The Lean Startup – Dont overload, Use Kanban and Reports

Since the learning process is the key driver of success, one has to be careful with how many projects are being dealt with and fully understand where the projects are in respect to its stage.

Kanban – Wikipedia Link

Kanban

In the lean startup a modification had been done.

The kanban taking place would look like this:

• Backlog= Ideas.
• In Progress = Being built.
• Built= Built but not validated. Measurements are being made.
• Validated= Fully complete. Measurements have been done and understood.
• Writing and distributing report to appropriate stakeholders.

By giving a constraint of e.g. 3 projects to each category or bucket one ensures that the experiments are being thoroughly understood before passed on. E.g. if the Kanban is full in what is in Process/being built, it would be reasonable to validate what has not been validated to make room for the soon to be-finished projects.

When a project is finished/validated a report could be written.
All reports made should go by the 3 As:

• Actionable – reports are to have clear cause and effect. Otherwise vanity and meaningless.Example: 40 000 new hits! How get more= “Well… That depends, where do these new hits come from? Are they from one blog or something else? What is a hit?

• Accesible: Simple and made to be understood. “Metrics are people too”. Make the reports acceciable for people in the copany contributing to an open climate. Also, accessibility provides evidence and thus authority for discussions.

• Auditable – Credible. Many people challenge the numbers of the report when their ego is hurt in discussions. Need for making the reports easy to double checking aswell.

 

The Lean Startup – Part 1

The Lean Startup – Eric Ries.
Number of pages: 320
Link to webpage: http://theleanstartup.com/

Eric Ries was the founder of the Avatar-chat IMVU. Basically IMVU allows the user to create your own character in a virtual world and meet new people from around the world.

What made the reading good for me was not only that there are countless concrete examples to picture as I read through the book. I did try IMVU after an ad through some affiliate-ad a few years back. I could see the book more clearly than usual from both Ries perspective and from the customer´s point of view. I actually invited a girl I liked at the moment to try it out. Funny I only stole a kiss in the virtual world.

Since the topic from the book covers a lot and I will break it all down to a few posts.

Extremely short summary: Take out the Ego of the equation and objectively evaluate onself(the organization or product) in order to get to know the customers and their wants/needs.

Explanation/summary/review: The book deals with lean production and aims to provide the reader with a logical and rational tool to develop the startup to success. Ries basically says that everyone is an entreprenur in some way. One does not have to own a business to be it. He recognizes a start up to be a new institution with a very uncertain outcome.

Eric Ries talk about business much in cycles or iterations. He introduces the Build-Measure-Learn cycle. See Picture below:

Ries claims that the company who learns the most quickly, adapts and harmonizes with customers will be successful. Thus one aims to minimize the total time throughout the loop.

Each iteration or experiment is an attempt to see if the motor of the company will turn giving more power for next turn. One could say that with success and more customers the move towards higher gear is needed. This is the objective.

The build-measure-learn cycle works in both directions.

Begin with thought/Idea.

1. What do we want to Learn?
2. What data must we measure in order to learn?
3. What do we have to build/do in order to measure?

After asking the questions above one can go on to action:

1. Build
2. Measure
3. Learn (And back to Thought/Idea)

The type of feedback that can be given is either:

• Qualitative: What they like/ Don’t Like
• Quantitative – How many does this give etc.

The loop and feedback comes from testing a hypothesis. If we want to find out something, the hypothesis is what we think will happen. The hypothesis could be seen an educated guess.

The Hypothesis comes from assumptions made. The biggest ones are called Leap of faith-assumptions, and are the dealbreakers.

Example of leap-of-faith-assumption:
Apple: People will download music from Itunes.
Linkedin: People will upgrade and start to pay.

If the assumptions made by a company turns out to be flawed or the hypothesis fails the company must understand why. They can decide to stay on course or to Pivot – meaning to change course.

A business aims to get customers and to earn money. By providing value they get growth. So the most important questions, what is the real value? and what is the best way to grow?

Value and growth hypothesis:

Value – Facebook´s customers are advertisers and they could show, both for them and investors, that people kept coming back to the website and used it alot. They could show, with numbers, that they had value.

Growth – How do we get customers? Is it by paid ads, is it viral? Is it sticky – once they are there they dont leave?  Do not assume you know, test one at a time and focus. Experiment and learn about your segment and which motor works.

I will finish this post by a quote  touching quality, which is a recurring theme in the book.

If we don’t know who our customer is, we do not know what quality is – Eric Ries

What should drive your strategy – Summary

First post.
1) Summary
2) My thoughts.

What should drive your strategy – Digital Tonto
September 1, 2013.
http://www.digitaltonto.com/2013/what-should-drive-your-strategy/

Summary:
In 1960, Harvard professor Theodore Levitt published a landmark paper in Harvard Business Review that urged executives to ask, “What business are you really in?” Even today, a half century later, his challenge still resonates.

