MGMT 340: Lean Start-Up (Ron Cheek)

What are the qualities of a good metric?

1. Actionable - You understand a clear cause and effect 2. Accessible - They can be easily understood 3. Auditable - We must ensure the data is correct

synthesis

The author adopted the view that their job was to find ________________ between their vision and what customers would accept.

worse, better

The author finds that when switching to validated learning, it feels ________ before it feels ___________.

most extreme position

The best way to influence the boss and get what you want is to take the ___________ possible.

quality problems can be identified much sooner

The biggest advantage of working in small batches is that ___________________.

which activities create value and which are a form of waste?

The critical first question for any lean transformation is:

a clear-eyed and objective mind-set

The decision to privot requires a ___________________.

plan

The first problem for startups failure is the allure of a good _______.

An engine of growth can be defined quantitatively.

True

New start-up organizations should be committed to making mistakes.

True

One of the most vexing aspects of the minimum viable product is the challenge it poses to traditional notions of quality.

True

Small batches normally allow new versions of products to be released to customers on a monthly, quarterly, or yearly cycle.

True

7 Sandbox Rules

1. Any team can create a split tests that only effects "sandboxes" parts of product or service; 2. One team must see experiment through to end; 3. Experiment must have specified end; 4. Experiment can only impact certain number of customers; 5. Experiment evaluated based on standard report of 5-10 actionable metrics; 6. Every team that works inside sandbox and every product built must use same metrics; 7. Team must monitor metrics and customer reactions while experiment is in progress, or end experiment if there is major problem.

2 Rules for Root Cause Analysis

1. Be tolerant of all mistakes the first time; 2. Never allow the same mistake twice.

The amount of time a company can count on holding on to market leadership to exploit its earlier innovations is shrinking.

True

The author felt he had committed the biggest waste of all - "building a product that our customers refused to use."

True

What four questions should you ask when determining what to build?

1. Do consumers recognize that they have a problem you are trying to solve? 2. If there was a solution, would they buy it? 3. Would they buy it from us? 4. Can we build a solution to their problem?

5 Principles of Lean Startup

1. Entrepreneurs are everywhere 2. Entrepreneurship is management 3. Validated learning 4. Build-Measure-Learn 5. Innovation Accounting

The first step in understanding a new product or service is to figure out if it is fundamentally value-creating or value-destroying.

True

The importance of small-batch approach produces a finished product every few seconds, whereas the large-batch approach must deliver all the products at once, at the end.

True

We must be willing to set aside our traditional professional standards to start the process of validated learning as soon as possible.

True

We must learn the truth about which elements of our strategy are working to realize our vision and which are just crazy.

True

Runway

True measure of startup's runway is how many pivots they can make prior to running out of money. Pivoting faster can extend the runway.

__________________ is the process of demonstrating empirically that a team has discovered valuable truths about a startup's present and future business prospects.

Validated learning

Minimum Viable Product

Version of the product that allows a full turn of the Build-Measure-Learn loop with minimum effort and least development time.

Engines of growth

________________ are designed to give startups a relatively small set of metrics on which to focus their energies.

Describe innovation accounting.

a disciplined, systematic framework that makes it clear when the company is stuck and needs to change direction. 1. Use MVP to establish real data on where the company is right now 2. Startups must attempt to tune the engine from the baseline through product development, marketing, or other initiative toward improving one of the drivers of its growth model. 3. After the startup tunes optimizations through its MVP, the company decides whether to pivot or persevere. If tuning the MVP doesn't lead to growth, it is probably time to pivot.

What is a customer archetype?

a document that seeks to humanize your proposed target customer, and that is iterated through as assumptions are.

4 Phases of Business

1. Scale (building product or service, getting into hands of customers); 2. Product Focus (product becomes public face, attracts competitors and copycats); 3. Operational Excellence (focus on increase margins, lower costs, differentiation, optimization); 4. Legacy (focus on reducing operating costs, maintaining market for product as long as possible).

