The Lean Startup Methodology: Building Businesses That Last
The Lean Startup methodology, popularized by Eric Ries, offers a scientific approach to creating and managing startups and new projects in an uncertain environment. It's about learning what customers want and building a sustainable business model by iterating quickly and avoiding wasted effort.
Core Principles of The Lean Startup
At its heart, the Lean Startup is built on a continuous cycle of building, measuring, and learning. This iterative process helps entrepreneurs validate their assumptions and pivot when necessary, rather than building a product based on unproven ideas.
The Build-Measure-Learn feedback loop is central to Lean Startup.
This loop involves quickly building a Minimum Viable Product (MVP), measuring customer reactions, and learning from that data to inform the next iteration.
The Build-Measure-Learn loop is the engine of the Lean Startup. First, you 'Build' a basic version of your product or feature (the MVP). Then, you 'Measure' how customers interact with it, collecting data on their behavior and feedback. Finally, you 'Learn' from this data, deciding whether to persevere with your current strategy or 'pivot' to a new direction. This cycle is repeated continuously.
Key Concepts Explained
Minimum Viable Product.
A Minimum Viable Product (MVP) is not necessarily the smallest product imaginable, but the fastest way to get through the Build-Measure-Learn loop with the least amount of effort. It's about testing your core hypotheses about your business model.
The goal of an MVP is to test fundamental business hypotheses, not to build a fully featured product.
Another crucial concept is 'Validated Learning'. This is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects. It's about learning what customers truly value, not just what they say they want.
To empirically demonstrate valuable truths about a startup's business prospects.
The methodology also emphasizes 'Innovation Accounting', which is a way to measure progress when you have little traditional data. It focuses on actionable metrics that demonstrate learning and progress towards a sustainable business model, rather than vanity metrics.
The Pivot or Persevere Decision
Based on the learning from the Build-Measure-Learn loop, startups face a critical decision: pivot or persevere. A pivot is a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth. Persevering means continuing on the current path, believing the data supports it.
| Decision | Trigger | Action |
|---|---|---|
| Pivot | Data suggests current strategy is not working. | Change a fundamental aspect of the business model (e.g., target customer, problem solved, technology). |
| Persevere | Data supports current strategy and shows progress. | Continue optimizing and iterating on the current path. |
The Lean Startup encourages entrepreneurs to embrace uncertainty and to treat their startup as a grand experiment. By focusing on rapid iteration and customer feedback, businesses can increase their chances of finding a repeatable and scalable business model.
The Build-Measure-Learn loop is a continuous cycle. Start with a hypothesis, build a Minimum Viable Product (MVP) to test it, measure customer behavior and feedback, and then learn from the data to inform the next iteration or pivot. This iterative process minimizes waste and maximizes learning.
Text-based content
Library pages focus on text content
Learning Resources
The official hub for The Lean Startup methodology, offering insights, tools, and community resources directly from the source.
Explains the concept of an MVP, its purpose in Lean Startup, and how to define and build one effectively.
The foundational book that introduced the Lean Startup methodology, essential for a deep understanding of its principles.
A concise overview of the core principles of Lean Startup, including the Build-Measure-Learn loop and validated learning.
Discusses how startups can use 'innovation accounting' to measure progress and make data-driven decisions.
A visual explanation of the Lean Startup methodology and its key concepts, including the Build-Measure-Learn loop.
Details the concept of pivoting in the Lean Startup context, when to pivot, and how to execute it.
A comprehensive overview of the Lean Startup methodology, its history, principles, and impact on entrepreneurship.
Practical advice and examples on how to define and build an MVP that effectively tests business hypotheses.
An introductory lecture from a Coursera course that breaks down the fundamental concepts of the Lean Startup methodology.