A startup is an institution built to search, not to execute

Ries defines a startup as a human institution designed to create a new product or service under conditions of extreme uncertainty — a definition deliberately broad enough to include a two-person garage operation or a new division inside a Fortune 500 company. This framing matters because it shifts the central challenge away from "execute the plan well" toward "figure out what the right plan even is," since in true uncertainty, nobody yet knows.

He contrasts this with how most businesses are managed: with detailed long-range plans, market research, and forecasts that assume a knowable future. Applying that same toolkit to a genuinely novel product, he argues, produces confident-sounding plans built on guesses, which is far more dangerous than admitting the uncertainty and designing a process to reduce it quickly.

Takeaway: treat your startup's plan as a set of hypotheses to be tested, not a forecast to be executed.