The Lean Entrepreneur
How visionaries create products, innovate with new ventures, and disrupt markets
I have recently read “The Lean Entrepreneur” book and I want to write an overview about this book. Brant Cooper and Patrick Vlaskovits successfully navigates the entrepreneurs to apply the lean startup. They equipped the book with many actionable case studies and tangible business examples both inside and outside of high-tech, in both startups and large enterprises.
The life is equal to change, it comprises of immense number of cycles. Change can big or little, dramatic or incremental, disruptive or sustaining in any field of life like technology, economy, etc. To prosper through these changes, whether as an individual or a business, you must be fast, efficient, and value-creating. You have to be LEAN. The Lean Entrepreneur is about navigating big change. The Lean Entrepreneur aims to help you create products people want, innovate with new ventures, and disrupt markets.
Let me remind you first what is Lean Manufacturing. Basically, lean manufacturing, derived mostly from the Toyota Production System, is about optimising efficiency in all value-added activities and minimising or eliminating all non-value-added activities. So the best way to navigate the near future is to hyperfocus on creating value for customers and moving at the speed of the Internet.
The vision is not as important as the drive to achieve it. So “The Lean Entrepreneur” book want you to determine first your actual driving force(Segment, Problem, Product, Technology, Sales Channel) for your startup. Your driving force isn’t necessarily the most important part of your business, or what you need to focus all your energy on. It’s a way to understand how you’re attempting to shape your business. Secondly, be a Learning organisation and use data to measure your progress or inform decisions.
I love the analogy of amateur and commercial fisherman example in the book. Know your audience, know your fishes in the sea ☺ Market segments drive your business model! For example, The segment determines the preferred method of payment and how customers would like to interact with the business.
You know the user acquisition and conversion funnel. The funnel is a valuable part of the stream, but it’s not enough. Let’s flip the funnel and try to understand why happy customers are passionate about our product? and work backward. The AppFog case study was very inspiring covered in the book.
Lucas Carlson(@cardmagic) is the CEO and founder of AppFog. He had been watching investigating Heroku for a long time. Then he started to move all side projects to Heroku but realised that Heroku that times did not support the PHP language. So one night, he planed to build a platform as a service site supporting PHP but he was very tired that night and designed a simple landing page writing a paragraph from a Hacker News and get the domain, put this landing page, and the next morning 800 people were signed up. He was extremely surprised. It means that many people expecting the solution of that problem. After a month there were 4000 people waiting for that product, than he prepared a survey and there were 2000 people that responded that survey and there were lots of text responses. So they were like early adopters. He read even all the words, and learn their expectations and he prioritised them and started to execute this idea. Now 100.000 apps created on AppFog.
Lean startups use three primary methods of testing the validity of their assumptions:
- Customer Interaction: Engage with their customers in order to learn from them. Talk to customers.
- Running Viablity Experiments: Landing page test, The Concierge test, Oz test, Crowd Funding test and etc. Let’s remind the appfog case study about landing page test.
- Analyse data: Especially it is very crucial for web/mobile startups, there are plenty of tools for that (i.e. Segment)
At the very beginning of the meetup.com, large organisations were using it, and these large organisations gave money to build enterprise level tools. But that wasn’t really their vision. In the following users many individuals were creating their own groups, rather than voting on others. By looking at this data they decided to navigate to locally driven groups and they re-architecture the whole service that was an extremely hard decision.
As a conclusion, you should read this book if you navigate the change in the face of extreme uncertainty by going lean since it has many case studies to enlighten your way.
Have a nice day!