# Eric Ries - The Lean Startup (Highlights)  ## Metadata **Review**:: [readwise.io](https://readwise.io/bookreview/39399117) **Source**:: #from/readwise #from/kindle **Zettel**:: #zettel/fleeting **Status**:: #x **Authors**:: [[Eric Ries]] **Full Title**:: The Lean Startup **Category**:: #books #readwise/books **Category Icon**:: 📚 **Highlighted**:: [[2024-04-06]] **Created**:: [[2024-04-13]] ## Highlights - Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught. ([Location 122](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=122)) ^703469292 - We really did have customers in those early days—true visionary early adopters—and we often talked to them and asked for their feedback. But we emphatically did not do what they said. We viewed their input as only one source of information about our product and overall vision. In fact, we were much more likely to run experiments on our customers than we were to cater to their whims. ([Location 138](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=138)) ^703469293 - I studied lean manufacturing, a process that originated in Japan with the Toyota Production System, a completely new way of thinking about the manufacturing of physical goods. ([Location 164](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=164)) ^703469294 - The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. ([Location 193](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=193)) ^703469295 - Validated learning. Startups exist not just to make stuff, make money, or even serve customers. They exist to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision. ([Location 199](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=199)) ^703469296 - Build-Measure-Learn. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop. ([Location 201](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=201)) ^703469297 - Innovation accounting. To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. This requires a new kind of accounting designed for startups—and the people who hold them accountable. ([Location 203](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=203)) ^703469298 - Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. Startups have neither. ([Location 210](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=210)) ^703469299 <!-- New highlights added May 12, 2024 at 3:07 PM --> - The method I recommend is called innovation accounting, a quantitative approach that allows us to see whether our engine-tuning efforts are bearing fruit. ([Location 1017](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=1017)) ^718679074 - If the company is making good progress toward the ideal, that means it’s learning appropriately and using that learning effectively, in which case it makes sense to continue. If not, the management team eventually must conclude that its current product strategy is flawed and needs a serious change. When a company pivots, it starts the process all over again, reestablishing a new baseline and then tuning the engine from there. The sign of a successful pivot is that these engine-tuning activities are more productive after the pivot than before. ([Location 1563](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=1563)) ^718679075 - When one is choosing among the many assumptions in a business plan, it makes sense to test the riskiest assumptions first. ([Location 1577](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=1577)) ^718679076 - Five dollars bought us a hundred clicks—every day. From a marketing point of view this was not very significant, but for learning it was priceless. Every single day we were able to measure our product’s performance with a brand new set of customers. Also, each time we revised the product, we got a brand new report card on how we were doing the very next day. ([Location 1612](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=1612)) ^718679077 - Instead of looking at cumulative totals or gross numbers such as total revenue and total number of customers, one looks at the performance of each group of customers that comes into contact with the product independently. ([Location 1626](https://readwise.io/to_kindle?action=open&asin=B004J4XGN6&location=1626)) ^718679078