The Lean Startup and Poor Economics may seem like very different boks. While the first is a business book for startups, the second one is about development economics. Yet after reading them back to back, I realized they are not only about the same thing (learning), but that together they suggest a very slick method to think about economic development.
In Poor Economics, Esther Duflo and Abhijit Banerjee (D&B) argue that “so much of anti-poverty policy has failed over the years because of an inadequate understanding of poverty.” They then go on to share how hundreds of rigorous randomized controlled trials have helped us learn about poverty, and explain how using that knowledge is key in the fight against it.
In The Lean Startup, Eric Ries tells us that startups fail because they have an inadequate understanding of who their customers are, or even of what their product should be. He then goes on to argue that in that uncertain environment startups exist to learn, and that the learning process holds the key to a startup’s success.
Both books are excellent reads alone, but together they were a real source of inspiration. Combining rigorous testing methods to learn about poverty with practical startup management methods could help development practitioners reach some transformational outcomes. Imagine how much great stuff could come out of a crossover between the World Bank and Dropbox!
But how would that actually work? One way would be to apply “lean methods” to development projects such as the build-measure-learn loop as described by Ries: