THE LEAN STARTUP BY ERIC RIES

Key Concepts of the Book

• The Build-Measure-Learn Feedback Loop: The fundamental activity of a startup. The goal is to move through this loop as quickly as possible—turning ideas into products, measuring customer response, and learning whether to pivot or persevere.
• Minimum Viable Product (MVP): Instead of building a polished final product, startups should create the simplest possible version that allows them to start the learning process with the least amount of effort and development time.
• Validated Learning: Success is not measured by "vanity metrics" (like social media followers), but by the scientific demonstration that a team has discovered valuable truths about a business's prospects.
• Pivot or Persevere: A critical decision point where a leader must decide, based on data, whether to change their fundamental strategy (pivot) or stay the course (persevere) with their current vision.
• Innovation Accounting: A new way of evaluating progress that focuses on how much has been learned about the customer, rather than just looking at traditional financial statements that don't apply to early-stage ventures.
• Genchi Genbutsu (Go and See for Yourself): Derived from the Toyota Production System, this principle emphasizes getting out of the office and into the real world to observe and talk to potential customers.
• Small Batches: The idea that working in smaller increments allows for faster identification of defects and more frequent opportunities to learn and adjust the product.
• The Five Whys: A root-cause analysis tool used to find the underlying source of a problem by asking "Why?" five times, ensuring that you fix the system, not just the symptom.
• The Engine of Growth: Startups must identify which engine drives their business—whether it is Sticky (customer retention), Viral (word of mouth), or Paid (advertising)—to focus their resources effectively.