Ask: Why are we doing this?
Maybe the train company should not limit itself to be in the train business.
Think Instead: We are in the transportation Industry!

Many companies still fail however, so its no key factor for success albeit many train comapnies that were in the freight business are still succesful. Expertise in core technologies is however something important. Capabilities matter a great deal.

Greg Satell continues with an example of Warren Buffet. What matters is the talent. Warren Buffet had according to himself a talent for allocating capital but it is dependant of the society he is in. If he was born somewhere else he could be useless. Steve Jobs for instance would do well in hardware, software or even retail. He wanted functional designs.

Andy Grove – Intel
Business: Memory Chips.
Problem: Japan – Low cost suppliers.
Future: Threatened.

Gordon Moore – Cofounder Intel and creater of: Moore´s Law
What business do we WANT to be in? Not which we are in. If we would stop working here. What would a new CEO do. So, Intel went out of memory chips and made a fortune in microprocessors.

Similar stories can be seen from:
Herb Kelleher – Co-founder of Southwest Airlines.
Sam Walton – Retailer and founder of Walmart.

Jim Collins – Author of Good to Great and Built to Last.

Many companies start out with no idea of business they were into but find themselves with a group of people that they like to work with
Collins advises:

1. Who
2. What

Sony and HP are other companies that started out without a good idea.

What business is Elon Musk in?
Co-founded Paypal and created SpaceX and Tesla.

Sergey Brin and Larry Page at Google. Have many companies and also now building autonomous cars.

Clayton Christensen at Harvard would approve:
Doesn´t matter what business we are in but which jobs need to be done.
In the Milkshake example:
Business leaders think in terms of categories.
Consumers however think: In their needs.

Many ask:  What business are you in?  What is your core competency?  What job needs to be done?  While many of these can provide useful insight, they can also lead you astray.

Instead or also: “What business do you want to be in?”  “What motivates you to get up everyday?”  “In what do you take pride?”

Lines today are blurry.Technology companies are hiring TV development executives, while open source competes with proprietary platforms and biotechnology researchers seek to upend the energy industry. Nothing is assured.  Business models no longer last.

World has changed. Scale advantages have dimished. Industry barriers have become porous and enterprises don’t organize so much rather direct passion and purpose.

Which brings us to another thing Warren Buffett said: “Without passion, you don’t have energy. Without energy, you have nothing.”  In a world of increasing automation, our ability to perform tasks is not nearly as important as our ability to dream.  The questions we need to ask are not ones of action, but ones of meaning.

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My thoughts:

I think: The article in Digital Tonto is about understanding the Why of the customer and yourself and the adaptation to customers. And you must be good in what you do.

I liked this article. It touched many areas and maybe most importantly the ideas of why. See the book and/or Tedtalk speech “Start with Why” – Simon Sinek.
Business models are getting old. The idea that broading the vision is more important by asking: What are we really in. It is more about the why as understanding the customer rather than the box in which old companies have placed around the customers. If the model doesn´t change due to customers not changing, then why should one go over to another business? I believe many companies lost the sense of Why as they started seeing things as they had always been.

Gary Vaynerchuck, Author of the “Thank You Economy”. Summary and thoughts on book coming soon, mentiones this. Vaynerchuck also mentiones one vital thing which is: There is no data for the future available yet for the “old” industries to look upon and make long term decisions. He mentiones that the data of the future never will be there, perfectly fit to old ways. It is a quick train passing through, and it is going quicker and quicker.

I believe that technology drives change, As technology breaks through, new poiossibilities come and this changes the industry in its core. This because technology is a tool for the mind. A concept that Steve Jobs bring out as his epihany moment in regards to computers.

The story goes like this: http://www.youtube.com/watch?v=c__DV-Ul9AM

Transportation Companies, Train or Freight. The WHY is important driving us to different areas. The Why, Passion and understanding of the business is what drives profit today. Just having a strategy by asking where to be is not the answer. It is about connecting to what you want to be, your why, because whatever changes in the environment it should not change your why. The why, the humanity of business or as Eric Ryes writes in his book the Lean Startyup – “Metrics are People too” However used in a different topic which are measurables, the main point whatever the setting is: Business is about people.

The last thing I want to finish with is a cool quote so I will mention something that is timeless which is this:

The 5 W + 1 small How:

• Who is it about?
• What happened?
• When did it take place?
• Where did it take place?
• Why did it happen?
• How did it happen.

These questions are mentioned in Journalism, Rethorics. Maybe all questions and answers break down into these small parts. Timeless Questions that will always put the customer inside an understandable box.

Steve Jobs – The only way to to great work, is to love what you do.