Here’s how The Lean Startup methodology is still holding up in 2021

If you’ve ever looked up the top books on entrepreneurship or launching a startup, you’re almost guaranteed to find this book featured on the list. 

Written by American entrepreneur Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses redefined the way entrepreneurs managed their startups.

The Lean Startup methodology threw traditional startup mentality out the window and simplified the process into three repeatable steps. It’s this easy method, coupled with smart and sound insights into startup management, that makes The Lean Startup one of, if not, the most popular books on startups ever published. 

But, given the book was released in 2011, the real question is whether The Lean Startup and the methodology still holds its value for budding entrepreneurs a decade later.

The startup world in 2011

The truth is most startups fail. While we’ve all heard the successful stories of great Australian startups overcoming massive hurdles, assembling great teams and making it big, the reality is that a disturbing amount of startups collapse every year.

There are many factors that can contribute to the failure of a startup or new venture, but one of the main issues is that there’s ‘no market need’ for the product. It’s not that Australian startups are launching bad ideas, rather it’s that they’re launching untested ideas. For the longest time, startups have had the mentality that ‘if you build it, they will come’, but failed to listen to what the customer actually wants.

The traditional approach to business management usually involved the entrepreneur doing market research, developing a strategy, working on an idea and launching it to the customer. The main issue in this approach is that there is an underlying assumption that the business is meeting the needs or providing its ideal customer a product they want. The only feedback entrepreneurs gain in this approach would only come once the product or venture is completely developed and in the market.

The Lean Startup methodology is designed to help startups avoid these failures by pushing the bounds of the traditional approach to business management and, essentially, fast-tracking learning. Ries calls it a scientific approach to making decisions, as opposed to entrepreneurs who get trapped in gut feelings or are blinded by the success of previous products.

What is the Lean Startup methodology?

The method is broken up into three easy steps: Build-Measure-Learn. It’s this model that sits at the core of the Lean Startup movement where entrepreneurs can increase learning and decrease time and capital spent on an idea through a continuous feedback loop. The framework was inspired by the lean manufacturing process introduced by Japanese automotive manufacturer Toyota which maximised the productivity by optimising the flow and minimising waste.

The simplicity of the concept is what Scott Middleton, founder of Terem Technologies, believes leads to the popularity of the book.

“The Lean Startup provided a simple method for building a new product and, to some extent, the company with it. It’s the simplicity of the method — build, measure, learn — that went a long way to making it popular,” says Middleton.

The build phase aims to clear most of the assumptions made about the product or venture by creating a minimum viable product (MVP). The MVP should be a version of the product that involves the least amount of time spent developing but can begin the feedback loop as a proof of concept. It sounds simple, but it’s not. 

Middleton explains that “many people have difficulty releasing the simplest version of an idea, which Ries coins as a Minimum Viable Product or MVP. You really need to be OK with imperfection but, more importantly, you really need to understand your customer or user’s problem. People often struggle with releasing something that isn’t perfect and they like to skip interviewing customers or bring their own bias to customer conversations”.

Once the MVP is out, it’s time for the measurement phase. This part of the loop aims to measure whether your assumptions about what the customer wants is translating into real progress through the use of metrics and data. Nowadays, this is much easier thanks to the abundance of customer tracking metrics such as website visits, social media follows, shopping cart completions, or even qualitative data through LinkedIn comments on the new venture.

The final step is the learn phase, which can be the most difficult part of the process. It asks the startup to face reality and evaluate whether the product works or not. It’s this point where the startup can either continue the venture if they find the MVP was successful or realise they need to pivot and change their approach.

As Middleton notes, “rapid iteration on customer feedback is a beautiful thing when it comes together”.

Is it still relevant today?

Well, yes and no. A lot can change in a decade and the world is very different. Think about all the things that didn’t exist 10 years ago — food delivery apps, Tinder and air fryers. Surely some parts of the wildly popular book are out-of-date by 2021, right?

Executive sales and leadership coach Kane Draper suggests that “the relevance of some of the points made in 2011 don’t cut through in regard to an entrepreneur wanting to launch a lean startup in today’s rapidly evolving and uber competitive marketplace”.

“As an immediate example — the process of identifying a vision should recognise how great (or small) a market opportunity is based upon the undertaking of upfront investigation,” notes Draper. 

“As such, if the opportunity is great and the product/service is something consumers thrive on, rather than move to a ‘steer’ stage, the entrepreneur should look to take advantage of the niche and the ‘accelerate’ as swiftly as possible and then make the pivots or steer where necessary.”

But while the speed in which the world moves today isn’t reflected in the current edition, “the concept of the ‘build-measure-learn feedback loop’ still remains valuable and should always be at the forefront of any entrepreneur’s thoughts — particularly with a lean startup,” Draper says.

For some, they have embedded the methodology into the core of their businesses:  “I’ve applied the build-measure-learn loop from The Lean Startup to everything in the business at Terem — from product development to marketing to finance — and made it a central part of how we work with our clients,” says Middleton. 

“We’re constantly pushing the comfort boundary for releasing early with the tech companies, government and enterprises we work with but, when we get there, it’s like a revelation for many.”

Should you read it?

Yes. There’s a reason why this book is an international best seller and continues to feature heavily on the top books for entrepreneurs.

While some of the examples or points made might not be as relevant today, the core build-measure-learn methodology behind The Lean Startup is simple, applicable and repeatable for any budding entrepreneur who wants to create and manage a startup. 

According to Middleton, “if you’re building a new product or startup then you ignore it at your peril. It’s fundamental reading for anyone working on a new venture or new product. The Lean Startup gives you a method to help you improve your chances, but it’s just one method and you still need commitment, vision and passion”.