Quotes from Eric Ries

Although lean production techniques are powerful, they are only a manifestation of a high-functioning organization that is committed to achieving maximum performance by employing the right measures of progress over the long term. Process is only the foundation upon which a great company culture can develop. But without this foundation, efforts to encourage learning, creativity, and innovation will fall flat—as many disillusioned directors of HR can attest.

Instead of working in separate departments, engineers and designers would work together side by side on one feature at a time. Whenever that feature was ready to be tested with customers, they immediately would release a new version of the product, which would go live on our website for a relatively small number of people.

They are fast. They embrace new thinking. They are geared for disruption and innovation through uncertainty.

As one of my mentors, the venture capital investor Shawn Carolan, put it, "Startups don't starve; they drown." There are always a zillion new ideas about how to make the product better floating around, but the hard truth is that most of those ideas make a difference only at the margins. They are mere optimizations. Startups have to focus on the big experiments that lead to validated learning.

A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title.

A Start Up is an institution designed to thrive in the soil of extreme uncertainty

Entrepreneurs are everywhere. You don't have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry.

companies using the sticky engine of growth track their attrition rate or churn rate very carefully. The churn rate is defined as the fraction of customers in any period who fail to remain engaged with the company's product.

We can see and feel the waste of material things. Awkward, inefficient, or ill-directed movements of men, however, leave nothing visible or tangible behind them. Their appreciation calls for an act of memory, an effort of the imagination.

The rules that govern the sticky engine of growth are pretty simple: if the rate of new customer acquisition exceeds the churn rate, the product will grow. The speed of growth is determined by what I call the rate of compounding, which is simply the natural growth rate minus the churn rate.

must learn what customers really want, not what they say they want or what we think they should want.

This is also common with pivots; it is not necessary to throw out everything that came before and start over. Instead, it's about repurposing what has been built and what has been learned to find a more positive direction.

Many of the techniques for doing this—actionable metrics, continuous deployment, and the overall Build-Measure-Learn feedback loop—necessarily cause teams to suboptimize for their individual functions.

Like the other engines of growth, the viral engine is powered by a feedback loop that can be quantified. It is called the viral loop, and its speed is determined by a single mathematical term called the viral coefficient. The higher this coefficient is, the faster the product will spread. The viral coefficient measures how many new customers will use a product as a consequence of each new customer who signs

Although we write the feedback loop as Build-Measure-Learn because the activities happen in that order, our planning really works in the reverse order: we figure out what we need to learn, use innovation accounting to figure out what we need to measure to know if we are gaining validated learning, and then figure out what product we need to build to run that experiment and get that measurement.

a viral loop with a coefficient that is greater than 1.0 will grow exponentially, because each person who signs up will bring, on average, more than one other person with him or her.

It does not matter how fast we can build. It does not matter how fast we can measure. What matters is how fast we can get through the entire loop.

Companies that rely on the viral engine of growth must focus on increasing the viral coefficient more than anything else, because even tiny changes in this number will cause dramatic changes in their future prospects.

A pivot is a special kind of change designed to test a new fundamental hypothesis about the product, business model, and engine of growth.

The alternative is to use a system called the Five Whys to make incremental investments and evolve a startup's processes gradually. The core idea of Five Whys is to tie investments directly to the prevention of the most problematic symptoms.

I particularly remember a moment from back then: the moment I realized my company was going to fail.

The first step would be to break down the grand vision into its component parts. The two most important assumptions entrepreneurs make are what I call the value hypothesis and the growth hypothesis. The value hypothesis tests whether a product or service really delivers value to customers once they are using it.

At the root of every seemingly technical problem is a human problem. Five Whys provides an opportunity to discover what that human problem might be.

In most cases, the answer was no; success was driven by decisions the team had made in the past. None of its current initiatives were having any impact. But this was obscured because the company's gross metrics were all "up and to the right.