The lean startup methodology is a set of principles popularized by author Eric Ries. While the principles were originally geared to high tech startups, they can be applied to many different types of companies.


The book outlines five main principles:

1. Before you Go All In, Build a Minimum Viable Product

2. Create a Process for Continuous Development

3. Split Test Different Version of Your Product

4. Track the Key Drivers of Your Business

5. Don't be Afraid to Pivot


The Minimum Viable Product

The MVP is a first "test" of your product where you can get valuable feedback from customers with the least effort. This allows you to avoid many pitfalls by getting feedback early and often so you can build a product your customers want. Many startups do not head this advice and will spend a tremendous amount of time and money on a product that they end up finding has many features their customers never wanted and never use.

Continuous Development

Continuous development and deployment helps startups continually develop their product and puts a focus on development that helps a company "move the meter" of a business.

Split Testing

Split testing helps startups identify the best performing products, prices, or features. Split testing helps you maximize your yields on price and can improve the impact of a companies marketing.

Actionable Metrics

Actionable metrics are measurments that those that help move the business forward. These metrics include customer acquisition cost, average order, and customer lifetime value.

Pivot

The now popular term, pivot, refers to changing course based on customer feedback. Ries uses Groupon as an example of a company that successfully pivoted. They changed course from their original concept of an online activism platform to an online coupon promotion platform that turned into a billion dollar business.

The lean startup methodology has continued to gain in popularity and is now widely taught in incubators, entrepreneurship classes, and has spawned 'lean startup' meetups worldwide.