3 Reasons To Buy This Book:
- Provides new tactics for practical application of Lean Startup theory
- Focused advice on how to segment the market, create a Value Stream, interact with customers, and create experiments
- Over two dozen case studies of successful Lean Startups
2 Reasons This Book May Not Be Right For You:
- Advice was NOT written for entrepreneurs developing products for a known market
- Not written to help an already successful small business owner become more efficient; not meant for lifestyle business owners satisfied with current revenues; not meant for solo practitioners who work small one-off projects
The authors of The Lean Entrepreneur, Brant Cooper and Patrick Vlaskovits, have been active participants within the Lean Startup movement for some time. They previously wrote a short 100-page book called The Entrepreneur’s Guide to Customer Development, designed as a cheat sheet to The Four Steps to the Epiphany written by Steve Blank. As you may or may not know, Steve Blank was the mentor to Eric Ries who wrote the very popular book called The Lean Startup. The books rests heavily upon frameworks such as Customer Development, Business Model Canvas, Lean Startup, design thinking, and discovery-driven planning. It may be helpful to be acquainted with some of these to get the most value from this book.
What You’ll Gain As A Lean Startup Entrepreneur
…lean startup is a methodology that helps you—as an entrepreneur, intrapreneur, or a linchpin—to not only find a place in this new world, but to thrive. ~ Brant Cooper and Patrick Vlaskovits
The book goes wide, thinly covering the Lean Startup process from beginning to end, but also pays special attention to a few areas. It’s those main areas of focus that I found to be the real value in the book. I’ll next discuss the areas of focus I found most beneficial to the reader in that they add new insight not found in other Lean Startup books.
1) The 5 Driving Forces
The authors claim that when you want to start a new business or restart an existing one, you should try to understand your driving force. This is the element of your business model that you are committed to keeping constant and cannot accept changing.
Here’s their list (they admit there can be more) of possible elements that might be the driving force or motivation behind why you want to work on a new business:
- Segment—you want to bring any kind of product for a specific group (or groups) of people.
- Problem—you want to solve a particular issue or address a specific passion.
- Product—you have a singular product vision.
- Technology—you have an invention you wish to productize.
- Sales Channel—you are great at selling or are committed to e-commerce.
Cooper and Vlaskovits go into detail on how to determine which is your driving force. They advise that if you choose to hold one of these constant because it’s what motivates you, you must accept the possibility that you could have been more successful if you had let go of it. Results from the marketplace could come in later that suggest that changing that variable would create better opportunities for the business. It’s okay to pivot around your driving force as you hold it constant. But, you should at least be aware of the possible consequences beforehand and be prepared for a trade-off.
2) Segmenting The Market Is Like Being A Commercial Fisherman
I really enjoyed the above analogy in the book. The authors provide the amusing insight that NO commercial fisherman has ever said that they plan to catch every type of fish in the sea. However, new entrepreneurs often get the crazy idea that everyone in the world is their potential customer. The authors take the analogy further and explain that commercial fishermen will actually throw back some species of fish for good reason, and entrepreneurs should do the same with customers that are not in their initial segment. Refusing to let go of the wrong catch can cause confusion about which way to progress the business and throw off the search for a repeatable business model.
…the process of segmenting your market is one of the most poorly understood concepts in today’s business startup world, yet as we can see, it is one of the most powerful. ~ Brant Cooper and Patrick Vlaskovits
The authors run you through a decent set of instructions for guessing what the likely segments are, how to create “personas” that visually represent the segments, and how to choose which segment to go after first. Their instruction sufficiently helps you form your assumptions about market segments that you’ll eventually test. You’ll likely pursue one segment to begin with and switch to another as you learn more after interacting with customers.
3) Articulating The Value Stream
The third interesting concept in the book is that of the Value Stream. It’s similar to a marketing funnel in that its a visualization of how customers move from being aware of your product to being “passionate” customers who refer your business to their friends and family. However, the Value Stream is different from a marketing funnel. It is a visualization from the customer’s perspective. Here’s the process according to the authors:
- Customer first becomes aware of your product
- After learning more about the product, they become trusting
- Next, they become convinced and buy the product
- After purchase, they are hopeful they have bought the right product for their need
- After some use of the product, they become satisfied
- With help from the company, they become passionate users of the product
The book goes into much greater depth as to what this looks like in real life. The value really comes out through the author’s advice on how to go about understanding the Value Stream for your company. Their incredible insight is to suggest you start with the end in mind, and work your way backwards from what it means to have a “passionate” customer to when they first become aware of your company. You will get great advice on how to map out the Value Stream for your company such as how to determine what specific activity your business conducts for each step, what actions to expect from your customer at each step, and how to measure all of this.
By mapping the funnel, you are forced to think through one buying cycle completely for one market segment. Related activities for each step become rather self-evident and act to flesh out your marketing and sales plan and provide additional aspects to test. ~ Brant Cooper and Patrick Vlaskovits
The purpose of this book is explicitly laid out as: 1) To describe why our economy is primed for a new wave of entrepreneurship using new methods of disruptive innovation, 2) To provide you real-world examples of how entrepreneurs are creating new markets and disrupting others, and 3) To show you how you can get started creating value. I think the authors did overall accomplish their goals. The beginning of the book lays out their reasoning behind why a new wave is plausible, there are 20+ case studies, and one can certainly get a better sense of how to begin creating value with the book’s focus on The 5 Driving Forces and Market Segmentation.
Personally, I really benefited from one piece of advice regarding their suggested stages of marketing for a new startup. It seems intuitive to want to first try to get as big of an audience as possible, a.k.a. stuffing the top of the funnel with customers. But, they suggest you first master the process of turning your initial customers into passionate customers. Next, you work on automating the movement of customers through the marketing funnel. Lastly, you do marketing activities to get as many people into the top of the funnel as possible. Learn how to master the conversion process before spending money to attract large numbers of customers.
One criticism I have with the book is the occasional use of academic-speak (latin) such as “ex post facto” and some political commentary on economic theory and taxes. I’m not sure what these topics have to do with Lean Startup and talk like that made me feel somewhat put-off.
My takeaway is that this is a great book if you’ve already read The Lean Startup and have seen the business model canvas explained in Business Model Generation. This book does a nice job of plugging some of the tactical gaps that are found in Eric Ries’ The Lean Startup and is beneficial as a compliment to that original book. Books like this add valuable insight into how to apply Lean Startup methodology and propel this entrepreneurial movement along. However, I wouldn’t recommend this book unless you’ve read The Startup Owner’s Manual or Running Lean. Both of those books are far superior to The Lean Entrepreneur in that both of those books are much more complete and practical in their advice.
Click here to check out The Lean Entrepreneur on Amazon.com
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