How the Lean Startup Evolved from Lean

assembly line manufacturing to small startup

Startup founders are bombarded with books, articles, and podcasts every day by well-meaning friends and colleagues who want them to succeed:

“You GOTTA read this!”

“You GOTTA listen to this!”

When in actuality, 95% of the content recommended, doesn’t apply to your situation. The content that does apply can usually be condensed into pages or bullet points. As Rob Walling says,” you need laser-focused books (or better yet blogs, podcasts and mentors) that speak in-depth about your particular situation.”

The Lean Startup was one of those books (and blogs) that applied to everybody’s situation.

When Eric Ries started blogging about Lean back in 2008, he made it clear that HE was not introducing an entirely new concept. Rather, he was trying to show how an existing manufacturing process — lean — could be applied to startups.

A tale of two readers

For serious entrepreneurs, the book was a godsend. It made sense immediately, like a great big “Aha!” moment. Lean articulated what they sorta knew, but weren’t fully putting into practice. Reading about Toyota, Henry Ford, and Kanban made them hungry for more. In fact, for these entrepreneurs, Reis’ book was just an appetizer. They devoured everything they could about Lean — primary sources, more books, blog posts, podcasts, conferences, and meetups.

For less serious entrepreneurs, Ries’ book wasn’t so much a new application as it was gospel truth. Overnight, lean evangelists were born. They dropped the a-word (agile), p-word (pivot), and i-word (iterate) wherever possible, even when it was off-base and inappropriate (not to mention dorky). The problem was that because lean made building great products look easy, essential concepts and definitions were glossed over. That’s why some less patient lean disciples, get prickly when they bump into new converts.

Mass movements are always a little funky.

Lean ain’t no fad

Lean only sounds like a fad if you hadn’t heard about it prior to Ries, but the roots run deep. Depending on who you ask, it goes back either decades or centuries. Lean’s intense customer focus and “respect for people” management-style has been included in the curriculum of top business schools since the 1980s.

Ries’ genius was taking what he saw in one place (the assembly line) and applying it somewhere else (a startup). This is a textbook example of disruptive innovation. It’s changed how startups bring a product to market and increasingly, how large corporations roll out new products.

The more you learn about lean — beyond the startup — the more opportunity you’ll find in the world. Your brain has a funny way of pulling inspiration from what you learn and observe. Besides, what’s funnier than a grab bag of Japanese words? I can’t think of anything!

Lean as a concept is also both simple and complex. For example, take a look at Lean for Dummies. Not so dumb, right? Contrary to what recent converts think, lean has never been an invitation to simply copy what successful startups do (spoiler alert! Origin stories aren’t always trustworthy). When you can explain lean concepts coherently, you’ll be able to drown out useless noise about lean, but still track the progress of the movement.

So, what follows is a list of popular lean/lean startup terms with definitions and examples. Test yourself. When you note the slight but important differences between lean and lean startup, you can see why they’ve gotten so mangled.

Value — that which is important to the customer. Value-added work is something your customer is willing to pay for. They would miss it if it disappeared. Both Lean and Lean Startup’s version of value is not tied to anything intrinsic (i.e., gold or diamonds), but is based on perception.

Innovation — a new product, method, idea. In lean terms, innovation is simply anything new, including a division working within a company. In lean startup terms, innovation can be repurposing an existing technology for a new use, devising a new business model, or even simply bringing a product or service to a new location or set of customers previously underserved.

Waste — or Mura, Muri, Muda. Confused? Waste in lean terms is the 7 Ws: defects, overproduction, transportation, waiting, inventory, motion, processing. In lean startup terms, waste is anything that doesn’t add value (no matter how much you might like it).

Risk — exposure to the chance of loss. All businesses have risk. In lean terms, it might be introducing a new feature. For lean startups, the risks are three: technical, customer and business model risk. According to one of Ries’ partners, customer risk is the most common uncertainty among startups. In fact, she says, you should always assume that to be true.

Pivot — a change in strategy, based on what you’ve learned about your customers and/or market. In lean terms, continual improvement (Kaizen) is always the goal, using a work cycle called PDCA (plan, do, check, act). In lean startup terms, the cycle is Learn, Build, Measure.

A textbook example of a pivot is YouTube. The product started out as a dating site where customers made videos of themselves. Somewhere along the way, the founders realized that dating was a losing model, and switched to general interest (cat) videos.

 Pull System — a method for controlling the flow of resources by replacing only what has been consumed. It’s flexible. In lean terms, this looks like a vending machine that gets restocked once everything’s been sold. The customers are pulling more candy bars. In lean startup terms, this could be watching how customers react to your product and building on the features they “pull.”

(Continuous) Flow — moving products through a production system without separating them into lots. In lean terms, this would be building a Toyota to completion on the assembly line and sending it to a waiting customer (pull). In lean startup terms, flow is establishing a work rhythm where you are most productive. It’s based on the Flow book.

Although Eric Ries is obviously a teacher at heart, he’s no academic. Most academics are happy to let their work collect dust in anonymity. Their employer, the university, is also happy with that arrangement. Ries wrote The Lean Startup after years of studying Lean. He put it out there, for the world to see, criticize and ACT upon.

And that’s what’s happening. Entrepreneurs are building products and starting companies armed with a little bit of lean knowledge. The ones that know lean better are probably building and starting companies faster and more successfully. Lean fanboys are just… talking.

At New Haircut, we think Ries made a convincing and credible case for lean. We’re sold. So far, it’s allowed us to rapidly iterate the web and mobile apps we create for our clients, till we’ve hit product-market fit. Win-win.