Book Review: “The Lean Startup” by Eric Ries

Three and a half stars

Crown Business – $26.00 – 336 pages

Traditionally, for any start-up business, producing the model for a new product or service includes tremendous expense, along with an arduous developmental timeframe on the front end. When I say long, I am comparing it to the recently popularized Lean Start-up paradigm that shortens the roll-out time necessary to keep up with today's accelerated market and competitive pressures.

These ramped-up time tables exist in particular in the areas of software, technology, and Internet-based concepts. For many entrepreneurs, the charge of writing a business plan may be pushed aside (temporarily at least) to a more abbreviated phase that quickly quantifies market feasibility based on unbiased customer input. Proving a business concept is marketable can be a gut-wrenching and imprecise science.

The Lean Startup by Eric Ries addresses this model of a starting business that minimizes the time and capital required for gauging this feasibility. Ries, a relatively young (age 31) engineer-turned-entrepreneur, incorporates lean manufacturing techniques that came out of Japan several decades ago, into a philosophy that also works to eliminate time work (waste) that fails to produce results (therefore value) for customers. Now carrying the banner of The Lean Startup mantra, Ries is garnering plenty of attention among Silicon Valley entrepreneurs.

At the core of this philosophy is using continuous consumer feedback during the development stage. Inventors are especially known for coming up with what they alone think are great products, placing an inordinate emphasis on product features rather than customer benefits. This may sound like Marketing 101 to some, but it's amazing how often a patent is nailed down without the inventor knowing if the product has any kind of viable market potential.

The Lean Startup process can also involve multiple prototypes beta-tested with real humans much earlier in the development stage. The emphasis is placed on a product that people will actually use, rather than on the development of the technical pieces of a product that no one will ever want. The process also utilizes the creation of rapid prototypes that test market assumptions.

Like driving a car, a project's destination is determined by changing course quickly as conditions evolve. This change, of course, is termed a pivot, allowing projects or companies to zigzag to success. The key is to make quicker, more informed decisions that minimize waste and time (hopefully before running out of money).

Ries learned the perils of the "build it and they will come" mentality with a start up of his own that blew time and money in its early days before Ries discovered that "lean thinking defines value as providing benefit to the customer; anything else is waste."

The startup company Aardvark is one of several companies used as lean startup examples in the book. Aardvark is a web site developed as a search type domain that answers more subjective answers than sites like Google, Yahoo, or Bing (Think of the type of recommendation question you might ask some friends at a party). During Aardvark's evolution, five other prototype concepts were cast aside in short order because of negative human reaction in beta testing.

Bottom Line: The Lean Startup plods along at times, with technical detail that non-engineers may find a bit tedious. Still, Ries uses his narrative to show the power of The Lean Startup process not just for new companies but also for larger established organizations that are attempting to develop a product or service line. For today's rapidly changing environment, The Lean Startup is one of the most interesting business books of the year.

Wendel is the Regional Director for Michigan Small Business & Technology Development Center (MI-SBTDC) in Traverse City. The MI-SBTDC assists businesses with one-on-one business consulting, market research information, and entrepreneurial training. The Northwest Michigan Council of Governments is the host organization for the MI-SBTDC in the Grand Traverse region.