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Lean Startup

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Lean Startup

A methodology for developing businesses through validated learning, scientific experimentation, and iterative product releases. Created by Eric Ries, built on Steve Blank’s customer-development methodology.

Core Thesis

Startups should eliminate uncertainty through systematic experimentation, not just speed or cost reduction. The question is not “can this product be built?” but “should this product be built?” and “can we build a sustainable business around it?”

The Build-Measure-Learn Loop

The fundamental feedback cycle:

  1. Build — Create a minimum-viable-product to test a specific hypothesis
  2. Measure — Collect data on how customers respond using actionable metrics
  3. Learn — Analyze results to validate or invalidate the hypothesis
  4. Decide — Pivot or persevere based on evidence

The goal is to minimize total time through this loop. Speed of learning — not speed of building — is the competitive advantage.

Five Core Principles

  1. Entrepreneurs are everywhere — Lean applies to any size company facing uncertainty
  2. Entrepreneurship is management — Startups need management suited to extreme uncertainty
  3. Validated learning — The unit of progress is learning, not features or code shipped
  4. Innovation accounting — Track actionable metrics showing cause-and-effect, not vanity metrics
  5. Build-Measure-Learn — Turn ideas into products, measure response, decide to pivot or persevere

Innovation Accounting

Standard financial metrics don’t work for early startups. Innovation accounting uses:

  • Actionable metrics (demonstrating cause-and-effect)
  • The “Five Whys” for systematic root-cause analysis
  • Cohort analysis over vanity metrics
  • Learning milestones over feature milestones

See Also

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