Describe the core principles of the Lean Startup Methodology

1. Startups require management geared towards extreme uncertainty. 2. Startups exist to learn how to build a sustainable business. This learning should be validated scientifically by running frequent experiments. 3. BML (Build-Measure-Learn) is the process of turning ideas into products, measuring how customers respond, and learning whether to pivot or persevere. 4. Innovation Accounting. To improve entrepreneurial outcomes, we must measure progress, set up milestones, and prioritize work, i.e, focus on the boring stuff.

Validated Learning

3rd principle of Lean Startups. Startups exist to LEARN how to build a SUSTAINABLE business which can be validated scientifically by running frequent experiments. Unit of progress for a business.

Build-Measure-Learn

4th principle of Lean Startups. The fundamental activity of startups is to 1) turn ideas into products, 2) measure customer response, 3) then pivot or persevere. All successful startup processes exist to accelerate feedback.

What percent of startups fail?

90 percent.

adaptive

A ___________ organization is one that automatically adjusts its process and performance to current conditions.

minimum viable product

A ______________ is the fastest way for entrepreneurs to learn.

analysis paralysis

A common problem entrepreneurs can fall victim to is _______, endlessly refining their plans.

Define "startup"

A human institution designed to create a new product or service in conditions of extreme uncertainty

What is a startup according to Eric Ries?

A human institution designed to create a new product or service under conditions of extreme uncertainty.

What is lean startup?

A method for developing business and products.

What is the MVP?

A product with the least amount of work required to test fundamental business hypotheses. Remove all features that do not contribute directly to the learning you seek.

Genchi Gembutsu

"Go and see for yourself." Most important part of lean manufacturing vocabulary, critical part of the Toyota Way. Do not rely on anything other than what you see firsthand.

Minimum Viable Product Design Principle

"Remove any feature, process or effort that does not contribute directly to the learning you seek."

4 Questions for Product Development

1) Do customers recognize they have the problem you are trying to solve? 2) If there was a solution, would they buy it? 3) Would they buy it from us? 4) Can we build a solution for that problem?

2 Dangers of Market Research and the Solution

1) Just-do-it types who start building after only cursory customer conversations; 2) Analysis paralysis types. Answer is to keep researching until you can conceive of a Minimum Viable Product to test, but to stop researching at that point and test the MVP.

3 Steps of Innovation Accounting

1) Minimum Viable Product establishes real data to set baseline; 2) Attempt to tune engine from baseline to ideal; 3) If no more experiments can move closer to the ideal decision point: pivot or persevere.

conditions of extreme uncertainty.

A startup is a human institution designed to create a new product or service under ____________________.

uncertainty

A startup is a human institution designed to create a new product or service under conditions of extreme __________.

What is a startup according to Steve Blank?

A temporary organization in search of a scalable, repeatable, profitable business model.

Lean Startup

Application of lean thinking to the process of innovation

The author Eric Ries explains "hard work and perserverance does lead to success.

False

The author agrees that a good plan, a solid strategy, and thorough market research works for startups.

False

What is the key question a startup should revolve around answering?

Can we build a sustainable business around this set of products and services? Approach this question as a science experiment

Pivot

Change in strategy when tests prove that Growth or Value Engine cannot maintain a viable business under current strategy.

What did lean startup do?

Combined Ford's principles.

Vanity Metric

Common metrics used to evaluate startups (gross revenue, number of customers, etc.) These do not prove Value or Growth Engines are working.

W. Edwards Deming View of Customer

Customer is the most important part of the production process - should focus all energy on producing outcomes the customer finds valuable.

Early Adopters

Customers who feel the need for the product most acutely, tend to forgive mistakes and eager to give feedback.

Learning Milestone

Data collected from MVP experiments that provide baseline data on customer reaction to product or service. Examples include conversion rate, sign-up or trial rate, customer lifetime value, etc.

Describe product/market fit.

Describes the moment when a startup finally finds a widespread set of customers that resonate with its product.

Taiichi Ohno and Shigeo Shingo

Developed Lean Manufacturing revolution at Toyota

The more specific the symptoms are, the _________ it will be for everyone to recognize when it's time to schedual a Five Whys meeting.

Easier

The ______________ is the mechanism that startups use to achieve sustainable growth.

Engine of growth

Why are small batches important?

