RUNNING LEAN SUMMARY
Arguably the No. 1 most important book an entrepreneur can read is Running Lean, NOT The Lean Startup (I'd say that's No. 2).
How do you go about contacting your audience and establishing channels of communication??How many people do you contact? Exactly what do you say to ensure you’re collecting the right info (not just getting “feedback”)? Exactly what qualifies as a properly constructed MVP experiment? Precisely how do you do that??If it’s not answered in?The Lean Startup , the remaining critical “how-to” questions are answered in this book: Running Lean by Ash Maurya.??
?If?The Lean Startup ?is my bible, then Running Lean is my day to day operational manual.?I use the outline below to look up and reread parts of the book as necessary.?Hopefully you’ll find it as useful as I have.??
Iterate from plan A to a plan that works.
Part 1: Roadmap
Meta-principles
Page 3. The author summarizes his book in three steps: document your plan A, identify the riskiest part of your plan, and systematically test your plan.?He believes in capturing your hypothesis and in a 1 page canvas. He likes an adaptation of Alex Osterwalder’s?Business Model Canvas.? That adaptation is shown below in Part 2.??
?These are the three stages of a startup:
Stage 1: Problem/solution fit. Do I have a problem worth solving?
Stage 2: Product/market fit (PMF).?Have I built something people want?
Stage 3: Scale. How do I accelerate growth?
Running lean illustrated
Page 15. The next example he talks about is how he used Running Lean principles in the creation of the book. He started by finding a solution, then validated qualitatively and verified quantitatively.?To know how that works, see below.
Part 2: Document Your Plan A
Create your lean canvas
Page 23. Start by sketching out a Lean Canvas.?It’s OK to leave sections blank if you don’t have the right answers, but be concise and think in the present. Use a customer-centric approach to think about problems and customer segments. List the top three problems and some existing alternatives. List the user roles and think about who might be early adopters.?
The above Lean Canvas is adapted from Business Model Canvas. You can download an original copy of Lean Model Canvas here. You can download a PowerPoint copy of a?Lean Canvas here .?
Unique Value Proposition (UVP)
“Instant clarity headline = end result customer wants + specific period of time + address the objections”
He uses Domino’s slogan as an example and I think it’s perfect. ‘Hot fresh pizza delivered to your door in 30 minutes or it’s free.’
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High concept pitch
Can you explain your idea in a memorable sound bite??This is not a Unique Value Proposition and not to be used on your landing page, but is a good quick mental exercise.?He cites Venture Hacks and its e-book (can ONLY be opened in Google Chrome)??Pitching Hacks ?as the source of this exercise:
Channels
As you’re looking at the category “channels,” it’s important to understand that “failing to build a significant path to customers is among the top reasons why startups fail.”??
GRKKT: Y-Combinator has a lot more to say about this.??If you don’t already know where your customers hang out, you may not have enough domain knowledge to launch a start up in that industry.
Right now, you’re not looking for press coverage. At this stage, outbound sales channels are hard to cost justify. You should be selling manually, before you try to automate.?If you don’t know how to sell the product yourself, how are you going to train someone else to do it later?
Minimum Viable Product (MVP)
As you think about revenue streams and cost structure, think about what you will need define and build your Minimum Viable Product (MVP). I think it’s a critical point here he feels that an MVP should not be a “half baked or buggy product.” It absolutely has to solve a problem worth solving for your customers. It has to have enough value that you can actually charge money for it. That is a real Minimum Viable Product (MVP).
?Price
Price is part of the product. It defines your customers. Getting paid is the most real form of validation there is.
Dave McClure’s Pirate Metrics for Startups: AARRR!
Unfair Advantage
Here he quotes Jason Cohen, from?A Smart Bear blog , “A real unfair advantage is something that cannot be easily copied or bought.”?
?Unfair advantage examples include: Insider information. A degree of expertise (domain knowledge) unparalleled anywhere. Network affects. A community of existing customers.?Special influencer connections that are unique to you.
GRKKT: For newbies, this is perhaps one of the most important and least understood parts of starting a startup.?If you don’t have a definitive unfair advantage, Venture Capitalists (VCs) will be shy about providing funding.?If your only advantage is that you are the first to have thought of the idea, you may be in trouble.?It’s a major flag when founders want people to sign non-competes before they will even talk about the concept.?VCs want to see something like patented tech, trade secrets or patented software algorithms you have developed that no one else has.?Once you show a little traction, what’s keeping someone else from stealing your idea??“Fragile” is the word the startup world uses to label startups with ideas that are easily stolen or copied.?
Part 3: Identify the Riskiest Parts of Your Plan
Prioritize where to start
Page 49. This answers the question “What startup should I start?” for a lot of people.?