{"id":422,"date":"2019-03-02T10:40:58","date_gmt":"2019-03-02T10:40:58","guid":{"rendered":"http:\/\/www.greatideasgreatlife.com\/?p=422"},"modified":"2019-07-02T04:09:57","modified_gmt":"2019-07-02T04:09:57","slug":"the-lean-startup-by-eric-ries","status":"publish","type":"post","link":"https:\/\/www.greatideasgreatlife.com\/blog\/the-lean-startup-by-eric-ries\/","title":{"rendered":"The Lean Start-up by Eric Ries"},"content":{"rendered":"\n<p>When you hear\nthe word \u201cstartup\u201d, what comes into your mind? You probably picture a garage\nwhere a group of friends develop a new product. It\u2019s a very exciting venture,\nwith a promise of earning big. That is how most dot com companies in Silicon\nValley started. In fact, as you probably know, that is how Apple started.<\/p>\n\n\n\n<p>But did you know\nthat there can be a startup even within an established company? You will learn\nthat and a lot of other interesting ideas in this book. The world of business\nis changing. And so, the traditional approach must be changed as well.&nbsp; The Lean Startup presents a modern approach\nin business.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>There are startups which have very good planning. They have a well-thought of product and marketing strategy. They have a team of intelligent members. But, after investing so much time, money and effort, why do these startups still fail? What could be missing? Is the planning not enough? <\/p><\/blockquote>\n\n\n\n<p>You may want to\nstart a business of your own. Or you may already be an entrepreneur looking for\na new venture. Either way this book is for you. If you\u2019re curious on how\nstartups can become multi-million companies, let\u2019s begin. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is the Lean Startup?<\/strong><\/h2>\n\n\n\n<p>The Lean Startup\nis essentially based on experimentation. The main idea is learning from\nmistakes. You don\u2019t spend years on perfecting the product. You don\u2019t spend\nyears on thinking whether the product would sell or how the customers would\nrespond. <\/p>\n\n\n\n<p>Using the Lean\nStartup method, you create an early version of the product in small amounts. Then,\nyou make the necessary changes along the way. The term is continuous\ninnovation.This prevents new products from getting wasted and pulled out from\nthe shelves. <\/p>\n\n\n\n<p>True enough, the\nLean Startup became a global movement. It was adopted by many organizations\nworldwide. It created a renaissance in the world of business. Not only new\ncompanies applied the principle, but also the most elite businessmen and the\nFortune 500. Interestingly, Eric Ries\u2019 company, the IMVU, earned $50 million\ntotal in 2011. <\/p>\n\n\n\n<figure class=\"wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"&quot;The Lean Startup&quot; by  Eric Ries - BOOK SUMMARY\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/sobxOzRjAGg?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><figcaption>Principles of the Lean Start-up.<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are the principles of the Lean\nStartup?<\/strong><\/h2>\n\n\n\n<p>There are five\nkey important ideas in the Lean Startup method. Number One is <strong>you don\u2019t have to be in a garage to start a\nnew business<\/strong>. It doesn\u2019t matter where you are. You can choose to be an\nentrepreneur. <\/p>\n\n\n\n<ul><li> A startup is defined by <strong>uncertainty<\/strong>. Any organization that wants to create a new service or product is a startup, that is if they are faced with extreme uncertainty. The Lean Startup can apply to companies of all sizes, no matter the industry or sector<\/li><\/ul>\n\n\n\n<ul><li>Number two is <strong>management<\/strong>. When you say startup, you are not only referring to a product. You are also referring to the people behind the product. The people or the institution needs to be managed. A special type of management is needed, especially that they are dealing with great uncertainty<\/li><\/ul>\n\n\n\n<ul><li>Number 3 is <strong>validated learning<\/strong>. Validated learning is a series of experiments where entrepreneurs can test what works for their business. It is familiar with testing a scientific hypothesis. This is important because the goal of startups is to make the business sustainable. It is not just to make profit<\/li><\/ul>\n\n\n\n<ul><li>Number 4 is <strong>build-measure-learn<\/strong>. The primary tasks of a startup are to<strong>build<\/strong> products from the ideas, <strong>measure<\/strong> the feedback of customers and <strong>learn<\/strong> from the feedback, if it is better to <strong>pivot or persevere<\/strong>. To pivot means to turn and try a different approach. To persevere means to go on and continue. You need to pivot if the feedback is not good, persevere if the feedback from the experiment is positive. <\/li><\/ul>\n\n\n\n<ul><li>Number 5 is <strong>progress<\/strong>. The startup must get used to the build-measure-learn cycle. It must learn more from the feedbacks in a shorter amount of time. The startup must know which process to persevere in order to achieve <strong><g class=\"gr_ gr_7 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"7\" data-gr-id=\"7\">sustainable<\/g> business<\/strong>. