Eric Ries has a great article on how to build companies that matter, based on a model that he calls the lean startup.
The way for the lean startup approach has been paved by recent technological innovations such as web 2.0 and has been made even more relevant by the current economic crisis.
Here’s the intro:
We’re living in a time of renewed possibility for startups. Major trends – from the pain of the economic crisis to the disruption of web 2.0 – are breaking the old models and paving the way for a new breed of company. I call it the Lean Startup.
The Lean Startup is a disciplined approach to building companies that matter. It’s designed to dramatically reduce the risk associated with bringing a new product to market by building the company from the ground up for rapid iteration and learning. It requires dramatically less capital than older models, and can find profitability sooner. Most importantly, it breaks down the artificial dichotomy between pursuing the company’s vision and creating profitable value. Instead, it harnesses the power of the market in support of the company’s long-term mission.
Tim O’Reilly has recently been advocating that as an industry we focus on building stuff that matters. In response, I want to try and present a way of building startups that can realize that dream. In particular, he as articulated three principles:
(1) Work on something that matters to you more than money, (2) Create more value than you capture, and (3) Take the long view.
Ries then goes on to present an approach for startups that builds on those principles.