Wednesday, 8 February 2012

Book Review: The Lean Startup, Eric Ries, 2011.

"How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses"

If Outliers exploits the success at a thin slice of luck – people born at the right place, right time and work hard, this book gives another perspective to make success steps by steps for startup from rigorous and systematic work with the maxim “work smarter, not harder.”

The book leverages values of customer’s validations and 3A metrics. Using a software startup as an example throughout the book, the value of customer’s feedback was used as the motto to guide for the success. In the case of software developers, for instance, the success isn’t delivering a feature, it’s the learning how to solve the customer’s problem. And what is 3A metric? It’s Actionable, Accessible and Auditable metric.

Actionable: All the report must be clear of Cause and Effect in correct metrics to avoid vanity metrics. Whenever a number (sale, visitor, register, downloading) goes up or down, the team has to find out the real reason behind. We tend to suppose that the last change we made was the cause than really digging deep down of the real reason itself. The book also proposed the excellent technique called “5 whys.” Keep asking 5 why questions to trace down the root of any issues (necessarily the presence of all team members for a 5 whys meeting. If else, the absent people are usually blamed for the failure). The lesson is never driving the cause to what you or your bosses want. The 5 whys technique is easier to say than do because it can turn to 5 blames in no time. However, as soon as a startup can master the technique, it’s worth it for the success.

Accessible: Usually, managers tend to interpret team’s reports by reflexing what they want more than what the real data means. That’s why there are many complex reports usually left in the corner without the genuine feedbacks to improve from the top managers. As a startup, from the beginning, managers should embrace simple, comprehensive, easy, detail and accurate reports and give genuine feedbacks in case they don’t understand. This will help drive the team out of vanity metrics early. To make sure the reports are understandable for the entire company, the startup should make them available for everyone. Keep practicing time by time, the company will be able build up their own metric language naturally which benefits the company for the long run later.

Auditable: Make reports reliable by validating with customers.
Beside those two important factors, pivot is another must-have requirement for all startups. Pivot is strategic and fundamental change which gauges the success or failure of the startup at different point of time. The success of a startup isn’t measured by how long they are survived, but it’s how many pivots they have made. No pivot is the way to dead end for startups.

There is a full catalog of pivots from the book which are worth to take notes. If basic pivots can be made by zooming in and out the product feature, there are also other pivots from analyzing customer segments and needs. Startup can also make pivots on their platform, or from their business architecture as well as from their engine of growth.

Last but not least, the book gave another invaluable technique called batch work. The technique embraces the value of small work than the mass production. For startups, a small work gives them a chance to test and improve products faster with lower cost than the mass production. Instead of waiting for a year to release a all-in-one software and find out the customers didn’t like the software at the time, startup team should just finish feature one by one and test the customer’s satisfaction before merging everything into one huge software. The batch work requires more labour to build, try and re-build, but it also enables startup the ability to probe the market at their best with the lowest cost of waste. With startup, everything out of the minimum viable product (MVP) is the waste at the end.

The most impression once first time opening the book is the table of content, very neat, simple and comprehensive. Nearly 300 page book were packed into one page of description. A startup growth was rhetorically described as an engine. As my point of view, the success of the book will not be perfect without this amazing table of content.

When thinking about startup, as all readers, I can’t stop asking what is entrepreneur. The book defined pretty well who entrepreneurs are and what they’re doing. Yeah, it may not be new but worth to know, entrepreneur work is management. Who can be entrepreneur? That is anyone who is working as manager. You don’t need to run your own business to be called as entrepreneur. That means the book is worth to all people who care about management work and especially desire to have their own startup.
After reading the book, there is also a place for my regular visiting and following the new updates for startups. You can visit the book author’s blog at and contribute your own opinions.

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