Episode 45 - Review and Summary of The Lean Startup by Eric Ries

Booked Morning Podcast

As entrepreneurs and leaders in organizations, we come up or are presented with many great ideas. We’ve all had those products, or business startup that we sank our time, money in and ended up being a black hole, draining our motivation, resources and more importantly our time. Eric says “A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.” ? Eric Ries, Imagine if there was a way for you to semi-scientifically avoid that, and find a sustainable business model and a product that our target audience clamors for. That is exactly what Eric Ries presents in this book. He came up with this, through his own personal struggle in a Start up. In 2004, he was a part of a Startup called IMVUm which was a 3D social communication platform to chat and meet other people. Being a part of the founding team and was its CTO, they all believed their idea. They spent almost a year developing their platforms. They integrated all know communication and popular chat engines of the time. They put their heart and soul into building all the best features they could think of in their platform. And were excited to launch. When they did, to their surprise. CRICKETS were what they found. Very few were interested in their platform. And they were demoralized. I am sure we would be too if we experienced this. So they then talked to their customers and found that their main assumption of integrating exisiting social chat platforms was completely wrong. Users preferred a whole new platform and did not want to use their existing chat networks. If they knew this ahead of time, they would not have wasted time building all those features and focused on what their target audience really wanted. That is how the Lean Startup Methodology was born. Today IMVU is the #1 avatar social community in the world with millions of users. Allow me to leave you with this final thought As entrepreneurs, we often rely on our guts and intuition for our businesses, but we should consider utilizing The lean Startup methodology to test the core assumptions of our product or business. Our goal should be to develop a viable business model based on validated and actionable metrics, instead of solely relying on our guts. We should employ the build, measure and learn loop in order to put our ideas to the test. This will allow us to test and validate our ideas as fast and as often as possible to know when to pivot or persevere. By applying the Lean Startup Framework, we can ensure viability, profitability and create a growth engine we can semi-scientifically bank on before sinking our entire life on an idea that may or may not work.