Absent

I was not here, due to snow. 

On the Edge Chapter 1

Here are my takeaways from Chapter 1 of On the Edge

If you are caught unprepared, let it be for something that you can not control.  At least then you don't question your ability

Ex.  Many people on high mountains turn around because of unforeseen environmental factors.  Otherwise, they are asking themselves could I have trained harder?.

People expect more from you when you are a leader, so make sure you come prepared in every way.

“To be an effective leader, it’s important that you condition yourself for time that sleep is not an option.”

Many people would say I have this covered.  I can make it through a day with only 4 hours of sleep

Levine talks about a how you want to go on a climb with people more skilled than yourself, same when choosing teammates.  If you surround yourself with people better than you, you will get better.

She also talks about the importance of finding a mentor.  She said, “ Don’t wait for mentors to come to you.”  

“When you see someone scared about making huge leap-reach out”

Levine also talk about how you can develop a strong team by allowing others to lead and empowering others to take responsibility. It helps the leader share the workload.   It also prepare them for worst case scenarios.

Ex. the 1996 Everest climb - the team leaders where not to be found during a deadly storm, so many just sat in confusion.

“Good leaders understand it's their duty to develop leadership skills in others”

Lean Startup Chapter 12

Here is the Last Chapter of Lean Startup!

First a recap on vanity metrics

an overly long cycle time

the use of large batch sizes

an unclear growth hypothesis

a weak experimental design

a lack of team ownership

With these there is very little learning

The innovation sandbox

The sandbox also promotes rapid iteration. When people have a chance to see a project through from start to end, they benefit from the power of feedback.

By making the batch size small, the sandbox method allows teams to make cheap mistakes quickly and start learning.  Small initial experiments can demonstrate that a team has a viable new business that can be integrated back into the parent company.

Ries talk about how entrepreneurship should be considered a career path for innovators inside large organizations. Managers who can lead teams by using the Lean Startup methodology should not have to leave the company to reap the rewards of their skills.  Instead, “they should have a business card that says simply "Entrepreneur" under the

name.”

Questioning the Lean Startup

“Those who look to adopt the Lean Startup as a defined set of steps or tactics will not succeed. I had to learn this the hard way.” It is true that if we try a new way of working, people will blame the new system for the problems that arise  “You have to be able to predict the outcome of the changes you make to tell if the problems that result are really problems.”

Lean Startup Chapter 11

Here are my noted for Chapter 11

Adaptive organization - one that automatically adjusts its process and performance to current conditions.

The Five Whys method is important to adaptive organization because it can help uncover the root problem and correct it.

Example from the book

1. Why did the machine stop? (There was an overload and the fuse blew.)

2. Why was there an overload? (The bearing was not sufficiently lubricated.)

3. Why was it not lubricated sufficiently? (The lubrication pump was not pumping sufficiently.)

4. Why was it not pumping sufficiently? (The shaft of the pump was worn and rattling.)

5. Why was the shaft worn out? (There was no strainer attached and metal scrap got in.)

Asking these “whys: got to the base of the problems, instaed of just scratching the surface.  

When frustrated teammates start pointing fingers at each other, it becomes the Five Blames,

Recommended tactics for escaping the Five Blames.

Whoever is left out of the discussion ends up being the target for blame - so make sure everyone apart of the process is brought to the meeting

It also requires executive leadership to sponsor and support the process.

Lean Startup Chapter 10

Here are my notes from Chapter 10

The engine of growth is the mechanism that startups use to achieve sustainable growth.

Sustainable growth is characterized by one thing: “New customers come from the actions of past customers.”

There are four ways customers drive sustainable growth:

1. Word of mouth - caused by satisfied customers' enthusiasm for the product.

2. As a side effect of product usage - product drives the awareness of themselves whenever they are used (ex. luxury items or Facebook)

3. Through funded advertising - Advertising paid for out of revenue, not one-time sources such as investment capital. .

4. Through repeat purchase or use . Some products are designed to be purchased repeatedly either through a subscription plan (a cable company) or through voluntary repurchases (groceries or lightbulbs).

Shawn Carolan said that, "Startups don't starve; they drown." because there are always a many new ideas about how to make the product. The engines of growth framework helps them stay focused on the metrics that matter.

Companies use the sticky engine of growth track their attrition rate or churn rate very The churn rate is the fraction of customers in any period who fail to remain engaged with the company's product. The rules: “if the rate of new customer acquisition exceeds the churn rate, the product will grow. The speed of growth is determined by what I call the rate of compounding, which is simply the natural growth rate minus the churn rate.”

Its focus needs to be on improving customer retention.

Online social networks and Tupperware are examples of products for which customers do most of the marketing

Ex. Hotmail was slow growing company at first then they added this to the bottom of each email

"P.S. Get your free e-mail at Hotmail" along with a clickable link.

This increased their customers exponentially.  

