The Lean StartUp

The more money, time, and creative energy that has been sunk into an idea, the harder it is to _________. a. find additional resources b. all of these are correct. c. pivot d. persevere

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. a. new plan b. old product c. pivot d. new product

pivot

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 _________________. a. use their learning to attract additional resources b. decide whether or not to sell the organization c. pivot or persevere d. revise their business plan

pivot or persevere

The biggest advantage of working in small batches is that ___________________. a. you can take advantage of economies of scale b. quality problems can be identified much sooner c. it has lower human resource requirements d. the money required is not so great

quality problems can be identified much sooner

Zappos' initial experiment provided a clear, _______. a. management strategy b. All of these are correct c. direction by management d. quantifiable outcome

quantifiable outcome

Startups are in a life-or-death struggle to learn how to build a sustainable business before they ______________________. a. run out of resources and die b. All of these are correct. c. have new competition in the marketplace d. lose focus and motivation

run out of resources and die

Through the use of _______________ as our yardstick, we can discover and eliminate the sources of waste that are plaguing entrepreneurship. a. scientific learning b. management principles c. competitive analysis d. in depth research

scientific learning

A ________ experiment is one in which different versions of a product are offered to customers at the same time. By observing the changes in behavior between the two groups, one can make inferences about the impact of the different variations. Select one: a. split-test b. blind test c. None of these are correct. d. centrally located

split-test

If the numbers for early experiments don't look promising, there is clearly a problem with the _________. Select one: a. product b. numbers c. strategy d. method of measuring

strategy

Startups have to focus on the big experiments that lead to _________________. a. the greatest profits b. validated learning c. the most traffic d. the greatest potential

validated learning

Startups have a true north, a destination in mind: creating a thriving and world-changing business. Ries calls this the startup's _________. Select one: a. measurement plan b. vision c. strategic plan d. marketing plan

vision

The goal of every startup experiment is to discover how to build a sustainable business around the entrepreneur's ______________. Select one: a. vision b. desired level of profitability c. level of investment d. investors' demands

vision

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. Select one: a. efficient b. cost effective c. valuable d. waste

waste

The critical first question for any lean transformation is: Select one: a. which activities create value and which are a form of waste? b. All of these are correct. c. how will the research be done for the development of the marketing plan? d. who will be responsible for the planning & implementation of the strategic plan?

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

Ries believes the mantra of successful entrepreneurs: through determination, brilliance, great timing, and above all, a great product, they can achieve fame and fortune. True False

False

_________ is the oldest excuse in the book for a failure of execution. Select one: a. High competition b. Lack of personnel c. Learning d. Lack of funds

Learning

A pivot requires that we keep one foot rooted in what we've learned so far, while making a fundamental change in strategy in order to seek even greater validated learning. True False

True

A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title. Select one: True False

True

A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. Select one: True False

True

As you consider building your own minimum viable product, let this simple rule suffice: remove any feature, process, or effort that does not contribute directly to the learning you seek. Select one: True False

True

Companies are able to design, develop, and ship out new features one at a time, taking advantage of the power of small batches. Select one: True False

True

Customers reveal the truth in what they want by their action or inaction to your products or services. Select one: True False

True

Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught. Select one: True False

True

Startups need to conduct experiments that help determine what techniques will work in their unique circumstances. Select one: True False

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. Select one: True False

True

The prevailing management paradigm is inadequate to handle the problems of continuous innovation in the modern economy. Select one: True False

True

The theory of the Lean Startup is an organization designed to create new products and services under conditions of extreme uncertainty. True False

True

_________ can allow entrepreneurs to form false conclusions and live in their own private reality. Select one: a. Poor record keeping b. Using the wrong metrics c. Incorrect sales figures d. Vanity metrics

