You will be able to adapt and change to what the market is telling you. This way, if your initial idea is flawed it shouldn’t be fatal to your organization. Through a process of validated learning, you can carefully test your assumptions through a product prototype and analyze solid, empirical data obtained from customer feedback. “Break down your plan into a hypothesis and run experiments to discover if they’re true or not” So to save yourself the heartache, Ries suggests: You’re hypothesizing how the market will react to your solution. Therefore the big, burly business plan you spent years creating is going to be full of untested assumptions. On the other hand, startups typically bring a completely new, innovative product or service to market with zero precedent. It’s a business idea that’s proven to work. What about all that time, energy, and money we’ve put into this?Īs Ries quickly understood, there’s a big difference between startups and traditional businesses.įor example, if you’re looking to open up a new craft beer place ( we brought in Brewdog COO David McDowell to show you how if that’s your thing 😉) there’s already an established model to follow.Do we really have to go back to the drawing board and start all over again?.What do they do if they suddenly find out customers are not actually interested in the final product?.If we switch out “ enemy” for “ customer” we can quickly see why spending 2-3 years on that detailed business plan was a bad idea. However, as the saying goes… “no good plan survives the first contact with the enemy” They put hours and hours of hard work into an intensely detailed business plan, build a team, pitch investors, and eventually start trying to sell it to customers. Ries realized that the majority of startups fail because they invest too much time, energy, and money into an idea that doesn’t work. First coined by Eric Ries in his book The Lean Startup, the methodology is inspired by the principles of Toyota’s famous lean manufacturing model reducing waste and optimizing resource allocation.

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