ENTP - 5000 Lean Startup Discussion Questions

What are the three structural attributes startup teams within companies need to succeed?

"Scarce but secure resources" "Independent authority to develop their business" "A personal stake in the outcome"

What is "validated learning" for Ries?

the process of demonstrating empirically that a team has discovered valuable truths about a startup's present and future business prospects. It is a rigorous method for demonstrating progress. Validated learning is backed up by empirical data collected from real customers

What does Ries mean "Think Big, Start Small"?

you should think big, and not limit your startup ideas to just small venture but find ways to start small and experiment with your idea I the real world. Don't think you have to wait till everything is perfect to get things out there. Break down your large vision into components and work on experimenting from there

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.

Why does Ries believe entrepreneur should be a job title?

Ries is referring to having the title of entrepreneur within an established company. Entrepreneurs can still have that title well after the startup years and be just as innovative and creative to continually make the company even better. Entrepreneurs are always needed, no matter the stage of the company.

Why is Ries skeptical w hen people say they learned from their failurs?

Ries is skeptical because what evidence to people have to backup the fact that they had learned from their failures. He wants to see proof that this has happened through validated learning.

What are "small batches" and why are they helpful to entrepreneurs?

Small batches are just that, small batches of workflow, even as small as one piece at a time vs. the method of doing large batches at a time. They are helpful to entrepreneurs because it allows you to improve the speed of validated learning. Small batches enable the entrepreneurs to discover any problems quickly and help minimize the expenditure of money, time and the effort that ultimately is wasted. The small batch method makes this much easier to swallow, say there was a problem with the product that was discovered by the customer. Well if you made only say 100 units, that is what your out vs. if you made a large batch of say a 1,000, now your problem is 10 times bigger.

Wizard of Oz testing:

This is where customers think they are interacting with the actual product, but behind the scenes human beings are doing the work. It is incredibly inefficient. The example in the book is the company called Ardvark that is a subjective Google query site.

According to Ries, where do new customers come from? Why?

Word of Mouth: Customers Spreading the Word As a side effect of product usage: This is where the product drives awareness of themselves whenever they are used. Through funded advertising: this is advertising that is paid for as an expense and comes from the revenue gained by selling products to customers Through repeat purchase or use: This would be like a subscription service or some sort of product that you repeatedly buy. An example I can think is the K-cups for Kureg coffee maker.

How does Ries define a startup?

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

How did Facebook's founders validate its value hypothesis?

by showing the amount of time that the raw amount of time that their users spent on their site. They showed that more than half of their users came back to the site every day. This clearly showed that their customers found value in their site.

What does Ries say is the goal of a startup?

figure out the right thing to build (what customers want and are willing to pay for) as quickly as possible

Concierge minimum viable product:

his is where you personally and manually escort or guide your customer through your product or service that you offer. An example from the book is the Food on the Table company and how they started with one customer, and the creators personally handled every stope of the process from creating the shopping list and meal plans for their only customer.

Innovation accounting:

how to measure progress, set up milestones, and prioritize work. It lets startups prove objectively that they are learning how to grow a sustainable business.

Video minimum viable product:

A very simple video that explains what your product does and how to access it and use it. An example from the book would be the Dropbox video that showed users what they did and how easy it was to use.

What can entrepreneurs learn from asking the Five Whys?

Entrepreneurs can learn what the root cause of a problem is and thus how to really fix something. Ries goes on to say t hat at the root of seemingly technical problem is a human problem. The Five Whys provide an opportunity to figure out what the human problem is.