Carl Schramm on The Lean Startup

By T. Ciarfalio

For those of you who haven’t yet had the pleasure, meet Carl Schramm, co-author of Good Capitalism, Bad Capitalism and president of the Ewing Marion Kauffman Foundation. The Kauffman Foundation is the world’s leading organization dedicated to creating new firms and understanding their role in economic growth. At its helm since 2002, Schramm focuses the organization and his own efforts on education, research and policy at the highest levels.

As a contributor to Forbes.com, Schramm’s promise is to cover the ways in which entrepreneurs will unleash our economy’s potential. His most recent posting, “Our Economy Needs Innovation, New Ideas And Scalable Businesses,” focuses on a book that sends the basic message that everything we thought we knew about teaching entrepreneurship and advising startups is mostly incorrect. It’s an open-minded choice of topic since, as Schramm readily admits, the Kauffman Foundation supports a number of efforts to train and assist entrepreneurs.

Under Schramm’s experienced microscope is The Lean Startup, a new business book by Eric Ries that made its debut last month at #2 on the New York Times bestseller list. In the book, Ries brings principles from lean manufacturing and agile development to the process of innovation with the goal of helping entrepreneurs make vastly better and faster business decisions. Ries knows his stuff: he co-founded and served as CTO of IMVU, his third startup; authors the blog, “Startup Lessons Learned”; is an Entrepreneur-in-Residence at Harvard Business School; an in-demand speaker; and has advised a number of startups, large companies, and venture capital firms on business and product strategy.

The full title of the book is The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. True to its title, the book illustrates Lean principles with well-documented and fascinating stories of both startups and groups within large organizations who have followed his often counter-intuitive path to great success.

In building a successful startup, Ries rejects as impractical a total reliance on traditional tools including business plans and what he calls “vanity metrics.” Rather, as Schramm boils it down, “The essence of the lean start-up idea is the Build-Measure-Learn feedback loop. The idea is for a start-up to build a “minimum viable product” as quickly as possible, test it with potential customers, rigorously measure the results, learn from the experience, and return to building the product. Iteration and experimentation are the methods, learning is the goal, and speed is the essential attribute.”

With the caveat that it’s impossible to know for sure, Schramm places his experienced vote in favor of the Lean approach. He writes: “The Lean Startup will endure because of the premise from which Ries is starting—our existing models of management are wholly inapplicable to what our economy desperately needs, which is innovation, new ideas and scalable businesses.”

For me, the Lean approach struck an immediate chord. Living lean has become the accepted norm for getting healthy and fit quickly and maintaining the maximum level of long-term success. I see that whether my personal health or the health of my business, it makes solid sense to establish a vision, then move efficiently to learn what works, implement, manage through challenges, evaluate and make necessary adjustments so I can continue to enjoy peak level success.

I highly recommend both reading The Lean Startup and joining the movement it has become at www.theleanstartup.com.

Tags: entreprenuers, startups