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is about conceiving and executing experiments without having to gain an excessive number of approvals.

Startup teams need complete autonomy to develop and market new products within their limited mandate. They have to be able to conceive and execute experiments without having to gain an excessive number of approvals.

is a grand experiment in trying to use the scientific method (predicting / learning / iterating) to answer this question: 'Can a sustainable business can be built around a given set of products and services''.

Instead, the way forward is to learn to see every startup in any industry as a grand experiment. The question is not 'Can this product be built'' In the modern economy, almost any product that can be imagined can be built. The more pertinent questions are 'Should this product be built'' and 'Can we build a sustainable business around this set of products and services'' To answer those questions, we need a method for systematically breaking down a business plan into its component parts and testing each part empirically.

is a human institution designed to create new products and services under conditions of extreme uncertainty.

1. Entrepreneurs are everywhere. You don't have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry.

is at heart, a catalyst that transforms ideas into products using the feedback and data that customers generate as they interact with those products.

At its heart, a startup is a catalyst that transforms ideas into products. As customers interact with those products, they generate feedback and data. The feedback is both qualitative (such as what they like and don't like) and quantitative (such as how many people use it and find it valuable). As we saw in Part One, the products a startup builds are really experiments... the learning about how to build a sustainable business is the outcome of those experiments. For startups, that information is much more important than dollars, awards, or mentions in the press, because it can influence and reshape the next set of ideas.

is concerned with creating new sustainable sources of growth.

Stories like this one are not nearly as common inside large corporations as they should be. After all, SnapTax competes directly with one of Intuit's flagship products: the fully featured TurboTax desktop software. Usually, companies like Intuit fall into the trap described in Clayton Christensten's The Innovator's Dilemma: they are very good at creating incremental improvements to existing products and serving existing customers, which Christensen called sustaining innovation, but struggle to create breakthrough new products disruptive innovation that can create new sustainable sources of growth.

is fundamentally about creating and accelerating a feedback loop consisting of turning ideas into products, measuring how customers respond, and then learning whether to pivot or persevere.

4. Build-Measure-Learn. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop.

is not just a business, but a business designed to confront situations of extreme uncertainty.

There is one more important part of this definition: the context in which the innovation happens. Most businesses large and small alike are excluded from this context. Startups are designed to confront situations of extreme uncertainty. To open up a new business that is an exact clone of an existing business all the way down to the business model, pricing, target customer, and product may be an attractive economic investment, but it is not a startup because its success depends only on execution so much so that this success can be modeled with high accuracy. (This is why so many small businesses can be financed with simple bank loans... the level of risk and uncertainty is understood well enough that a loan officer can assess its prospects.)

is not just a product but an institution, one requiring a new kind of management specifically geared to its context of extreme uncertainty.

2. Entrepreneurship is management. A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty. In fact, as I will argue later, I believe 'entrepreneur' should be considered a will argue later, I believe 'entrepreneur' should be considered a job title in all modern companies that depend on innovation for their future growth.

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