Vanity metrics

The decision to privot requires a ___________________. Select one: a. strong strategic plan b. All the above are correct c. excellent vision statement d. a clear-eyed and objective mind-set

a clear-eyed and objective mind-set

One of the most important things to note about MVP is its ____________. a. decelaration b. potential for overall strategic influence c. value for investment d. acceleration

acceleration

Many viral products do not charge customers directly but rely on indirect sources of revenue such as _________________. Select one: a. new products b. referrals c. advertising d. new services

advertising

Suppose and advertisement costs $100 and causes fifty new customers to sign up for the service. This ad has a ____________ of $2.00. Select one: a. cost per acquisition (CPA) b. None of these are correct c. Cost of Goods Sold (COGS) d. average cost (AC)

cost per acquisition (CPA)

The Lean Startup Model often works because _______________. Select one: a. customers often don't know what they want. b. cost are so inexpensive c. it is less expensive to set up d. All of these are correct

customers often don't know what they want.

The following are all examples of ______________: Vanity metrics Unclear hypothesis Fear Select one: a. strategic alternatives to planning b. entrepreneurial paralysis c. delaying the decision to pivot

delaying the decision to pivot

The point is not to find the average customer but to find ___________: the customers who feel the need for the product most acutely. Select one: a. high volume customers b. late adopters c. mass market customers d. early adopters

early adopters

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 ______________. a. All of these are correct. b. economies of scale c. large machines in the factories d. discounts for large purchases

economies of scale

One of the most important lessons of the scientific method: if you cannot ____, you cannot learn. a. produce innovative products b. reach your customers c. develop a strategic plan d. fail

fail

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. Select one: a. feedback loop b. implementation of the strategic plan c. introduction of new products

feedback loop

might lead to more significant growth. a. formal growth model b. sound strategic strategy c. strict measurement tools in place d. vision statement

formal growth model

A startup is _________ the sum of its parts. Select one: a. less than b. none of these are correct c. equal to d. greater than

greater than

The goal of creating learning milestones is ______________; to make sure that there is relevant data in the room when it comes time to decide. Select one: a. make decisions easy to make b. assist in making the decisions easy c. is not to make the decision easy d. None of these are correct.

is not to make the decision easy

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. a. larger b. smaller

larger

The __________ is that version of the product that enables a full turn of the Build-Measure-Learn loop with a minimum amount of effort and the least amount of development time. Select one: a. first b. last batch c. best d. minimum viable product (MVP)

minimum viable product (MVP)

On an average each person who signs up will bring, on an average _______ than one other person with him or her. a. less b. more c. no one

more

An engine of growth can be defined quantitatively. Select one: True False

True

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

True

The goal of a minimum viable product is to begin the process of learning, not end it. Select one: True False

True

It is often easier to raise money or acquire other resources when you have ____ revenue. Select one: a. zero b. growing c. negative d. large

zero

If you are building the wrong thing, optimizing the product or its marketing will yield significant results. Select one: True False

False

If you are causing (or missing) quality problems now, the resulting defects won't slow you down later. Select one: True False

False

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 False

False

Eric Rees says their organization IMVU does everything wrong: instead of spending years perfecting their technology, they build a minimum viable product (MVP), an early product that is terrible, full of bugs with stability problems. Then they ship it to their customers way before it's ready and expect the customers to pay for it. Select one: True False

True

Lean thinking defines value as providing benefit to the customer; anything else is waste. Select one: True False

True

Ries believes that entrepreneurship requires a managerial discipline to harness the entrepreneurial opportunity we have been given. Select one: True False

True

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

True

Startup organizations must attempt to tune the engine from the baseline toward the ideal. Select one: True False

True

Startups are too unpredictable for forecasts and milestones to be accurate. True False

True

We must learn what customers really want, not what they say they want or what we think they should want. Select one: True False

