The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Business, is a book written by Eric Ries and published in 2011. It was a New York Times Best Seller and has sold more than 1 million copies and translated to more than thirty languages. To quote Tim Brown, CEO of IDEO, Eric Ries unravels the mysteries of entrepreneurship and reveals that magic and genius are not necessary ingredients for success (of business) but instead proposes a scientific process that can be learned and replicated. This has got me to read the book.
What if this book offers a no-fail proof strategy on starting a business that returning OFWs may learn and replicate as they embark on their new career as entrepreneurs?
Many of the repatriating OFWs would want or are planning to start their businesses. This book and the methodology and principles of entrepreneurship known as Lean Startup offers insights into how one may go about starting a business sans losing a great deal of investment from the research and experimentation.
According to the book, a startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. So, not all businesses are startups. That, I learned from this reading. It should operate under conditions of extreme uncertainty. It means opening a business that already has an existing business model, pricing, target customer and if its success depends only on execution is not considered a startup.
After the pandemic, the word extreme uncertainty seems to be a very relatable term. The pandemic has changed the business landscape globally. What used to be the way business is conducted as we know it becomes outdated.
The Lean Startup is a set of practices for helping entrepreneurs increase their odds of building a successful startup.
How an OFW may benefit from this book?
These are some of the concepts espoused by the book, which if we adopt in our own business environment may actually help us propel the business to be successful.
Build-Measure-Learn
The book advocates this three-step process: Build-Measure-Learn feedback loop. By build, a minimum viable product (MVP) is produced with a minimum amount of effort and the least amount of development time. For an entrepreneur who wants to roll out its product in the market in its perfection, that goes against this principle. For in trying to achieve perfection, without even knowing if there is a market for the product, so many resources are wasted. For the OFW-entrepreneur, adopting this B-M-L, not only saves some hard-earned investment from going down the drain all at once if the business does not pan out but also has the chance to take valuable inputs from its prospective market as it further develop the product.
The measure phase is determining whether the product development is leading to real progress. Here, an innovation accounting that measures progress (customer response), sets up milestones and prioritizes work as well as set accountability on the part of the one in charge of developing the product. Emphasis is on measuring that which brings actual growth.
By learn or validated learning, the concept in the book, is a rigorous method for demonstrating valuable truths about a startup’s present and future prospects. The startup is established not only to earn money or to serve customers but to make it a sustainable business. It says that this is the principal antidote to the lethal problem of business failure. It is when this learning is ignored or brush aside that the business fails.
Experimentations
The book espouses getting to know the customers through constant feedback and experiments. This is based on the premise that an action-based on results of experiments kills uninformed opinions and guesses and saves the business.
Results from such experiments are only meaningful when they are actionable, accessible and auditable. By actionable, it should show clear cause and effect. By accessible, it should be understood by all and can be used as a guide in decision-making and by auditable, data should be credible.
Pivot or Persevere
This is the difficult phase in the business. It is that change designed to test a new fundamental hypothesis about the product, strategy, and engine of growth. Normally, the question of whether or not to pivot comes when the business is neither dying nor growing.
Though it claims to be scientific in its methodology, this is where the human element of vision, intuition, and judgment plays a part. Should the entrepreneur steer the business in a new direction by changing the target market or should it exert more effort in the marketing department?
At a point when an entrepreneur needs to decide whether to pivot or to persevere in the business, the book offers instances why such a decision requires courage. The entrepreneur may have measured the wrong parameters or values as the basis for the growth of the business, when the entrepreneur has unclear hypothesis from the start and when they are afraid.
To propel the business, it is very important to ask which activities create value and which are a form of waste. Once a distinction has been made the lean techniques may now be adopted to eliminate waster and increase the efficiency of the value-creating activities.
Conclusion
The book is technical and as you read, you made have to relate it to the business you have in mind to fully grasp the ideas presented in the book. The examples presented are more on the technology but the principles may very well apply to any new startup as defined earlier.
The details of all the concepts mentioned here are explained thoroughly in the book, complete with examples.
Hi, I'm Cecille. I have been an OFW in KSA for 13 long years. I have been there, done that. I'd say I was lucky because for most of those years, my family was with me. I'd like to share in this blog what makes those years worthwhile, the lessons I learned and bits and pieces of info that may pique your interest as bagong bayani.