Core Concepts
- Build-Measure-Learn: The fundamental feedback loop. Build an MVP, measure customer response, learn from the data, and iterate as fast as possible.
- Minimum Viable Product (MVP): The smallest version of your product that allows you to test your core assumptions with real customers.
- Validated Learning: Use experiments to learn what customers actually want, not what they say they want. Data over opinions.
- Pivot or Persevere: When experiments show your strategy isn't working, either pivot (change direction) or persevere (keep going). Data drives the decision.
- Actionable Metrics: Focus on metrics that inform decisions, not vanity metrics that just make you feel good.
A New Way to Build Businesses
Eric Ries developed the Lean Startup methodology after experiencing the frustrating cycle of building products nobody wanted. Most startups fail not because they can't build their product, but because they build the wrong product.
The Lean Startup applies scientific method to entrepreneurship: form hypotheses, test them with experiments, learn from the results, and iterate rapidly. The goal is to minimize the time through the Build-Measure-Learn feedback loop.
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The Build-Measure-Learn Loop
This is the core engine of the Lean Startup. Unlike traditional development where you spend months building a perfect product, the Lean approach is to get something in front of customers as quickly as possible and learn from their real behavior.
Build
The build phase creates the MVP—the smallest thing you can make that tests your most critical assumptions. This might be a landing page, a video, a concierge service, or a prototype. The goal is speed, not perfection.
Measure
Collect data on how customers actually use (or don't use) your product. Focus on actionable metrics— data that helps you make decisions—not vanity metrics that just make you feel good. What matters is what customers do, not what they say they'll do.
Learn
Use the data to validate or invalidate your hypotheses. If your assumptions are wrong, you've learned something valuable. If they're right, you've gained confidence to invest more. Either way, you've reduced uncertainty.
The Minimum Viable Product
The MVP is the version of a new product that allows a team to collect the maximum amount of validated learning with the least effort. It's not about building less—it's about learning more with less waste.
Types of MVPs
- Landing Page MVP: A simple page describing your product and a signup button. Measure interest before building anything.
- Video MVP: Dropbox famously used a video to test demand before building their product.
- Concierge MVP: Manually deliver the service to early customers to learn what they actually need.
- Wizard of Oz MVP: The customer sees an automated product, but humans are doing the work behind the scenes.
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Beautiful infographic with the Build-Measure-Learn loop, MVP types, and pivot strategies.
Pivot or Persevere
Based on your experiments, you must decide whether to pivot (change direction) or persevere (stay the course). This is not a failure—it's a strategic correction based on data.
Types of Pivots
- Zoom-in Pivot: A single feature becomes the whole product
- Zoom-out Pivot: The whole product becomes a single feature of something bigger
- Customer Segment Pivot: You solve the same problem for different customers
- Channel Pivot: You change how you reach customers
- Technology Pivot: You achieve the same result using different technology
Innovation Accounting
Traditional accounting doesn't work for startups because revenue and profit are often zero. Ries proposes "innovation accounting"—a way to measure progress when learning is the goal.
The key metrics are: How fast are you moving through the Build-Measure-Learn loop? Are your experiments generating validated learning? Are you moving toward product-market fit? Speed of learning is the ultimate competitive advantage.