I just finished reading The Lean Startup by Eric Ries. In it he details his work as CTO at IMVU. He talks about how he setup a Agile development environment and how they iterated over changes to the application they were working on. The Lean Startup uses principles that are part of Lean Manufacturing, these are techniques pioneered by Toyota to compete with US auto manufactures. Ries breaks down the book in three parts, Vision, Steer and Accelerate. Each part is critical in the success of a startup. The key concept Eric stumbles onto at IMVU is what he calls “validated learning”. At IMVU they got their product out quickly and had an idea of what they thought it would be. They had good metrics setup to see how customers reacted to their changes and were able to quickly make changes according to the the user response.
Ries then took what he has learned and his techniques and mentored other startups through a similar procedure of getting out a product quickly and use qualitative metrics to determine what is working for the business and what is not. This sometimes requires a pivot or a change in course to the business. Many startups go through a similar phase. Eric talks about at IMVU they initially thought there product would work in one market but they soon found out how people were really using it and changed course. Just like captain of ship leaders of startup chart a course but often they need to update that when new information comes in.
The Lean Startup Wiki: