https://www.kevinslin.com/notes/1da94030-c045-4002-8de0-67d35e6eee74/ [ ]For full text search please use the '?' prefix. e.g. ? Onboarding The Lean Startup Summary Eric Ries breaks down the "lean startup methodology", a process in which to come up with, execute and grow an idea from just that to a successful business. Review Clear, actionable and effective ways of starting a new venture. Takeaways * don't assume, measure * be explicit about value and growth assumptions and then build-measure-learn * progress should be measured with Validated Learning Key Points * a Startup tries to build something in extreme uncertainty * a startup tends to be based on a Leap of Faith Assumption + these assumptions have a Growth Hypothesis and Value Hypothesis * progress should be measured by Validated Learning * to achieve progress, adopt Build-Measure-Learn Loop loop * kanban with limit on works in progress at any stage * everything that doesn't help with learning is wasted work * making progress means understanding value that product is actually providing users and figuring out the Engine of Growth * make Proportional Investment when growing and scaling Concepts See Concepts Notes vision 1 start * goal of startup is to figure out what to build (as quickly as possible) * startup is like driving a car, you want to continuously steer vs planning for a rocket launch where a single error could be a disaster * this process is the Build-Measure-Learn Loop * true north, strategy, product 2 define * a Startup is an organization that is building something in environments of extreme uncertainty 3 learn * Validated Learning is discovering truth about current and future prospectsl * real progress in a startup is learning what work created value for users (anything else is waste) * goal of learning is to find the point of intersectino btw startup vision and what customers want * EVERYTHING that a startup is doing should be in the service of validated learning * eg: IMVU had faulty assumptions about what users wanted (people did not want to learn new social network, people wanted to talk to their existing friends) steer 4 experiment * if you can't fail then you can't learn + eg. Zappos beginning, take picture of other people's inventory and try to sell online to see if there is demand o source: The Lean Startup (Private) * to experiment, hypothesize, predict, and then measure * two most important hypothesis + Value Hypothesis + Growth Hypothesis 5 leap * Leap of Faith Assumption is riskiest part of plan * once assumptions are clear, build and validate * to measure learning, use Innovation Accounting and Learning Milestones * after Build-Measure-Learn Loop, startup needs to decide to Pivot or Preserve * Analogue and Antilogue can be a useful framework in Leap of Faith Assumption * priorities of a startup + be able to systematically test assumptions + connect present tests with long term vision * as founder + figure out what parts of original plan were good and what parts need to change + need to understand what is responsible for startup growth * nothing as effective as Genchi Gembutsu + "see for yourself", talk to the customer 6 test * create a Minimal Viable Product * early adopters will be suspicious if product too polished, time on polish can be waste of time * types of MVPs + Video MVP + Concierge MVP * when creating a MVP, don't waste time trying to fully solve problem + until you know your customer, you don't know what quality even is + #mw: doing things that don't scale * remove everything that doesn't contribute to learning 7 measure * startup needs to do 2 things + measure where they are now + figure out how to get closer to the ideal * most startups, when asked if they're making the product better, will say yes but have no data to back it up + eg. we launched a few features and our numbers went up (but then subsequently went down again) + see The Lean Startup (Private) * begin process of Innovation Accounting + 1: build mvp to gather baseline data + 2: tune Engine of Growth to get closer to ideal + 3: make decision to Pivot or Preserve * when testing, test riskiest assumption first + #MW: deploy in IAD * beware of Vanity Metrics * focus on Cohort Based Metrics and Split Testing * kanban + backlog, in progress, built, validated * story not complete until we have validated learning from it * have upper limit on items in any given stage #star * metric focuses + actionable: establish cause and effect + accessible: concrete units + auditable: everyone has access (ideally, team that owns product should also own this) o you should be able to spot check data (eg. talk to customers and see if user behavior confirms the data) --------------------------------------------------------------------- accelerate 8 pivot * startup run rate is amount of pivots it has left * productivity is measured not in features released by the alignment of effort with value and growth * need clear hypothesis or can't decide about pivot + eg. potbelly sandwich shop began as antique shop in 1977 * things to measures registration, activation, rentention, referral * types of pivots + zoom: focus on one from a whole + zoom out: expand feature + customer segment: b2b to b2c + platform pivot: change from app to platform or ice versa + technology: switch tech for same wndat + channel: direct vs cto + engine of growth: viral, sticky and paid + value capture: charge at diff point in chain + business architecture: high margin low volume vs opp 9 batch * small batch sizes help validate ideas quicker + do continuous deployment * same person during multiple function, take advantage of breadth of skills + corporate doesn't do this because of accountability hard * can't have too much work in progress, in manufacturing line, fills up all the machines but no visible signs of this with knowledge work #star * use hypothesis for what customer wants to work on batch and move forward 10 grow * sustainable growth: new customer come from actions of old * growth types: + word of mouth + side effect of using product (eg fashion) + funded advertising + repeat purchase (eg lightbulb) * startups don't starve, they drown #star * engines of growths + sticky: rate of customer acquisition should exceed churn rate, can increase retention + viral: customers spread product, aim for coefficient of 1 (every customer will result in 1 more customer) + paid: cpa (cost per acquisition) lt ltv (life time value of customer) * focus on only one engine of growth at a time * when making customer segment pivot, consider changing engine of growth * product market fit, Marc Horowitz, customers pull product into mainstream #star 11 adapt * adjust processes and performance according to problem + #MW: cross the bridge when we get there * small problems should have small response, large should have larger response * root of every tech problem tends to be human #star * use 5 whys + have everyone involved in incident present + avoid 5 blames + don't send baggage through system, tackle new prob + appoint 5 why master * mistakes + be tolerant of 1st mistake + no 2nd mistake * adopt Proportional Investment * accuirvib failure successfully by working on things that don't matter #star * small batch sizes, quickbooks waterfall anti-example 12 innovate * qualities of startup + scarce but secure resource + ind dev auth + personal stake * in org, how to protect parent org from startup? manager will feel threatened epilogue * frederick winsolw taylor's principles of scientific management # todo (Private) * see forest vanishing but can't see minds being wasted #analogy (Private) * nothing quite so useless as doing with great efficiency what should not be done at all, peter drucker #quote * 100 years, what techniques and believes will seem outlandish and stupid --------------------------------------------------------------------- Children 1. Concepts Summary Review Takeaways Key Points Concepts Notes vision 1 start 2 define 3 learn steer 4 experiment 5 leap 6 test 7 measure accelerate 8 pivot 9 batch 10 grow 11 adapt 12 innovate epilogue