The emergence of the Lean Startup methodology, its formalization in the book “The Lean Startup” [E. Ries, 2011], and its subsequent dissemination and adoption in start-up ecosystems worldwide has caused a total upheaval in how the creation and development of companies are conducted, by causing a paradigm shift and killing myths that have accompanied the success stories of entrepreneurs for a very long time.

Entrepreneurship as a science

Entrepreneurship, once perceived as a vocation, an art reserved for a few predisposed individuals, is now defined as a branch of management, which has its laws, rules, and best practices. In this sense, entrepreneurship can be learned, taught, and practiced by everyone.

End of certainty and start-ups everywhere

Eric Ries gives his definition of a start-up as “a human institution designed to create a new product or service under conditions of extreme uncertainty”. The term “human institution” indicates that start-ups can be found wherever there is uncertainty; including in a multinational with 30,000 employees, in an administration, or in a government institution.

The end of the myth of the customer is king

Make no mistake: the customer is still king in the sense that they are the one who –in fine– has the power to promote or kill a product. But the Lean method completely abandons the idea of asking the customer what they want or what they need, as they are incapable of knowing which product they would ultimately adopt or not and which feature would bring them the most value.

In the book “The Innovator’s Dilemma” [C. Christensen, 1997], the author explains how Apple completely failed with its first PDA, The Newton, by basing its development mainly on the requests of hypothetical customers and by integrating technologies that were cutting-edge at the time, such as handwriting recognition, into a product that ended up being too complex, too expensive, and not attractive enough for customers.

Rather than asking the customer what they would like to have, observing them in the tasks they seek to accomplish is the primary source of ideas for the entrepreneur.

Eric Ries recounts his experience at IMVU: after spending more than 6 months integrating the market’s instant messengers into their environment, they found that users did not use them to communicate and then concluded that if they had just added a button labeled “Use messaging” with an error message appearing when clicked, they would have saved a lot of precious time and money.

The end of large batches

The Lean Startup method, inherited from lean manufacturing or Toyotaism and integrating the practices of agile development methods, has highlighted the power of small batches: start-ups, in a very uncertain environment, would be heavily impacted by losses related to working in large batches.

Lean manufacturing indicates, for example, that inventory represents a waste of resources. In a start-up, the equivalent of inventory is represented by code developed or under development that does not benefit the end user.

Rather than waiting 2 years before releasing a new version of a software, creating rapid updates every week, or even every day, by measuring the progression of carefully developed metrics to validate hypotheses and accumulate knowledge on user behavior is the best practice. The use of this principle to its maximum results in software in “permanent Beta” in the style of Google.

The end of the myth of the perfect product and the cult of the lighthouse customer

The Lean Startup method has destroyed the popular myth that success belongs to perfectionists working on their products until they make them perfect in every way before presenting them to customers. In the recent past, this resulted in more than 90% of start-up products never being used by their target customers.

A contrario, the Lean method recommends launching minimal products, even with bugs, even incomplete, and even if they are not aesthetically finished.

And for good reason: it is about dealing with a category of customers called early adopters, also known as lighthouse customers (lighthouse customers), who are very interested in being the first users of a product and less concerned about details. Furthermore, they are generally influencers in their respective communities.

For example, the first version of the iPhone, called iPhone Edge, had neither UMTS (3G), nor multi-tasking, nor the appstore, nor copy/paste, nor native SMS and had a non-replaceable battery and screen. It was still a great success that allowed it to be improved over subsequent iterations.

These minimal products can even sometimes be replaced by experiments whose sole purpose is to answer fundamental questions about the planned business.

Far too many start-ups have products that the user will never want. Rather than delaying the release of a product by 6 months—or even more—to make it perfectly finished but end up in failure, it is better to accelerate its release and improve it later if it receives a good reception.

The end of the business plan and the cult of value

It is said that a start-up is “a temporary organization designed to search for a repeatable and scalable business model” [Steve Blank, Search versus Execute, 2012]. Therefore, a start-up does not—yet—have a business model. It is in the process of searching for one.

Did Larry Page, when he was developing the Pagerank algorithm or even when he created the company Google Inc. with his co-founder, know that Google would become a media group deriving its income from advertising? One can doubt it.

Rather than focusing on creating the perfect business plan that will—surely—not hold up, priority is given to the creation of value: if we create value, someone will eventually pay to have it.

Experimentation and learning as doctrine

“I failed but the experience taught me a lot” is a justification phrase used by losers. The only benefit that can be claimed from an experience is validated learning.

If the question is “are customers ready to pay a premium for such a feature?” and the experiment leads to the answer “NO”, it is not a failure but validated knowledge about a market.

It is about creating short and numerous rapid cycles of build-measure-learn experiments to collect a maximum of knowledge on the needs and behaviors of the product’s user. The resulting conclusions must be indisputable; experiments are therefore conducted one at a time, by cohort, and by comparing metrics to a reference group.

Growth as the ultimate indicator

The ultimate goal of a start-up is to create a scalable—or repeatable—business model. Consequently, the Lean method considers growth not as the ultimate goal to be achieved but as an indicator of product-market fit.

Making changes to a website and moving from a click-through rate of 1/1000 to 3/1000 indicates that the new version is more in phase with the customer’s need and behavior.

Google concluded, after many experiments, that 10 search results displayed on each page is the ideal number that allows for the best click-through rate on its results. No intuition could have led to this result. Only experimentation can lead to getting the most out of the product. Successive optimizations of the product allow for improving different metrics: all levers acting on the company’s growth.

Innovation as a management system

Alongside traditional accounting intended for financiers, the Lean method advocates for the establishment of innovation accounting to make every person in the company accountable for their growth hypotheses and to encourage innovation from every member of the company.

What doesn’t change: change

This goes against the persistence taught by all the mythology on entrepreneurship: if the development of a product does not yield sufficient growth for a start-up, one must “dare” to change strategy. Indeed, more than 90% of brilliant, visionary, hardworking entrepreneurs who sacrifice everything for their companies end up failing anyway. Considering a change in strategy is then a life-saving measure.

Treating a different segment of the customer base, changing the product to meet the same need, finding another more important need for the same customer, taking one element of its product and making it its new product, changing the business model… are all ways—among many others—to PIVOT.

Knowing how to pivot at the right time and in the best way until finding the ideal strategy constitutes one of the pillars of Lean: while remaining faithful to their initial vision and using all the knowledge accumulated on the market, the entrepreneur must know how to abandon their initial strategy and adopt a new one to ensure stronger growth.

And in conclusion

Entrepreneurship in Lean mode, in the era of mobile web, IoT, 3D printing, big data, drones, and sharing and streaming platforms, is a way to approach a group of users by proposing to bring them value in the best way possible thanks to these technologies, to test their interest at the lowest possible cost and then to adapt to their reaction and behavior to refine the product and gradually extend it to the entire market.