The Lean Startup - Ge.2.5-Flash Flashcards
(252 cards)
1
Q
What is the core definition of a startup according to the Lean Startup methodology?
A
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.
2
Q
What is validated learning?
A
Validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects.
3
Q
What are the five principles of the Lean Startup?
A
- Entrepreneurs are everywhere. 2. Entrepreneurship is management. 3. Validated learning. 4. Build-Measure-Learn. 5. Innovation accounting. (Chapter: 1, Title: Start, Page: 15)
4
Q
What is the Build-Measure-Learn feedback loop?
A
The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. (Chapter: 1, Title: Start, Page: 16)
5
Q
What is the primary goal of a startup?
A
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. (Chapter: 1, Title: Start, Page: 26)
6
Q
What is “achieved failure”?
A
Achieved failure is successfully, faithfully, and rigorously executing a plan that turned out to have been utterly flawed. (Chapter: 1, Title: Start, Page: 27)
7
Q
What are leap-of-faith assumptions?
A
The riskiest elements of a startup’s plan, the parts on which everything depends. The two most important assumptions are the value hypothesis and the growth hypothesis. (Chapter: 5, Title: Leap, Page: 69-70)
8
Q
What is the value hypothesis?
A
The value hypothesis tests whether a product or service really delivers value to customers once they are using it. (Chapter: 5, Title: Leap, Page: 70)
9
Q
What is the growth hypothesis?
A
The growth hypothesis tests how new customers will discover a product or service. (Chapter: 5, Title: Leap, Page: 70)
10
Q
What is a minimum viable product (MVP)?
A
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. (Chapter: 6, Title: Test, Page: 70, 82)
11
Q
What is the goal of the MVP?
A
The goal of the MVP is to begin the process of learning, not end it. (Chapter: 6, Title: Test, Page: 82)
12
Q
Who are early adopters and why are they important for startups?
A
Early adopters are a special breed of customer who accept—in fact prefer—an 80 percent solution; you don’t need a perfect solution to capture their interest. They use their imagination to fill in what a product is missing. Before new products can be sold successfully to the mass market, they have to be sold to early adopters. (Chapter: 6, Title: Test, Page: 84)
13
Q
What is a concierge MVP?
A
In a concierge MVP, this personalized service is not the product but a learning activity designed to test the leap-of-faith assumptions in the company’s growth model. (Chapter: 6, Title: Test, Page: 90)
14
Q
What is Wizard of Oz testing?
A
In a Wizard of Oz test, customers believe they are interacting with the actual product, but behind the scenes human beings are doing the work. (Chapter: 6, Title: Test, Page: 93)
15
Q
What is innovation accounting?
A
Innovation accounting is a quantitative approach that allows us to see whether our engine-tuning efforts are bearing fruit. It is an alternative to traditional accounting designed specifically for startups. (Chapter: 7, Title: Measure, Page: 70, 102)
16
Q
What are the three learning milestones in innovation accounting?
A
- Establish the baseline. 2. Tune the engine. 3. Pivot or persevere. (Chapter: 7, Title: Measure, Page: 103)
17
Q
What is cohort analysis?
A
Instead of looking at cumulative totals or gross numbers such as total revenue and total number of customers, one looks at the performance of each group of customers that comes into contact with the product independently. (Chapter: 7, Title: Measure, Page: 107)
18
Q
What are vanity metrics and why are they dangerous?
A
Vanity metrics are numbers that give the rosiest possible picture, but do not accurately reflect whether a startup is making progress. They can allow entrepreneurs to form false conclusions and live in their own private reality. (Chapter: 7, Title: Measure, Page: 112)
19
Q
What are actionable metrics?
A
Actionable metrics are the kind of metrics we use to judge our business and our learning milestones. They demonstrate clear cause and effect. (Chapter: 7, Title: Measure, Page: 112, 123)
20
Q
What are the three A’s of good metrics?
A
Actionable, accessible, and auditable. (Chapter: 7, Title: Measure, Page: 123)
21
Q
What is a split-test experiment (A/B testing)?
A
A split-test 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. (Chapter: 7, Title: Measure, Page: 118)
22
Q
What is a pivot?
A
A structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth. (Chapter: 8, Title: Pivot (or Persevere), Page: 70, 128, 240)
23
Q
What is the true measure of a startup’s runway?
A
The true measure of runway is how many pivots a startup has left: the number of opportunities it has to make a fundamental change to its business strategy. (Chapter: 8, Title: Pivot (or Persevere), Page: 137)
24
Q
What is a zoom-in pivot?
A
A zoom-in pivot is refocusing the product on what previously had been considered just one feature of a larger whole. (Chapter: 8, Title: Pivot (or Persevere), Page: 132)
25
What is a customer segment pivot?
A customer segment pivot is keeping the functionality of the product the same but changing the audience focus. (Chapter: 8, Title: Pivot (or Persevere), Page: 134)
26
What is a platform pivot?
A platform pivot is changing the planned growth model to one where the business would be able to fund growth out of the profits generated from each B2B sale, instead of selling an application to one customer at a time. (Chapter: 8, Title: Pivot (or Persevere), Page: 134-135)
27
What is lean manufacturing?
Lean manufacturing is a process that originated in Japan with the Toyota Production System, a completely new way of thinking about the manufacturing of physical goods. Among its tenets are drawing on the knowledge and creativity of individual workers, the shrinking of batch sizes, just-in-time production and inventory control, and an acceleration of cycle times. (Chapter: 1, Title: Start, Page: 24)
28
What is genchi gembutsu?
A Japanese term from the Toyota Production System which means "go and see for yourself" so that business decisions can be based on deep firsthand knowledge. (Chapter: 5, Title: Leap, Page: 77)
29
What is just-in-time scalability?
Conducting product experiments without making massive up-front investments in planning and design. (Chapter: 9, Title: Batch, Page: 274)
30
What are the three engines of sustainable growth?
Paid, viral, or sticky. (Chapter: 10, Title: Grow, Page: 277)
31
What is a sticky engine of growth?
Companies that rely on attracting and retaining customers. The rate of return customers is the primary driver of growth. (Chapter: 10, Title: Grow)
32
What is a viral engine of growth?
Growth that is driven by customers recruiting other customers. (Chapter: 10, Title: Grow)
33
What is a paid engine of growth?
Growth that is driven by purchasing advertising. (Chapter: 10, Title: Grow)
34
What is the Five Whys technique?
A technique from lean manufacturing used to trace a problem to its root cause by asking 'Why?' five times. (Chapter: 11, Title: Adapt, Page: 283, 330)
35
What is an adaptive organization?
An organization that can invest in the right amount of process to keep teams nimble as they grow. (Chapter: 11, Title: Adapt, Page: 280, 282)
36
What is disruptive innovation?
Breakthrough new products that can create new sustainable sources of growth. (Chapter: 2, Title: Define, Page: 34)
37
What is sustaining innovation?
Incremental improvements to existing products and serving existing customers. (Chapter: 2, Title: Define, Page: 34)
38
What is the key lesson of the scientific method for startups?
If you cannot fail, you cannot learn. (Chapter: 4, Title: Experiment, Page: 54)
39
What is the importance of identifying assumptions in a business plan?
To test those assumptions as quickly as possible because they haven't been proved to be true and are often erroneous. (Chapter: 5, Title: Leap, Page: 73)
40
What is the difference between value-creating and wasteful activities in a startup?
Lean thinking defines value as providing benefit to the customer; anything else is waste. In a startup, value is what has been learned about what creates value for customers. (Chapter: 3, Title: Learn, Page: 47)
41
Why is it important to get out of the building and talk to customers?
The facts that we need to gather about customers, markets, suppliers, and channels exist only "outside the building." Startups need extensive contact with potential customers to understand them. (Chapter: 5, Title: Leap, Page: 79)
42
What is a customer archetype?
A brief document that seeks to humanize the proposed target customer, serving as an essential guide for product development. (Chapter: 5, Title: Leap, Page: 80)
43
Why is building an MVP not without risks?
The most common speed bumps are legal issues, fears about competitors, branding risks, and the impact on morale. (Chapter: 6, Title: Test, Page: 96)
44
Why is fear of competitors stealing ideas often unfounded for startups?
