The Lean Startup
Stop me if you’ve heard this one before: A brilliant college kid in a dorm room, possessed of youthful enthusiasm and new technology, builds a new company from scratch. Through sheer determination, hard work, and a perfect product, he achieves fame and fortune.
This is the modern-day rags-to-riches story, a mythmaking industry hard at work to sell us the idea that success is inevitable if you just have the right stuff. But as Eric Ries explains in The Lean Startup, there is a much grimmer reality. Most startups fail. Most new products are not successful.
The Lean Startup offers an antidote. It rejects the myth of the visionary genius in favor of a scientific and repeatable process designed to steer new ventures away from failure. Its central mission is to eliminate the colossal waste of building things nobody wants, and it achieves this by applying a rigorous method called validated learning.
This article distills the seven most impactful and counter-intuitive truths from The Lean Startup methodology that will fundamentally change how you approach building your business.
1. Stop “Just Doing It”: Why The Lean Startup Argues Entrepreneurship is Management
Entrepreneurship is a kind of management. No, you didn’t read that wrong.
We have wildly divergent associations with these two words. “Entrepreneurship” feels cool, innovative, and exciting. “Management” feels dull, serious, and bland. Yet Ries argues that we must look past these preconceptions.
This doesn’t mean applying the doctrines of traditional general management, which is “ill suited to handle the chaos and uncertainty that startups must face.” Instead, The Lean Startup proposes a new kind of management, a “managerial discipline to harness the entrepreneurial opportunity.”
Many entrepreneurs, wary of bureaucracy, adopt a “just do it” attitude, avoiding all forms of process and discipline. Unfortunately, this approach leads to chaos more often than it leads to success. The passion and vision that people bring to new ventures are resources too precious to waste. The Lean Startup provides the necessary framework to manage the chaos and steer a startup toward success.
2. The Real Goal Isn’t a Perfect Product, It’s “Validated Learning”
How should a startup measure progress? For most, it’s about making sure work proceeds according to plan, is high quality, and stays on budget. But as Ries asks, “What if we found ourselves building something that nobody wanted? In that case what did it matter if we did it on time and on budget?”
This question is at the heart of The Lean Startup, which proposes a new unit of progress: Validated Learning. Ries defines it as “a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty.” It is the process of empirically demonstrating that a team has discovered valuable truths about a startup’s business prospects.
Ries uses the initial failure of his company, IMVU, as a powerful example. The team spent six months of intense work building an instant messaging (IM) add-on product that their “seemingly brilliant initial strategy” suggested people wanted. They launched, and then… nothing happened. Nobody would even try it.
Ries reflects on this painful period:
After all the hours we had spent arguing about which features to include and which bugs to fix, our value proposition was so far off that customers weren’t getting far enough into the experience to find out how bad our design choices were.
This learning came from painful in-person interviews. Ries recalls showing the product to teenagers who, when asked to invite a friend, would bluntly refuse. “What are they going to think of me?” one said. “If it sucks, they’re going to think I suck, right?” This direct feedback made it clear their initial strategy was fundamentally flawed. The months of work building the product were largely a waste, but the real progress IMVU made was learning that their entire strategy was wrong. The core goal of The Lean Startup is to structure the startup as a grand experiment to achieve this validated learning as quickly as possible, thereby avoiding the “lethal problem of achieving failure: successfully executing a plan that leads nowhere.”
3. Build a Minimum Viable Product (MVP) to Learn, Not to Launch
The Minimum Viable Product (MVP) is one of the most famous concepts from The Lean Startup, yet it is widely misunderstood. It is not just a smaller version of your final product.
The goal of the MVP is to be the “fastest way to get through the Build-Measure-Learn feedback loop with the minimum amount of effort.” Its purpose is to “begin the process of learning, not end it.” An MVP is designed to test a startup’s fundamental business hypotheses, not just answer technical or design questions.
Two powerful examples from the book illustrate this principle perfectly:
- Dropbox: Founder Drew Houston had a leap-of-faith assumption that customers desperately wanted a seamless file synchronization service. But the technology was extremely difficult to demonstrate in a prototype. To avoid the risk of spending years building a product nobody wanted, his MVP was a simple video. The three-minute video demonstrated the software as it was meant to work and was targeted at a community of technology early adopters. As Houston narrated, the video was filled with in-jokes and humorous references that resonated with the audience. The result was staggering: the beta waiting list blew up from 5,000 to 75,000 people overnight. The video was enough to prove customers wanted the product before it was even built.
- Groupon: The first Groupon MVP wasn’t a complex, automated deal platform. It was a simple WordPress blog. The team posted deals manually, and when someone bought one, they generated a coupon as a handmade PDF and emailed it. As founder Andrew Mason said, “It was totally ghetto.” But it was enough to prove the concept and show it was something people really liked.
This approach often challenges our traditional notions of quality. But The Lean Startup offers a powerful principle: “If we do not know who the customer is, we do not know what quality is.” Any work you do beyond what is required to start learning is a form of waste.
4. Beware of “Vanity Metrics”: The Lean Startup’s Guide to Real Progress
It’s easy to feel like you’re succeeding when your charts are all “up and to the right.” But are you measuring what truly matters?
The Lean Startup draws a critical distinction between two types of metrics:
- Vanity Metrics: These are the gross numbers, like total registered users or total revenue, that can give a false impression of success but often hide the truth.
- Actionable Metrics: This is data that demonstrates clear cause and effect and provides evidence of real progress. These are the foundation of Innovation Accounting, the rigorous framework for measuring progress in a startup.
