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DefineA startup is a company designed to growfast. Being newly founded does not in itselfmake a company a startup. Nor is it necessaryfor a startup to work on technology, or takeventure funding, or have some sort of "exit."The only essential thing is growth. Everythingelse we associate with startups follows fromgrowth. Paul Graham
DefineA startup is a human institution designed tocreate a new product or service underconditions of extreme uncertainty.Entrepreneurship is management.
LearnIf the fundamental goal of entrepreneurship isto engage in organization building underconditions of extreme uncertainty, its most vitalfunction is learning.Unfortunately, “learning” is the oldest excuse inthe book for a failure of execution.
LearnAdopt the view that your job is to find asynthesis between your vision and whatcustomers would accept; it isn’t to capitulate towhat customers think they want or to tellcustomers what they ought to want.
LearnThe point is not to find the average customerbut to find early adopters: the customers whofeel the need for the product most acutely.
LearnIt is often easier to raise money or acquireother resources when you have zero revenue,zero customers, and zero traction than whenyou have a small amount.This phenomenon creates a brutal incentive:postpone getting any data until you are certainof success.
LearnCan we build a sustainable business aroundthis set of products and services?
ExperimentThink big, start small. Build a minimum viableproduct to test your hypothesis relying on thescientific method.
ExperimentBreak down the grand vision into its componentparts. The two most important assumptionsentrepreneurs make are the value hypothesisand the growth hypothesis.
ExperimentPlanning is a tool that only works in thepresence of a long and stable operating history.
LeapYour goal is to validate your value and growthhypothesis.
LeapGenchi Gembutsu: "go and see for yourself"You cannot be sure you really understand anypart of any business problem unless you goand see for yourself firsthand."If you dont go, you dont know"
LeapLean UX recognizes that the customerarchetype is a hypothesis, not a fact.The customer profile should be consideredprovisional until the strategy has shown viavalidated learning that we can serve this type ofcustomer in a sustainable way.
LeapAvoid the dangers of the two extremes: just doit vs analysis paralysis.
TestThe fastest way to get through the Build-Measure-Learn feedback loop with theminimum amount of effort is via a MVP.The goal of the MVP is to begin the process oflearning, not end it.
TestBefore new products can be sold successfullyto the mass market, they have to be sold toearly adopters. These people are a specialbreed of customer. They accept—in factprefer—an 80 percent solution; you don’t needa perfect solution to capture their interest.
TestThe lesson of the MVP is that any additionalwork beyond what was required to startlearning is waste, no matter how important itmight have seemed at the time.
TestExamples of MVPs● Video● Landing page● Concierge● Wizard of Oz.
TestIf we do not know who the customer is, we donot know what quality is.
MeasureInnovation accounting enables startups toprove objectively that they are learning how togrow a sustainable business.
Measure: Innovation accounting1. Establish the baseline a. Build an MVP b. Measure how customers behave right now2. Tune the engine a. Experiment to see if we can improve metrics from the baseline towards the ideal3. Pivot or persevere a. When experiments reach diminishing returns, it is time to pivot
MeasureMetrics must be:● Actionable● Accessible● Auditable
MeasureThis is the pattern: poor quantitative resultsforce us to declare failure and create themotivation, context, and space for morequalitative research.
Measure: Using kanbanStories could be cataloged as being in one offour states of development: in the productbacklog, actively being built, done (featurecomplete from a technical point of view), or inthe process of being validated.Validated was defined as “knowing whether thestory was a good idea to have been done in thefirst place.”
PivotPivot is to change direction while keeping afoot on sure ground.A pivot is better understood as a new strategichypothesis that will require a new MVP to test.A startups runway is the number of pivots itcan still make.
PivotThe more money, time, and creative energythat has been sunk into an idea, the harder it isto pivot.Remember, if were building something thatnobody wants, it doesnt much matter if weredoing it on time and on budget.
Pivot: Kinds● Zoom in● Zoom out● Customer segment● Customer need● Bussiness architecture● Value capture● Engine of growth● Channel● Technology
BatchWorking in small batches ensures that a startupcan minimize the expenditure of time, money,and effort that ultimately turns out to have beenwasted.
BatchBy reducing batch size, we can get throughthe Build-Measure-Learn feedback loopmore quickly than our competitors can.The ability to learn faster from customers is theessential competitive advantage that startupsmust possess.
BatchLarge-batch death spiral: the larger the batch,the higher the pressure to deliver a high-qualityversion of the product.In light of how long the product has been indevelopment, why not fix one more bug or addone more feature? Who really wants to be themanager who risked the success of this hugerelease by failing to address a potentiallycritical flaw?
BatchPull, dont push: avoid stockpiled Work InProgress. Experiments should pull thedevelopment.Build-Measure-Learn => Learn-Measure-Build
GrowSustainable growth: New customers comefrom the actions of past customers.● Word of mouth● Side effect of product usage● Funded advertising● Repeat purchase or use
Grow: Engines of growthSticky● Relies on high customer retention rate.● Key is for new customer acquisition exceed churn rate.
Grow: Engines of growthViralMany viral product do not charge customersdirectly but rely on indirect sources of revenuesuch as advertising.Customers are not intentionally acting asevangelists, growth happens automatically as aside effect of customers using the product.
Grow: Engines of growthPaid● Marginal profit, the margin between LTV (customer lifetime value) and CPA (cost per acquisition)● Relies on paid advertising
AdaptBuild a company that can adapt and change asfast as possible.
Adapt: The five whysThe core idea of Five Whys is to tieinvestments directly to the prevention of themost problematic symptoms.Adopt these simple rules:1- Be tolerant of all mistakes the first time2- Never allow the same mistake to be madetwice
InnovateAs the company grows, keep innovating. Buildsmall teams of entrepreneurs within thecompany to have a diverse portfolio and keepinnovating.Create a sandbox for innovation that willcontain the impact of the new innovation butnot constrain the methods of the startup team.
InnovateStartup teams require three structuralattributes:● scarce but secure resources,● independent authority to develop their business,● and a personal stake in the outcome.
InnovateThe innovation team should be cross-functionaland have a clear team leader.It should be empowered to build, market, anddeploy products or features in the sandboxwithout prior approval.It should be required to report on the successor failure of those efforts by using standardactionable metrics and innovation accounting.
EpilogueFor all of our vaunted efficiency in the makingof things, our economy is still incrediblywasteful.This waste comes not from the inefficientorganization of work but rather from working onthe wrong things - and on an industrial scale.As Peter Drucker said, “There is surely nothingquite so useless as doing with great efficiencywhat should not be done at all.”
EpilogueBy focusing on functional efficiency, we losesight of the real goal of innovation: to learn thatwhich is currently unknown.
Extractos de "What User-Centered Design is Good For"de Dan Saffer
User-centered designNo matter how many users you talk to, nomatter how much data you collect, at the end ofthe day, a human has to decide.No amount of data analysis can make up for alack of talent.
User-centered designUsers and their data should be there to informdesigners, not to substitute for them.Great ideas cant be tested. Only mediocreideas can be tested.
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