Lean Startup

• Steve Blank and Eric Ries: Origins of lean startup in entrepreneurship

• Fake it till you make it: Dan. Sullivan.

• What type of lean startup should I run?

What

A module of New Venture Development courses.

Firms that follow a hypothesis-driven approach to evaluating entrepreneurial opportunity are called "lean startups." Entrepreneurs in these startups translate their vision into falsifiable business model hypotheses, then test the hypotheses using a series of "minimum viable products," each of which represents the smallest set of features/activities needed to rigorously validate a concept. Based on test feedback, entrepreneurs must then decide whether to persevere with their business model, "pivot" by changing some model elements, or abandon the startup. - HBS.EDU

Lean startup takes its name from the lean manufacturing initiative introduced by Taiichi Ohno and Shigeo Shingo at Toyota. “Lean thinking” radically alters the way supply chains and production system are run by drawing on the knowledge and creativity of line workers, reduced batch sizes, just-in-time production and inventory control, and an acceleration of cycle times.

This approach highlighted the differences between value creating activities and waste. Measures of lean manufacturing focus on the production of high-quality products; lean startup focuses on validated learning. (Related: Decoding the DNA of the Toyota Production System, HBR, 2009)

Learning Objectives

When you have completed this module, you should be able to:

• Explain the distinction between engaging in months of research (i.e., the "business planning approach") and the lean startup mindset that all entrepreneurs really have is a series of untested hypotheses – good guesses

• Elaborate on the expression “get out of the building” as a way to test hypotheses and collect evidence about whether they are true or false (the customer development process)

• Describe and provide examples of how lean startups practice agile development by working iteratively and incrementally with the customer, always iterating to a refined version of the minimum viable product

• Explain the expression "entrepreneurs are everywhere" in terms of different contexts and how this expression relates to satisfying unmet customer needs

• Explain how "entrepreneurship is management"

• Provide a definition and examples of "validated learning"

• Describe the Build-Measure-Learn cycle and what takes place in each step

• Relate what "innovation accounting" is and how it is different from traditional accounting measures

Instructions

• Watch the assigned videos and presentations;

• Read the assigned readings;

• Complete the practice quiz or other assigned practice activity

• Complete the assessment;

• Complete the "Mark as Complete" checklist.

Practice

Assessment - Graded Activity

References

Adner, R. 2012. The Wide Lens. New York: Penguin Group.

Armstrong, C. E. (2017). Running lean startup in the classroom: From idea to experiment in 1 week. Management Teaching Review, 2(2), 132-140.

Blank, S. (2010). What’s A Startup? First Principles. Steve Blank.

Blank, S. (2013). Why the lean start-up changes everything. Harvard business review, 91(5), 63-72.

Blank, S. (2003). The four steps to the epiphany: successful strategies for products that win. John Wiley & Sons.

Blank, S., & Dorf, B. (2012). The startup owner’s manual: The step-by-step guide for building a great company. K & S Ranch. Inc, California. PubMed Abstract OpenURL.

Blank, S., & Euchner, J. (2018). The genesis and future of Lean Startup: An interview with Steve Blank. Research-Technology Management, 61(5), 15-21.

Chesbrough, H. 2006. Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston, MA: Harvard Business School Publishing.

Duke, A. (2019). Thinking in Bets: Making Smarter Decisions when You Don't Have All the Facts. Portfolio.

Euchner, J., and Ganguly, A. 2014. Business model innovation in practice. Research-Technology Management 57(6): 33-39.

Gassman, O. and Frankenberger, K. 2014. The Business Model Navigator: 55 Models That Will Revolutionise Your Business. Harlow, England: Pearson.

Gilbert, C. G., & Eyring, M. J. (2010). Beating the odds when you launch a new venture. Harvard business review, 88(5), 92-98.

Govindarajan, V., and Trimble, C. 2010. The Other Side of Innovation: Solving the Execution Challenge. Boston, MA: Harvard Business Press.

Henderson, P. 2013. You Can Kill An Idea, But You Can't Kill An Opportunity. Hoboken, NJ: John Wiley & Sons.

Keeley, L., and Waters, H. 2013. Ten Types of Innovation: The Discipline of Building Breakthroughs. Hoboken, NJ: John Wiley & Sons.

Kelley, T. 2001. The Art of Innovation. New York: Currency.

Marion, T. 2015. The importance of lean innovation. Leaders@Work, June 25. https://leadersatwork.northeastern.edu/strategy/the-importance-of-leaninnovation/

Osterwalder, A., and Pigneur, Y. 2010. Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers. Hoboken, NJ: John Wiley & Sons.

Ries, E. 2011. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Business.

Ries, E. (2017). The startup way: how modern companies use entrepreneurial management to transform culture and drive long-term growth. Currency.

Sims, P. (2011). Little bets: How breakthrough ideas emerge from small discoveries. Simon and Schuster.

Slywotzky, A. 2002. The Art of Profitability. New York: Warner Books.

Slywotzky, A., and Morrison, D. 2001. How Digital is Your Business? New York: Crown Business.

Mark as Complete