study guide Flashcards
- What is a startup and what’s its job? (27, 114)
“a. A startup is a human institution designed to create a new product of service under conditions of extreme uncertainty. The most important part about the definition is what it omits; it says nothing about size of company, the industry, or the sector of the economy. It doesn’t matter if you are working for a government agency, ventured backed company, or for-profit company with financial investors.
b. A start-ups job is to:
i. Rigorously measure where it is right now, confronting the hard truths that assessment reveals
ii. Devises experiments to learn how to move the real numbers closer to the idea reflected in the business plan”
- The Lean start Method’s 5 Principles (8,9)
“1. Entrepreneurs are Everywhere: you don’t have to work in a garage to be a start-up; it’s anyone who works to create new products and services under conditions of extreme uncertainty, any company, any sector or industry
- Entrepreneurship is Management: A startup is an institution not just a product or service
- Validated Learning: they exist to learn how to be a sustainable business, learning can be validated scientifically by running frequent experiments
- Build-Measure-Learn: the fundamental activity of a startup is to turn ideas into products, measure how customers respond, then learn whether to pivot or preserve. (Feedback loop)
- Innovation Accounting: to measure progress, how to set up milestones, and how to prioritize work; This requires a new kind of accounting designed for startups and the people who hold them accountable.”
- Learning/Validated learning(38,49)
a. Validated Learning: A rigorous method for demonstrating progress when there is so much uncertainty in which startups grow. The process of demonstrating empirically that a team has discovered valuable truths about present and future business prospects. It is more concrete, more accurate, and faster than market forecasting or classical business planning. Validated learning is backed up by empirical data collected from real customers.
- Pivot- (149, 154, 164, 125)a. What is it?
a. What is it? – A structure course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.
- Pivot- (149, 154, 164, 125)b. How do you know when do you need to do it?
– “Are we making sufficient progress to believe that our original strategic hypothesis is correct, or do we need to make a major change?” The answer to this question tells you to pivot or not… Also, the decreasing effectiveness of product experiments and the general feeling that product development should be more productive.
- Pivot- (149, 154, 164, c. How do you know if it was successful?
The sign of a successful pivot is when you see the engine-tuning activities are more productive after the pivot than before. So, is your new hypothesis and tactics working better than before the pivot?
- MVPs- (110, 93-107, 106) a. What are they?
A minimal viable product …a MVP helps an entrepreneur start the process of learning as quickly as possible. Is is a product that is simply the fastest way to get through the Build-Measure-Learn feedback loop with the minimum amount of effort.
- MVPs- (110, 93-107, 106)b. How complex are they/should they be? -
There is no degree to the complexity of an MVP. The fundamental purpose of an MVP is to begin the process of learning.
- MVPs- (110, 93-107, 106)c. How do they work?
don’t know
- MVPs- (110, 93-107, 106)d. What’s the goal of an MVP?
Unlike a prototype or concept test, an MVP is designed not just to answer product design or technical questions. Its goal is to test the fundamental business hypothesis.
- MVPs- (110, 93-107, 106)e. Acceleration of MVPs
Being able to validate or refute the next hypothesis faster than the one before. Each time you start a new MVP it should progress faster because you are not starting from scratch each time but taking pieces of knowledge from previous MVP’s and adding to it, to eventually reach your hypothesized end goal.
- MVPs- (110, 93-107, 106)f. Wizard of Oz Testing
In this type of test customers believe they are interacting with the actual product, but behind the sense human beings are doing the work.
- Split Testing (A/B Testing) (152)
In a split test different versions of a product to be offered to different customers at the same time. By observing changes in behavior between the two groups, one can make inferences about the impact of the different variations. Splits testing also helps teams refine their understanding of what customers want and don’t want.
- Land of the living dead (153) –
Happens when a company has achieved a modicum of success, just enough to stay alive, but is not living up to the expectations of its founders & investors.
- Innovation Accounting (117) What is it?
– Innovation account enables startups to prove objectively that they are learning how to grow a sustainable business. It begins by turning the leap-of-faith assumptions into a quantitative financial model.
