Troy Blaylock’s Reviews > The Lean Startup > Status Update

Part 2 ended with the repercussions of failing to pivot and the different type of pivots. Businesses will often break principles once they begin to taste success. This leads to value-destruction.

It's important to think of a pivot structured change designed to test a new fundamental hypothesis about a product, business model, and engine of growth. Pivots are the key to resilience and business strategy.

This chapters covers when to pivot or persevere. A pivot is a drastic change in your business fundamentals/strategy to avoid stagnant or value-destroying growth. Failure is a prerequisite for a pivot. To pivot, you first must analyze your data objectively for actionable metrics. If your growth and value hypotheses doesn't produce results intended, it's time for a pivot. (Presents case studies of successful pivots)

Discussed the Kanban Diagram and Agile Methodology, which are strategy prioritization tools for new ideas, and productivity with a focus on actionable metrics vs. vanity metrics. The Measure chapter also covers the three A's of analyzing data: actionable, accessible, and audible. Data is crucial to how you drive decisions. If not read correctly the team will suffer from unproductivity. Decisions turn into guesses.

Startups often times get stuck in the vanity metrics to determine if they're making progress. A good strategy is to make cohort analysis, which is testing groups of people and taking note of KPIs that actually will move the needle for the business. Launch your MVP, fine tune the engine, then decide to pivot or persevere base on the data collected and metrics clearly aligned. This is the idea of Innovation Accounting.

The book goes deeper into the minimum viable product. The MVP serves the purpose to achieve validated learning.

Two types: Video, Concierge

Video - in a market where features don't run seamlessly, a how to guide can offer amazing feedback

Concierge - don't serve the masses. Serve one without building anything. Only focus on the concept, no software needed. Then build after you know what the customer wants.

Part 2 of the book focuses on the Build, Measure, Learn feedback loop. As a startup, you're going to have leap-of-faith assumptions. Determine whether these assumptions are value creating or destroying, then immediately start to experiment to get data.

Value can come in many forms. The early stages of FB were not profitable, but the speedy growth and retention of it's users made it worth $500,000 in VC funding.

Strive for disruptive innovation, features that evolve at the speed your company experiments with products.

Realize which efforts will bring value and which ones are wasted. You'll never know what a customer will like/dislike. Don't build features that people won't notice. Typically your assumptions about what others will like are wrong, which can destroy plans. Learn from your customers, then innovate.

Entrepreneurship is management. Most efforts for start-ups is to launch like a rocket, which in any small error will result in a catastrophic crash. Rather, a start-up should be like driving a car, tuning the engine and adjusting the steering whenever a wrong turn is made. Learn from your customers and decide whether to take a detour (pivot) or stay the course (persevere). Build, Measure, and Learn.