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by
Eric Ries
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April 15 - April 29, 2020
Jeff Lawson, the CEO of cloud communications company Twilio, says, “You’re not going to get anywhere if you have a big vision but you’re not solving the customer’s problem.
A clear understanding of the tools of the Lean Startup is necessary before diving further into the Startup Way.
HOW THE LEAN STARTUP WORKS Here is an overview of the basics of the Lean Startup method. We’ll get into each one, and each specialized term, in greater detail. Identify the beliefs about what must be true in order for the startup to succeed. We call these leap-of-faith assumptions. Create an experiment to test those assumptions as quickly and inexpensively as possible. We call this initial effort a minimum viable product. Think like a scientist. Treat each experiment as an opportunity to learn what’s working and what’s not. We call this “unit of progress” for startups validated learning. Take
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“Using metrics having to do with access, affordability, and outcomes, the president wanted to change the conversation about what defines a school’s value.”
But it’s crucial that teams, managers, and leaders take an honest look at the company’s plans and accept that they are filled with technical assumptions about product features and specifications as well as commercial assumptions about marketing and sales strategies.
Then ask these kinds of questions: What assumptions would have to be true in order for the project to succeed? Are they assumptions about customers? Partners? Competitors? How much do we really know about customers’ habits, preferences, and need for solutions like ours? What evidence is there that customers really have the problem being solved for them and strongly desire (and are willing to pay for) a solution to it? What is really known about what customers want in that solution?
By writing down what they think will happen ahead of time, team members are reminded that they won’t always be right—which is fine. The goal is to learn.
Do people really have the problem you think they do? How do they approach the problem today? Is your concept a better alternative for them? Only after I have tested with customers do I start building. Don’t overdo
Avoid analysis paralysis at all costs, and usually that means focusing on fewer rather than more assumptions
Why? Because we all tend to gravitate toward the comfortable—the areas we know most about that feel the safest.
This is a simple form of risk mitigation: Focus on actions that present the greatest opportunities for learning.
We have the words Done is better than perfect painted on our walls to remind ourselves to always keep shipping.”
2. Minimum Viable Product (MVP) Once we’ve gathered predictions and assumptions and articulated value and growth hypotheses, the next step is to build an experiment called a minimum viable product or MVP.
An MVP is an early version of a new product that allows a team to collect the maximum amount of validated learning (learning based on real data gathering rather than guesses about the future) about customers.
A minimum viable product quickly turns an idea into something real—even if imperfect—in order to begin the process of iterating and retesting.
“The thing about Minimum Viable Products is that while you decide what’s Minimum, the customer decides if it’s Viable,”
MVPs come in all sizes and flavors. It all depends on what you’re trying to learn.
“The goal of rapid experiments is to learn as fast as possible from real customers, based on real behaviors, before investing additional resources in a given idea or course of action.”
Validated Learning In The Lean Startup, I told an embarrassing story about the time I spent six months building a piece of software that, as it turned out, customers didn’t even want to download.
For metrics to support a valid inference, they must follow the three A’s: actionable, accessible, and auditable.
ACTIONABLE. For a report to be considered actionable, the data must demonstrate clear cause and effect and be related to changes in the product itself.
see these reports and understand them, or there is no way they can be put to use.
AUDITABLE. The data has to be credible. Often when projects are killed because of poor metrics, a team or an individual will challenge that decision.
Often the hardest part of running a startup is simply getting everyone on the team to agree on the same set of facts.
BUILD-MEASURE-LEARN LOOP
“The one rule you want to apply is to get customer feedback, and you need to try to get it as early as possible,”
Startup history is filled with legendary pivot stories. Among them are PayPal, which went from a money transfer mechanism for Palm Pilots only to the web-based version we now have; Netflix, which moved from mailing DVDs to customers to streaming; and some of the companies whose stories I told in The Lean Startup, such as Wealthfront (which began as the online gaming business KaChing) and Groupon.
Sometimes, one pivot leads to another pivot, and then another, until the team runs out of pivots and realizes that their vision, great as it might have seemed, cannot find successful footing. That’s exactly what happened to one of GE’s Turbomachinery Solutions teams, that nevertheless counts the cancellation of their project as a good outcome.
LEAN STARTUP FOR LEADERS In the Lean Startup methodology, one of the most important things a leader has to do is ask questions of the people doing the build-measure-learn work. The most important questions for the leaders to ask are: What did you learn? How do you know?
As we’ll see again and again throughout this book, so much of this change in management approach comes down to culture, mindset, and habits. One of the hardest assumptions to dispel is the idea that the leader is the supreme expert: The leader makes the plan, and subordinates execute it.
On the other side of the divide, Silicon Valley startups have a problem that is caused by their own successes: scale.
ACCOUNTABILITY IS THE FOUNDATION OF MANAGEMENT Entrepreneurial management is a leadership framework designed specifically for twenty-first-century uncertainty. It’s not a replacement for traditional management. It’s a discipline designed to help leaders become as rigorous in the entrepreneurial part of their management portfolio as they are in the general management part.
The foundation of the Startup Way is made up of these same elements, beginning with ACCOUNTABILITY: the systems, rewards, and incentives that drive employees’ behavior and focus their attention.
PROCESS concerns the tools and tactics that employees habitually use every day to get work done, such as project planning, management, team coordination, and collaboration.
Over time, these habits and ways of working congeal into CULTURE: the shared, often unstated, beliefs that determine what employees believe to be possible, because “that’s just the way things are around here.”
Every culture attracts certain kinds of PEOPLE: the ultimate corporate resource. A toxic or old-fashioned culture repels innovative talent. Ultimately, the success of any organization depends on the caliber of the people it is able to attract and retain.
To incubate a new culture requires individual teams to self-organize. New cultures come from the lived experience of seeing a new way succeed.
THE OUTCOMES OF TRANSFORMATION 1. It provides many more opportunities for leadership
2. It helps keep innovative people in the company instead of incentivizing them to leave
3. It reduces wasted time and energy
4. It’s a much better way to kill projects
5. The ability to solve heterogeneous problems with speed and agility
The point is that in the grand scheme of things, this is a problem too small to rise to the level of the CEO or senior leaders. In order to solve it, the ability to experiment and pivot and learn has to be embedded in the fabric of a company. It has to be available to every employee.
“war room”:
RULE 1: The war room and the meetings are for solving problems.
RULE 2: The ones who should be doing the talking are the people who know the most about an issue, not the ones with the highest rank.
RULE 3: We need to stay focused on the most urgent issues, like things that will hurt us in the next 24–48 hours.
chapters. He got people into the same room, he made them work together, he prioritized, he enforced a culture of meritocracy, and he asked for honesty.
how to move an organization to a more effective, entrepreneurial way of working, and it answers three fundamental questions: What, exactly, are the systems and structures we need to implement? How, exactly, do we convince managers and employees alike to try something different than what they’ve known their whole careers? (Remember, even in a hypergrowth startup, most employees were not present for the founding of the company.) When, exactly, is a company ready to make this transformation happen?
Phase One is about laying the foundation through experimentation, adaptation, and translation.
