'Lean startups' can happen anywhere: 5 key ingredients

In today's hyper-competitive global economy, large organizations need to have startups under their roofs to survive and thrive. 'Lean startup' guru Eric Ries shows them how to begin.

Maybe you work in the depths of a gigantic multinational corporation, or even a government agency, and  watch longingly as entrepreneurial types strike out on their own, launching and building a new venture with their sweat, toil and funding.

Well, startups -- and the entrepreneurial energy that fuel them -- aren't just limited to lone visionaries in garages or spare bedrooms. In today's hyper-competitive global economy, large organizations need to have startups under their roofs to survive and thrive. A couple of decades back, some visionaries were floating the idea of "intrapreneurs" -- motivated innovators within organizations that pull together ideas and resources to make new things happen.

In his latest book, The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, Eric Ries, creator of the Lean Startup methodology, builds upon the idea that startups can happen anywhere, and outlines the 5 key principles that should make up the foundation of any lean startup effort. And, tellingly, the key takeaway is that startups can happen anywhere, at anytime:

1. Entrepreneurs are everywhere. Ries argues that statrups are everywhere – which he defines as an “institution designed to create new products and services under conditions of extreme uncertainty.”  Groups of people working with Fortune 500 corporations or large government agencies could meet the definition of a “startup.”

2. Entrepreneurship is management. Ries argues that “entrepreneur” should be a job title in companies of all ages and sizes.

3. Validated learning. The main purpose of a startup is to learn about customer needs, Ries says. Run frequent experiments to see what ideas stick, and which do not.

4. Build-measure-learn. A successful startup needs to operate within a continuous feedback loop. This loop consists of turning ideas into products, measure how customers respond, and “learn whether to pivot or persevere.”

5. Innovation accounting. Startup leaders still need to focus on the “boring stuff,” Ries advises: measurement, milestones, and prioritizing work. “This requires a new type of accounting for startups, and the people who hold them accountable.”

While startups may seem chaotic and more driven by passion than management, sensible and accountable management is still needed, Ries says. But the bottom line is that it can and will happen anywhere and everywhere -- the key is that entrepreneurs, to paraphrase the Nike ad, "just do it."

This post was originally published on Smartplanet.com

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