Part of the special challenge of being a startup is the near impossibility of having your idea, company, or product be noticed by anyone, let alone a competitor. (Chapter: 6, Title: Test, Page: 97)
45
What is the importance of iteration in the Lean Startup model?
A commitment to iteration means that no matter what comes of testing the MVP, you will not give up hope. It is the first step on a journey of learning. (Chapter: 6, Title: Test, Page: 98)
46
Why is traditional accounting not helpful in evaluating entrepreneurs?
Startups are too unpredictable for forecasts and milestones to be accurate. (Chapter: 7, Title: Measure, Page: 101)
47
How does innovation accounting help startups prove progress?
Innovation accounting enables startups to prove objectively that they are learning how to grow a sustainable business. (Chapter: 7, Title: Measure, Page: 102)
48
Why are actionable metrics important for learning?
When cause and effect is clearly understood, people are better able to learn from their actions. (Chapter: 7, Title: Measure, Page: 124)
49
How can reports be made more accessible?
Make the reports as simple as possible so that everyone understands them, using tangible, concrete units like people-based reports from cohort analysis. Also, provide widespread access to the reports. (Chapter: 7, Title: Measure, Page: 124-125)
50
Why is it important for metrics to be auditable?
We must ensure that the data is credible to employees. We need to be able to test the data by hand, in the messy real world, by talking to customers. (Chapter: 7, Title: Measure, Page: 126)
51
What happens when a company gets stuck in the land of the living dead?
It 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 and investors. Such companies are a terrible drain of human energy. (Chapter: 8, Title: Pivot (or Persevere), Page: 131)
52
What are the three reasons why entrepreneurs delay pivoting?
1. Vanity metrics. 2. Unclear hypothesis. 3. Fear. (Chapter: 8, Title: Pivot (or Persevere), Page: 138)
53
How does the Lean Startup method help build capital-efficient companies?
The Lean Startup method builds capital-efficient companies because it allows startups to recognize that it’s time to pivot sooner, creating less waste of time and money. (Chapter: 8, Title: Pivot (or Persevere), Page: 70-71)
54
What is the importance of a feedback loop in an automobile as a metaphor for a startup?
The engine of growth, like the engine inside a car, drives the startup forward with a feedback loop of customer interactions. The steering wheel, representing the Build-Measure-Learn loop, allows for constant adjustments based on feedback, similar to how a driver steers a car. (Chapter: 1, Title: Start, Page: 26-27)
55
What is the difference between driving a startup like a car versus launching a rocket ship?
Planning to launch a rocket requires precise, detailed instructions upfront, where tiny errors can be catastrophic. Driving a car allows for constant adjustments based on feedback (Build-Measure-Learn loop), which is how a startup should operate in the face of uncertainty. (Chapter: 1, Title: Start, Page: 27)
56
What is the role of strategy in a startup according to the Lean Startup method?
For startups, the role of strategy is to help figure out the right questions to ask, based on a set of assumptions that need to be tested. (Chapter: 5, Title: Leap, Page: 73-74)
57
What is the difference between analogs and antilogs in startup strategy?
Analogs are previous successful companies or products that share similarities with the new venture, helping identify assumptions that may not be leaps of faith. Antilogs are failures or negative examples that must be addressed in the new venture's strategy. (Chapter: 5, Title: Leap, Page: 75-76)
58
Why is it important to test the riskiest assumptions first?
If you can’t find a way to mitigate these risks toward the ideal that is required for a sustainable business, there is no point in testing the others. (Chapter: 7, Title: Measure, Page: 104)
59
What is the relationship between quantitative and qualitative data in validated learning?
Quantitative targets create the motivation to engage in qualitative inquiry and guide us in the questions we ask. Poor quantitative results force us to declare failure and create the motivation, context, and space for more qualitative research. (Chapter: 3, Title: Learn, Page: 43-44, Chapter: 7, Title: Measure, Page: 109)
60
Why is it important to measure progress in terms of validated learning rather than just building features?
Because startups often accidentally build something nobody wants, it doesn’t matter much if they do it on time and on budget. The real progress is what has been learned about what creates value for customers. Effort that does not contribute to this learning is waste. (Chapter: 1, Title: Start, Page: 26, Chapter: 3, Title: Learn, Page: 48)
61
What is the audacity of zero?
The irony is that it is often easier to raise money or acquire other resources when you have zero revenue, zero customers, and zero traction than when you have a small amount. Zero invites imagination, but small numbers invite questions. (Chapter: 3, Title: Learn, Page: 51)
62
How can the waste caused by the audacity of zero be mitigated?
We can mitigate the waste that happens because of the audacity of zero with validated learning. (Chapter: 3, Title: Learn, Page: 52)
63
Why is it important to avoid building a product that is too polished too early?
Additional features or polish beyond what early adopters demand is a form of wasted resources and time. (Chapter: 6, Title: Test, Page: 85)
64
How can companies address concerns about damaging their brand with an MVP?
Launch the MVP under a different brand name. Also, a long-term reputation is only at risk when companies engage in vocal launch activities such as PR and building hype. (Chapter: 6, Title: Test, Page: 97)
65
What is the danger of vanity metrics when making pivot or persevere decisions?
Vanity metrics can allow entrepreneurs to form false conclusions and live in their own private reality, which robs teams of the belief that it is necessary to change. (Chapter: 8, Title: Pivot (or Persevere), Page: 138)
66
How does an unclear hypothesis make it difficult to pivot?
When an entrepreneur has an unclear hypothesis, it’s almost impossible to experience complete failure, and without failure there is usually no impetus to embark on the radical change a pivot requires. (Chapter: 8, Title: Pivot (or Persevere), Page: 138)
67
How does fear make it difficult to pivot?
Acknowledging failure can lead to dangerously low morale. More terrifying is the thought that the vision might be deemed wrong without having been given a real chance to prove itself. This fear drives up the risk because testing doesn’t occur until the vision is fully represented, by which time it is often too late to pivot because funding is running out. (Chapter: 8, Title: Pivot (or Persevere), Page: 138)
68
What is the importance of building an innovation factory?
A company's only sustainable path to long-term economic growth is to build an "innovation factory" that uses Lean Startup techniques to create disruptive innovations on a continuous basis. (Chapter: 2, Title: Define, Page: 37)
69
What is the role of senior management in cultivating entrepreneurship?
Cultivating entrepreneurship is the responsibility of senior management. Leadership requires creating conditions that enable employees to do the kinds of experimentation that entrepreneurship requires. (Chapter: 2, Title: Define, Page: 35, 38)
70
Why are learning milestones important for entrepreneurs and managers?
Learning milestones are useful for entrepreneurs as a way of assessing their progress accurately and objectively; they are also invaluable to managers and investors who must hold entrepreneurs accountable. (Chapter: 5, Title: Leap, Page: 70)
71
What is the danger of focusing on functional efficiency in a Lean Startup?
The individual efficiency of specialists is not the goal in a Lean Startup. Instead, we want to force teams to work cross-functionally to achieve validated learning. Focusing on functional efficiency can lead to suboptimization of the system as a whole. (Chapter: 11, Title: Adapt, Page: 314, 317)
72
How does validated learning help to avoid waste?
By focusing our energies on validated learning, we can avoid much of the waste that plagues startups today. Learning where and when to invest energy results in saving time and money. (Chapter: 5, Title: Leap, Page: 70)
73
What is the definition of a startup according to the Lean Startup methodology?
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.
74
What does the "Build" phase of the Build-Measure-Learn loop involve?
Turning ideas into products. (Chapter: 1, Title: Start, Page: 16)
75
What does the "Measure" phase of the Build-Measure-Learn loop involve?
Measuring how customers respond to the products. (Chapter: 1, Title: Start, Page: 16)
76
What does the "Learn" phase of the Build-Measure-Learn loop involve?
Learning whether to pivot or persevere based on customer response. (Chapter: 1, Title: Start, Page: 16)
77
What is the primary purpose of experiments in the Lean Startup model?
To discover how to build a sustainable business around the startup's vision. (Chapter: 4, Title: Experiment, Page: 54)
78
What is the role of observation in the Build-Measure-Learn loop?
