Introduction to Lean Startup

Welcome to Week 2! 
This week we will learn what is a Lean Startup, how to capture your business model with the Lean Canvas, and what process should an entrepreneur follow in order to minimize the chance of failure.

what is a Lean Startup concept?

Lean Startup is a method for developing businesses and products first proposed in 2008 by Eric Ries and claims that startup success can be learnt, by following the right process.

Based on his previous experience working in several U.S. startups, Ries claims that startups can reduce the market risk and shorten their product development cycles by adopting a combination of business-hypothesis-driven experimentationsiterative product releases, and what he calls validated learning.
Originally developed with high-tech companies in mind, the lean startup philosophy has since been expanded to apply to any individual, team, or company looking to introduce new products or services into the market. Today, the lean startup’s popularity has grown outside of its Silicon Valley birthplace and has spread throughout the world, in large part due to the success of Ries’ bestselling book.

Ries developed the idea for the lean startup from his experiences as a startup advisor, employee, and founder. While at Yale, Eric Ries began his entrepreneurial career as the co-founder of Catalyst Recruiting, a startup that failed because they did not understand the wants of their target customers, and because they focused too much time and energy on the initial product launch.

After Catalyst, Ries was a senior software engineer with There, Inc. Ries describes There Inc. as a classic example of a Silicon Valley startup with five years of stealth R&D, $40 million in financing, and nearly 200 employees at the time of product launch. In 2003, There, Inc. launched its product,, but they were unable to garner popularity beyond the initial early adopters.

According to Ries, the biggest mistake was that the company’s vision was almost too concrete, making it impossible to see that their product did not accurately represent consumer demand.

After the failure of, Ries started another company, IMVU Inc., a social network, in 2004, along with one of the founders of, Will Harvey.

Ries met IMVU investor Steve Blank, who insisted that IMVU executives audit his class on entrepreneurship at UC Berkeley. There he picked up Blank’s method of fast customer feedback, which Blank called “Customer Development”, and applied it at IMVU, testing alternate versions of the product and measuring download rates. IMVU deployed code to production nearly 50 times a day, an unusually rapid development cycle.

The world before lean startup
Before the Lean Startup movement, the traditional approach to start a company was to write a business plan (which could consist of 20-50 pages). Making 5-year forecasts was quite common.
Once the business plan was done and validated by investors, companies and startups were following a product development model. Most software development teams were using the Waterfall design process, that did not involve the customer.
We’re talking about software development here, because this industry sector is where Lean Startup first emerged, but this vision is true for most industries.
According to Steve Blank, there was a popular belief that somehow, “magically”, if we did enough market research, the plan would work and we would simply hire people to execute that plan and make money. Making five-year forecasts was viewed as normal and were requested by many investors.
The Lean Startup has gained in popularity very quickly over the past years and it is taught nowadays in many business schools around the world.

So, what was fundamentally wrong about the traditional vision?

We can explain that by the lack of a dedicated framework for startups, facing high uncertainty. The framework used for new business was the same as the one taught in MBAs for existing validated businesses.

The Lean Startup movement has created an awareness that a startup is not a smaller version of a large company.

Therefore, the stack of tools for administering big businesses is not valid for STARTING a business.


The lean startup philosophy

The lean startup philosophy is based on lean manufacturing, the streamlined production philosophy pioneered by Taiichi Ohno by combining flow principles used by Henry Ford starting in 1906 and the TWI (Training Within Industry) programs introduced to Japan in 1951.

Lean manufacturing is a management philosophy derived itself mostly from the Toyota Production System (TPS). The steady growth of Toyota, from a small company to the world’s largest automaker, has focused attention on how it has achieved this success.


Similar to the precepts of lean management, the Lean Startup philosophy seeks to eliminate wasteful practices and increase value-producing practices during the product development phase so that startups can have a better chance of success without requiring large amounts of outside funding, elaborate business plans, or the perfect product.

In order to avoid designing features or services customers do not want, the entrepreneur must “get out of the building” to receive feedback before and during the whole development process, based on cycles as short as possible. This is done primarily through two processes, using key performance indicators and a continuous deployment.

Lean Startup is about speedlearning and focus.

You may be still wondering: what is the alternative to business plans in a Lean Startup?

The alternative is a 1-page Canvas that describes the entire business model:
– Business Model Canvas was invented by Alexander Osterwalder and Yves Pigneur.
– Lean Canvas is an equally popular template, and is an adapted version of the Business Model Canvas by Ash Maurya.
We will describe the Lean Canvas more in detail in a later course this week.
The 5 principles of Lean startup
#1 Entrepreneurs are everywhere
You don’t have to work in a garage to be a startup. Ries’ definition of a startup is the following:“a human institution designed to create new products and services under conditions of extreme uncertainty”

That means entrepreneurs are everywhere, in any sector or industry, in any kind of company, whatever its size.
#2 Entrepreneurship is management
A startup is an institution, not just a product, and requires a new kind of management geared towards its context of extreme uncertainty.
#3 Validated learning
The ultimate goal of a startup is to build a sustainable business. Learning should be validated by running frequent experiments that allow entrepreneurs to test the assumptions that they made in their business model.
#4 Build-Measure-Learn
The fundamental activity of a startup is to turn ideas into products, measure how customers respond and then learn whether to pivot or persevere. All successful startup processes should be aimed at accelerating that feedback loop.
#5 Innovation accounting
To improve entrepreneurial outcomes and hold investors accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. This requires a new kind of accounting designed for startups and the people who hold them accountable.7
Jim Rohn Sứ mệnh khởi nghiệp