The Lean Startup by Eric Reiss | Book Summary

This book pioneered the now-canonical concepts of minimum viable products and pivots.

• The goal of a lean startup is to figure out the right thing to build — that customers want and will pay for — as quickly as possible. The product should not try to achieve perfection, rather it should be built based on the expressed desires of the market. Thus, a startup should assess consumer interest and quickly iterate after feedback.
• How do we know what customers want? Sometimes even the customers don’t even know what they want. To confirm or reject your hypothesis, experiments must be run to gain validated learning about potential customers. Experimentation is favored more than adherence to a rigid plan. An MVP (Minimum Viable Product) usually forms the basis of such experiments. It should not contain any feature that does not help us in our journey of validated learning. Releasing a small form or early concept products is important in order to assess the customer reaction to the product.

• Three popular types of MVPs are:

1. Video- Release a video of how the product would operate and the functionality it would provide
2. Concierge- Focus on a single niche and expand into the general population. Eg: OnePlus started by targeting the Tech enthusiast and has now become a general smartphone brand for the masses
3. The Wizard of Oz- Showcase the functionality through a manual process or brute force

• Every startup should focus on an engine of growth

1. Sticky- The Customer Acquisition rate should be more than the Churn Rate
2. Viral- Each customer should attract more than one customer, also known as the Viral Coefficient
3. Paid- Trough paid advertising, the cost of acquiring one customer should be less than its Lifetime Value

• Successful entrepreneurship is about perseverance and flexibility at the same time. You can either pivot the customer segment, the business model, or the growth engine. Pivoting an idea does not equal failure, in fact, almost every successful startup has done a major change to its strategy at some point. Instagram didn’t start as a photo-sharing app, neither Twitter as a social network.