Key learnings from the book “The Lean Startup” by Eric Ries for PMs
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses is a book written by Eric Ries in 2011 that revolutionized the way startups and product development are done. The Lean Startup methodology focuses on validating assumptions and learning from customers, rather than simply building and launching products. This approach is becoming increasingly popular among product managers, as it encourages a more agile, customer-centric, and data-driven way of working. In this post, we’ll discuss the key learnings from The Lean Startup that product managers can apply to their roles.
- Build-Measure-Learn Feedback Loop
The Build-Measure Learn feedback loop is the core concept of The Lean Startup. It is a process that helps product managers continuously validate their assumptions and hypotheses about their products. The loop consists of three stages:
- Build: This is where the product or feature is developed and launched in the market.
- Measure: This is where the product manager collects data about how customers are using the product, what they like, and what they don’t like.
- Learn: This is where the product manager analyzes the data collected and identifies areas for improvement.
This loop should be repeated continuously, and each iteration should be used to improve the product. By using this feedback loop, product managers can make data-driven decisions, reduce waste, and increase the chances of building a successful product.
2. Minimum Viable Product (MVP)
A minimum viable product (MVP) is a version of a product that has just enough features to satisfy early customers and collect feedback for future product development. This concept is crucial for product managers, as it enables them to test their assumptions about the market with minimal investment. An MVP can be a landing page, a prototype, or a simple version of the product. The goal is to validate the idea and understand what customers need before investing too much time and money.
3. Validated Learning
Validated learning is the process of testing assumptions and hypotheses with real customers to validate or invalidate them. Product managers can use various methods to collect data, such as surveys, customer interviews, usability tests, and analytics. The data collected should be analyzed to identify patterns and insights that can be used to improve the product. Validated learning is essential for building successful products, as it ensures that the product meets the needs of customers and solves real problems.
4. Pivot
A pivot is a change in direction that a company makes based on validated learning. It is a strategic decision that product managers must make when the data shows that the current approach is not working. A pivot can be a change in the target market, the product features, or the business model. Pivoting is not a failure; it is a natural part of the product development process. Product managers should be open to pivoting if the data shows that it is necessary.
5. Innovation Accounting
Innovation accounting is a way of measuring progress in startups that focuses on learning, rather than revenue or profit. Product managers can use innovation accounting to track the progress of their products and identify areas for improvement. It involves three stages:
- Establishing a baseline: This is where the product manager identifies the key metrics that they want to improve and establishes a baseline for these metrics.
- Tuning the engine: This is where the product manager makes small adjustments to the product to improve the metrics.
- Pivot or persevere: This is where the product manager decides whether to pivot or persevere based on the data collected.
Innovation accounting helps product managers to focus on learning and improvement, rather than just revenue or profit.
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