Monday, September 9, 2013

The Lean Startup

In the excellent book The Innovator's Dilemma, the competitive situation is generally viewed through the eyes of the established incumbent. In The Lean Startup by Eric Ries, the focus is on the disrupting company.

While a lot of ink has been spilled trying to use science to help established companies grow and maintain share, little scientific effort is spent trying to understand start-ups. I think the general feeling is that a successful start-up is some sort of varying combination of founder genius and luck (e.g. right place at the right time). That may be true, but it may not always be so. Ries offers a number of guiding principles that promise to significantly reduce the luck factor.

I really enjoyed this book. Ries takes a number of well-known, accepted principles in established industries, and adapts them so that they are applicable for a start-up. For example, in lean manufacturing, there is an emphasis on small batch sizes, as it reduces WIP inventory. In a startup, however, WIP is not necessarily tangible (so it may go unseen) but it is very much still gobbling resources: it's the effort and capital that has gone into development.

From this principle comes the concept of the Minimum Viable Product, which reduces the "batch" size of development so that assumptions about market demand can be tested quickly. This concept and others like it are designed to accelerate the loop between customer feedback and continuing development, resulting in less wasted labour and capital building things that customers don't want (a major, major risk in start-ups).

This is very much an operations book. In that way it reminded me a lot of one of my favourite books, The Goal. Except it's not a novel, and it's meant for start-ups, not established manufacturers.

I should warn you that the book is rather repetitive. Some of the concepts were foreign to me and so I didn't quite get them the first time around, so for me this was helpful. Others will be annoyed, however. Enjoy!

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