The primary tool for getting actionable metrics is cohort analysis. Instead of looking at cumulative totals, cohort analysis tracks the performance of each group (or cohort) of new customers independently.
The source text presents two revealing graphs from an early IMVU board meeting. The first, a vanity metric, shows a reassuring “up and to the right” curve of total registered users, suggesting success. But the second graph, a cohort analysis, tells the real story. It shows that despite months of hard work and product improvements, the percentage of new customers who became paying customers was stubbornly flat at 1%. This stark, actionable metric proved that none of the team’s hard work was actually improving the business model and forced them to pivot.
Vanity metrics lead to “success theater,” making you look good without being good. Actionable metrics like split-testing and cohort analysis lead to validated learning and tell you when it’s time to pivot or persevere.
5. To Go Faster, Work in Small Batches (Yes, Really)
Which is faster: stuffing 100 newsletters by folding all 100 letters, then stuffing all 100, then sealing all 100? Or completing each newsletter one at a time from start to finish?
The book recounts this exact story. A father, using the one-at-a-time “single-piece flow,” easily beat his daughters, who used the large-batch approach. This counter-intuitive principle is central to lean manufacturing and The Lean Startup.
Small batches are faster for two key reasons:
- They reduce the overhead of managing large piles of unfinished work (sorting, moving, stacking).
- More importantly, they allow you to spot quality problems almost immediately. If the letters don’t fit in the envelopes, you discover it on the very first one, preventing massive rework.
For a startup, this principle is even more critical. The biggest quality problem isn’t a bug; it’s building a product customers don’t want. Small batches ensure you find this out sooner, minimizing the expenditure of time, money, and effort that ultimately turns out to have been wasted. The ultimate expression of this in software is continuous deployment. At IMVU, the team made an average of fifty changes to their product every single day, allowing them to learn from customers at an incredible pace.
6. Know When to Pivot: The Smart Alternative to Blind Perseverance
Perseverance is a celebrated entrepreneurial virtue, but blind perseverance can lead startups to become stuck in the “land of the living dead”—neither growing enough nor dying, just consuming resources. The smart alternative is the pivot.
A pivot is not just another word for “change.” Ries defines it as “a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” It is a disciplined action, keeping one foot rooted in what you’ve learned while making a fundamental strategic change.
The story of Votizen provides a masterclass in pivoting. Founder David Binetti used actionable metrics to see that his initial social network for voters was failing to retain and refer users. This led him to a series of pivots:
- Zoom-in Pivot: Refocusing the product on just one feature—contacting elected officials. This dramatically improved metrics but didn’t generate revenue.
- Customer Segment Pivot: Keeping the product but changing the target customer from individual activists to large organizations. This failed to generate sales.
- Platform Pivot: Changing the model into a self-serve platform where anyone could pay to run a campaign. This final pivot produced a sustainable business model.
Each pivot was a new experiment based on prior learning. This reframes a startup’s most precious resource. Your runway isn’t just the cash in the bank; it’s “how many pivots a startup has left.”
7. Get Out of the Building and Go See for Yourself
One of the core principles of the Toyota Production System is genchi gembutsu, which means “go and see for yourself.” Decisions must be based on deep, firsthand knowledge, not on reports or assumptions made in a conference room.
The book gives two powerful examples of this principle in action:
- Toyota Sienna: Yuji Yokoya, the chief engineer for the 2004 Sienna minivan, undertook an epic 53,000-mile road trip across North America. By observing families and driving the roads himself, he learned firsthand what customers truly wanted, leading to a hugely successful redesign that was built with “kid appeal.”
- Zappos: Founder Nick Swinmurn didn’t test his hypothesis that people would buy shoes online with a survey. He went out to local stores, took pictures of their inventory, and posted the photos for sale on a simple website. This allowed him to observe real customer behavior—what people actually do, not what they say they will do.
As startup mentor Steve Blank teaches, the facts you need to build a successful business exist only “outside the building.” You must get out of your chair and get to know your customers.
Conclusion: Stop Wasting Time
The central theme of The Lean Startup is a disciplined, scientific methodology for reducing the colossal waste of time, passion, and skill that goes into building things nobody wants.
The principles of validated learning, Minimum Viable Products, actionable metrics, and pivots are not just isolated tactics. They form a complete framework for navigating the extreme uncertainty that defines a startup. They are tools for learning what works and discarding what doesn’t, faster than anyone else.
So, as you move forward with your idea, ask yourself this one powerful question: What is the single most important assumption about my business that I haven’t truly tested, and what is the smallest, fastest experiment I could run this week to learn the truth?
Eric Ries is an entrepreneur and the author of The Lean Startup, a book that introduces the Lean Startup methodology, which he developed. Before writing the book, he co-founded IMVU, his third startup, and served as its Chief Technology Officer. Ries is also known for his popular blog, Startup Lessons Learned, where he shares insights on entrepreneurship. He has advised startups, large companies, and venture capital firms on business and product strategy. His Lean Startup methodology has been featured in top publications like the New York Times, Wall Street Journal, and Harvard Business Review. Ries has also worked as an Entrepreneur-in-Residence at Harvard Business School and currently resides in San Francisco.
Book details
- Title: The Lean Startup
- Explanatory Title: : How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
- Author: Eric Ries
- Publisher: Crown Currency
- Publication Date: September 13, 2011
- Print Length: 336 pages
- ISBN-10: 9780307887894
- ISBN-13: 978-0307887894
- Category: Starting a Business / Entrepreneurship / Business Management