- The Four Principles
- The Five Whys
- Long-term stock exchange
- The boring
- The product lifecycle
- Experience vs Expertise
- Management vs Entrepreneurship
- Notable Quotes
- Other Takeaways
Overall Link to heading
A fun read that I’d qualify as a classic and would recommend to some, but not everyone. As someone who has spent a fair number of years at a startup himself, it’s inspirational in parts, a little too obvious in others, occasionally outdated, and often re-states “that thing” you needed to hear more often than once.
- Must-read: If you’ve never worked or co-founded a startup but aspiring to.
- Maybe-read: If you’ve been around but know you have some gaps or reminders to fill.
- Re-read: If you’re running or part of a startup that needs a turnaround.
- Don’t read: If you know what you’re doing or been around the block more than once.
One of my favorite moments from the book aligns with a strong personal belief. Reis mentions how it’s really hard to get people to steal your idea. If it’s a world-changing idea, everyone thinks it won’t work and you have to “shove it down” people’s throats. If it’s a feature a large company could copy, the amount of work that needs to go through selling it to management, prioritizing it on the roadmap, and making it “perfect” is more than enough to help you validate and go to market. Though there are exceptions to the rule, it’s important to remember that they are exceptions as long the lean startups is focused and executes on the right things.
The Four Principles Link to heading
Reis outlines these four principles that are always good to remind oneself of, especially the last one.
- Smaller teams. Shift from large teams with uniform functional roles to smaller, fully engaged teams whose members take on different roles.
- Achieve shorter cycle times.
- Faster customer feedback. Test both whether features crashes customers’ computers and the performance of new features/customer experience.
- Courageous decisions. Enable and empower teams to make fast and challenging decisions.
The Five Whys Link to heading
The “Toyota Methodology” has been coming up in different parts of my life (books, podcasts, conversations, etc…) recently. There’s more to learn from Toyota than I had ever anticipated, but one that Reis kept bringing back up was the “5 whys”, not to be confused with the “5 Ws”.
Wikipedia sums it up pretty well:
Five whys (or 5 whys) is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem. The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?” five times. The answer to the fifth why should reveal the root cause of the problem.
Outdated Link to heading
There were many references to specific companies, technologies or ideas which really date the book. The analogies and references still make sense, but I think it would have been more impactful if the references were evergreen. Here are just a few that stood out:
- Groupon: Groupon, now a zombie, was referenced as a gold standard multiple times.
- CI / CD: This is such an obvious concept nowadays, it’s crazy to think it was novel AND controversial when the book was released.
- Path: I remember using an app most must’ve never heard of, and I learnt that they rejected a $100M offer from Google!
- Snaptax: A feature by intuit that anyone can build today in a day was considered a great and non-trivial product.
- LLMs: In general, it’s crazy how old some things feel given the age of LLMs.
Long-term stock exchange Link to heading
Eric brings up the idea of a long-term stock exchange, which has since come to fruition to some degree: ltse.com. I’m a very big fan of this idea, but in practice I’ve seen how this can easily be circumvented via crypto. “Liquid staking” enables staking a long-term deposit, and wherever there’s a will, I can see secondary markets creating a way.
The following excerpt is from the book that gives more details:
In addition to quarterly reports on profits and margins, companies on the LTSE would report using innovation accounting on their internal entrepreneurship efforts. Like Intuit, they would report on the revenue they were generating from products that did not exist a few years earlier. Executive compensation in LTSE companies would be tied to the company’s long-term performance. Trading on the LTSE would have much higher transaction costs and fees to minimize day trading and massive price swings. In exchange, LTSE companies would be allowed to structure their corporate governance to facilitate greater freedom for management to pursue long-term investments. In addition to support for long-term thinking, the transparency of the LTSE will provide valuable data about how to nurture innovation in the real world. Something like the LTSE would accelerate the creation of the next generation of great companies, built from the ground up for continuous innovation. IN CONCLUSION As a movement, the Lean Startup must avoid doctrines and rigid ideology.
The boring Link to heading
There were a lot of philosophical meta takeaways which are often discussed but not very actionable, so I won’t go into them in depth. They are concepts I agree with and are definitely valuable to individuals with less experience. However, if you’re not “fresh out of College”, there may be some moments one might might want to speed through.