As customers interact with products, they generate feedback and data, which can be both qualitative and quantitative. (Chapter: 2, Title: Define, Page: 68)
79
What is the critical question to consider when building an MVP?
Whether customers will in fact sign up for the free trial given a certain number of promised features (the value hypothesis). (Chapter: 6, Title: Test, Page: 85)
80
How does split testing help teams refine their understanding of customers?
Split testing often uncovers surprising things, like features that engineers and designers like but have no impact on customer behavior. It calls into question underlying beliefs about what customers desire when extra features don't change behavior. (Chapter: 7, Title: Measure, Page: 118-119)
81
What is the Kanban system in the context of Lean Startup?
A system where user stories are not considered complete until they lead to validated learning, limiting the number of stories in different development states (backlog, building, done, validated). (Chapter: 7, Title: Measure, Page: 119)
82
How does the Kanban system help teams focus on validated learning?
It forces teams to investigate stories that are done but haven’t been validated, often requiring nonengineering efforts like talking to customers and looking at data. This encourages teams to measure productivity by validated learning, not just feature production. (Chapter: 7, Title: Measure, Page: 121-122)
83
What is the danger of building a product based solely on market research or surveys?
Customers cannot tell us what they wanted; most, after all, had never heard of 3D avatars. Instead, they revealed the truth through their action or inaction. Relying solely on research might not reveal what customers actually will do. (Chapter: 3, Title: Learn, Page: 44, Chapter: 4, Title: Experiment, Page: 55)
84
What is the role of a minimum viable product in testing leap-of-faith assumptions?
The MVP is designed not just to answer product design or technical questions, but to test fundamental business hypotheses, particularly the value and growth hypotheses. (Chapter: 5, Title: Leap, Page: 69-70, Chapter: 6, Title: Test, Page: 82)
85
How does focusing on actionable metrics help prevent interdepartmental blame?
When cause and effect is clearly understood through actionable metrics, people are better able to learn from their actions, rather than blaming other departments when numbers go down. (Chapter: 7, Title: Measure, Page: 124)
86
What is the importance of having a clear and objective assessment for learning?
Human beings are innately talented learners when given a clear and objective assessment. (Chapter: 7, Title: Measure, Page: 124)
87
How does providing widespread access to reports improve a startup's learning?
Everyone always has a fresh copy in their e-mail in-boxes. The reports are well laid out and easy to read, with each experiment and its results explained in plain English. This helps settle product arguments throughout the organization. (Chapter: 7, Title: Measure, Page: 125)
88
What are some ways to make data auditable and credible to employees?
Remember that "Metrics are people, too." Test the data by hand by talking to customers. Ensure that the mechanisms that generate the reports are not too complex and are drawn directly from the master data. (Chapter: 7, Title: Measure, Page: 126)
89
Why is acknowledging failure important for a startup?
Acknowledging failure can lead to dangerously low morale. However, failure is a prerequisite to learning. Without failure, there is usually no impetus to embark on the radical change a pivot requires. (Chapter: 8, Title: Pivot (or Persevere), Page: 131, 138)
90
How does delaying testing the vision increase risk for a startup?
Delaying testing drives up the risk because testing doesn’t occur until the vision is fully represented, by which time it is often too late to pivot because funding is running out. (Chapter: 8, Title: Pivot (or Persevere), Page: 138)
91
What is the difference between sticky, viral, and paid engines of growth?
Sticky engine of growth relies on high customer retention. Viral engine of growth relies on customers recruiting other customers. Paid engine of growth relies on purchasing advertising. (Chapter: 10, Title: Grow)
92
How does the Build-Measure-Learn feedback loop relate to a startup's vision and strategy?
The Build-Measure-Learn loop is at the core of the Lean Startup model. The goal of every startup experiment (part of the Build phase) is to discover how to build a sustainable business around that vision. Strategy is based on assumptions that need to be tested through this loop. (Chapter: 4, Title: Experiment, Page: 54, Chapter: 5, Title: Leap, Page: 73, Chapter: 6, Title: Test, Page: 82)
93
What are some examples of MVP techniques?
Video MVP, Concierge MVP, and Wizard of Oz testing. (Chapter: 6, Title: Test, Page: 86, 87, 93)
94
What is the primary purpose of innovation accounting?
Innovation accounting enables startups to prove objectively that they are learning how to grow a sustainable business. (Chapter: 7, Title: Measure, Page: 102)
95
How does cohort analysis provide a more accurate picture of startup progress than gross metrics?
Cohort analysis looks at the performance of each group of customers independently, providing an independent report card that shows whether product changes are truly affecting customer behavior, unlike gross metrics which can be influenced by other factors. (Chapter: 7, Title: Measure, Page: 107-108, 112-113)
96
What are the key characteristics of actionable metrics?
They are actionable (demonstrate cause and effect), accessible (simple and easy to understand), and auditable (credible and testable). (Chapter: 7, Title: Measure, Page: 123-126)
97
How does a pivot differ from simply changing a product feature?
A pivot is a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth, based on validated learning, while keeping one foot rooted in what has been learned. (Chapter: 8, Title: Pivot (or Persevere), Page: 70, 128, 132)
98
Why is it important to measure a startup's runway in terms of pivots instead of time?
Measuring runway through the lens of pivots rather than that of time suggests another way to extend that runway: get to each pivot faster. This focuses on the number of opportunities to make a fundamental change rather than just the remaining cash. (Chapter: 8, Title: Pivot (or Persevere), Page: 137)
99
What are the benefits of using small batches in a Lean Startup?
Just as lean manufacturing has pursued a just-in-time approach to building products, reducing the need for in-process inventory, Lean Startups practice just-in-time scalability, conducting product experiments without making massive up-front investments in planning and design. (Chapter: 9, Title: Batch)
100
How does the Five Whys technique help startups?
It helps startup teams grow without becoming bureaucratic or dysfunctional by tracing problems to their root cause. (Chapter: 11, Title: Adapt, Page: 283, 330)
101
What is the key to building an adaptive organization?
Investing in the right amount of process to keep teams nimble as they grow, enabling them to combat the extreme uncertainty that is a startup's chief enemy. (Chapter: 11, Title: Adapt, Page: 259, 280, 282)
102
How does a startup's vision relate to its strategy and product?
Startups have a true north, a destination in mind: creating a thriving and world-changing business (the vision). To achieve that vision, startups employ a strategy, which includes a business model, a product road map, etc. The product is the end result of this strategy. (Chapter: 1, Title: Start, Page: 27-28)
103
Why should entrepreneurs be wary of implementing traditional management practices early in a startup?
Entrepreneurs are rightly wary of implementing traditional management practices early on in a startup, afraid that they will invite bureaucracy or stifle creativity. (Chapter: 1, Title: Start, Page: 21)
104
How is validated learning different from simply learning from experience?
Validated learning is a rigorous method for demonstrating progress when embedded in extreme uncertainty. It is backed up by empirical data collected from real customers, unlike after-the-fact rationalization or simply learning things that are irrelevant. (Chapter: 3, Title: Learn, Page: 40, 49)
105
What is the primary purpose of innovation accounting?
Innovation accounting allows us to create learning milestones, which are an alternative to traditional business and product milestones. (Chapter: 5, Title: Leap, Page: 70)
106
Why is it often easier to raise money with zero traction than with a small amount?
Zero invites imagination, but small numbers invite questions about whether large numbers will ever materialize. As long as nothing has been released and no data has been collected, it is still possible to imagine overnight success in the future. (Chapter: 3, Title: Learn, Page: 51)
107
What is the critical first question for any lean transformation in a startup?
Which activities create value and which are a form of waste? (Chapter: 9, Title: Batch, Page: 262, 263)
108
How does the Lean Startup method help entrepreneurs navigate the chaos and uncertainty of a startup?
It provides a managerial discipline and a scientific process for turning product insights into a great company and making constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop. (Chapter: 1, Title: Start, Page: 21, 27)
109
What is the role of theory in the Lean Startup method?
