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Lean Startup

Use this framework for a business start-up

In 2007 Eric Ries, a West Coast code writer, was named by Business Week as one of the best young entrepreneurs of tech. In 2011 he published his framework for new start-ups in a book entitled The Lean Startup: How Constant Innovation Creates Radically Successful Businesses.

Eric Ries defines a startup as "a human institution designed to deliver a new product or service under conditions of extreme uncertainty". By its very nature a start-up is surrounded by uncertainty and for this reason many fail. Ries believes that failure rates could be minimised by applying a structure to the start-up. This he calls the lean startup. He proposes three stages:


1. Build: this is the first stage in which the idea is turned into a product.

Customers should be central to all new business ideas. Ries reminds us that at every stage of turning the idea into a product the customers' views are vital – even if only one customer.


2. Measure: as the product is developed it is important to see how customers respond.

Start-ups are inevitably experiments. The business idea is based on a hypothesis that someone is interested in the new product. Therefore as frequently as possible tests should be made to see how customers respond. Getting close to the customer and understanding their reactions is critical.

3. Learn: almost certainly there will need to be some changes required.

In most cases, the original idea will require tweaking in order to meet customers’ needs and to ensure it is financially viable. This means the entrepreneur must be able to pivot, learning from the experiment and ensuring that problems are fixed and value is built into the new product.

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As with all things in business this is a circular framework, constantly building on ideas, measuring responses and applying the learnings to make improvements.

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