True

The _______________ about how to build a sustainable business is the outcome of experiments. a. learning b. All of these are correct Incorrect c. strategy d. vision

learning

A ________________ helps entrepreneurs start the process of learning as quickly as possible. Select one: a. sound business plan b. All of these are correct. c. minimum viable product d. strategic plan

minimum viable product

The ___________ a startup builds are really experiments. Select one: a. management strategies b. vision plans c. products d. organizational strategies

products

The amount of time a company can count on holding on to market leadership ot exploit its earlier innovations is _____________. a. irrelevant b. growing c. about the same d. shrinking

shrinking

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

True

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

True

The higher-quality of the existing playbook is, the easier it will be for it to evolve over time. Select one: True False

True

If you reach the limits for new customer growth (they are exhausted) and the growth suddenly slows, it provokes ______________. Select one: a. a crisis b. lower profits c. new ideas d. new competition

a crisis

The "growth hypothesis" _______ how new customers will discover a product or service. Select one: a. measures b. surveys c. tests d. validates

tests

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

value

Most tools from general management are designed to flourish in the harsh soil of extreme uncertainty in which startups thrive. Select one: True False

False

Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. This is why they work so well for start-up companies. Select one: True False

False

_____________ is the essential unit of progress for startups. a. Profitability b. The volume of sales c. Learning d. The number of customers

Learning

Early adopters use their imagination to fill in what a product is missing. Select one: True False

True

Everything a startup does is understood to be an experiment designed to achieve validated learning. Select one: True False

True

The stories in the magazines are true: hard work and perseverance does lead to success. True False

False

______________ , a quantitative approach that allows us to see whether our engine-tuning efforts are bearing fruits. a. Innovation Accounting b. Yahoo analytics c. Online Measurement tools d. Google analytics

Innovation Accounting

____________ enables startups to prove objectively that they are learning how to grow a sustainable business. Select one: a. Minimum viable product b. All of these are correct c. Innovation accounting d. A sound business plan

Innovation accounting

The amount of time a company can count on holding on to market leadership to exploit its earlier innovations is shrinking, and this creates an imperative for even the most entrenched companies to invest in innovation. True False

True

The challenge of entrepreneurs is to find ways to achieve the same amount of validated learning at lower cost or in a shorter time. Select one: True False

True

A common problem entrepreneurs can fall victim to is _______, endlessly refining their plans. Select one: a. finding the right product or service b. analysis paralysis c. All of these are correct. d. identifying their unique customers

analysis paralysis

When experiments produce a negative result, they ______________. Select one: a. are a total waste of organizational resources and should not be repeated b. reflect poorly on management c. are instructive and can influence the organization's stratgey d. All of these are correct

are instructive and can influence the organization's stratgey

Upon completing the Build-Measure-Learn loop, startups confront the most difficult question any entrepreneur faces: Select one: a. whether to allocate additional resources b. to pivot or persevere c. All of these are correct. d. whether to abandon the project

to pivot or persevere

The MVP's ultimate goal is to ________________. Select one: a. find the greatest number of users b. cut the cost of developing the product c. achieve the vision of management d. to test fundamental business hypothesis

to test fundamental business hypothesis

A startup's job is to Select one: a. Both of these are correct b. rigorously measure where it is right now, confronting the hard truths that assessment reveals c. devise experiments to learn how to move the real numbers closer to the ideal reflected in the business plan

Both of these are correct

The essential lesson the be learned from small batch sizes is that by reducing batch sizes, organizations can get through the _____________ more quickly than competitors. Select one: a. Build-Measure-Learn feedback loop b. manufacturing process c. strategic cycle d. All of these are correct. e. planning process

Build-Measure-Learn feedback loop

_______________ are inventing the future. Select one: a. Skilled computer programmers b. All of these are correct c. Academic programs d. College students

College students

Innovation is a _______________. Select one: a. All of these are correct b. unpredictable c. bottoms up d. decentralized

All of these are correct

The Lean Startup model offers a way to test an organization's hypotheses __________. a. thoroughly b. immediately c. rigorously d. All of these are correct.

All of these are correct.