The Lean Startup is not a collection of individual tactics. It is a principled approach to new product development. The only way to make sense of its recommendations is to understand the underlying principles that make them work. Theory is needed to answer questions and predict the results of proposed changes. (Chapter: 4, Title: Experiment, Page: 53, Chapter: 11, Title: Adapt, Page: 295, 310)
110
How can a startup avoid analysis paralysis?
By using the concept of the minimum viable product (MVP) to know when to stop analyzing and start building. (Chapter: 5, Title: Leap, Page: 81)
111
What is the difference between a prototype/concept test and 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 fundamental business hypotheses. (Chapter: 6, Title: Test, Page: 82)
112
How can startups prevent problems caused by adopting a new way of working, such as validated learning?
By having the benefit of theory, it is known that this loss of productivity is an inevitable part of the transition and can be managed actively. Expectations can be set up front. (Chapter: 11, Title: Adapt, Page: 322-325)
113
What is the danger of relying on pseudoscience in startup management?
We routinely green-light new projects more on the basis of intuition than facts. Too many innovation teams engage in success theater, selectively finding data that support their vision rather than exposing the elements of the vision to true experiments. This leads to inaccurate conclusions and a lack of real progress. (Chapter: 13, Title: Epilogue: Waste Not, Page: 357-358)
114
How can a startup establish real facts about the validity of its vision?
Only by building a model of customer behavior and then showing our ability to use our product or service to change it over time can we establish real facts about the validity of our vision. (Chapter: 13, Title: Epilogue: Waste Not, Page: 358)
115
What is the importance of continuous innovation for established companies?
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. (Chapter: 2, Title: Define, Page: 37)
116
How does the Lean Startup approach apply to large companies or government agencies?
The concept of entrepreneurship includes anyone who works within the definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. The Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry. (Chapter: 1, Title: Start, Page: 15)
117
What is the danger of relying on a good plan, solid strategy, and thorough market research in a startup?
This doesn't work, because startups operate with too much uncertainty. Startups do not yet know who their customer is or what their product should be. Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. Startups have neither. (Chapter: 1, Title: Start, Page: 16-17)
118
What is the definition of value in a startup according to the Lean Startup?
Value in a startup is not the creation of stuff, but rather validated learning about how to build a sustainable business. It is providing benefit to the customer. (Chapter: 9, Title: Batch, Page: 266, Chapter: 3, Title: Learn, Page: 47)
119
Why is it important to focus on minimizing the total time through the Build-Measure-Learn feedback loop?
This is the essence of steering a startup. Accelerating this loop allows startups to learn faster than anyone else, which is the only way to win. (Chapter: 5, Title: Leap, Page: 70, Chapter: 6, Title: Test, Page: 97)
120
What is the primary challenge of entrepreneurship?
The challenge of entrepreneurship is to balance all the activities: the engine of growth is running, we are tuning, and we are steering. (Chapter: 1, Title: Start, Page: 29)
121
How can startups avoid wasting resources on features customers don't want?
By using an MVP to test assumptions before building the full product. Any additional work beyond what was required to start learning is waste. (Chapter: 6, Title: Test, Page: 85)
122
What is the importance of having a clear hypothesis before building a feature?
Without a clear hypothesis, how can a story ever be validated? Features built without a clear hypothesis are likely to be a waste of time and effort if they don't contribute to validated learning. (Chapter: 7, Title: Measure, Page: 122)
123
How does the Lean Startup method help companies innovate continuously?
It represents a new approach to creating continuous innovation. By building an "innovation factory" that uses Lean Startup techniques to create disruptive innovations on a continuous basis. (Chapter: 1, Title: Start, Page: 12, Chapter: 2, Title: Define, Page: 37)
124
What is the difference between tuning the engine and pivoting?
Tuning the engine involves making micro changes and product optimizations to move the baseline metrics towards the ideal. Pivoting is a major change to a new strategic hypothesis when the current product strategy is flawed and not making sufficient progress. (Chapter: 7, Title: Measure, Page: 103, Chapter: 8, Title: Pivot (or Persevere), Page: 70, 128)
125
How does a disciplined team help in adopting the Lean Startup methodology?
A disciplined team may apply the wrong methodology but can shift gears quickly once it discovers its error. They can experiment with their own working style and draw meaningful conclusions. (Chapter: 7, Title: Measure, Page: 117-118)
126
What is the danger of celebrating if there is any positive increase in any of the numbers without a clear hypothesis?
This is a kind of storytelling that takes place at most startup board meetings and is not a good indicator of whether a startup is making progress. It's hard to know if the changes made are related to the results seen or if the right lessons are being drawn. (Chapter: 7, Title: Measure, Page: 101-102)
127
How does the Lean Startup method encourage rapid iteration?
By emphasizing fast iteration and customer insight and focusing on minimizing the total time through the Build-Measure-Learn feedback loop. Building an MVP is the fastest way to get through this loop. (Chapter: 1, Title: Start, Page: 26, Chapter: 5, Title: Leap, Page: 70, Chapter: 6, Title: Test, Page: 82)
128
What is the role of a minimum viable product in the Build-Measure-Learn loop?
The MVP is the 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. It is the first step to enter the Build phase as quickly as possible. (Chapter: 5, Title: Leap, Page: 70)
129
What are the consequences of not making progress in tuning the engine towards the ideal?
A startup that fails to do so will see that ideal recede ever farther into the distance. It becomes a sure sign that it’s time to pivot. (Chapter: 7, Title: Measure, Page: 105)
130
How does the Lean Startup approach help entrepreneurs make testable predictions?
It provides a method for systematically breaking down a business plan into its component parts and testing each part empirically. Every product, feature, and marketing campaign is understood to be an experiment designed to achieve validated learning. (Chapter: 4, Title: Experiment, Page: 53)
131
What is the core idea behind the Toyota Production System?
Learning to see waste and then systematically eliminate it has allowed lean companies such as Toyota to dominate entire industries. (Chapter: 3, Title: Learn, Page: 47)
132
How does the Lean Startup adapt the ideas from lean manufacturing?
The Lean Startup adapts these ideas to the context of entrepreneurship, proposing that entrepreneurs judge their progress differently from the way other kinds of ventures do. It uses validated learning as the unit of progress to discover and eliminate sources of waste. (Chapter: 1, Title: Start, Page: 24)
133
What is the purpose of innovation accounting and actionable metrics?
To improve entrepreneurial outcomes and hold innovators accountable, focusing on measuring progress, setting up milestones, and prioritizing work. Actionable metrics help to analyze customer behavior in ways that support innovation accounting. (Chapter: 1, Title: Start, Page: 16, Chapter: 5, Title: Leap, Page: 70, Chapter: 7, Title: Measure, Page: 112)
134
How does the Lean Startup help minimize the total time through the Build-Measure-Learn feedback loop?
All of the techniques in Part Two are designed to minimize the total time through the Build-Measure-Learn feedback loop, by focusing on learning where and when to invest energy, building MVPs quickly, and using innovation accounting to measure progress. (Chapter: 5, Title: Leap, Page: 71, Chapter: 3, Title: Learn, Page: 48, Chapter: 6, Title: Test, Page: 82, Chapter: 7, Title: Measure, Page: 102)
135
What is the importance of understanding the reasons behind a startup's growth?
There are many value-destroying kinds of growth that should be avoided, such as growth through continuous fund-raising and paid advertising without developing a value-creating product. Understanding the engine of growth helps direct energy where it will be most effective in growing the business. (Chapter: 5, Title: Leap, Page: 77, Chapter: 10, Title: Grow, Page: 277)
136
What is the role of qualitative feedback in the Build-Measure-Learn loop?
Qualitative learning is a necessary companion to quantitative testing. Qualitative research is generated by poor quantitative results and produces new ideas/hypotheses to be tested. (Chapter: 4, Title: Experiment, Page: 56, Chapter: 7, Title: Measure, Page: 109)
137
How does the Lean Startup method help manage innovative teams?
It provides a new management discipline specifically geared to the context of extreme uncertainty. It supports cross-functional collaboration to achieve validated learning, rather than focusing on individual efficiency. (Chapter: 1, Title: Start, Page: 16-17, 29, Chapter: 11, Title: Adapt, Page: 258, 314)
138
What is the importance of having a clear understanding of the customer in a startup?
