book

Running Lean, 3rd Edition

by Ash Maurya

March 2022

Intermediate to advanced

367 pages

8h 44m

English

O'Reilly Media, Inc.

Audiobook available

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O’Reilly Online LearningHow to Contact UsAcknowledgments
A Tale of Two EntrepreneursOne Year Ago…Off to the RacesSix Months LaterCatch-22A Traction-First Approach Is the New Way ForwardWhat Determines Success Isn’t Differing Skill Sets But Differing MindsetsThe Stakes Are Much Higher This TimeSpeed of Learning Is the New Unfair AdvantageSucceeding in the New World Requires New MindsetsYou Can’t Afford to Wait for an Idea Whose Time Has ComeSteve Learns About Minimum Viable ProductsDon’t Start with an MVPThere Is a Systematic Approach to EntrepreneurshipAbout MeHow This Book Is OrganizedPart I: DesignPart II: ValidationPart III: GrowthIs This Book for You?Does It Work for Services and Physical Products?Practice Trumps Theory
Sketching Your First Lean CanvasCustomer SegmentsProblemUnique Value PropositionSolutionChannelsRevenue Streams and Cost StructureKey MetricsUnfair AdvantageRefining Your Lean CanvasSo, How Do You Avoid the Goldilocks Problem?How Do You Know When to Split Your Lean Canvas?Steve Splits His Big Idea Canvas into Specific VariantsWhat’s Next?
Defining BetterOur Innovator’s Bias Gets in the WayMeet the Innovator’s GiftUnpacking the Innovator’s GiftSteve Challenges the Innovator’s GiftUsing the Innovator’s Gift to Stress Test Your Idea for DesirabilityCustomer Segments: Keep It SimpleEarly Adopters: Forget PersonasExisting Alternatives: Transcend CategoryProblems: What’s Broken with the Old Way?UVP: How Will You Cause a Switch?Steve Realizes He Has a Hammer Problem
Don’t Create a Financial Forecast; Use a Fermi Estimate InsteadWhat Is Traction?Welcome to the Customer FactoryTesting the Viability of Your Idea Using a Fermi EstimateDefine a Target Throughput GoalTest Whether Your Idea Can Deliver Your Target Throughput GoalRevise Your Goal or Fix Your Business ModelRunning a Fermi Estimate on Your IdeaSteve Reviews His Business Models with Mary
Charting a Traction RampSteve Charts His Traction RoadmapFormulating a Now-Next-Later Rollout PlanStage 1: Now—Problem/Solution FitStage 2: Next—Product/Market FitStage 3: Later—ScaleSteve Gets a Lesson on Right Action, Right TimeSteve Learns About Wizard-of-Oz MVPsSteve Formulates His Now-Next-Later Rollout Plan
What’s Your Elevator Pitch?Outlining Your Elevator PitchThe Different Worldviews of an IdeaThe Investor WorldviewThe Customer WorldviewThe Advisor WorldviewDelivering Your Business Model PitchThe 10-Slide Business Model Pitch DeckDesirabilityViabilityFeasibilitySteve Shares His Business Model Pitch with Others

