Eric Ries – The Lean Startup

Main Ideas:

Speeding up the product development cycles to get more feedback earlier
using a/b tests and customer feedback to steer the company
using an mvp to determine product viability before anything else
“leaps of faith” that need to happen for the company to be successful

using actionable metrics instead of vanity metrics
pivoting is not failure

work in small batches at first
use small pods of interdisciplinary staff instead of departments

Quotes:

Zappos mvp: nick swinmurn testing to see if people will buys shoes online
four questions: Do consumers recognize that they have the problem you are trying to solve? If there was a solution, would they buy it? Would they buy it from us? Can we build a solution for that problem?
Minimize time in the build measure learn feedback loop: Build product, measure data, learn ideas, repeat
leaps of faith: value hypothesis (does this create or destroy value for the consumer?) growth hypothesis (can this grow quickly?)
Minimum viable product starts the process of learning asap “the lesson of the mvp is that any additional work beyond what is required to start learning is a waste, no matter how important it might have seemed at the time”
Wizard of oz testing: human behind the mvp, not the technology: inefficient, but starts the learning process quickly
“If we do not know who the consumer is, we do not know what quality is”
“Customers don’t care how much time something takes to build. They only care if it serves their needs”
“If a competitor can outexecute a startup once the idea is known the startup is doomed anyway. The reason to build a new team to pursue an idea is that you believe that you can accelerate through the BMLFL faster than anyone else”
Use cohort analysis: look at the performance of each group of customers that comes into contact with the product independently
KANBAN – backlog, in progress, built, validated, only three modules in each bin at a time
Metrics – actionable, accessible, auditable
“5% of entrepreneurship is the idea, the business model, the whiteboard strategizing, and the splitting up of spoils. The other 95% is the gritty work that is measured by innovative accounting: product prioritization decisions, deciding with customers to target or listen to , and having the courage to subject a grand vision to constant testing and feedback”
Pivots: zoom in, zoom out, customer segment, customer need, platform, business architecture, value capture, engine of growth, channel
small batches id mistakes early on in the process, dont waste time sorting into piles, etc
reduce WIP inventory by converting push methods to pulls, reducing batch size
engines of growth: sticky (retain customers for a long time), viral (word of mouth), paid growth
problem solving: getting to the root: ask why 5 times, have everyone EVERYONE in the room when doing it
make a proportional investment into each why level problem
Rules: 1 Be tolerant of all mistakes the first time. 2 Never allow the same mistakes to be made twice.
1 Smaller teams 2 Shorter Cycle times 3 Faster customer feedback 4 empower teams to make fast and courageous decisions
innovation sandbox: 1 Create a true split test environment that affects only the sandboxed parts of a product or service 2 one team must see the experiment through from end to end 3 no experiment can run longer than a specified amount of time 4 no experiment can affect more than a specified number of customers 5 every experiment has to be evaluated on the basis of a single standard report of 5 – 10 actionable metrics 6 every team that works inside the sandbox and ever product that is built must use the same metrics to evaluate success 7 any team that creates an experiment must monitor the metrics and customer reactions while the experiment is in progress and abort it if something catastrophic happens