If we do not know who the customer is, we do not know what quality is. Startups need extensive contact with potential customers to understand them. (Chapter: 6, Title: Test, Page: 94, Chapter: 5, Title: Leap, Page: 79)
139
What is the danger of overestimating how many features are needed in an MVP?
Most entrepreneurs and product development people dramatically overestimate how many features are needed in an MVP. Every extra feature is a form of waste, and delaying the test for these extra features comes with a tremendous potential cost in terms of learning and cycle time. (Chapter: 6, Title: Test, Page: 85)
140
What is the difference between actionable and vanity metrics?
Actionable metrics demonstrate clear cause and effect and help teams learn from their actions, while vanity metrics give a rosy picture but do not accurately reflect progress or help in drawing clear inferences. (Chapter: 7, Title: Measure, Page: 112, 123-124)
141
What are the consequences of being misled by vanity metrics?
Vanity metrics can allow entrepreneurs to form false conclusions and live in their own private reality. They can cause teams to spin their wheels, giving the sensation of forward motion even though the company is making little progress. They can also lead to wasted energy on success theater. (Chapter: 8, Title: Pivot (or Persevere), Page: 138, Chapter: 7, Title: Measure, Page: 117, 112)
142
How does the Kanban system help prevent wasted work?
It prevents wasted work by ensuring that stories are not considered complete until they lead to validated learning. This prevents building features that don't matter to customers. (Chapter: 7, Title: Measure, Page: 119, 118)
143
How does a successful pivot impact the productivity of engine-tuning activities?
The sign of a successful pivot is that these engine-tuning activities are more productive after the pivot than before. Efforts are aligned with what customers really wanted, making experiments more likely to change behavior for the better. (Chapter: 7, Title: Measure, Page: 103, 109)
144
How does the Lean Startup method help in making decisions about when to invest in scaling the business?
The Lean Startup allows entrepreneurs to make testable predictions and measure progress through innovation accounting, which helps in deciding whether to pivot or persevere. This learning guides decisions on when to invest in scaling. (Chapter: 1, Title: Start, Page: 25, Chapter: 5, Title: Leap, Page: 70)
145
What is the danger of the "Just Do It" school of startups?
If the plan is to see what happens, a team is guaranteed to succeed—at seeing what happens—but won’t necessarily gain validated learning. This approach can lead to chaos more often than it does to success. (Chapter: 4, Title: Experiment, Page: 54, Chapter: 1, Title: Start, Page: 21)
146
What is the importance of understanding the customer's perspective in product development?
Using user stories that describe features from the customer's point of view helps keep engineers focused on the customer's perspective throughout the development process. (Chapter: 7, Title: Measure, Page: 115)
147
What are the benefits of using cohort analysis in a startup?
Cohort analysis allows us to understand a business quantitatively and have much more predictive power than do traditional gross metrics. It provides an independent report card for each group of customers, making it clear if product changes are effective. (Chapter: 7, Title: Measure, Page: 108)
148
How does the Lean Startup method help combat bureaucracy and lethargy as companies grow?
By building an adaptive organization and maintaining agility, learning orientation, and a culture of innovation even as they scale. Techniques like the Five Whys help teams grow without becoming bureaucratic or dysfunctional. (Chapter: 11, Title: Adapt, Page: 271, 280, 283, 330)
149
What is the difference between optimizing a product and learning in a startup?
Optimization involves improving a product's performance or marketing, which yields incremental benefits in traditional organizations. Learning in a startup measures progress against a high bar: evidence that a sustainable business can be built, which requires clear, tangible predictions and experiments. If you are building the wrong thing, optimizing won't yield significant results. (Chapter: 7, Title: Measure, Page: 110)
150
How does the Lean Startup method help avoid wasting precious resources?
By recognizing that it’s time to pivot sooner, creating less waste of time and money, and by eliminating any feature, process, or effort that does not contribute directly to the learning you seek. (Chapter: 8, Title: Pivot (or Persevere), Page: 70-71, Chapter: 6, Title: Test, Page: 96)
151
What is the fundamental problem that innovation accounting solves?
Innovation accounting solves the problem of how to claim success when inevitably failing to deliver what was promised in initial plans and projections, which are full of uncertainty in a startup context. It provides a disciplined, systematic approach to figuring out if we're making progress and achieving validated learning. (Chapter: 7, Title: Measure, Page: 99)
152
How does the Lean Startup method help in deciding whether to pivot or persevere?
Innovation accounting makes it clear when the company is stuck and needs to change direction. The goal of learning milestones is to make sure that there is relevant data in the room when it comes time to decide. (Chapter: 7, Title: Measure, Page: 111, Chapter: 8, Title: Pivot (or Persevere), Page: 131)
153
How does the Lean Startup method encourage a culture where ideas are evaluated by merit?
A solid process, such as routinely split-testing all features no matter who commissioned them, lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title. (Chapter: 7, Title: Measure, Page: 122)
154
What is the importance of customer retention in a sticky engine of growth?
In a sticky engine of growth, the rate of return customers is the primary driver of growth. (Chapter: 10, Title: Grow)
155
What is the importance of network effects in certain business models?
Like most communication networks, IM is thought to follow Metcalfe’s law: the value of a network as a whole is proportional to the square of the number of participants. This makes the network more valuable as more people join. (Chapter: 3, Title: Learn, Page: 41)
156
How does the Lean Startup approach help established companies invest in disruptive innovation?
By providing a new management discipline that can be mastered by practicing entrepreneurs and the people who support them. It encourages creating autonomous divisions or teams to pursue startup-like innovation. It also provides techniques for incubating innovation teams within the context of an established company. (Chapter: 2, Title: Define, Page: 35, Chapter: 12, Title: Innovate, Page: 435, 290)
157
What is the danger of the "Just Do It" approach in startups?
This approach avoids all forms of management, process, and discipline, which leads to chaos more often than it does to success. (Chapter: 1, Title: Start, Page: 21)
158
How does validated learning relate to the Build-Measure-Learn feedback loop?
Validated learning is the outcome of the experiments (products) built in the Build phase and measured in the Measure phase. The Build-Measure-Learn loop is geared to accelerate that feedback loop to gain validated learning. (Chapter: 2, Title: Define, Page: 68, Chapter: 1, Title: Start, Page: 16)
159
What is the importance of focusing on customer behavior rather than just customer opinions?
Customers could not tell us what they wanted; most, after all, had never heard of 3D avatars. Instead, they revealed the truth through their action or inaction. Observing real customer behavior provides more accurate data than asking hypothetical questions. (Chapter: 3, Title: Learn, Page: 44, Chapter: 4, Title: Experiment, Page: 55)
160
How does the Lean Startup method help entrepreneurs make difficult trade-off decisions?
It gives entrepreneurs clear guidance on how to make the many trade-off decisions they face, such as whether and when to invest in process, planning, infrastructure, partnering, responding to feedback, sticking with vision, and scaling. (Chapter: 1, Title: Start, Page: 25)
161
What is the importance of having a quantitative financial model in innovation accounting?
Innovation accounting requires that a startup have and maintain a quantitative financial model that can be used to evaluate progress rigorously. This model provides assumptions about what the business will look like at a successful point in the future and serves as a baseline for measuring progress. (Chapter: 5, Title: Leap, Page: 77, Chapter: 7, Title: Measure, Page: 102, 104)
162
How does the Lean Startup method address the fear of failure in entrepreneurs?
It encourages entrepreneurs to face their fears and be willing to fail, often in a public way. It reframes failure as a prerequisite to learning and provides a structured way to learn from mistakes through pivots. (Chapter: 8, Title: Pivot (or Persevere), Page: 138, 131, 241)
163
What are the benefits of measuring productivity according to validated learning?
Teams working in this system begin to measure their productivity according to validated learning, not in terms of the production of new features. This aligns efforts with a business and product that are working to create value and drive growth, leading to more productive work. (Chapter: 7, Title: Measure, Page: 122, 129)
164
How does the Lean Startup method help avoid the trap of being satisfied with a small profitable business?