The 90-Day CycleA Typical 90-Day CycleGetting Ready for Your First 90-Day CycleAssemble the Right TeamEstablish a Regular Reporting CadenceSeven Habits for Highly Effective Experiments1. Declare Your Expected Outcomes Upfront2. Make Declaring Outcomes a Team Sport3. Emphasize Estimation, Not Precision4. Measure Actions, Not Words5. Turn Your Assumptions into Falsifiable Hypotheses6. Time-Box Your Experiments7. Always Use a Control GroupSteve Establishes an External Accountability Structure
Steve Calls a 90-Day Cycle Kickoff MeetingThe Problem/Solution Fit PlaybookCustomers Don’t Buy Products, They Buy a Promise of Something BetterHow to Make a Promise of BetterWhen Are You Done with Problem/Solution Fit?Steve Calls a 90-Day Cycle Planning MeetingThe Mafia Offer CampaignBuilding a Mafia OfferRunning a Mafia Offer CampaignWhen to Use a Mafia Offer CampaignSteve Tries Taking a ShortcutMary Bursts Steve’s Bubble (Again)No Surveys or Focus Groups, PleaseAre Surveys Good for Anything?Preemptive Strikes and Other Objections (or Why I Don’t Need to Interview Customers)
The Problem with ProblemsCase Study: Using Problem Discovery Interviews to Drive New Home SalesFocus on the Bigger Context: The Job-to-be-DoneCase Study: Using Problem Discovery Interviews to Build Better Drill BitsFinding the Bigger ContextScoping the Bigger ContextDiving Deeper into a Bigger, More Specific ContextRunning a Problem Discovery SprintBroad-Match Versus Narrow-Match Problem Discovery SprintsFinding ProspectsSteve Kicks Off the First Problem Discovery SprintConducting InterviewsSteve Creates a Meta-Script for His InterviewsCapturing InsightsSteve Reviews the Results of the Broad-Match Problem Discovery SprintWhen Are You Done with Problem Discovery?The Altverse Team Uncovers Several Additional Jobs-to-be-Done
Steve Learns About the Concierge MVPRunning a Solution Design SprintAddressing DesirabilityAddressing ViabilityAddressing FeasibilityThe 5 P’s of MVPSteve Takes a Stab at the 5 P’s of MVP
Case Study: The iPad Mafia OfferRunning an Offer Delivery SprintAssembling Your OfferDefine the Characters in Your Customer Story PitchOutline the Structure of Your Customer Story PitchSteve Shares His Customer Story Pitch Outline with the TeamDelivering Your OfferOptimizing Your OfferMeasure Your Customer Factory Metrics WeeklyIdentify Your Key ConstraintFormulate Ways of Breaking the ConstraintSteve Meets with the Team to Review the Results of Their First Offer Delivery SprintWhen Are You Done with Offer Delivery?
Steve Calls a Pre-Review Meeting Just with MaryPreparing for the MeetingCollect/Update ArtifactsAssemble a Progress Report Pitch DeckRunning the MeetingSteve Calls a 90-Day Cycle Review Meeting
The Altverse Team Prepare for LaunchKeep Your Customer Factory RunningLook for Ways to Automate Your Customer FactoryRace to Value DeliveryExtend Your Customer Factory Metrics DashboardRoll Out Your MVP in BatchesThe Altverse Team Launch Their Concierge MVP
The Altverse Team Learns About Behavior DesignThe Happy Customer LoopDon’t Be a Feature PusherImplement an 80/20 RulePrevent a SwitchOutlearn the CompetitionReduce FrictionLearn the Science of HabitsChart a Customer Progress RoadmapTrigger Your CustomersHelp Your Customers Make ProgressReinforce ProgressThe Altverse Team Calls a 90-Day Cycle Review Meeting
The Altverse Team Learns About Growth RocketsThe Rocket Ship Growth ModelLaunching Rocket ShipsThe Three Types of Growth LoopsThe Revenue Growth LoopThe Retention Growth LoopThe Referral Growth LoopCan You Have Multiple Growth Rockets?Finding Your Primary Growth RocketShort-Listing Growth Rocket CandidatesValidating Your Growth RocketOptimizing Your Growth RocketSteve Makes Mary an Offer She Can’t Refuse
The BOOTSTART Manifesto1. Entrepreneurs Are Everywhere2. The Persona of the Garage Entrepreneur Has Changed3. There Is No Better Time to Start4. Most Products Still Fail5. A Dozen Reasons Why Products Fail6. The Number One Reason Why Products Fail7. The Number Two Reason Why Products Fail8. You Don’t Need Permission to Start9. Love the Problem, Not Your Solution10. Don’t Write a Business Plan11. Your Business Model Is the Product12. Focus on Time, Not Timing13. Not Acceleration, but Deceleration14. Not Faux Validation, but Traction15. Remove Failure from Your Vocabulary16. It’s Time to Act on Your Big Idea

Content preview from Running Lean, 3rd Edition

Chapter 5. Communicate Your Idea Clearly and Concisely

The number one reason why startups fail is that they build something nobody wants. The number two reason why products fail is not getting the right buy-in from key stakeholders.

Your key stakeholders include your founding team members, early customers, advisors, and investors.

If you’re incubating your idea in a large company, you’re probably going to be asked to write a 60-page business plan with a 5-year financial forecast and an 18-month product roadmap. For new, innovative ideas, these things are simply unknowable at the outset. As a result, these ideas seldom get past the gatekeepers.

If you’re a startup (or part of an innovation team with a mandate to innovate), getting started is a bit easier. You may sketch your Lean Canvas, formulate your MSC, identify the problem and customer segments…but then you get stuck shortly thereafter when trying to secure additional resources to grow your product and team. You need to pitch your idea in order to get others to see what you see, to buy into your worldview, join your mission, and invest their time, money, and/or effort.

We saw how Steve struggled to get others to see what he saw with his idea. He wasn’t able to convince others (investors or cofounders) to get behind his vision, which led to a classic catch-22. Even if you’re bootstrapping your project and not seeking investors, you’ll eventually need additional resources like cofounders, equipment, etc. to grow an idea.