Mustafa Degerli - 2016 - Technology Entrepreneurship and Lean Startups - Reading Reflection - Hypothesis-Driven Entrepreneurship: The Lean Startup – T. Eisenmann, E. Ries, and S. Dillard

1. Technology Entrepreneurship and Lean Startups - Reading Reflection
Hypothesis-Driven Entrepreneurship: The Lean Startup – T. Eisenmann, E. Ries, and S. Dillard
Mustafa Degerli - MD
Page 1 of 2
In this paper, I provide my summary and reflections as bulleted items on behalf of the “Hypothesis-
Driven Entrepreneurship: The Lean Startup” article by Thomas Eisenmann, Eric Ries, and Sarah
Dillard.
 The subject paper defines what the hypothesis-driven entrepreneurship (the lean start-up
approach) is, lists and elaborates the steps of the hypothesis-driven entrepreneurship, details the
lean start-up psychology, and concludes with a firm appreciation of the approach.
 Largely, I found the whole article as a promotion and description/prescription manuscript for the
lean start-up approach. The subject paper defines the the lean start-up approach as a way of
hypothesis-driven entrepreneurship. I categorically agree with this argument since at the hearth
of lean start-ups, we have to concentrate on effectiveness and efficiency, and in this regard
hypothesis-driven course of action is a very good and safe way for progress.
 The subject paper underlines that start-ups mostly confront huge uncertainties, and they are
determinedly required to manage these by very means of definite experimentation, premeditated
staging, and cleverly shifting risk to relevant and applicable partners. Certainly, we cannot fully
eliminate the all-embracing relevant uncertainties, yet we have such mechanisms to manage the
situations.
 What the most important concept related with the approach elaborated in the subject paper is
surely minimum viable products (MVPs). We apply hypotheses tests in this regard. By means of
MVPs, we predominantly crack down on the smallest set of features and/or activities needed to
approve or refute a business model hypothesis that we set or design beforehand.
 In the lean start-up approach, as stressed in the pertinent paper, we regularly and continuously
test our business model. Results of these tests may lead to no changes to our business model, pivot
to a revised model that changes some model elements whereas preserving others, or principally
perish, halting the start-up. It is simple, about our business model, we may preserve,
revise/improve, or quit in accordance with the test results.
 In the text, it is highlighted that the fundamental objective of an early-stage start-up is not to grow,
in its place it is to learn how to build a justifiable and workable initiative. That is very important
because unless we erect a valid and workable edge, any growth figure will not be maintainable
and at the end we will gradually or unexpectedly downfall.
 Regarding resource spending, lean start-up approach requires us focus mostly on escaping wastes
and enhancing, but not much about minimizing. This argument is also salient as we have to be
very effective and efficient to attain and sustain our goals.

2. Technology Entrepreneurship and Lean Startups - Reading Reflection
Hypothesis-Driven Entrepreneurship: The Lean Startup – T. Eisenmann, E. Ries, and S. Dillard
Mustafa Degerli - MD
Page 2 of 2
 Hypothesis-driven entrepreneurship has basically six steps. These can be summarized as:
Developing a vision (ideation), translating the vision into hypotheses (business model), specifying
MVPs tests (real products), prioritizing tests (sequencing), learning from MVP tests (feedbacks),
and preserving/pivoting/perishing (final decision).
 Actually, there is a fairly well-defined path to follow for hypothesis-driven entrepreneurship.
Though, all of the steps shall be adjusted with respect to contextual realities and business needs.
These are tools (means) not ends (aims). There is a constant testing, and check-balance approach
in the pertinent view. Feedbacks shall be handled wisely and utilized for improvement purposes
since they are early indicators for many things related with the customers and/or consumers.
 As pointed out by the authors of the text, there are some cognitive biases that are especially
relevant for entrepreneurs in the context of lean start-ups. These are optimism bias (overrating the
likelihood of positive events), the planning fallacy (misjudging the benefits of a task and
miscalculating its duration, costs, and risks), confirmation bias (tendency to validate), and the
sunk cost fallacy (aversion to loses). All of these biases shall be noticed by the successful
entrepreneur and all actions should be done correspondingly. We should distinguish that these are
distilled from experiences and written with kind of bloods and millions of dollar costs. We must
not repeat the same mistakes related with our efforts. Just like our products, we should be
innovative regarding our mistakes by not repeating the well-established and mainly repeated ones.
 Boundary conditions and, in fact, contextual realities shall also be effusively taken into account
during whole efforts related with our initiatives. Especially, on the account of mistake limits,
demand uncertainty, information quality, and development cycles, we should fully investigate
and interpret the situations and do act suitably. These are very fundamental issues that mostly
shape our start-up’s success as the environment truly govern many things.
 We can fairly list three main concepts from the article as a take away message. These are “test
and invest,” “minimum viable products,” and “pivots.” These should be known and appreciated
for success. Furthermore, contextual realities and biases should also be comprehended and
appreciated for success.
 Still, lastly, I need to underline that hypothesis-driven entrepreneurship (the lean start-up
approach) may probably not work for every situation, and it is, of course, not a silver bullet. We
can mostly benefit from the approach and its details elaborated in the text. However, we should
be very careful about our goals, our customers/consumers, and contextual realities while
benefiting from the model/approach, and we ought to fine-tune any appropriate issues
correspondingly to attain and sustain the success.