Although the early efforts were small-scale, that did not fade the huge Zappos vision. It helped to observe, interact and learn from real customers and partners.

The initial experiment provided a clear, quantifiable outcome: either a sufficient number of customers would buy the shoes or they would not. Zappos began with a tiny, simple product. He would then post the pictures online and come back to buy the shoes if a customer ordered. He began asking local shoe stores if he could take pictures of their inventory. Instead, he started by running an experiment. Many early e-commerce pioneers did just that, including infamous dot-com failures such as Webvan and. Swinmurn could take a long time to build warehouses, distribution partners, and the promise of significant sales.

He envisioned a new and superior retail experience. But it did not start that way!įounder Nick Swinmurn was frustrated because there was no central online site with a great selection of shoes. This requires a new kind of accounting designed for startups-and the people who hold them accountable.World’s largest online shoe store Zappos, with annual gross sales of over $1 billion, is known as one of the most successful, customer-friendly e-commerce. To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. All successful startup processes should be geared to accelerate that feedback loop. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. This learning can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision. They exist to learn how to build a sustainable business. Startups exist not just to make stuff, make money, or even serve customers. In fact, as I will argue later, I believe “entrepreneur” should be considered a job title in all modern companies that depend on innovation for their future growth.

A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. You don’t have to work in a garage to be in a startup.

The lean startup by eric ries