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The methodology has since been expanded to apply to any individual, team, or company looking to introduce new products or services into the market. June 2012 the book had sold 90,000 copies. Ries’ said that his first company, Catalyst Recruiting, failed because he and his colleagues did not understand the wants of their target customers, and because they focused too much time and energy on the initial product launch. Next, Ries was a senior software engineer with There, Inc. 40 million in financing, and nearly 200 employees at the time of product launch. Ries claims that despite the many proximate causes for failure, the most important mistake was that the company’s “vision was almost too concrete”, making it impossible to see that their product did not accurately represent consumer demand. Although the lost money differed by orders of magnitude, Ries concluded that the failures of There, Inc.
Catalyst Recruiting shared similar origins: “it was working forward from the technology instead of working backward from the business results you’re trying to achieve. After more than 15 years of experiments, he had a stable and reproducible system. The lean manufacturing system considers as waste the expenditure of resources for any goal other than the creation of value for the end customer, and continually seeks ways to eliminate such waste. In particular, the system focuses on minimizing inventory throughout the assembly line. Additionally, immediate quality control checkpoints can identify mistakes or imperfections during assembly as early as possible to ensure that the least amount of time is expended developing a faulty product.
Another primary focus of the lean management system is to maintain close connections with suppliers in order to understand their customers’ desires. Similar to the precepts of lean manufacturing, the lean startup methodology seeks to eliminate wasteful practices and increase value-producing practices during the product development phase so that startups can have a better chance of success without requiring large amounts of outside funding, elaborate business plans, or the perfect product. Customer feedback during product development is integral to the lean startup process, and ensures that the producer does not invest time designing features or services that consumers do not want. In his blog and book, Ries uses specific terms to refer to the core lean startup principles. Instead of building a website and a large database of footwear, Swinmurn approached local shoe stores, took pictures of their inventory, posted the pictures online, bought the shoes from the stores at full price after he’d made a sale, and then shipped them directly to customers. Swinmurn deduced that customer demand was present, and Zappos would eventually grow into a billion dollar business based on the model of selling shoes online.