In his book The Lean Startup, Eric Ries pioneered the concept of Build-Measure-Learn. It is a learning and feedback loop for determining the effectiveness of a product, service, or idea as fast and inexpensively as feasible.
The Lean Startup is all about rapidly figuring out what your customers want. It’s about constantly testing what your clients want and adapting based on the results – all before you run out of funds.
Lean Startup Highlights
- Entrepreneurship, like launching a new product or service, has a process. You can learn it.
- The purpose of a company is to figure out what to produce as rapidly as possible – what people want and will pay for.
- Customers do not express their desires to us. Through their actions or inactions, they disclose the truth.
- You must test and validate your value and growth hypothesis using the Build-Measure-Learn Feedback Loop.
- Use MVPs to cycle through the Build-Measure-Learn feedback loop quickly.
- Pivot as many times as needed before your run out of funds.
When you use Lean Startup, you don’t waste time developing something no one wants. Webvan, an online grocery delivery service that spent over $1 billion setting out warehouses and a delivery fleet before finding there just weren’t enough consumers for their service at the time, is a typical example of a firm that created something no one wanted. Webvan immediately failed.
Startup in a nutshell
Startup definition: a human organization designed to create a new product or service under conditions of extreme uncertainty
A startup aims to determine the right product to produce – what consumers want and will pay for – as quickly as possible. Learning milestones feel less effective since learning is intangible. However, learning is the most important thing for a business to focus on. Instead of creating and implementing a complex strategy, get into the Build-Measure-Learn feedback loop as soon (and as inexpensively) as feasible.
Lean Startup Main stages
- Vision. Your true north. The change you want to see in the world.
- Strategy is how you attain your vision. You will probably have to do a few alterations, referred to as pivots. You must strike a balance between your vision and client expectations. The majority of the time, clients need to figure out what they want ahead of time.
- Product. The product is the result of the strategy. Products are continuously changing as a result of the optimization process.
Questions for product development
There is no need to move further if you do not answer yes to each question.
- Do customers realize that they have the issue you’re attempting to solve?
- Would they buy a solution if one existed?
- Would they purchase it from us?
- Can we provide a solution to this problem?
The most critical assumptions entrepreneurs make
- Value hypothesis: Does a product or service genuinely provide value to customers once they use it? Create experiments that demonstrate this through their actions. Do not use surveys!
- Growth hypothesis: How would new consumers learn about a product or service, according to the growth hypothesis?
The Build-Measure-Learn Feedback Loop
The aim is to complete the Build-Measure-Learn loop as fast as feasible. You save time and money by learning as quickly as possible. Every Startup has a hypothesis from which it is founded. These are your thoughts or assumptions about what your consumer wants.
Preparation

The first step is to describe the concept you want to test and the material you need to acquire. Formulate a hypothesis: your prediction of what will occur during the experiment. Your thesis might cover everything from product features and customer service concepts to optimal pricing methods and distribution channels. Next, identify what you’ll need to measure to test your hypothesis and how to gather your data. Data collection methods include interviews, questionnaires, website analytics, and specialist software applications.
Step 1: Build
The objective here is to develop a Minimum Viable Product (MVP) – the smallest product feasible that allows you to test your hypothesis.
Definition: Minimum Viable Product or MVP is a development technique in which a new product is introduced with basic features but enough to get the consumers’ attention. The final product is released in the market only after getting good feedback from the product’s initial users.
It might be a functional prototype, simple advertising, or a landing page. It might be a PowerPoint presentation, a fake brochure, a sample dataset, a storyboard, or a movie demonstrating what you have to offer. Whatever MVP you pick should display just enough essential features to pique the attention of early adopters — the individuals who will most likely want to buy your product as soon as it is released.

As a startup, your focus should be to demonstrate the need for your proposed product, not to develop a completely functional model with sophisticated features. When you’ve finished your MVP, you can launch it and collect data using the approaches you selected during the planning process. After that, you may collect funds to build a more feature-rich product.
