The Lean Startup- How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses11 Apr 2017
title: Lean Startup- How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
- a great read, powerful, logical
- Providing a method to develop and manage startups. A systematic, scientific way for making fast decisions
- Inspired by the lean manufacturing revolution developed at Toyota: / attending to the ideas and knowledge of the workers; / making smaller batch sizes; / just-in-time production / accelerating cycle times.
1: Start -Startups need management but of the sort that is tailored to their unique needs. -startups require a certain amount of failure as various products are tested and improved.
2: Define -when job is to head up an initiative for a new product or a whole new venture -“creates new products or services in an atmosphere of uncertainty.” -sustaining innovation and disruptive innovation
3: Learn -Stick with the plan, do quality work and stay on budget. -one key practice: to learn from mistakes. Study error systematically and critically — and learn. -have to be able to capture the consumer metrics, analyze them, learn from them, change the product in response and try again. -Validated learning is a system for demonstrating progress in a chaotic and changing environment. It’s quick and easy. It’s also backed up by empirical data culled from real customers. ==> launched a low-quality early prototype; charged customers from day one; and used low-volume revenue targets to drive accountability.
4: Experiment -Launching a new product should be viewed much like conducting a scientific experiment. .. carefully designed. Frame a hypothesis; test the prediction. -Two most important assumptions are the value hypothesis and the growth hypothesis. -Value hypothesis asks: Does the product deliver value to the customer? answer through experimentation. -Growth hypothesis to see how customers discover the new product. Test behavior to see if your assumptions are correct.
5: Leap -essence of the Build-Measure-Learn feedback loop. -when a startup is starting up, there’s no data. There’s no way to evaluate performance, so you have to go with intuition. -important to get to the Build phase right away – the most basic version of the product that can kick start the Build-Measure-Learn loop.
6: Test -Get MVP out right away, even if isn’t wholly ready for prime time. The MVP lets you start the Build-Measure-Learn feedback loop and test your hypotheses. -Gear the MVP toward the early adopters, not the mainstream. Early adopters: Being first is more important to them than quality, so make the MVP as simple as possible. -a strong temptation to put a ton of energy into creating a thing of quality…but until you know what the customer wants, .. -the most important thing is to keep trying.
7: Measure -Ultimately, to become a sustainable business. ..has to evaluate progress, -Disruptive industries call for innovation accounting. -1) use a MVP to establish baseline data; 2) improve and fine tune the product; and 3) if the product continues to improve, pivot and establish a new baseline, starting the process over again. -Do a cohort analysis. Breaking things down into cohort groups, and looking at the performance of different groups of customers, can help you understand if real growth is happening. Don’t be led astray by good looking metrics. -different versions of a product to different people can help refine what the customer does and does not want. -Metrics should be actionable, accessible and auditable:
8: Pivot (or Persevere) -“when to change, don’t throw everything out and start over; to build on what learned so far.” -“Pivot or persevere” regularly -“Zoom in: focusing on a small part of the previous strategy, or a single feature of the product -customer segment pivot / Platform pivot / Business architect pivot. / Value capture pivot. / Engine of growth pivot. / Channel pivot. / Technology pivot.
9: Batch -need to know who customers are, what customers want, how to listen to customers and how to plan to grow -Small batch sizes are better for startups in the face of rapid change.
10: Grow: ways to build sustainable growth -Sticky Engines of growth: rely on lots of repeat business. -Viral Engines of growth, powered by a feedback loop — the viral loop — and its productivity is measured with the viral coefficient. T -The Paid Engine of growth, e.g., advertising or sales team, key is to increase revenue from customers and/or reduce the cost of acquiring new customers.
11: Adapt -“Speed can compromise quality if you let it”. -“Early adopters are tolerant of minor flaws, but eventually want to go mainstream and that market is intolerant of flaws.” -“Five Whys.” to ask “why?” five times, and with each iteration, you burrow deeper into the root of a problem. “behind every technical problem is a human problem.” / Focus on new problems as they come up.
12: Innovate / certain structures and organizational qualities facilitate innovation. / scarce, but secure, resources / do need steady income and the confidence that comes with it. / Startup teams should also be autonomous. / have to run many experiments / teams should include people from every functional and relevant area / innovators should have a stake in the outcome/ to create a sandbox where innovators can try out new ideas.
13: Epilogue / “ need to experiment to verify …working on the right thing. “
The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future
- Great Summary @ URL
- “Catch a man a fish, and you can sell it to him. Teach a man to fish – and you ruin a wonderful business opportunity” - Karl Marx
- Listen – figure out the pain of your customer so you can deliver a unique cure in a profitable way.
- Treating our customers in marketing efforts like real people: “customer profiling”: Interests, Passions, Skills, Beliefs, Values
- The deeper you engage and know your ideal customer; the easier it is for them to buy from you.
- “The not-so-secret to improving income in an existing business is through tweaks; small changes that create a big impact. Keeing tweaking/ experimenting: the power of tweaking things, measuring them; and then picking the best as you keep tweaking some more is incredible, especially when your customer numbers go up.