting with other companies. The term 'lean' in Lean Startup applies to a different form of waste that traditional lean thinking.  In a startup waste is defined by Ries as anything that keeps the team from learning about how to create value for the customer.  The techniques Ries applies to being a Lean Startup are related to general lean principles but unique to the challenges of creating something new.

Ries makes a significant point when he writes, “Entrepreneurship is a kind of management”.  And that point sets the context for the rest of the book.  Taking a management approach enables Ries to focus on the mechanics and approaches to getting new ideas out and into the market.  It also allows him to incorporate Lean thinking in ways that address many of the limitations of high risk, low yield, long lead time product development processes.

Unlike prior books on startups, Ries focused on approaches and metrics used to guide the actual process of creating a startup. This is in marked contrast to other books that discuss funding, marketing, etc. – everything other than the work required to create a startup.  The fact that these practices can be applied within companies makes this book one of the top two or three I have read so far in 2011.

Strengths

• Describes the principles of entrepreneurship as management in terms that are readily applicable in a startup as well as in established companies that are creating an internal startup.
• Discussion of specific techniques and concepts related to running an effective startup.  Ideas like validated learning, vanity metrics, innovation learning, and minimum viable products, among others.  Each of these techniques offers a new approach and way of thinking about the process of creating new sources of value.
• Ries uses his experience to discuss how these ideas are applied in real life providing the reader with sufficient depth to think about how these ideas might apply to your situation.
• The book presents these ideas in a clear and engaging manner that builds understanding.

Challenges

• The book's examples and cases concentrate on eCommerce and social media startups that will limit its direct applicability outside of high tech.
• The book gives you just enough detail to start you thinking but not enough to give you a recipe that you can apply on your own.
• The book can be read as an extended advertisement for Reis and his startup consulting practice.  You get this feeling when he introduces a new subject, providing a description without actionable advice and examples.

Overall, this is one of the books that everyone should take the time out to read, as the Lean Startup practices are actionable both within a startup and an established company.  Everyone needs more than a stream of ideas, we need a stream of new solutions and the Lean Startup provides a strong description of how to bring those ideas to market.

Mark McDonald, Ph.D., is a group vice president and head of research in Gartner Executive Programs. He is responsible for the research agenda focused exclusively on CIOs and the business of information technology