Step 2: Measure
What happened compared to your hypothesis? Is there enough interest in your concept to keep developing it? Is the evidence indicating that you can create a long-term business around your product or service?
Useful metrics should have three qualities, known as the three A’s:
- Actionable: Your measure must demonstrate a clear cause-and-effect relationship. If you experiment, you must understand how it influenced your action. How else will you know whether you’re making headway?
- Accessible: Make your measure as straightforward as possible for everyone in the organization to comprehend. For example, while not everyone understands what a “hit” on a website is, everyone understands what a person who visits your site implies. Consider displaying critical metrics on public displays so that everyone may view them.
- Auditable: It should be easy to delve into the data to determine how a statistic is constructed. This prevents employees from fighting over how the measure was created and allows them to focus on achieving progress.
Step 3: Learn
By this point, you can make good, evidence-based business judgments on what to do next. Then there are two options:
- Persist: Because your theory proved correct, you continue with the same aims. You iteratively enhance and perfect your concept by repeating the feedback loop even if your idea has had enough initial success to warrant continuing. Remember that your next version may not be ready to change your mind.
- Pivot: Although the experiment disproved your theory, you still learned much about what doesn’t work. You may reset or correct your path and continue the loop, applying what you’ve learned to test new hypotheses and conduct other experiments.
Pivot or the courage to challenge your idea
Build-Measure-Learn frequently has negative results, especially early in the cycle. This is simply because you are testing at an early stage of development before fully understanding what customers want and before your product has any value-added features. Before you can endure, you may need to pivot several times. Pivoting might harm your morale, but remember that it is an essential element of the Build-Measure-Learn process. Every unsuccessful or unimpressive MVP is a chance to learn, develop, and recommit to the feedback cycle.
Flexibility and the courage to continue are critical to the success of Build-Measure-Learn – and business building in general. This is where you should consider your “runway” – the quantity of money accessible from investors. If you have a limited runway, you may only have time to test a few concepts before you run out of money. You have many more possibilities to turn if your runway is longer.
Here are a few illustrations of well-known pivots.
Netflix
Viewers sometimes forget that Netflix used to be the service that delivered DVDs to your mailbox. Today, many customers do not possess a DVD player and are instead accustomed to watching videos on their phones, laptops, and other devices. While this shift was being implemented, the previous DVD-by-mail business offered stability to the company. This service gradually became a considerably smaller component of the company’s offering. Netflix recognized a shifting market and adapted. Furthermore, Netflix recognized the necessity for ever-changing and diverse content. As a result, they decided to create a production business and supply a significant percentage of the available content.
Instagram began as the internet firm Burbn, which allowed users to check in at their favourite locations. It also enabled them to share photographs. It became evident that the most popular function was photo sharing. He renamed the app Instagram after himself. Two years later, Facebook paid $1 billion for Instagram.
The startup platform, formerly named “Odeo,” was created to make podcasts more accessible. Twitter is now a platform for microblogging. It is famous for the sharing of ideas, news, and entertainment. When Apple released iTunes, the original version was immediately modified. Twitter evolved into a medium for individuals to express themselves in real-time.
Lean Startup Conclusion
The Lean Startup method shows how to achieve business success by learning what customers want fast. Eric Ries explains how to launch a minimum viable product, why you should ignore vanity metrics, and how to use ‘split-testing’ to avoid wasting years of your life building a product nobody wants.
To use the Build-Measure-Learn feedback loop, follow these steps:
- Plan your experiment by learning, measuring, building, and generating a formal hypothesis.
- Create and test a minimal viable product.
- Compare the findings to your hypothesis to see whether you can build a successful business around your product.
- Evaluate your findings and determine whether to continue or pivot.
Then, go back to the beginning and repeat the process as you build your product. The most significant advantage of the Lean Startup method is that it reduces the risk and cost of developing items or services that no one wants, allowing you to “focus” on something that people would love. David Gousset.
When you want to launch or improve a service or a good, the following reading will be useful:
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