Over the past six months, lean startup philosophy has become nearly ubiquitous in Silicon Valley, but the principles of lean startups are widely misunderstood. Contrary to the argument between Ben Horowitz and Fred Wilson, the amount of money raised for a company is not a factor in lean startups. Rather, running a startup lean is about the product and customer development process.

Lean business management is based on Toyota’s Production System, a manufacturing innovation that Toyota developed and publicized the in 1980s. To quote from Scott Allison’s excellent summary of an interview with Eric Ries

Fundamentally lean is about the speed of iterations.

Stephen Blank’s The Four Steps to the Epiphany is the seminal work on the application of the Toyota Production System to startups. It’s a wonderful primer and highly recommended. 

Understanding lean startups is key to rapid, successful product development, proper measurement of key metrics and maximizing the chances of success.