Lean Startup method
We think that entrepreneurs and management are two different roles. The book promotes that these two disciplines be combined.
TLDR;
Start with a value and growth hypothesis. Test the market. Gather feedbacks then improve based on the feedback. Do it as quickly as possible.
Having a grand vision, decide the strategy to follow (batch working, efficiency), and then make the product.
Another way of describing the start is having a Big Hairy Audacious Goal (BHAG).
A Startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.
Most large companies fail because the mid-managers cannot plan and execute properly. This is because mid-managers acts like politicians, they manage the 'storm', good news gets escalated and bad news is swept under the rug.
Mid managers lack accountability and power to make decisions and do not want to fail. 'Learning' is the common excuse they use when they fail.
Malcolm Gladwell mentioned PDI in Outlier, the further between the top manager and exec, the further the communication and likely for it to break down.
Peter Thiel mentioned a company in Zero to One should not exceed three-level from top management to execs to improve efficiency and communication.
IMVU built a chat that integrates with other IM, but it didn't work because they had a terrible vision. As it turns out, users didn't want integrated IMs. They want to meet new friends, instead of inviting existing friends into the platform.
IMVU learned the hard way.
Which customer to listen to. Which to prioritise? It doesn't matter.
If you cannot fail, you cannot learn.
Value hypothesis - What value (gain or pain) are we solving and are customer willing to pay to solve it?
Growth hypothesis - what would make the customer want to share?
Mark Cook (Kodak), "Success is not building features, but to learn how to solve customer problems"
Build (Product) - Measure (Data) - Learn (Ideas) loopback to Build.
The goal is not to only make a complete cycle, but to run it as fast as you can. Build it as quickly as you get data.
FB took the leap of faith. Move quickly and break things.
Leap of faith assumptions - Value hypothesis and growth hypothesis.
Toyota uses 'Genshi gembutsu' which means "Go and see for yourself".
Strategy is based on assumptions. The one that is closer to users is the ones that make complete sense.
Test as often as possible. A split test, AB test whatever test you can get your hands on. Don't worry too much about the quality. Build the MVP (Minimum viable product) that is acceptable to work.
If we don't know who the customer is, we don't know what quality is
"Two pizzas for the price of one" is never a beneath-you idea. It has to work for people and Groupon (which soon failed in the industry).
Drew Houston - Minimum Viable Video showed people how things work for dropbox to make people understand how the 'magic' works.
Iteration has to be built into the calendar. It's a habit of producing things again and again until it's fully refined.
The rate of growth depends on 3:
Three learning milestones.
Be careful when preserving, most businesses are too stubborn; they collapsed from their stubbornness.
Vanity Metric - Metric that makes you look good. Like revenue, no of followers, it actually tells you nothing.
Actionable Metric - Metric that you can do something about. Typically an outcome of formula, e.g. profit per customer, pages per user etc.
Companies that can't pivot and are unwilling to face the data presented to them will face the land of the dead. Neither growing nor dying, consuming resources and employees' commitment without moving forward.
It's not about adding more widgets or features but tuning it towards growth, creating value and a growth engine.
Registration -> Activation -> Retention -> Referral
Failure is prerequistite to learning.
Pivot requires Courage.
Types of Pivot
Failure to pivot – the decision is difficult.
Part 3 Accelerate
We must balance between speed and thinking in execution. Don't think too much, and Don't move too fast.
Going through without sacrificing speed and agility.
Its easier to make changes in small batches vs large batches. Doing letters one at a time, as opposed to in one big swoop is quicker (insert all, stamp all).
E.g. Reply to customer feedback. Act on it now, as opposed to collecting all and doing it later at one go.
In small-batch, you can detect flaws much quicker compare to big batches.
Both have its advantage, right now, we are not mass-produced, we are finding a better way of doing it.
The startup way:
People < Culture < process < Accountability
Briefly;
A new customer comes from the action of past customers.
Don't try to make it all work. Focus one at a time. The best is running all three.
Achieve product-market fit, Andersen. When the product fit the market, keep pivoting. There is no such thing as a perfect product.
Death of growth engine is when you look at vanity metrics, then you think it's good enough. Instead, the focus should be on improving user behaviour (so people keep using the product), finding new things to improve (pivot) and continuing buying the next iteration.
Adaptive organisation. Train your staff.
Ask 5 whys, then empowers someone to take charge of the initiative. When finding fault, don't blame others; only try to get to the bottom. All relevant and related parties must come to the table to discuss when using the five whys.
Large companies can innovate if they Learn to change their management philosophy.
Create smaller teams; this will help them with;
I thoroughly enjoyed the book. Though the idea in the book is not new to me, "The Lean Startup" was the starting point (or movement) and presented the ideas clearly.
The biggest mistake I did in life was to wait for it to be perfect.
Instead, I should accept the flaws, get feedback and improve further. I would need to work on my patience then.