The product lifecycle Link to heading
The product lifecycle is obvious in hindsight, but I’ve never seen it laid out this way and was one of my favorite excerpts from the book.
I’d summarize it myself as:
- Go through research & development
- Become part of the company’s main strategy
- Convert to be the subject & focus of optimization
- Dwindle to old news
Every successful product or feature began life in research and development (R&D), eventually became a part of the company’s strategy, was subject to optimization, and in time became old news. The problem for startups and large companies alike is that employees often follow the products they develop as they move from phase to phase. A common practice is for the inventor of a new product or feature to manage the subsequent resources, team, or division that ultimately commercializes it. As a result, strong Creative managers wind up getting stuck working on the growth and optimization of products rather than creating new ones. This tendency is one of the reasons established companies”
Experience vs Expertise Link to heading
There is a big difference between experience and expertise. There’s also a big difference between being able to lead, research, ideate, build, execute and more. When someone can do all of the above, and have both experience and expertise, they become an unstoppable force of nature. The following are some of the takeaways from the book that stuck:
- If the goal is a successful business, one must build a business strategy before building.
- Identifying how much strategy is needed before building is not easy.
- MVP requirements are not formulaic and require more intuition than most expect.
- Allowing the team to bike shed over the code quality of features no one will ever use is a fine balance.
- If the goal is to learn and have fun, there are no rules.
- Do not discount the tension that could arise from treating consumer and enterprise customers differently, both internally and externally.
Management vs Entrepreneurship Link to heading
All entrepreneurs are managers, but not all managers are entrepreneurs. Reis touches on this more than once. A few takeaways from the book include:
- Entrepreneurship at a big company has more focus on politics & teaching
- Entrepreneurship always involves management of some sort, whether it’s managing risk, uncertainty, people, time, money, ideas, relationships, technologies, etc…
- Strong, creative managers often get stuck in managing and optimizing commercializing a product rather than creating new ones
There’s a lot more than what I listed above, but it’s what stuck out. There’s never a right answer, and as always, the challenge is finding balance.
Notable Quotes Link to heading
tl;dr Figure out what people will pay for.
The goal of a startup is to figure out the right thing to build — the thing customers want and will pay for — as quickly as possible.
tl;dr Entrepreneurship are a rare and expensive breed.
The passion, energy, and vision that people bring to these new ventures are resources too precious to waste.
tl;dr The Lean startup method is more about how-to-drive than how-to-do.
The Lean Startup method, in contrast, is designed to teach you how to drive a startup. Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop. Through this process of steering, we can learn when and if it’s time to make a sharp turn called a pivot or whether we should persevere along our current path.
tl;dr The Lean startup method is more about how-to-drive than how-to-do.
What would an organization look like if all of its employees were armed with Lean Startup organizational superpowers? For one thing, everyone would insist that assumptions be stated explicitly and tested rigorously not as a stalling tactic or a form of make-work but out of a genuine desire to discover the truth that underlies every project’s vision
Other Takeaways Link to heading
There are too many quotes, moments, and takeaways so here is a collection of some points I wanted to remember:
- Startups around about turning visions into products.
- Entrepreneurs need an appetite for risk-taking
- Measuring progress is about providing value, not about keeping “to the plan”.
- A great signal is when customers complain about missing features.
- Speed and quality are allies in the pursuit of customer needs.
- Anchoring to outrageous suggestion is a necessary evil in order to find a compromise closer to what you need.
- Raising money is easier when you have zero traction because of FOMO and hypothetical “what could be”.
- If the goal is purely to see what happens, do it: it’s guaranteed to succeed.
- The way to change the world through innovation is to solve a human problem.
- Success is about solving the customers problem, not about delivering a feature.
- There’s a fine line between necessary metrics VS vanity metrics.
- lean thinking: provide value to the customer (doesn’t matter how its assembled, just how ti works)
- theres nothing as wrong as doing with efficiency what shouldn’t be done at all
- Successfully executing, a flight plan is the worst type of starting failure that you could have because you’re not billing what the user actually need
- The success a company discusses today is driven by decisions from a distant past
- Success theatre is a sure way to fail
- All startups need periodic “pivot consideration” meetings
- Discipline is at the core of all success