Without a formal growth model and systematic testing, many companies get caught in the trap of being satisfied with a small profitable business when a pivot might lead to more significant growth. The Lean Startup encourages testing the growth model systematically with real customers to know when to pivot. (Chapter: 6, Title: Test, Page: 90)
165
What is the importance of customer behavior in determining the effectiveness of product improvements?
A good design is one that changes customer behavior for the better. If design changes do not improve key metrics like activation rate, the new design should be judged a failure. (Chapter: 7, Title: Measure, Page: 104)
166
How does the Lean Startup method help in prioritizing features?
By using innovation accounting and actionable metrics, startups can see which product development efforts are leading to real progress and improving the drivers of their growth model, guiding prioritization decisions. (Chapter: 5, Title: Leap, Page: 70, Chapter: 7, Title: Measure, Page: 102, 104)
167
What is the significance of the Build-Measure-Learn feedback loop?
This feedback loop is at the core of the Lean Startup model. It is the essence of steering a startup and allows startups to learn how to build a sustainable business. (Chapter: 5, Title: Leap, Page: 70, Chapter: 1, Title: Start, Page: 16, Chapter: 2, Title: Define, Page: 68)
168
What are the benefits of achieving validated learning?
Validated learning is the essential unit of progress for startups. It is backed up by empirical data collected from real customers and is more concrete, accurate, and faster than market forecasting or classical business planning. It is the principal antidote to the lethal problem of achieving failure. (Chapter: 3, Title: Learn, Page: 49, 40)
169
How does the Lean Startup method help in making decisions about whether to pivot or persevere?
Innovation accounting makes it clear when the company is stuck and needs to change direction. If the company is making good progress towards the ideal, it makes sense to continue. If not, the management team eventually must conclude that its current product strategy is flawed and needs a serious change (a pivot). (Chapter: 7, Title: Measure, Page: 111, 103)
170
What is the importance of understanding the engine of growth for a startup?
By identifying which engine of growth a startup is using (paid, viral, or sticky), it can then direct energy where it will be most effective in growing the business. Every new version of a product, feature, and marketing program is an attempt to improve this engine of growth. (Chapter: 10, Title: Grow, Page: 277, Chapter: 1, Title: Start, Page: 26)
171
How does the Lean Startup method encourage a scientific approach to building a sustainable business?
By treating every product, feature, and marketing campaign as an experiment designed to achieve validated learning, and by applying the scientific method to test hypotheses empirically. (Chapter: 4, Title: Experiment, Page: 53, 54)
172
What are the dangers of working in large batches in product development?
If a team is used to working in larger batches and passing work between departments, a new process that requires cross-functional collaboration and smaller batch sizes can feel like it is reducing their productivity initially. This can lead to delays in feedback and slower learning. (Chapter: 1, Title: Start, Page: 25, Chapter: 7, Title: Measure, Page: 110)
173
How does the Lean Startup method help companies avoid building something nobody wants?
By focusing on validated learning as the unit of progress and using MVPs to test fundamental business hypotheses with real customers as quickly as possible. If customers won't use the MVP, it indicates the product is not wanted. (Chapter: 3, Title: Learn, Page: 49, Chapter: 6, Title: Test, Page: 82, Chapter: 5, Title: Leap, Page: 70)
174
What is the role of the chief engineer in the Toyota Production System as an example of entrepreneurial management?
The chief engineer is a cross-functional leader who oversees the entire process from concept to production, making decisions based on deep firsthand knowledge gained from going and seeing for yourself (genchi gembutsu). (Chapter: 5, Title: Leap, Page: 78)
175
How does the Lean Startup method help prevent wasting resources on success theater?
By using innovation accounting to differentiate between false startups and true innovators, and by focusing on actionable metrics rather than vanity metrics that can give the illusion of traction but ultimately waste precious resources. (Chapter: 5, Title: Leap, Page: 77, Chapter: 7, Title: Measure, Page: 112)
176
What is the importance of customer interaction in testing a startup's assumptions?
To sell the shoes, Zappos had to interact with customers: taking payment, handling returns, and dealing with customer support. This interaction provides more accurate data about customer demand because it is observing real customer behavior, not asking hypothetical questions. It also allows the company to interact with real customers and learn about their needs. (Chapter: 4, Title: Experiment, Page: 55-56)
177
What are the benefits of using cohort-based reports?
They turn complex actions into people-based reports. Each cohort analysis shows the performance of each group of customers independently, making it clear whether product changes are effective. (Chapter: 7, Title: Measure, Page: 107-108, 124-125)
178
How does the Kanban system improve the product prioritization process?
Under the new system, user stories were not considered complete until they led to validated learning. This forces the team to focus on whether the story was a good idea to have been done in the first place, based on validation through split tests, customer interviews, or surveys. (Chapter: 7, Title: Measure, Page: 119)
179
What is the impact of premature PR on a startup's ability to pivot?
When a product fails to live up to pronouncements made through PR, real long-term damage can happen to a corporate brand. Premature PR can also make it harder to pivot without public embarrassment or distraction. (Chapter: 6, Title: Test, Page: 97-98, Chapter: 8, Title: Pivot (or Persevere), Page: 132)
180
What are the characteristics of entrepreneurs who succeed?
The successful entrepreneurs had the foresight, the ability, and the tools to discover which parts of their plans were working brilliantly and which were misguided, and adapt their strategies accordingly. They possess a unique combination of perseverance and flexibility. (Chapter: 5, Title: Leap, Page: 76, Chapter: 6, Title: Test, Page: 98)
181
How does the Lean Startup method help in managing innovation within established companies?
It provides a new management discipline and a systematic approach to building new and innovative products. It encourages creating autonomous divisions to pursue startup-like innovation and provides techniques for incubating innovation teams. (Chapter: 13, Title: Epilogue: Waste Not, Page: 352, Chapter: 12, Title: Innovate, Page: 435, 290)
182
What is the importance of continuous deployment in a Lean Startup?
Continuous deployment is one of the techniques that forces teams to work cross-functionally to achieve validated learning, even if it means suboptimizing for individual functions initially. It allows for faster iteration and feedback. (Chapter: 11, Title: Adapt, Page: 314)
183
How does the Lean Startup method address the problem of startups building products nobody wants?
By emphasizing validated learning as the unit of progress, ensuring that effort is directed towards learning what customers want. It utilizes the Build-Measure-Learn loop to quickly test ideas and measure customer response before significant resources are invested in building the full product. (Chapter: 3, Title: Learn, Page: 49, Chapter: 1, Title: Start, Page: 16, Chapter: 5, Title: Leap, Page: 70)
184
What is the role of prediction in the scientific method as applied to startups?
A true experiment follows the scientific method and begins with a clear hypothesis that makes predictions about what is supposed to happen. The theory of the Lean Startup allows for making testable predictions. (Chapter: 4, Title: Experiment, Page: 54, Chapter: 1, Title: Start, Page: 25)
185
How does the Lean Startup method help avoid getting stuck in the land of the living dead?
Innovation accounting makes it clear when the company is stuck and needs to change direction. It provides the data needed to make the difficult decision to pivot rather than persevering too long in a state of moderate success. (Chapter: 7, Title: Measure, Page: 111, Chapter: 8, Title: Pivot (or Persevere), Page: 131)
186
What is the importance of the customer in the production process according to W. Edwards Deming and the Lean Startup?
Deming's dictum is that the customer is the most important part of the production process, meaning focus should be on producing outcomes the customer perceives as valuable. In a startup, if we don't know the customer, we don't know quality. (Chapter: 6, Title: Test, Page: 94)
187
What are the benefits of having an auditable data reporting system?
It ensures that the data is credible to employees. It allows managers to spot check the data with real customers and gain insights into why customers are behaving a certain way. (Chapter: 7, Title: Measure, Page: 126)
188
How does the Lean Startup method help in allocating resources effectively?
By focusing on validated learning, startups can identify which efforts are value-creating and which are wasteful, allowing them to invest energy where it will be most effective in building a sustainable business. (Chapter: 3, Title: Learn, Page: 47-48, Chapter: 5, Title: Leap, Page: 70, Chapter: 10, Title: Grow, Page: 277)
189
What is the role of intuition and vision in the Lean Startup method?
