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57 pages 1 hour read

Eric Ries

The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Eric RiesNonfiction | Book | Adult | Published in 2011

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Background

Cultural Context: Innovation and Popular Appeal

Since its release in 2011, The Lean Startup has sold over a million copies and has been translated into over 30 languages. As businesses moved toward startup culture in the 2010s, The Lean Startup’s method quickly gained popularity among entrepreneurs looking to avoid the pitfalls of innovation: “Although the methodology is just a few years old, its concepts—such as ‘minimum viable product’ and ‘pivoting’—have quickly taken root in the start-up world, and business schools have already begun adapting their curricula to teach them” (Blank, Steve. “Why the Lean Start-Up Changes Everything.” Harvard Business Review, May 2013). It became a new strategy for organizations that wanted to move away from the hierarchical decision-making and slow progress of traditional business models.

One of the book’s most popular ideas is “validated learning,” which reframes failure as an opportunity for growth and refinement. Because validated learning comes from direct experience, “It is more concrete, more accurate, and faster than market forecasting or classical business planning. It is the principal antidote to the lethal problem of achieving failure: successfully executing a plan that leads nowhere” (38). This shattered the illusion of a simplistic business plan and encouraged entrepreneurs to be dynamic and not fear setbacks. The Lean Startup references the many startup companies and organizations that used its method for success as examples proof of concept. These include Aardvark, Alphabet Energy, General Electric, Food on the Table, and Village Laundry Service, among others. Moreover, Ries associates his startup model with the lean manufacturing methods developed by Toyota Production Systems to prove the soundness and efficacy of his methods.

The author’s self-representation in the text is another reason for the book’s popular appeal. Although the popularity of The Lean Startup may correlate to the success of the startups described in the text, Ries’s acknowledgment of his own failures, as well as the subsequent dissection of why he failed, depict the ups and downs of startups in an accessible, relatable manner. This honesty, accompanied by practical advice, provides a realistic representation of a startup’s lifecycle. Ries also provides a behind-the-scenes look at the minutiae of product development, business strategy, and marketing that otherwise goes unmentioned in conventional conversations about startups. Ries thus positions himself as an insider who leaves the publicly inaccessible offices of Silicon Valley to share the secrets of startup success with a general audience. This Promethean persona positions Ries as in touch with the motivated entrepreneur who needs an extra edge to innovate in their organization. The Lean Startup resonates with readers who feel stuck in orthodox and unproductive modes of business. Ries presents his text as an insider’s guide to fostering new business methods and culture.

Historical Context: Toyota and Lean Manufacturing

The lean manufacturing movement, first developed in Japan by Toyota Production Systems after World War II, inspires the Lean Startup method. The devastation of World War II destroyed the Japanese economy, which made it difficult for Toyota to raise enough capital to invest in mass-production machines. Moreover, Toyota could not compete with the immense scale and speed of American factories that churned out thousands of vehicles a day. The innovators behind the lean manufacturing movement, Taiichi Ohno and Shigeo Shingo, developed a system that could use small, general-purpose machines to produce an array of parts in small batches. To maintain the speed of production, each machine would be changed at a rapid pace “to make the right part at the right time” (186) in the production process. The combination of speed and agility in small-batch product development allowed Toyota to manufacture complete automobiles efficiently. To reduce the amount of time needed to change the parts of each machine, Shingo created the concept of Single-Minute Exchange of Die (SMED) which reinvented the way each part was taken apart and put back together, ultimately reducing changeover time from hours to minutes. Additionally, the small batch sizes allowed for Toyota employees to catch disruptions and errors without compromising an entire rollout of new vehicles. Ohno’s and Shingo’s lean manufacturing eventually enabled Toyota to break into larger and larger markets, until it became “the world’s largest automaker in 2008” (187).

Ries adapts the theory of lean manufacturing to entrepreneurship. Ries’s recommendations for lean thinking operation, such as small batch sizes, validated learning, and empirical research, come from Toyota’s successful innovations. To further connect the approaches, Ries uses Japanese lean manufacturing terms such as the andon cord, a process of quality assurance (187, 227), genchi gembutsu, the first-hand and empirical research needed for meaningful innovation (86-88, 249), the kanban process, a principle of capacity constraint (138-141), and shusa, the chief engineer (256). The theory and language of lean manufacturing and the historical success of Toyota provide the foundation of the Lean Startup method.

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