"We're testing how customers behave, not how they think," says Ries. "Think about the original Facebook: it had exactly one feature, called 'poll.' Anyone from the outside would say, 'That's stupid.'

"You have to think big. Zuckerberg just knew enough to start small. People want to be the next Steve Jobs: On a big stage, launching the iPad. But Jobs started by launching the Apple I, a home hobbyist kit that barely did anything.

"Don't ask customers what they think. This isn't a focus group. We're experimenting to discover how they behave. We need to find experiments that help us find what direction the company should go. You have to have a belief that you know where the product should go.

"It isn't about optimization; you need to have a falsifiable hypothesis. You believe in what's going to happen, and if it doesn't, you're shocked.

"A good example is teleportation. If I offer the ability of teleportation to 10 customers, all 10 should say Yes. The problem is that most people think their product is as good as teleportation. If zero buy, then we at least have a clue: Something is not right."

Tip #8: Money is good, raising money not always.

"There's nothing wrong with raising money, provided you spend efficiently," Ries says. "The real challenge is that the energy you spend in raising money is energy you could have spent building a great product.

"Whenever possible, I advise people to get learning, rather than getting money. The more you can learn, the more you can prove, the easier it will be to raise money. Facebook had only a couple thousand customers when they raised their first round.

"But they had metrics: How do we know Facebook customers found it valuable? They came back every day. You could see the retention. How do we know they'll grow? Every time they launched in a new campus it took them two weeks to get 80 percent of the campus. From those two key pieces of data, investors were willing to say, 'OK, here's a lot of money.'"

Tip #9: Every startup needs two different types of CEO.

"There are two kinds of management,"says Ries. "Entrepreneurial and general. In the earliest stages it's all entrepreneurial. Motivate the team, pivot, adapt, it's all good. But as the product gets successful, you have to seek out new sources of growth and sustain your existing base.

"Successful companies have to do both. Any management company that abandons one at the expense of the other will fail. If you fire the original CEO and hire all MBAs, you're going to have a hard time reinventing new products that drive growth.

"It's a rare person who has the combination of talents -- yet that's exactly the skill set we're looking for in an early-stage company."

Tip #10: Startups don't starve, they drown.

"The best advice I ever got was from one of my venture investors who said, 'Startups don't starve, they drown,' Ries says. "In other words, it's not about coming up with more things to do, it's really about paring back. How do I focus on those few things that really matter?

"Many startups fall into the trap of hiring too fast -- they're in too much of rush to have staff. Be in a rush to have a great product, not to get big. Hiring someone who has a reputation for making great products won't necessarily help you if the things they care about are not the things that your customers care about.

"Steve Blank has a saying: 'Get out of the building.' If you're sitting in your office, you have no access to any facts. Go where your customers are, and immerse yourself in their environment. Go and see for yourself. Whenever you find yourself relying on reports, it's anathema. You need to understand what's really going on."

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