All innovation begins with vision. While intuition and vision are important, they must be subjected to repeated testing through the scientific method to improve judgment. (Chapter: 13, Title: Epilogue: Waste Not, Page: 358, 352)
190
What is the difference between sustainable and disruptive innovation?
Sustaining innovation involves incremental improvements to existing products and serving existing customers, while disruptive innovation involves creating breakthrough new products that can create new sustainable sources of growth. (Chapter: 2, Title: Define, Page: 34)
191
How does the Lean Startup method help reduce waste in innovation?
By focusing on validated learning, startups can discover and eliminate the sources of waste that are plaguing entrepreneurship. Most forms of waste in innovation are preventable once their causes are understood and the collective mind-set changes to focus on learning. (Chapter: 1, Title: Start, Page: 24, Chapter: 13, Title: Epilogue: Waste Not, Page: 334-339)
192
What are the risks of postponing getting data until you are certain of success?
Such delays have the unfortunate effect of increasing the amount of wasted work, decreasing essential feedback, and dramatically increasing the risk that a startup will build something nobody wants. (Chapter: 3, Title: Learn, Page: 51)
193
What is the importance of continuous learning in a startup?
A startup's most vital function is learning. We must learn the truth about which elements of our strategy are working, what customers really want, and whether we are on a path to growing a sustainable business. (Chapter: 3, Title: Learn, Page: 40)
194
How does the Lean Startup method help in identifying the right questions to ask?
For startups, the role of strategy is to help figure out the right questions to ask, based on a set of assumptions that need to be tested through experiments. (Chapter: 5, Title: Leap, Page: 73)
195
What is the significance of the pivot in the Lean Startup method?
A pivot is the heart of the Lean Startup method. It is a special kind of structured change designed to test a new fundamental hypothesis about the product, business model, and engine of growth. It is what makes the companies that follow Lean Startup resilient in the face of mistakes. (Chapter: 8, Title: Pivot (or Persevere), Page: 240, 241)
196
How can a startup accelerate its MVP process?
By learning critical things about its customers, market, and strategy through each iteration and focusing on achieving the same amount of validated learning at lower cost or in a shorter time. (Chapter: 8, Title: Pivot (or Persevere), Page: 136-137)
197
What is the danger of using management practices that are devoid of scientific rigor in startups?
This can lead to green-lighting projects based on intuition rather than facts, engaging in success theater by selectively finding data to support a vision, and justifying failures by resorting to learning as an excuse without demonstrating validated learning. (Chapter: 13, Title: Epilogue: Waste Not, Page: 357-358)
198
What is the importance of adapting the Lean Startup framework to the conditions of each specific company?
The Lean Startup is a framework, not a blueprint of steps to follow. It is designed to be adapted to the conditions of each specific company, allowing for building something that is perfectly suited to the company using techniques like the Five Whys. (Chapter: 11, Title: Adapt, Page: 328, 330)
199
What is the difference between a startup and a traditional small business?
A startup is designed to confront situations of extreme uncertainty and its success depends on innovation, while a traditional small business may be an exact clone of an existing business and its success depends only on execution, which can be modeled with high accuracy. (Chapter: 2, Title: Define, Page: 33)
200
What is the goal of innovation accounting for managers and investors?
To hold innovators accountable and assess their progress accurately and objectively by evaluating whether they are making progress towards a sustainable business based on validated learning. (Chapter: 1, Title: Start, Page: 16, Chapter: 5, Title: Leap, Page: 70)
201
How does the Lean Startup method promote a culture of learning?
It redefines the unit of progress as validated learning, encourages continuous experimentation and feedback, and uses tools like actionable metrics and cohort analysis to provide clear and objective assessments of progress. (Chapter: 3, Title: Learn, Page: 49, Chapter: 4, Title: Experiment, Page: 53, Chapter: 7, Title: Measure, Page: 112, 107)
202
What is the role of experimentation in the Lean Startup method?
Every product, every feature, every marketing campaign—everything a startup does—is understood to be an experiment designed to achieve validated learning. Experiments test the startup's strategy and hypotheses empirically to discover how to build a sustainable business. (Chapter: 4, Title: Experiment, Page: 53-54)
203
How can startups use the concept of "just-in-time" from lean manufacturing?
Lean Startups can practice just-in-time scalability, conducting product experiments without making massive up-front investments in planning and design. (Chapter: 9, Title: Batch)
204
What is the core idea of the Build-Measure-Learn feedback loop?
To accelerate the process of turning ideas into products, measuring customer response, and learning whether to pivot or persevere. (Chapter: 1, Title: Start, Page: 16, Chapter: 5, Title: Leap, Page: 70)
205
How does focusing on actionable metrics prevent teams from being misled?
Actionable metrics are the antidote to this problem. When cause and effect is clearly understood, people are better able to learn from their actions and are less likely to be misled by vanity metrics. (Chapter: 7, Title: Measure, Page: 124)
206
What is the importance of customer feedback in the Build-Measure-Learn loop?
As customers interact with products, they generate feedback and data. This feedback is essential for learning whether to pivot or persevere and for refining the product and strategy. (Chapter: 2, Title: Define, Page: 68, Chapter: 1, Title: Start, Page: 16, Chapter: 3, Title: Learn, Page: 50)
207
What is the role of innovation accounting in making pivot or persevere decisions?
Innovation accounting provides a quantitative approach to evaluate whether engine-tuning efforts are bearing fruit. If the numbers are not moving towards the ideal, it becomes a sure sign that it's time to pivot. (Chapter: 5, Title: Leap, Page: 70, Chapter: 7, Title: Measure, Page: 105)
208
What are the benefits of adopting a disciplined approach in a startup?
A disciplined team may apply the wrong methodology but can shift gears quickly once it discovers its error. A disciplined team can experiment with its own working style and draw meaningful conclusions. (Chapter: 7, Title: Measure, Page: 117-118)
209
How does the Lean Startup method help reduce the risk of building something nobody wants?
By emphasizing validated learning and using MVPs to test fundamental hypotheses early and often, startups can discover if their product is not wanted before investing significant resources. (Chapter: 3, Title: Learn, Page: 49, Chapter: 6, Title: Test, Page: 82, 85)
210
What is the importance of testing hypotheses empirically?
To answer the questions "Should this product be built?" and "Can we build a sustainable business around this set of products and services?", we need a method for systematically breaking down a business plan into its component parts and testing each part empirically. (Chapter: 4, Title: Experiment, Page: 53)
211
How does the Lean Startup method help in identifying the right customers to listen to?
By identifying early adopters who feel the need for the product most acutely and are eager to give feedback. Using actionable metrics helps in analyzing customer behavior to understand which customers are finding value. (Chapter: 4, Title: Experiment, Page: 58-59, Chapter: 5, Title: Leap, Page: 70, Chapter: 7, Title: Measure, Page: 112)
212
What is the relationship between speed and quality in the Lean Startup method?
Speed and quality are allies in the pursuit of the customer’s long-term benefit. The Lean Startup is not opposed to building high-quality products, but only in service of the goal of winning over customers. Faster iteration through the Build-Measure-Learn loop allows for quicker learning and ultimately building the right high-quality product. (Chapter: 13, Title: Epilogue: Waste Not, Page: 377, Chapter: 6, Title: Test, Page: 96)
213
How does the Lean Startup method help established companies adapt to the changing market?
By providing a new management paradigm that encourages investing in innovation, building an innovation factory, and using Lean Startup techniques to create disruptive innovations on a continuous basis. (Chapter: 2, Title: Define, Page: 37)
214
What is the danger of optimizing a product that is not the right thing to build?
If you are building the wrong thing, optimizing the product or its marketing will not yield significant results. Energy invested in optimization could have been used to help build a sustainable business. (Chapter: 7, Title: Measure, Page: 110, 112)
215
What is the primary focus of the "Accelerate" part of the book?
To explore techniques that enable Lean Startups to speed through the Build-Measure-Learn feedback loop as quickly as possible, even as they scale. (Chapter: 1, Title: Start, Page: 18)
216
What is the importance of investing in systems that increase the speed of experimentation?