Ensures that a startup can minimize the expenditure of time, money, and effort that ultimately turns out to have been wasted. Lets people discover the truth faster.

Entrepreneurship

Entrepreneurs are everywhere (anyone creating product or service under extreme uncertainty). "Entrepreneur" should be a job title in all companies. (Principles 1 and 2 of Lean Startup).

managerial discipline

Entrepreneurship requires a ______________ to harness an entrepreneurial opportunity.

Who was lean startup first proposed by in 2008?

Eric Ries.

The truth is every engine of growth __________________.

Eventually runs out of gas

a crisis

If you reach the limits for new customer growth (they are exhausted) and the growth suddenly slows, it provokes ______________.

early adopters

The point is not to find the average customer but to find ___________: the customers who feel the need for the product most acutely.

What is the TWI program?

Training With Industry program which was developed for the Japanese industry to help them quickly rebuild their industrial base.

sustainable

In modern economy, almost any product that can be imagined can be built. The more pertinent question is "Can we build a __________ business around this set of products and services?"

built

In modern economy, almost any product that can be imagined can be built. The more pertinent question is "Should this product be _____?"

Having a low-quality product can _____________ learning when the defects prevent customers from experience (and giving feedback on) the product's benefits.

Increase

Actionable Metric (3 A's)

Measuring based on cohorts, split tests, and reaction to MVP tests. Each metric must be Actionable, Accessible, and Auditable.

Leap of Faith Questions

Questions that can validate either your Value Hypothesis or your Growth Hypothesis.

Startups are in a life-or-death struggle to learn how to build a sustainable business before they ______________________.

Run out of resources and die

All businesses exist to do what?

Solve a problem.

run out of resources and die

Startups are in a life-or-death struggle to learn how to build a sustainable business before they ______________________.

one

Successful startups usually focus on ______ engine(s) of growth, specializing in everything that is required to make it work.

True

T/F Companies are able to design, develop, and ship out new features one at a time, taking advantage of the power of small batches.

True

T/F Entrepreneurs need a personal stake in the outcome of their creations.

True

T/F If we do not know who the customer is, we do not know what quality is.

False

T/F If you are building the wrong thing, optimizing the product or its marketing will yield significant results.

False

T/F If you are causing (or missing) quality problems now, the resulting defects won't slow you down later.

True

T/F In the Lean Startup model, an experiment is more than just a theoretical inquiry; it is also a first product.

False

T/F Innovation accounting will still work even if a startup is being misled by vanity metrics such as gross number of customers and so on.

True

T/F Lean Startup is a principled approach to new product development.

True

T/F Most of the time customers don't know what they want in advance.

False

T/F Most tools from general management are designed to flourish in the harsh soil of extreme uncertainty in which startups thrive.

True

T/F New start-up organizations should be committed to making mistakes.

True

T/F Once IMVU's efforts were aligned with what customers really wanted, their experiments were much more likely to change their behavior for the better.

True

T/F One of the most vexing aspects of the minimum viable product is the challenge it poses to traditional notions of quality.

False

T/F Pivots are a permanent fact of life for any growing business. Unless they achieve initial success.

True

T/F Startup organizations must attempt to tune the engine from the baseline toward the ideal.

True

T/F Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught.

False

T/F Startups are different - too much budget is as harmful as too little.

True

T/F Startups need to conduct experiments that help determine what techniques will work in their unique circumstances.

False

T/F Strategic planning takes months to complete and experiments should not begin until it is completed.

True

T/F The amount of time a company can count on holding on to market leadership to exploit its earlier innovations is shrinking.

False

T/F The author Eric Ries explains "hard work and perserverance does lead to success.

False

T/F The author agrees that a good plan, a solid strategy, and thorough market research works for startups.

True

T/F The author felt he had committed the biggest waste of all - "building a product that our customers refused to use."

True

T/F The challenge of entrepreneurs is to find ways to achieve the same amount of validated learning at lower cost or in a shorter time.

True

T/F The goal of a startup is to figure out the right thing to build - the thing customers want and will pay for - as quickly as possible.

True

T/F The higher-quality of the existing playbook is, the easier it will be for it to evolve over time.

