The Lean Startup: Review & Notes

Mike’s Review:

I enjoyed The Lean Startup very much. My big takeaway:

  • You don’t need to spend a massive time planning, building, and then build up to a launch. Build something smaller, get it out to market, get measurable feedback & metrics, and improve. This loop of rapid “build –  measure – learn” is something I return to often in life & business.

My notes:

  • Instead of focusing on our individual productivity, or even productivity in general, focus on how quickly an organization builds things that the market wants.
  • Instead of focusing on productivity-based-outcomes, focus on adaptive, validated learning
  • Feedback loop to follow:
    • Build -> measure -> learn
  • A company’s success depends on how it can incorporate this feedback loop. Essentially, we must create an “innovation factory”
  • The culture that is required for this is not a Cesar who puts his thumbs up and down. Build teams that feel comfortable to innovate at an appropriate speed.
  • Classic market forecasting is slow. Validated learning is rapid, fast, and utilizes market feedback.
    • Everything a company does is an opportunity to learn, test, and improve.
  • “If you build and just see what happens, you’ll succeed…at seeing what happens”
  • Good businesses test two hypotheses:
    • Value Hypothesis: Will product or service deliver value to customers?
    • Growth Hypothesis: How will new customers discover a product
  • Test this via 4 questions:
    • Do customers recognize they have the problem I’m 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
  • Success is not delivering a product or service – it’s solving the customer’s problem
  • Feedback loop:
    • Idea -> build -> Product -> Measure -> Data -> Learn -> Repeat
    • The best professional development focuses on the entire feedback loop, not just one element.
  • Book then talks a good deal about MVP’s
    • Come up with an 80% solution and launch to early adopters
  • The only way to win is to learn faster than anyone else
  • A startup’s job is to measure where they are right now quantitatively and then: devise a plan of learning experiments to improve the numbers
  • Pivoting should only be done as a way to improve the metrics the business uses to measure itself
    • Ask ourselves: how do we know X was a good idea or not: by using metrics to guide their learning
    • Many types of pivots:
      • zoom in/out to a certain feature set / change customer segment /  platform / technology / etc..
  • Cohort analysis is important to measure this, as opposed to sum-metrics.
  • Split test metrics
  • Three A’s of metrics:
    • Actionable
    • Accessible
    • Auditable
  • Engine of growth:
    • paid / viral / sticky
    • Word of mouth / growth hacked / paid / repeat use
  • Small batches win VS large batches:
    • letter folding experiment: imagine you had 100 letters to fold, stuff, address, and seal.
      • Large batching means folding 100 letters first, then stuffing 100 letters, etc…
      • Small batching means fold, stuff, address, and seal one letter, then the 2nd.
    • In these letter folding experiments, small batching always wins.
    • Same with business, the faster you can complete something and get it out to market – the better. The faster you can learn, measure, and grow from it.
    • Toyota did this since they couldn’t compete against ford’s massive large batch industrial line – and they now have one of the most efficient operations on the planet.
  • When things break, ask “why” 5 times to discover the root cause