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Kindle Notes & Highlights
Three patterns of startup failure
We all revert to our default operating modes under stress.
Overthinkers are bright and analytical, often former consultants who always think before acting. Their motto is, “Measure twice, cut once.”
they already have a list of reasons it would never work, even though they haven’t tried it.
if you’re truly blazing a new trail, advisors won’t have the right answers.
And all that conjecture comes at the expense of execution.
Underthinkers are impatient and decisive. They know that action is the sine qua non of startup success. They push everyone to build, ship, and execute. Perfect is the enemy of done. When things fail, they gather the lessons and try the next thing until something shows promise. When things aren’t working, they try more things.
building adds complexity. Each new feature you build, each campaign you run, each project you try makes the business harder to run: a larger codebase, a more complicated user experience, a harder product to explain and sell, more legacy customers and use cases to support. That complexity slows you down when you need speed above all.
Delegators understand that their own skills are limited, and a great company is built on a strong team. Their motto is the Jim Collins quote, “First who, then what. Get the right people on the bus.” To them, being a leader means they hire the best people for each function, clarify the goal, and give each person the resources to do their best work. If things aren’t working, maybe the goal isn’t clear enough, or maybe you have the wrong people on the bus.
Some startups grow through sales, others through marketing, yet others through the product itself, and usually through a combination. In any case, you won’t have the resources to fund even a fraction of these proposals.
The root cause Deliberation, execution, hiring, and delegation are all critical; no business succeeds without a healthy blend of those. However, in early-stage startups, these strategies consistently fail for one important reason: missing information.
while strategizing, executing, hiring, and delegating are great ways to optimize, they’re inefficient ways to learn.
When fast learning is the goal, you need a different process—a process of discovery.
A startup needs to discover, as quickly as possible, who will buy their product, when and how they’ll use it, where they’ll look for it, and how they expect it to work. Only then is it possible to find big growth levers. They need to shift into discovery mode.
This is the key
A business operates in optimization mode when its fundamental ins and outs are already well understood and working. The goal isn’t to discover the fundamental operations; it’s to make those operations more efficient by compounding marginal gains.
A business operates in discovery mode when its fundamental ins and outs aren’t well understood.
to create a new system, not run an existing system more efficiently.
Your success depends on the pace and quality of learning.
discovery isn’t about getting marginally better; it’s about becoming categorically different.
Resourceful generalists
The winner will be the first to figure out how to do it right. It will be the first team to figure out all the thousand little things that will make this a successful business.
The success of any startup depends on the pace and quality of learning. Therefore, to succeed, an early-stage startup needs to become an instrument of discovery.
Step 1: Understand the journey that leads customers to you.
Step 2: Map your growth model to find points of leverage.
Step 3: Run growth sprints to test i...
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Step 4: Shift your team’s mindset from optimizati...
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Struggle: Every action we take, product we buy, and decision we make is fueled by some kind of struggle—either a problem to solve or a goal to achieve.
You’ll need to figure out what struggles initiate your customers’ journey.
Search: At some point, your customers will take action to reach their goals.
You need to understand why they spring into action when they do.
Ref: JTBD Catalyst
they’re looking for information, you want to know where they look and make sure you’re the one providing it, and if they’re trying something, you want to make sure it’s your thing.
Selection: Before your customers feel comfortable choosing a solution, they’ll have some specific questions and worries that need to be addressed, along with some switching costs—non-financial fact...
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When you understand customers’ struggle, search, and selection, you’ll start uncovering promising growth
A growth model is a flowchart that maps out how your business finds, acquires, and delights new customers. It will show you where your limited resources can have the greatest impact, mathematically, on your growth.
A growth model will help your team align their work toward a common goal and provide a framework for everyone to agree on priorities without having to escalate every resource decision to the founder.
It also enables you to spot bottlenecks that need unblocking and feedback loops that need to be nurtured.
A growth sprint is a process in which you prioritize ideas with the greatest potential upside (regardless of cost), and then rapidly test the most promising ones with experiments. Each experiment aims at testing a specific hypothesis. These go beyond simple A/B tests;
prioritize those with the greatest upside, not just riskiest assumptions. the former is looking fir growth while the latter is for invalidating the assumpions the business has life
Most of your experiments will fail. But your aim is to learn from every experiment—especially the failures.
With enough persistence, patience, and a bit of luck, you’ll find winners, and your data will give you the confidence to double down on them.
The discovery process involves being wrong a lot (and realizing where you’ve been wrong all along).
As a leader, you’ll need to help everyone overcome their conditioning and embrace the new approach. Otherwise, you and your teams might revert to optimization instead of discovery.
I used to live in an apartment complex surrounded by a wrought-iron fence with a locked gate. Each tenant had a key. One day, a sticker appeared on the gate: Genius! For 99.999% of my life, I won’t need a locksmith. But when I do, I’ll be right here at this gate. The locksmith knew exactly where to find me in my moment of need.
What’s their locksmith moment?
Instagram’s founders understood that their early customers wanted to post their photos on Facebook. So, they made it easy to cross-post Instagram images to Facebook. Each cross-post showcased the app and brought new users to Instagram.
Before Airbnb got popular, people mostly looked for vacation rental apartments on Craigslist. Airbnb's founders realized this and started automatically cross-posting Airbnb listings onto Craigslist. That brought them massive amounts of highly qualified free traffic.
Soy milk: sits in the dairy aisle at the supermarket, even though it doesn’t need to be refrigerated.
The better you understand the contexts in which your customers are likely to use your product, the better your chances of finding their locksmith moments.
important
Customer journeys have three stages: Struggle, search, and selection. Each stage has two phases. You’ll have potential customers, and potential opportunities, at each phase.