True

T/F The importance of small-batch approach produces a finished product every few seconds, whereas the large-batch approach must deliver all the products at once, at the end.

True

T/F We must be willing to set aside our traditional professional standards to start the process of validated learning as soon as possible.

True

T/F We must learn the truth about which elements of our strategy are working to realize our vision and which are just crazy.

False

T/F With proper managerial structure innovation is a top-down, centralized, and predictable thing that can be managed.

The "growth hypothesis" _______ how new customers will discover a product or service.

Tests

Growth Hypothesis

Tests how new customers will discover a product or service.

Value Hypothesis

Tests whether product or service really delivers value to customers once they use it.

tests

The "growth hypothesis" _______ how new customers will discover a product or service.

tests

The "value hypothesis" __________ whether a product or service really delivers value to customers once they are using it.

continuous

The Build-Measure-Learn feedback loop is a __________ process.

customers often don't know what they want.

The Lean Startup Model often works because _______________.

thoroughly immediately rigorously

The Lean Startup model offers a way to test an organization's hypotheses __________.

the challenges it faces

The Lean Startup works only if we are able to build an organization as adaptable and fast as ____________.

to test fundamental business hypothesis

The MVP's ultimate goal is to ________________.

value

The __________ hypothesis tests whether a product or service really delivers value to customers once they are using it.

engine of growth

The ______________ is the mechanism that startups use to achieve sustainable growth.

churn rate

The __________________ is defined as the fraction of customers in any period who fail to remain engaged with the company's product.

At its heart what is lean startup methodology?

The application of the scientific method to building a business.

3 Advantages of Validation

1) More accurate data about customer demand (real customer behavior vs. hypothetical; 2) Interaction with real customers to learn about needs; 3) Allows you to be surprised when customer acts unexpectedly

The biggest advantage of working in small batches is that ___________________.

quality problems can be identified much sooner

The critical first question for any lean transformation is:

which activities create value and which are a form of waste?

Lean Startup is a scientific approach to manage ------ ------

disruptive innovation.

A common problem entrepreneurs can fall victim to is _______, endlessly refining their plans.

Analysis paralysis

Quality Principle

If we do not know who the customer is, we do not know what quality is.

Scientific Method Lesson

If you cannot fail, you cannot learn

Most problems that at first appear to be individual mistakes can be traced back to problems in ____________.

Training

3 Engines of Growth

1. Sticky engine of growth - focus on attracting and retaining customers over long term (rate of acquiring customers must exceed churn rate); 2. Viral engine of growth - customers do majority of marketing like Tupperware, network marketing (viral coefficient must be greater than 1 to succeed); 3. Paid engine of growth - each customer brings in enough revenue to advertise and bring in additional customers (lifetime value of customer must exceed cost per acquisition).

4 Tips for Using 5 Whys

1. Use a 5 Why's Master to facilitate; 2. Only apply to new problems that arise; 3. Everyone involved in issue must be involved in the meeting; 4. Remind everyone the purpose of 5 Why's each time you use it.

What are the two most important assumptions an entrepreneur must make?

1. Value Hypothesis - does the product or service deliver value to customers? 2. Growth Hypothesis - how well does the product grow among customers?

What are the primary ways of driving sustainable growth?

1. Word of mouth 2. A side effect of product usage (i.e., someone seeing a fashion, etc.) 3. Through funded advertising (as long as cost of acquiring a customer is less than the revenue the customer generates) 4. Through repeat purchase or use

9 Pivots

1. Zoom In Pivot - Single feature becomes whole product or service. 2. Zoom Out Pivot - Whole product becomes single feature of bigger product. 3. Customer Segment Pivot - Product solves problem for different customers than originally thought. 4. Customer Need Pivot - Customers have different problem than originally thought. 5. Platform Pivot - Change from platform to application or vice versa. 6. Business Architecture Pivot - Switch from high margin/low volume to high volume/low margin or vice versa. 7. Value Capture Pivot - Change to the way the company captures value (monetization, revenue model, subscription, etc.) 8. Channel Pivot - Change in way product or service is delivered to customer (direct sale, network, affiliate, etc.) 9. Technology Pivot - Use of different technology to deliver same product or service.

