The Lean Startup - Deepstash
eric ries

“Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be engineered by following the right process, which means it can b...

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The Lean Startup

The Lean Startup

by Eric Ries

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Why Do startups fail ??

According to Eric Ries, there are two main reasons for startup failures:

  • Traditional management methods do not work for a highly uncertain startup
  • ...

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What is a Lean Startup?
  • Many people share the opinion that entrepreneurial success is a combination of perseverance, intelligence, a good product, and the luck of being in the right place at the right time.
  •  ...

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  • Entrepreneurs are everywhere
  • Irrespective of the size of the venture if you guys are working on a product that solves a problem in a new and better way then ...

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Continuation of the above topic
  • The cycle "build-measure-learn". First, create an MVP of the product, evaluate consumers' reaction, 
  • And then decide whether to continue on the chosen course o...

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Startups are not rocket science they are like car rides
  • Instead of making complex plans based on many assumptions,
  •  you can make constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop. 
  • Startups are ...

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  • As an entrepreneur, the core aim is to build a product or a solution to a burning problem 
  • And even though the user experience matters

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How to go into practice?

The feedback that a startup receives in its experiments

 can be qualitative (which product options they like and which they don't) 

or quantitative (how many customers use the product, ...

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Build #step-1
  • For a startup, you need to start creating a Minimum Viable Product (MVP) as soon as possible. 
  • MVP is a version of a product that allows you to start the Build-Measure-Learn cycle with...

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Types of MVP
  1. Video MVP {A video that explains your product or solution to measure traction}
  2. The Concierge MVP {idea that when you’re just starting out you don’t need to be able to handle thousands...

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  • "Measure" means determining whether the efforts to create a product are producing the desired results. 
  • And this is the key difference between Lean Startup valuation and standard metho...

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Learn #step-3
  • It means to figure out whether the chose path lead to success or we need to pivot
  • When an entrepreneur sees that the chosen path does not lead to success, 
  • he must be ready to ...

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Genchi Genbutsu
  • Genchi Genbutsu, which is translated as "go and see." This principle is guided, in particular, in Toyotа. 
  • A manager responsible for the development of the Sienna minivan travelled aro...

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  • It is not uncommon for entrepreneurs to first create a product and then find out consumers' reactions. But the point is to do the opposite.
  • The goal of creating a Minimum Viable Produc...

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  • As we have already mentioned, Innovation accounting is a systematic approach to figuring out if you are making progress and getting evidence from the facts. 
  • It is an alternative to th...

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1. Create MVP and get feedback to understand the real state.

2. Try to bring metrics closer to ideal ones. It can take a lot of trying.

3. Decide whether to move in the same direction o...

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  • One of the most important analysis tools for a startup is Cohort analysis.
  • It may sound complicated, but it is based on one simple premise. 
  • Rather than looking at aggregate me...

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  • If nobody uses your product, then optimization or marketing will make no sense. 
  • A startup must be very clear about making clear and well-founded predictions to prove that a good busin...

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1. Effective indicators. show what needs to be done to get the results you want. They help to learn from the results of their actions. 

2. Simplicity of presentation...

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When should you make a pivot?
  • When it becomes clear that the initially chosen path will not lead to success, 
  • the entrepreneur is required to make a pivot - to radically change the strategy, create and test a new h...

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  • if a startup has a million dollars in the bank and spends $100k per month, its runway is 10 months. 
  • Based on this definition, the "runway" can be extended in two ways: by reducing cos...

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Small batch approach

The Lean Startup methodology is based on a small batch approach, borrowed from the concept of lean manufacturing.

  • When working in small batche...

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“The engine of growth is the mechanism that startups use to achieve sustainable growth. I use the word sustainable to exclude all one-time activities that generate a surge of customers but have no ...

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  • The rules that govern sticky growth are pretty simple: if the acquisition rate exceeds the loss rate, then the popularity of the product rises. Therefore, companies need to track consumer loss...

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  • It's called the viral loop, and its speed is determined by the viral rate. 
  • The higher this coefficient, the faster the product will gain popularity. 
  • The viral ratio shows how...

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  • For a company to grow steadily over a long time using a paid-growth tool, it needs a differentiated ability to 'monetize' a particular group of users.
  • For example, at IMVU (Ries' ex-co...

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KEY TAKEAWAYS:
  • The lean startup is developing a product based on the expressed desires of the market.
  • The lean startup uses validated learning, which is a process by which companies assess consumer i...

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Adaptation
  • A startup cannot afford to operate without a system. 
  • To be successful, a startup needs to be an adaptive organization in which processes and actions are quickly and automatically adju...

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