The Lean Start Summary

Personal Favourite quote - “A startup is a human institution designed to

create a new product or service under conditions of extreme uncertainty.”

The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create
Radically Successful Businesses is a book by Eric Ries describing his proposed lean
startup strategy for startup companies. Ries developed the idea for the lean startup
from his experiences as a startup advisor, employee, and founder. Ries attributes the
failure of his first startup, Catalyst Recruiting, to not understanding the wants of their
target customers and focusing too much time and energy on the initial product launch.
LESSON 1 Find a Strong Business model by validating your idea
Semi-scientific is a word mentioned again and again
To find a sustainable business model (i.e. one on which you can work for at least 5
years), you have to work (like a scientist) i.e to create hypothesis of every experiment
or product according to our reference . For example, Amazon’s hypothesis was that
people would buy books online, while Lenskart thought that people would love to
purchase eyeglasses online.

that was the easy part. And this is usually where scientists start creating theories
researching, calling colleagues, and a whole other experimentation, which won’t get
them closer to finding out whether the hypothesis is vali

That’s why you have to be only semi-scientific, because now you just throw your
hypothesis(business idea ) out into the market.

What does that look like? For Amazon it was a very simple website, and  for Lenskart it
just started from a room where they got their first order adjust the lens themselves with
a machine and shipped.

The important part is to start generating revenue as soon as because when people
say great idea or I will buy that doesn’t put a cent in your pocket.

So get out there and instead of calling friends, researching and getting feedback, find
people and ask them to buy.

Lesson 2: Tell value from waste with split-testing.

Another semi-scientific approach to then developing your product is split testing.

Nowadays often In this you create two version of your product and the one which got
maximum recommendation will be considered for analyses purpose.

This allows you to tell the difference between features your customers value, and
those they don’t want or need.

Imagine how hard this was a 10 or 15 years ago, where the only way to do this was to
create physically different products.

For example if Domino’s wanted to change the design of their pizza boxes, they
would’ve had to create 2 different designs, use them to ship pizzas to 1,000 customers
each, and ask each customer for feedback on the box.

Now, in the world of the interwebs, technology can do their work in seconds they just
come up with 2 designs in and hold a poll on their Facebook page, website or any other
their social pages and would instantly get hundreds , thousands of answers.

Lesson 3: Never ever indulge in vanity metrics.

The data you get from split testing is valuable. The number of your Social media likes
isn’t. It’s a vanity metric and you must never ever indulge in those.

Getting lots of page views is great, so is being covered in the press and having lots of
followers on Twitter.

But none of these gives money!

The only metrics you should measure your success with are the ones who tell you if
you’re profitable or not.

Do customer recommend you? How is your image in the market? What is your average
order value?

Are existing customers coming back to buy more? Do you have any USP (Unique selling
proposition) from your competitors Is the cost of your customer acquisition is less than
customer life time value (total worth to a business of a customer over the whole period
of their relationship.)

These are the kinds of metrics you should look at, because at the end of day your
finances speak whether business running good or not?
Facing the truth means facing the right metrics, so get on with the puffery and focus
on numbers that matter.