What are 10 different types of pivots?

1. Zoom-in pivot: What was considered a single feature in a product becomes the whole product 2. Zoom-out pivot: What was considered the whole product becomes a single feature in a much larger product. 3. Customer segment pivot: The product hypothesis is partially confirmed, solving the right problem, but for a different customer than originally anticipated. 4. Customer need pivot: The product hypothesis is partially confirmed. The target customer has a problem worth solving, just not the one you anticipated 5. Platform pivot: A change from an application to a platform or vice versa 6. Business architecture pivot: example, when a startup goes from a high margin/low volume to mass market or vice versa. 7. Value capture pivot: How do companies capture value? 8. Engine of growth pivot: A company changes its growth strategy to seek faster or more profitable growth 9. Channel pivot: The same basic solution could be delivered through a different channel with greater effectiveness. 10. Technology pivot: When discovering a technology to achieve the same solution by using a completely different technology.

pivot or persevere

After the startup has made all the micro changes and product optimizations it can to move its baseline toward the ideal, the company reaches a decision point. At this point they _________________.

All of these are ways past customers drive sustainable growth. Through repeat purchase or use. Word of mouth. As a side effect of product design. Through funded advertising.

All of the following are primary ways past customers drive sustainable growth EXCEPT

The Lean Startup model offers a way to test an organization's hypotheses __________.

All of these are correct

at the same time

As startups grow, entrepreneurs can build organizations that learn how to balance the needs of existing customers with the challenges of dinding new customers to serve, managing existing lines of business, and exploring new business models - all ____________.

What are the 5 why's and why are they used?

At the root of every seemingly technical problem is a human problem. The 5 why's provides an opportunity to discover what that human problem might be.

economies of scale

Because the Japanese car market after the war was so small and capital was not available, they were unable to do mass production and take advantage of ______________.

How do we search?

Begin with an educated guess, Change guesses into facts using experiments, Move through the loop quickly.

Customer Archetype

Brief document describing the proposed target customer.

The author strongly recommend that startup teams be _____________.

Completely cross-functional

A startup is a human institution designed to create a new product or service under ____________________.

Conditions of extreme uncertainty

waste

Consider all the ______ caused by our incorrect strategic assumptions.

Vision

Goal of lean startup is to find a synthesis between the vision and what customers will accept.

The _________ hypothesis tests how new customers will discover a product or service.

Growth

At the root of every seemingly technical problem is a ___________ problem.

Human

Startup Defined

Human institution designed to create a new product or service under conditions of extreme uncertainty.

strategy

If the numbers for early experiments don't look promising, there is clearly a problem with the _________.

mentors

If the performance of the mentor and mentee are linked, it will ensure that the ___________ take education seriously.

ground rules

It is important to focus on establishing the _________ under which autonomous startup teams operate.

whole process

Lean Management requires treating work as a system and then dealing with the batch size and cycle time of the ___________.

What did lean startup emerge from?

Lean Manufacturing.

What is a leap-of-faith assumption?

Leap-of-faith assumptions - The two most important assumptions a business makes are: Value hypothesis Growth hypothesis Leap of faith assumptions make or break your business, and it is the startups job to tune these assumptions as quickly as possible.

__________ is the oldest excuse in the book for failure of execution.

Learning

advertising

Many viral products do not charge customers directly but rely on indirect sources of revenue such as _________________.

product/market fit

Marc Andreessen coined the term ___________ to describe the moment when a startup finally finds a widespeard set of customers that resonate with its product.

Kanban

Method of limiting work until it is validated, which forces priority on validation throughout the work process. 4 buckets (backlog, in progress, built, validated) with rule limiting each bucket to set number of items (i.e. Only 4 things can be in the progress bucket at one time - to begin work on something new it must either be validated or abandoned).

4 Methods of Sustainable Growth

New customers come from the actions of past customers. Happens 4 ways: 1. Word of mouth; 2. Side effect of product usage (other see it being used and want it); 3. Self-Funded advertising (ads paid for completely out of revenue); 4. Repeat purchase or use.

more

On an average each person who signs up will bring, on an average _______ than one other person with him or her.

