At its core it is built upon three key areas:
- Iterative product releases with extremely fast cycle times
- Validated learning to focus on what customers want
- A scientific approach to decision making
This allows the output of shortened product development cycles, measured progress, and input of valuable customer feedback (observing behaviour, not directly asking).
Organizations can design their products and services to directly meet the demands of their customer base without requiring large amounts of initial funding or expensive product launches that may fail. Waste spending and risk are massively reduced.
Originally designed for high-tech companies, the philosophy has now expanded out to include any individual, team, agency or company looking to introduce new products or services into the market.
Ries developed the Lean Startup methodology through his direct experiences as a startup employee, founder and advisor. Through success and failure (and especially failure), he began to highlighted the biggest mistakes made by these emerging organizations.
In the twentieth century, a good plan, a solid strategy and thorough market research were often indicators of likely success. The problem with a startup (and indeed a lot of businesses right now) is that they do not yet know who their customers are or what their products should be - as startups are essentially a search for a viable business model there is too much uncertainty for accurate forecasting.
Failure then was the result of having too concrete a vision. It did not accurately represent consumer demand, and assumptions were not validated. When a product finally launched after a huge amount of investment, it ended up being something customers either didn’t want or wouldn’t pay for.
Ries calls this “achieving failure” - successfully, faithfully, and rigorously executing a plan that turned out to be utterly flawed.
A new methodology was required to address this.