The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries

7 conclusions from the book «The Lean Startup».

Favorite quote from the author:
The only way to win is to learn faster than anyone else.
-Eric Ries

1. Semi-Scientific Method
   Formulate a hypothesis like a scientist, but test it quickly in the real market without getting bogged down in lengthy theoretical research. Always validate your sh*t.
   *Example (Amazon & Zappos): Amazon’s hypothesis was that people would buy books online, while Zappos tested whether they’d buy shoes. Instead of overanalyzing, they launched basic websites and checked if real customers would actually pay.
2. MVP (Minimum Viable Product
   Create a “scrappy” prototype with only the most essential features to quickly discover if people are willing to pay.
   *Example (Noah Kagan): For AppSumo, Noah Kagan used a simple “ghetto” website where users just PayPaled him $60. This immediate payment proved demand before he invested in building more complex systems.
3. Real Purchases as Validation
   Hearing “That’s a great idea!” doesn’t guarantee revenue. The best indicator of market demand is when people are actually willing to buy your early-stage product.
   *Example (Zappos Founder): He didn’t stock shoes initially. After customers ordered from his bare-bones website, he personally bought the shoes in a store and shipped them out-proving people would really pay online.
4. Build-Measure-Learn Cycle
   Move quickly in short iterations: build a basic version, measure results (track meaningful metrics), learn from the data, and make adjustments. Repeat until you find a solid product-market fit. Everything needs to be iterated and done quickly.
   *Example: Whether testing an idea for an online tutoring service or a new ebook marketplace, you gather user feedback after each small release, then adjust your product accordingly.
5. Pivot or Persevere
   If an experiment doesn’t validate your hypothesis, change direction (pivot). If it does, continue and scale the current approach.
   *Example: When early tests reveal the product isn’t resonating, entrepreneurs shift to a different niche or solution. If tests confirm strong demand, they double down on the existing model.
6. A/B Testing to Eliminate Waste
   Split tests help pinpoint which features are truly valuable to customers and which can be discarded without harm. This means you create 2 versions of your product, show both of them to the same amount of people, and in this way figure out which one people like more. This allows you to tell the difference between features your customers value, and those they don’t want or need. Modern tools do this faster and cheaper than before.
   *Example (Domino’s): Changing pizza box designs used to be costly and time-consuming. Now, they could simply post two designs on social media (Version A vs. Version B) and instantly see which one resonates most with customers.
7. Beware of Vanity Metrics
   Likes, views, and followers don’t necessarily indicate a profitable business. Focus on metrics that reflect sales, customer retention, revenue, and repeat purchases.
   *Example (Jimmy’s 1,000 Facebook friends): Just because he looks popular online doesn’t mean he’s actually succeeding in business. Focus on metrics that reflect real growth and revenue.