(cross posted at sherylsbooklist.blogspot.com)  

This is probably the top business book that has been recommended to me since I joined a startup. Now that I have read it, I can understand why – it ought to be required reading for anyone coming from a big company into a fast-paced startup. I had many a “a-ha” moment reading this, like “Oh, that’s why we are shipping a product that seems incomplete…it’s on purpose!”

The concept of Lean Manufacturing grew out of the Toyota Production Systems innovations of the mid-20th century. This comprised the idea of constantly improving systems, measuring more important things, and driving organizational learning. In grad school, I remember learning about this, and about its influence on the software industry. Agile/scrum development seems to have its roots in Lean.

So all this forms the backdrop for the ideas in this book – that companies and projects in general can use a lot of the same concepts that have fundamentally improved Manufacturing and Software Development. There’s a real focus on learning and structuring the product development process to increase the speed with which everyone learns. (And it is worth pointing out that like Innovator’s Dilemma, this is relevant for innovative parts of big companies, not just startups.) Two items stuck with me the most:

1. Vanity Metrics – Ries argues strongly against using vanity metrics when evaluating a change to a product. He says that too often metrics are chosen that look like improvements when really they aren’t, like number of downloads (without number of repeat customers) or number of repeat customers (without number of paying customers.) He says you really need to know what you are measuring and why.

2. Experiments – Ries gives several examples of how you want to run experiments about your product in real life with real customers. If your audience is big enough, A/B test actual features. Release great products without all their features to see if you have Andreesen’s elusive product/market fit. Ask focus group customers the right questions, not question your existing assumptions. 

It’s his examples that I liked the most – they were perfectly relevant and constructive. He’s delightfully honest about how hard it is to learn this way by sharing his experiences at his company IMVU. In any case, this is a MUST-READ for people interested in the model for success in technical innovation in the next decade. It’s in my mental bookshelf next to “Innovator’s Dilemma” “Good to Great” and “Crossing the Chasm.”