The viral engine is powered by a feedback loop, called the viral loop , Its speed is determined by a single mathematical term called the viral coefficient . The higher this coefficient is, the faster the product will spread. The viral coefficient measures how many new customers will use a product as a consequence of each new customer who signs up. “Put another way, how many friends will each customer bring with him or her? Since each friend is also a new customer, he or she has an opportunity to recruit yet more friends.”

A viral loop with a coefficient that is greater than 1.0 will grow exponentially, because each person who signs up will bring, on average, more than one other person with him or her. For example look at the chart below:

Companies that rely on the viral engine of growth must focus on increasing the viral coefficient more than anything else, because even tiny changes dramatic changes. A consequence of this is that many viral products rely on indirect sources of revenue such as advertising.

It is recommended  that startups focus on one engine at a time.

Product/market fit to describe the moment when a startup finally finds a widespread set of customers that resonate with its product:

Lean Startup Chapter 9

Here are my notes for Chapter 9

The Lean Startup methodology advocates for the small batch approach. The biggest advantage of working in small batches is that quality problems can be identified much sooner. The small-batch approach produces a finished product every few seconds, whereas the large batch approach must deliver all the products at once, at the end

Example of large batch

It is like the changes that are made to a product such as the iPhone when it is updated.  All 1,500 updates are released to customers in one giant batch

.

Small batching is also called continuous deployment. This is where you make changes everyday then check for defects and remove them immediately.

Small batches allow startups to get through the Build-Measure-Learn feedback loop quickly. The ability to learn faster from customers is the essential competitive advantage that startups must possess.

Here is an example of small batches at work from the book

THE PROJECT TIME LINE
Design and engineering of the initial virtual prototype	1 day
Production and assembly of initial hard prototypes	3 days
Design iteration: two additional cycles	5 days
Initial production run and assembly of initial forty units	15 days

Large batches end in problems that lead to interruptions for the next batch.  It also causes a focus on how many you can produce rather than getting it to the customer.

Lean Startup Chapter 8

Here are my notes from Lean Startup Chapter 8

Every entrepreneur eventually faces an overriding challenge in developing a successful product: deciding when to pivot and when to persevere

Failure is a prerequisite to learning.  

Most entrepreneurs wish they would have pivoted sooner than they did. There are three reasons for this.

1. Vanity metrics can allow entrepreneurs to form false conclusions and live in their own private reality
2. When an entrepreneur has an unclear hypothesis, it’s almost impossible to experience complete failure, which is the only way you can change
3. Many entrepreneurs are afraid. They fear their vision will prove to be wrong without having been given a real chance to prove itself

Different Types of Pivots

Zoom-in Pivot a single feature in a product becomes the whole product.

Zoom-out Pivot - what was considered the whole product becomes a single feature of a much larger product.

Customer Segment Pivot - change to a different customer base than originally anticipated.

Customer Need Pivot - when a company learns the problem they were trying to solve is not very important.  The company finds other related problems instead.  This may require a completely new product.

Platform Pivot - a change from an application to a platform or vice versa.

Business Architecture Pivot a pivot between two major business architectures: high margin, low volume (complex systems model) or low margin, high volume (volume operations model).

Value Capture Pivot - they change the way they capture value.  Value captures are like monetizations and revenue models

Engine of Growth Pivot - changes its growth strategy to seek faster or more profitable growth.Commonly but not always, the engine of growth also requires a change in the way value is captured.

Channel Pivot - changes sales channel or distribution channel (the way the customer gets the product)

Technology Pivot - a company that discovers a way to achieve the same solution by using a completely different technology.

Lean Startup Chapter 7

Here are my notes from Chapter 7

Innovation accounting enables startups to prove objectively that they are learning how to grow a sustainable business. Innovation accounting begins by turning the leap-of-faith assumptions into a financial model.

Vanity metrics are cumulative totals and gross numbers such as total revenue and total number of customers.  These can be misleading and do not show trends that can be attached on because they hide confounding data.  For a report to be considered actionable, it must demonstrate clear cause and effect. Otherwise, it is a vanity metric. With vanity metrics, it’s so common to have a meeting in which the marketing departments thinks the numbers went up because of a new PR or marketing effort and the engineering department thinks the better numbers are the result of the new features it added.

Cohort analysis is one of the most important tools of startup analytics. Actionable metrics like a cohort analysis look at the performance of each group of customers that comes into contact with the product independently. Each group is called a cohort. The graph can show the conversion rates of new customers who joined your company in each indicated month. Each conversion rate shows the percentage of customer who registered in that month who subsequently went on to take the indicated action.  

Here are examples of a cohort graph

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, it is easier to make inferences about the impact of the different variations.

Only 5 PERCENT of entrepreneurship is the big idea, the business model, the whiteboard strategizing, and the splitting up of the equity.

The other 95 percent is the hard work that is measured by innovation accounting: product prioritization decisions, deciding which customers to target or listen to, and having the courage to subject a vision to constant testing and feedback.