What is Lean Startup?

Lean Startup became popular with Eric Ries’ book, but it also has earlier intellectual roots.

Ries mentioned Frederick Taylor, whose scientific management emphasized the use of scientifically generated insights to improve work methods. In entrepreneurship, Block and MacMillan (1985, p. 184) argue that “starting a new business is essentially an experiment. Implicit in the experiment are a number of hypotheses (commonly called assumptions) that can be tested only by experience.” Sull (2004) emphasized that these hypotheses should be made explicit, and submitted to empirical tests. Generally, entrepreneurs can be seen as theorists (Felin and Zenger, 2009) that combine imagined possibilities into models and hypotheses and submit them to logical reasoning, social experimentation, and rigorous empirical tests.

We argue that explicit experimentation can help the entrepreneur to focus attention on the most impactful questions to address, helps to eliminate decision making-biases, helps to generate speedy and specific feedback, and invites the entrepreneur to use different modes of learning. Evidence on the effectiveness of Lean Startup is largely anecdotal and qualitative, but quantitative evidence is emerging.

References

Block, Z., MacMillan, I.C., (1985). Milestones for successful venture planning. Harvard Business Review, 85, 184-188.

Felin, T., Zenger, T.R., (2009). Entrepreneurs as theorists: on the origins of collective beliefs and novel strategies. Strategic Entrepreneurship Journal, 3, 127-146.

Ries, E., (2011). The Lean Startup. Crown Publishing, New York.

Sull, D.N., (2004). Disciplined entrepreneurship. MIT Sloan Management Review, 46, 71-77.