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How &#8220;<strong>Zappos<\/strong>&#8221; did a Lean Start-up?<\/h2>\n\n\n\n<p>Zappos is an\nonline shop for shoes. It\u2019s better that open the website now and see what it\nreally is!! Its best asset is being customer-friendly. Zappos is one of the\nlargest e-commerce businesses internationally. In fact, it is the most\nsuccessful with annual sales of up to $1 billion. But like all startups, the\ncompany has a humble beginning.<\/p>\n\n\n\n<p>The founder of\nZappos is Nick Swinmurn. Years ago, he got frustrated because there was no\nsingle online site which showcases all kinds of shoes out in the market. He\nwanted customers to have the best buying experience. <\/p>\n\n\n\n<p>Swinmurn could\nhave spent a long time planning. He should have figured out everything first\nstarting from the warehouses, to distribution partners and the potential sales.\nThat was the trend for the pioneers of e-commerce. <\/p>\n\n\n\n<p>However,\nSwinmurn began Zappos with an experiment. He had the hypothesis that people are\nalready confident of buying shoes online. What he did was to ask the local shoe\nbrands for permission to take pictures of their products. In exchange, Swinmurn\nwould upload the photos online. He would go back to the stores to buy the shoes\nif customers ordered. <\/p>\n\n\n\n<p>Zappos began as\na simple functioning site. Swinmurn was set to answer if there is really a\ndemand for online shopping of shoes. By interacting with actual customers, he\nwas also able to derive the best payment, returns and customer support system. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Doing this experiment is very different from market research. If Swinmurn had conducted a survey, he would have got what the customers wanted. By building the site, he learned so much more. <\/p><\/blockquote>\n\n\n\n<p>First, by having\nreal customers, he got more accurate data than made-up situations on a survey.\nSecond, he learned the actual needs of the customers. He learned that Zappos\nmight need to have discounted pricing. Third, he was able to deal with customer\nbehaviour. He learned how to react with return issues. <\/p>\n\n\n\n<p>Zappos gained a\nlot from Swinmurn\u2019s experiment. Though the company started small-scale, it\nyielded good results. Swinmurn learned best what needs to be included in the\nonline store. Zappos became an established brand. In 2009, the company was bought\nby Amazon for $1.2 billion. <\/p>\n\n\n\n<p>The story of Zappos\nproved the efficiency of Lean Startup. The experiment saved the company time,\neffort and money. Instead of having stocks of shoes, Swinmurn was right to\nensure the orders first. In this way, he didn\u2019t have shoes in the inventory\nwhich no one wanted to buy. <\/p>\n\n\n\n<p>It also\nprevented the need for a customer survey. Actual customer interaction was more\naccurate. He was also able to deal with actual problems and achieve customer\nsatisfaction. Swinmurn started with a raw product. But through experiment,\nZappos became the perfect customer-friendly site. <\/p>\n\n\n\n<p>The simple\nfunctioning site he made is called a <strong>Minimum\nViable Product<\/strong>. An <strong>MVP <\/strong>is an\ninitial version of the product. It is cheap, easy and quick to develop. It\nwould evolve into a perfect final product through the results of\nexperimentation.<\/p>\n\n\n\n<p>Based on the\nLean Start-up principle, we can see that Zappos began with a lot of\nuncertainty. There was no existing online shop for shoes. Besides, Swinmurn\nwasn\u2019t sure if there is evena demand for one.<\/p>\n\n\n\n<p>But he applied\nvalidation learning.Swinmurn tested his hypothesis by launching the experiment\nsite. Then, he applied build-measure-learn as he dealt with real customers. Swinmurn\nlearned which approaches to pivot or persevere, like discounts and return\nsystem. Eventually, Zappos became a sustainable business.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you hear the word \u201cstartup\u201d, what comes into your mind? You probably picture a garage where a group of friends develop a new product. It\u2019s a very exciting venture, with a promise of earning big. That is how most dot com companies in Silicon Valley started. In fact, as you probably know, that is how Apple started. But did you know that there can be a startup even within an established company? You will learn that and a lot&#8230;<\/p>\n<p class=\"read-more\"><a class=\"btn btn-default\" href=\"https:\/\/www.greatideasgreatlife.com\/blog\/the-lean-startup-by-eric-ries\/\"> Read More<span class=\"screen-reader-text\">  Read More<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":427,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Lean Start-up by Eric Ries - GIGL<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.greatideasgreatlife.com\/blog\/the-lean-startup-by-eric-ries\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Lean Start-up by Eric Ries - GIGL\" \/>\n<meta property=\"og:description\" content=\"When you hear the word \u201cstartup\u201d, what comes into your mind? 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