Lean Startup Book Notes

Lean Startup is a great book by Eric Ries, highly recommended.

Five Principles

Entrepreneurs are everywhere—not just in startups, big companies need them too.
Entrepreneurship is management—you’re building an organization in an environment of extreme uncertainty.
Validated learning—the primary reason for existence for a startup is to learn. The best way to do that is through scientific experiments that test each element of the vision.
Build-measure-learn—ideas are built into products which are measured generating data that we learn from and form new ideas, including whether to pivot or persevere. Through this loop learning informs the vision, and vision drives the learning.
Innovation accounting—establish the baseline, tune the engine, pivot or perservere. Cohort analysis is important concept here, because you don’t get fooled by the snowball effect of traditional metrics. Good metrics need to be actionable, accessible, and auditable. Use A/B split testing once the baseline is established to improve the ratios.

Any work that generating value (providing benefit to the customer) is waste. In the context of a startup, any work that isn’t directly linked to a learning experiment is waste.
The two most important assumptions entrepreneurs make are the value hypothesis and the growth hypothesis.
- Value: will the product or service really deliver value?
- Growth: how will customers find the product or service?
Concierge MVP—operate the product with people doing the work that computers will eventually do, to test the viability of the whole concept before building a lot of software.
An experiment is a product. And first products should not be built to be perfect. Their role is to generate data that we can learn from.
Learn the difference between dangerous vanity metrics vs. nuts-and-bolts actionable metrics.
Keep batches small—strive to keep delivery as close to continuous as possible.

Do customers recognize they have the problem we’re trying to solve?
If there was a solution, would they buy it?
Would they buy it from us?
Can we build a solution to that problem? (The common tendency is to jump right to this one.)

Zoom-in Pivot—a single feature becomes the product.
Zoom-out Pivot—what was considered the whole product becomes a single feature of a larger product.
Customer Segment Pivot—the product solves problems for a different customer than originally conceived.
Customer Need Pivot—we learn about the customer, and that they have bigger problems that we can solve, which may require tweaks to the product or perhaps a different product altogether.
Platform Pivot—change from an application to a platform or vice versa.
Business Architecture Pivot—switch from high volume, low margin to low volume, high margin, or the reverse.
Value Capture Pivot—changes to revenue or monitization model.
Engine of Growth Pivot—change in growth strategy: viral, sticky, paid.
Channel Pivot—change in sales or distribution, where or how it’s sold or bought.
Technology Pivot—change to capture superior cost and/or performance.

Filed under Product Development Product Management startup