Developing these experimentation systems is the responsibility of senior management; they have to be put in by the leadership. These systems allow teams to move and innovate at the speed of the experimentation system. (Chapter: 2, Title: Define, Page: 38)
217
What is the relationship between learning and waste in the Lean Startup method?
The effort that is not absolutely necessary for learning what customers want can be eliminated and is considered waste. Learning where and when to invest energy results in saving time and money. (Chapter: 3, Title: Learn, Page: 49, Chapter: 5, Title: Leap, Page: 70)
218
How does the Lean Startup method address the problem of unclear hypotheses?
It encourages entrepreneurs to identify their leap-of-faith questions explicitly at the outset and make quantitative predictions about each of them. This makes it clear when a hypothesis is refuted and a pivot is needed. (Chapter: 8, Title: Pivot (or Persevere), Page: 131-132)
219
What is the role of perseverance in the Lean Startup method?
Successful entrepreneurs do not give up at the first sign of trouble. They possess a unique combination of perseverance and flexibility, knowing when to persevere along the current path and when to pivot. (Chapter: 6, Title: Test, Page: 98, Chapter: 1, Title: Start, Page: 27)
220
How does the Lean Startup method help in building a sustainable business?
It provides a scientific process that can be learned and replicated to turn product insights into a great company. It focuses on validated learning about how to build a sustainable business, and uses the Build-Measure-Learn loop to systematically figure out the right things to build. (Chapter: 1, Title: Start, Page: 10, 21, Chapter: 3, Title: Learn, Page: 40, Chapter: 5, Title: Leap, Page: 71)
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What is the importance of a clear definition of a startup?
Defining what a startup is helps set the record straight and provides a basis for applying the appropriate practices (the Lean Startup set of practices). It highlights that startups operate under conditions of extreme uncertainty. (Chapter: 2, Title: Define, Page: 32)
222
What is the primary focus of the "Steer" part of the book?
"Steer" dives into the Lean Startup method in detail, showing one major turn through the core Build-Measure-Learn feedback loop. It is about minimizing the total time through this feedback loop. (Chapter: 1, Title: Start, Page: 18, Chapter: 5, Title: Leap, Page: 70)
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How does the Lean Startup method help in deciding which customers to listen to?
By identifying early adopters who feel the need for the product most acutely. Actionable metrics and cohort analysis help in understanding customer behavior and segmenting customers. (Chapter: 4, Title: Experiment, Page: 58-59, Chapter: 5, Title: Leap, Page: 70, Chapter: 7, Title: Measure, Page: 112, 107)
224
What is the importance of having a clear baseline metric?
Without a clear-eyed picture of your current status—no matter how far from the goal you may be—you cannot begin to track your progress. The baseline metric serves as the foundation for learning about customers and their reactions to a product. (Chapter: 7, Title: Measure, Page: 103, 104)
225
How does the Lean Startup method help in creating learning milestones?
Innovation accounting allows us to create learning milestones, which are an alternative to traditional business and product milestones, providing a way to assess progress accurately and objectively. (Chapter: 5, Title: Leap, Page: 70)
226
What is the role of the product in the Lean Startup method?
The product is the end result of the startup's strategy. Products are experiments designed to achieve validated learning. Products change constantly through the process of optimization (tuning the engine). (Chapter: 1, Title: Start, Page: 28, Chapter: 2, Title: Define, Page: 68)
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How does the Lean Startup method help in accelerating through the Build-Measure-Learn feedback loop?
Techniques in the Accelerate section (Part Three) are designed to speed through the loop even as the startup scales. Examples include using small batches and focusing on the right engine of growth. (Chapter: 1, Title: Start, Page: 18, Chapter: 9, Title: Batch, Page: 273, 268, Chapter: 10, Title: Grow, Page: 277)
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What is the danger of building a product based on an analogy without empirical testing?
Analogies can obscure the true leap of faith and make the business seem less risky. Without empirical testing, the assumptions underlying the analogy may be wrong, leading to building a product that customers don't want. (Chapter: 5, Title: Leap, Page: 74-75)
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What is the difference between productivity in traditional management and in a startup?
In traditional management, productivity might be measured by keeping people busy or machines running at full capacity. In a startup, productivity is measured by validated learning, aligning efforts with a business and product that are working to create value and drive growth. (Chapter: 1, Title: Start, Page: 25, Chapter: 11, Title: Adapt, Page: 314, Chapter: 7, Title: Measure, Page: 122, 129)
230
How does the Lean Startup method help in making decisions about organizational design?
It suggests that startups need organizational structures that combat the extreme uncertainty and that encourage cross-functional collaboration to achieve validated learning rather than focusing on individual functional efficiency. (Chapter: 9, Title: Batch, Page: 259, Chapter: 11, Title: Adapt, Page: 314)
231
What are the risks of having a high profile for a startup when releasing an MVP?
Because of the high-profile nature, the MVP can attract significant press attention, and if the product is not targeted at technology early adopters, the early reaction can be quite negative, which can be hard to ignore. (Chapter: 8, Title: Pivot (or Persevere), Page: 138-139)
232
What is the importance of the "Pivot or Persevere" decision?
This is one of the most difficult, time-consuming, and biggest source of waste for most startups. It is the most difficult question any entrepreneur faces and determines whether the startup will change direction based on validated learning or continue on a potentially flawed path. (Chapter: 7, Title: Measure, Page: 128, Chapter: 5, Title: Leap, Page: 70)
233
How does the Lean Startup method encourage a culture of honesty and learning from failures?
By reframing failure as a prerequisite to learning and encouraging teams to respond to failures and setbacks with honesty and learning, not with recriminations and blame. (Chapter: 8, Title: Pivot (or Persevere), Page: 131, Chapter: 13, Title: Epilogue: Waste Not, Page: 380)
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What is the ultimate goal of the Lean Startup movement?
The Lean Startup movement seeks to ensure that those who long to build the next big thing will have the tools they need to change the world. It is dedicated to preventing failures and the colossal waste of human resources. Its mission is to improve the success rate of new innovative products worldwide. (Chapter: 1, Title: Start, Page: 18, 22, 15)
235
What is the importance of community in the Lean Startup movement?
"Being embedded in a startup ecosystem is still an important part of entrepreneurship. There are organized communities of practice in many cities and online resources where entrepreneurs can share ideas and struggles. (Chapter: 14, Title: Join the Movement, Page: 391, 35, 393, 395, 399)
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What is a Smoke Test?
A test where a product is advertised before it exists to see if customers express interest or try to buy it.
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What is Split Testing (A/B Testing)?
Comparing two versions of a product or feature to see which one performs better with users.
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What is a Concierge MVP?
A version of a product where the service is provided manually to validate demand and understand customer needs.
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What is a Wizard of Oz Test?
A test where users think they're using a real system, but behind the scenes, humans are doing the work.
240
How does the Scientific Method apply to startups?
Each product or feature is treated as a hypothesis and tested through experiments.
241
What is the Kanban Validation Process?
A system where features must be validated through tests before being considered complete.
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What is Cohort Analysis?
A method of tracking groups of customers over time to analyze behavior and improvements.
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What is a Net Promoter Score (NPS)?
A survey metric that tracks customer satisfaction and loyalty over time.
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What are Value and Growth Hypotheses?
Tests that validate whether the product provides value and how it attracts new users.
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What is the purpose of Customer Interviews and Surveys?
To collect qualitative feedback that supports or contradicts quantitative test results.
246
What is Genchi Gembutsu (Follow-Me-Home Study)?
A technique where developers observe customers in their natural environment to identify needs.
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What is Innovation Accounting?
A system of using actionable metrics and experiments to measure learning and progress.
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How did Zappos test their MVP?
They posted pictures of shoes online and purchased them at retail after customers ordered.
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How did Aardvark use a Wizard of Oz Test?
They manually answered user queries to simulate an AI-driven service.
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What was IMVU's MVP approach?
They released an early, buggy version to gather real user feedback and validate assumptions.
251
How did Grockit test registration impact?
By running an A/B test on registration steps to see if removing them increased signups.
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What was HP’s Concierge MVP strategy?
Manually matching users to volunteer opportunities to test value before automation.