Sandbox

Part of existing product or service that teams are allowed to experiment on (while remainder of product or service is "off limits" for experimentation). Primarily for established businesses and products.

The 5 Whys

Process of asking "why" 5 times to discover root cause of an identified problem. Tends to uncover human managerial or system issues versus surface issues.

Marc Andreessen coined the term ___________ to describe the moment when a startup finally finds a widespeard set of customers that resonate with its product.

Product/market fit

Value

Providing benefit to the customer; anything else is waste.

What are the engines of growth? What metrics are important for each?

Successful startups usually focus on just one, specializing in everything that makes it work. Engines of growth are designed to give startups a relatively small set of metrics on which to focus their energies. 1. Sticky engine of growth - track their attrition or churn rate a. Churn rate - fraction of customers in any period who fail to remain engaged in the company's product. b. If the rate of new customers exceeds the churn rate, the product will grow. 2. Viral engine of growth - depends on person-to-person transmission as a consequence of normal product use a. Viral coefficient - how many new customers will use the product as a consequence of each new customer signing up. b. A viral coefficient > 1 will lead to exponential growth 3. Paid engine of growth - each customer pays a certain amount of money for the product over his or her lifetime as a customer. a. Cost per Acquisition (CPA) b. Customer Lifetime Value (LTV) c. The margin between the LTV and the CPA will determine rate of growth. The company cannot grow if LTV isn't greater than the CPA

cost per acquisition (CPA)

Suppose and advertisement costs $100 and causes fifty new customers to sign up for the service. This ad has a ____________ of $2.00.

How would you define a startup success/startup productivity?

Systematically determining the correct things to build, or learning how to solve a customer's problem

False

T/F A head start is usually large enought to matter, and tyime spent in stealth mode - away from customers -is likely to provide a head start.

True

T/F A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title.

larger

The focus of each team is iterating with customers as rapidly as possible, running experiments, and then using validated learning to make real-time investment decisions about what to work on. No team is _________ than five people.

delaying the decision to pivot

The following are all examples of ______________: 1. Vanity metrics 2. Unclear hypothesis 3. Fear

vision

The goal of every startup experiment is to discover how to build a sustainable business around the entrepreneur's ______________.

unrelenting

The imperative for new startups to innovate is ______________.

smaller and larger

The investment shoud be _________ when the symptom is minor and ______ when the symptom is more painful.

you have zero revenue, zero customers, and zero traction

The irony is that it is often easier to raise money or acquire other resources when you have _________________.

waste

The lesson of the minimum viable product is that any additional work beyond what was required to start learning is ___________, no matter how important it might have seemed at the time.

What is an engine of growth?

The mechanism that startups use to achieve sustainable growth. Sustainable growth is characterized by one simple rule: New customers come from the actions of past customers.

pivot

The more money, time, and creative energy that has been sunk into an idea, the harder it is to _________.

easier

The more specific the symptoms are, the _________ it will be for everyone to recognize when it's time to schedual a Five Whys meeting.

small batches

The one envelop at a time approach is called "single-piece flow" in lean manufacturing. It works because of the surprising power of _______________.

Who are early adopters and why are they important to validated learning?

The product must be sold to early adopters, a special breed of customer who prefer to be the first ones using a product, before it can be sold to the mass market. The lessons about what works and what doesn't come from these early adopters.

Engine of Growth

The profit making engine of the business; every new version or feature of product, every new marketing innovation, all experiments are designed to tune the engine of growth.

general management

The reason is that in _______________, a failure to deliver results is due to either a failure to plan adequately or failure to deliver results is due to either a failure to plan adequately or a failure to execute properly.

faster than anyone else can

The reason to build a new team to pursue an idea is that you believe you can accelerate through the Build-Measure-Learn feedback loop __________.

What is a startup's strategy?

The strategy is to figure out the right questions to ask First challenge: Build an organization that can systematically test these assumptions. Second challenge: Perform rigorous testing without losing sight of the company's overall vision.

What is a minimum viable product?(according to Eric Ries)

The version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.

Why do startups fail?

