Tuesday, February 11, 2014

review: The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Recommendation: Go get it, amazing book!

In a nutshell

The profitable value comes from the learning verified speed of an organization or individual.
Entrepreneurship doesn't mean unmanaged goals, neither killing creativity, but taking innovation into the field minimizing the waste to align and create remarkable real value.

Juice!

What is so critical about eliminating waste?

How would you feel if tons of precious resources were wasted for incorrect leadership and driving? i.e. electricity, water, real state...  very alarming right?   What about your/your team time and talent, the unlimited potential to produce wealth!

The critical question is: which activities create value and which are a form of waste?

“There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

"Our current problems are caused by trying too hard—at the wrong things."


What options we have? 

Be very romantic and produce the perfect product in your garage, see what happens, cross your fingers and expect some luck to happen. risk: Producing something no body wants.

Stop the chaos and freeze very well defined goals to deliver in a period of time, let your self and the team work and focus on making things happen and then launch the innovation to succeed your dream! risk: Producing something no body wants.

Work in small batches of experiments, you do not have a clear idea of what the dream product is, just hypothesis to be evaluated in a minimum period of time, you produce an MVP (minimum viable product) only to asses the experiment hypothesis.  Evaluate the experiment results from non vanity metrics, nor politics and decide: 1. persevere or pivot 2. what is next?
"risk": Producing something people uses and do not like

Decisions are made based on common sense not on what the person with higher range statement is.

Metrics need to be: actionable, accessible, and auditable.

The learning needs to be constant and very dynamic, in a loop of Build-Measure-Learn and constantly optimizing the duration of this loop, forget about the competitive advantage on the market, if you go faster than the market in this loop you'll get the advantage otherwise you need to evaluate your process and make changes.

Evaluating hypothesis on two type of assumptions:
  • Does it create value?
  • Does it create growth?
Startups need to start by focus all their energy on early adapters, once the company grows there is a challenge necessary pivot to be able to satisfy masses, they have a very different expectations than early adapters.

On Growth

There are four ways past customers drive sustainable growth:
  • Word of mouth.
  • As a side effect of product usage.
  • Through funded advertising.
  • Through repeat purchase or use.
There is not good or bad, It's based on the experiments you produce the type of growth injector you will need to implement.

Good tips

I like the recommendation on processes stages: backlog, in progress, build, validated
No more than 3 projects at a time on every stage (It reminds me "The Goal" - Goldratt)

“Stop production so that production never has to stop.”, you don't want to trade quality for time!

The 5 why's a great exercise to learn and improve from mistakes!  just like kiddos!

Quotes

"Lean thinking defines value as providing benefit to the customer; anything else is waste."

"we could have discovered how flawed our assumptions were without building anything?"

"The lesson of the MVP is that any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time."

"As you consider building your own minimum viable product, let this simple rule suffice: remove any feature, process, or effort that does not contribute directly to the learning you seek."

"I’ve come to believe that learning is the essential unit of progress for startups. The effort that is not absolutely necessary for learning what customers want can be eliminated. I call this validated learning because it is always demonstrated by positive improvements in the startup’s core metrics. As we’ve seen, it’s easy to kid yourself about what you think customers want. It’s also easy to learn things that are completely irrelevant. Thus, validated learning is backed up by empirical data collected from real customers."

"systematically figuring out the right things to build."

"“Can this product be built?” In the modern economy, almost any product that can be imagined can be built. The more pertinent questions are “Should this product be built?”"

"if you cannot fail, you cannot learn."

"Success is not delivering a feature; success is learning how to solve the customer’s problem."

"planning really works in the reverse order: we figure out what we need to learn, use innovation accounting to figure out what we need to measure to know if we are gaining validated learning, and then figure out what product we need to build to run that experiment"

"“get out of the building” and start learning."
"“go and see for yourself”"

"If we do not know who the customer is, we do not know what quality is."

"The reason to build a new team to pursue an idea is that you believe you can accelerate through the Build-Measure-Learn feedback loop faster than anyone else can."
"The only way to win is to learn faster than anyone else."

"Sustainable growth follows one of three engines of growth: paid, viral, or sticky."

"reducing batch size, we can get through the Build-Measure-Learn feedback loop more quickly"

"The ideal goal is to achieve small batches all the way down to single-piece flow along the entire supply chain. Each step in the line pulls the parts it needs from the previous step. This is the famous Toyota just-in-time production method."

"“Startups don’t starve; they drown.” There are always a zillion new ideas about how to make the product better floating around, but the hard truth is that most of those ideas make a difference only at the margins. They are mere optimizations. Startups have to focus on the big experiments that lead to validated learning. The engines of growth framework helps them stay focused on the metrics that matter."

"in my experience startup teams require three structural attributes: scarce but secure resources, independent authority to develop their business, and a personal stake in the outcome."

"“In the past, the man has been first; in the future, the system must be first.”"




2 comments:

  1. Love this post! What you're up to sounds awesome and I am cheering you on. I am also a big fan of whiteboards, and installed one in my home office for whenever I need to "think big".
    Thanks for sharing this ..
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  2. Oh wow, that's interesting. Haven't heard about it yet. Speaking about internet and technologies these days. It helps us live easier. Like now I store my paperwork in the online data room. I know it's safe for sure.

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