The lean startup methodology is a way of building new products and businesses by testing ideas with real customers in small, fast experiments. Instead of following a long plan, a team builds a minimum viable product, measures how people respond and learns whether to keep going or change course.
This guide covers where the method came from, its five principles, the build-measure-learn loop, minimum viable products, validated learning, innovation accounting and the pivot. It ends with a simple way to run a first experiment.
Key takeaways
- Lean startup treats a new product as a series of experiments, not a plan to execute.
- The build-measure-learn loop turns ideas into products, products into data and data into decisions.
- A minimum viable product is the smallest thing that tests your riskiest assumption.
- Validated learning, backed by actionable metrics, is the measure of progress.
- Each cycle ends with a choice: pivot to a new approach or persevere with the current one.
Where the lean startup came from
Eric Ries described the method in his 2011 book The Lean Startup, drawing on his own startups. He combined lean manufacturing ideas such as small batches and the five whys with Steve Blank's customer development process.
Blank's work, set out in The Four Steps to the Epiphany, argued that startups should search for a business model by talking to customers before scaling. Ries added a way to run that search with fast product experiments and clear metrics.
The five principles of lean startup
Ries sets out five principles in the book. They apply to new ventures inside large companies as much as to startups.
- 1
Entrepreneurs are everywhere
Anyone creating a new product under extreme uncertainty is doing entrepreneurial work, whatever the size of the organization.
- 2
Entrepreneurship is management
A startup is an institution, and it needs a form of management suited to uncertainty.
- 3
Validated learning
Startups exist to learn how to build a sustainable business, and that learning should be tested by experiments.
- 4
Build measure learn
The core activity is turning ideas into products, measuring how customers respond and learning whether to pivot or persevere.
- 5
Innovation accounting
Progress is measured with milestones and actionable metrics designed for uncertain, early work.
The build-measure-learn loop
The loop has three steps. Build turns an idea into something customers can react to, often an MVP. Measure collects data on what they actually do. Learn decides what the data means for the next step.
Ries suggests planning in reverse: start from what you need to learn, work out what to measure to learn it, then build only what is needed to get that measurement. The aim is to make each trip around the loop as short as possible.
Minimum viable product
A minimum viable product (MVP) is the version of a product that lets a team collect the most validated learning about customers with the least effort. It is an experiment, not a cut-down first release.
MVPs can be very small: a landing page that describes the product, a short video, a manual service run by hand behind a simple front end, or a single feature. The MVP tools guide lists software for building them, and A/B testing tools help measure the response.
Validated learning and innovation accounting
Validated learning is learning that has been tested with real customer behavior, rather than opinions or surveys alone. It is how a lean startup shows progress before revenue arrives.
Innovation accounting sets a baseline with an MVP, tunes the product toward an ideal through experiments, then decides whether to pivot or persevere. It relies on actionable metrics, such as conversion rates by cohort, rather than vanity metrics such as total sign-ups, which rise whatever the product does.
Pivot or persevere
A pivot is a structured change of course to test a new hypothesis about the product, the customer or the business model, while keeping what the team has learned.
Ries describes several types, such as a zoom-in pivot, where one feature becomes the whole product, and a customer segment pivot, where the same product serves a different customer. Regular pivot-or-persevere meetings stop a team drifting on an idea that is not working.
Lean startup tools
The Lean Canvas, created by Ash Maurya, puts a business model on one page so its riskiest assumptions are easy to see. Customer discovery tools help run and analyze interviews.
The lean startup tools hub covers software for each step of the loop, and actionable metrics and validated learning are explained in the glossary.
How to run your first experiment
Write down the assumption that would sink the idea if it were wrong. Usually it is whether customers have the problem at all, or whether they would pay to solve it.
Decide what result would prove or disprove it, and set the threshold before you start. Then build the smallest test that produces that result, run it with real prospects and compare the outcome with your threshold.
Record what you learned, decide to pivot or persevere, and start the next loop.