Book Review: The Lean Entrepreneur
Wiley, 2013 – Hardcover $19.99, Kindle $18.99
"Life moves pretty fast. You don't stop and look around, you might miss it." -Ferris Bueller
We've all heard the old adage that many entrepreneurs are too busy working in the business and not on their business. This is also true of startup businesses that fall in love with their new idea, but fail to recognize if there is even a market for their product or service to begin with.
To counter this tendency, the lean start-up theory became popular several years ago with the book The Lean Startup by Eric Ries. His theory, which was developed for the technology sector, sought to eliminate wasteful practices during the product development phase so that startups could have better chances of success without requiring large amounts of outside funding.
The Lean Entrepreneur, however, applies the lean startup mantra to a wider range of business models. Using extensive case study interviews, the authors mesh theory with more tangible businesses examples.
For example, a fast food restaurant noticed a trend in consumers ordering milk shakes during their long commutes. These commuters weren't hungry yet, but they wanted to stave off hunger until noon.
The employees noticed that the commuters had little time, were wearing work clothes, and they had one free hand. Out of this came the solution to add fruit (to supposedly make them more nutritious) and to make them thicker (so they lasted longer). The refined product therefore grew out of this customer "sub-segment."
Gathering and gleaning customer information can be what the book calls a double-edged sword. It can make market decisions for you, but that data must be calculated correctly and not become what is termed a "vanity metric."
For example, a restaurant may have more than 1000 "likes" on its Facebook page, but that does not necessarily translate into customers walking through the door and ordering food. What matters in the lean entrepreneurship model is building an audience of like-minded people who will drive product development, which ultimately guarantees long-term financial success for the business.
Authors Cooper and Vlaskovits take great care in explaining the steps needed to understand an audience and articulate a value proposition for them, turning targeted customers into satisfied customers, and satisfied customers into passionate customers. There is also an interesting section on how innovation can disrupt particular industries, such as iTunes in the music industry and how Amazon continues to disrupt the publishing industry.
The Lean Entrepreneur builds on the existing lean startup methodology and provides additional applications for new business models. The book is divided into 10 chapters that detail the process. The case studies presented in each chapter are comprehensive but add real life examples (at times a welcome break) to the somewhat burdensome terminology.
There is no right way to start a business, but The Lean Entrepreneur will open eyes and give the aspiring entrepreneur plenty to ponder before aimlessly moving into what the book terms "The Valley of Death," where the developed product has no customers.
An established business can look at its existing customer base and use "Lean Entrepreneurship" to learn similar lessons.
When it's all said and read, for those new to the concept of the lean startup in The Lean Entrepreneur is important to read, but it may be repetitive to those already familiar with the world of lean startup.
Chris Wendel is a consultant and lender with Northern Initiative in Traverse City. Northern Initiatives is a private, non-profit community development corporation that provides entrepreneurs with access to capital, technical assistance, and new markets.