They do not fail because they do not have a product, they fail because they lack customers and a profitable business model.

rocket

They prescribe the steps to take and the results to expect in excruciating detail, and as in planning to launch a ______, they are set up in such a way that even tiny errors in assumptions can lead to catastrophic outcomes.

a "just do it" attitude

This approach leases to chaos more often than it does success.

the right things to build

This is true startup productivity: systematically figuring out _______________.

Explain why adaptive processes are important.

To accelerate, lean startups need a process that provides a natural feedback loop. Adaptive processes force you to slow down and invest in preventing the kinds of problems that are currently wasting time. As those preventative efforts pay off, naturally speed up again.

Goal of Startups

To figure out the right thing to build - the thing customers want and will pay for - as quickly as possible. Emphasis is 1) fast iteration, 2) customer insight, and 3) huge vision/ambition

The MVP's ultimate goal is to ________________.

To test fundamental business hypothesis

Delay

______________ prevents many startups from getting the feedback they need.

Entrepreneurs need a personal stake in the outcome of their creations.

True

If we do not know who the customer is, we do not know what quality is.

True

Concierge MVP

Type of Minimum Viable Product. One-on-one product or service you can offer to first customers (often delivered by entrepreneur personally) to get real-time feedback on experiments before scaling.

Smoke Test MVP

Type of Minimum Viable Product. Signup page for "wait list" but no product. Could be a video describing product (Dropbox example).

Prototype MVP

Type of Minimum Viable Product. This is an actual prototype of the product or service with minimum number of features to conduct one turn of the Build-Measure-Learn loop.

time

Under pressure, teams may feel that they don't have _______ to waste on analyzing root causes even though it would give them more time in the long term.

rocket

Unfortunately, too many startup business plans look more like they are planning to launch a _______ ship than drive a car.

The imperative for new startups to innovate is ______________.

Unrelenting

to pivot or persevere

Upon completing the Build-Measure-Learn loop, startups confront the most difficult question any entrepreneur faces:

Startups have to focus on the big experiments that lead to _________________.

Validated learning

Startups have a true north, a destination in mind: creating a thriving and world-changing business. This is called a startup's _____.

Vision

The goal of every startup experiment is to discover how to build a sustainable business around the entrepreneur's ______________.

Vision

Vision-Strategy-Product Triangle

Vision at base, followed by Strategy, with Product at the top. Products change constantly. Strategy changes sometimes (called a Pivot). Vision rarely changes.

numbers

We could have tried marketing gimmicks, bought a Super Bowl ad, or tried flamboyant public relations as a way to juice up our gross ________. That would have given investors the illusion of traction, but only for a short time.

pivot

When a company _______, it starts the process all over again, reestablishing a new baseline and then tuning the engine from there.

classic startup trap

When an organization is successful in their early efforts and ignore the principles behind their success, they have fallen into the ______________.

feedback loop

When an organization starts making cuts that result in a slowdown of the ___________, all they have accomplished is to help the startup go out of business more slowly.

Continuous Deployment / Andon Cord

When system detects a problem everything stops (like Andon Cord in Toyota Production System) until: 1. The defective change is removed immediately and automatically; 2. Everyone on team is notified of problem; 3. Team is blocked from introducing any other changes until... 4. The root cause of the problem is found and fixed.

Lean Management requires treating work as a system and then dealing with the batch size and cycle time of the ___________.

Whole process

pivot

Without a formal growth model, many companies get caught in the trap of being satisfied with a small profitable business when a ______ might lead to more significant growth.

The author finds that when switching to validated learning, it feels ________ before it feels ___________.

Worse; better

Vanity metrics

_________ can allow entrepreneurs to form false conclusions and live in their own private reality.

learning

__________ is the oldest excuse in the book for failure of execution.

Innovation accounting

____________ enables startups to prove objectively that they are learning how to grow a sustainable business.

Innovation Accounting

______________ , a quantitative approach that allows us to see whether our engine-tuning efforts are bearing fruits.

The Lean Startup Model often works because _______________.

customers often don't know what they want.

Define "validated learning"

the process of empirically demonstrating that a team has discovered valuable truths about a team's present and future business prospects. It is more concrete, more accurate, and faster than market forecasting or classical business planning.