This book essentially talks about how to sustain innovation in a company (not just startups). Ries began the book by talking about IMVU, a 3D instant messaging kind of social media platform, and its success stories, followed by other companies such as Kodak and Dropbox. As a fresh-out-of-college student with little work experience and minimal knowledge about startups, this book was a bit complex for me to apprehend. However, after reading summaries from a few sites, I have constructed a better understanding to share with you all in my own words.
Let’s first define what a start-up is:
You can never be sure of what the demands and needs are from people as they keep on changing with the continuous advancement of technology that we have now. As companies continue to develop their product/service, they must demonstrate validated learning using metrics where they know they are demonstrating progress in their creation meeting customers’ demands. This method is inspired by Toyota’s motto, genchi gembutsu, which means “go and see for yourself.” From this motto, companies can find who their target audience is and what they want, which is crucial at the beginning stages of starting a company.
After key tasks have been established and deciphered from the initial stages, you then have a minimum viable product (MVP) solidified to help conduct a build-measure-learn feedback loop to ensure progress is STILL being made by performing this in small batch sizes to avoid major mistakes later on. Ries emphasizes conducting experiments rather than a large one at the final stages to save time. This consistent testing for success will determine whether to pivot (reestablishing a new baseline) or persevere.
Once the feedback loop is ready to persevere, the next step is for the startups to regulate speed without wasting any more time, while also being mindful of not getting too ahead of themselves. Developers often get so fixated on their creation that they often forget what the actual needs of the customers are. In conjunction with the build-measure-feedback loop, Ries explained the “Five Whys,” created by Taiichi Ohno, founder of Toyota Production System. The “Five Whys” help objectively reveal the root cause of any problems that may arise during the development of the startup without blame to any one individual. Ries emphasized that it is imperative to have a meeting with all members involved in the Five Whys because behind every technical problem is a human problem.
In summary, disruptive innovation, the creation of new market value and network, is key to success in any company as old networks become obsolete over time. Surely, startups have the ability to adapt to changes more rapidly, but large companies also have an advantage with more money and can also do the same with more mindful changes in culture. Having a sandbox of innovators at hand working in cross-functional teams to continuously improve the old will provide a stable foundation for growth.