This led to some frustrating board meetings at which we could show great product “progress” but not much in the way of business results. - Eric Ries

A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.

Startups are different: too much budget is as harmful as too little — as countless dot-com failures can attest — and startups are extremely sensitive to midcourse budgetary changes.

Innovation accounting begins by turning the leap-of-faith assumptions discussed in Chapter 5 into a quantitative financial model. Every business plan has some kind of model associated with it, even if it’s written on the back of a napkin. That model provides assumptions about what the business will look like at a successful point in the future.