Lean Project Management: This Book Includes: Lean Startup, Enterprise, Analytics, Agile Project Management, Six Sigma, Kaizen

By Philip Small

This Is How The World's Top Tech Companies Manage Their Projects - Use Their Methods And Let Your Startup Thrive!

 

This book includes: Lean Startup, Lean Enterprise, Lean Analytics, Agile Project Management, Lean Six Sigma, Kaizen

 

Do you want to run your small business using the same strategies as the leaders in your field?

Do you want to have a clear advantage over your competitors?

Do you want your customers to be happy and eager to pay you even more?

It's time to learn Lean.

 

With Lean Project Management, you can create highquality products in less time. You can manage projects in a way that actually empowers and motivates your employees. Last but not least, your customers will
LOVE working with you if your company uses Lean and Agile methods.

This book will show you how to implement Lean methods in your startup and take it to the next level.

 

With this book, you will:

• Learn the step-by-step process of  managing Lean projects
• Maximize your team's productivity with Scrum
• Visualize your workflows with Kanban
• Understand Lean Six Sigma roles and management boards
• Explore The 5S system - pros and cons
• Use Lean Analytics to measure the things that matter
• Adopt the Kaizen mindset to encourage growth and positive change
• Grow and scale your thriving business!

The Lean mindset is your key to maximum productivity and genuine leadership. It's your key to innovation and success (and making more money in the process). You can use it to manage everything from your personal projects to a thriving corporation - Lean is scalable, flexible, and empowering.

In fact, Lean Project Management can be used in all fields and industries - so dive in and transform your business now!
 

Get your hands on this book before your competitors do. Get you copy now!!!

• Language: English
• Publisher: Philip Small
• Release date: Sep 23, 2021
• ISBN: 9798201445638

Book preview

LEAN PROJECT MANAGEMENT

THIS BOOK INCLUDES:

Lean Startup, Enterprise, Analytics, Agile Project Management, Six Sigma, Kaizen

Philip Small

© Copyright 2020 - All rights reserved

The content contained within this book may not be reproduced, duplicated, or transmitted without direct written permission from the author or the publisher.

Under no circumstances will any blame or legal responsibility be held against the publisher, or author, for any damages, reparation, or monetary loss due to the information contained within this book. Either directly or indirectly.

Legal Notice

This book is copyright protected. This book is only for personal use. You cannot amend, distribute, sell, use, quote or paraphrase any part, or the content within this book, without the consent of the author or publisher.

Disclaimer Notice

Please note the information contained within this document is for educational and entertainment purposes only. All effort has been executed to present accurate, up to date, and reliable, complete information. No warranties of any kind are declared or implied. Readers acknowledge that the author is not engaging in the rendering of legal, financial, medical, or professional advice. The content within this book has been derived from various sources. Please consult a licensed professional before attempting any techniques outlined in this book.

By reading this document, the reader agrees that under no circumstances is the author responsible for any losses, direct or indirect, which are incurred as a result of the use of the information contained within this document, including, but not limited to, errors, omissions, or inaccuracies.

Table of Contents

LEAN STARTUP

Introduction

Chapter 1. What Is the Lean Startup Methodology

Chapter 2. Lean Startup Models

Chapter 3. The Startup Vision

Chapter 4. Steer

Chapter 5. Accelerating

Chapter 6. A Smooth 5S Transition

Chapter 7. Is Six Sigma Right for My Company?

Chapter 8. Lean Six Sigma Training

Chapter 9. Lean Thinking

Chapter 10. Agile and Scrum

Chapter 11. Crucial Steps for a Lean Product

Chapter 12. How to Accelerate

Chapter 13. How to Envision the Startup

Chapter 14. The Primary Wastes of Lean Systems

Chapter 15. Eliminate the Waste

Chapter 16. Six Sigma Deployment

Conclusion

LEAN ENTERPRISE

Introduction

Chapter 1. What Is Lean and Why It Matters to Your Company?

Chapter 2. Can I Run a Lean Office?

Chapter 3. Lean 5S

Chapter 4. Creating a Lean System

Chapter 5. Downtime: The 8 Deadly Wastes of Lean Systems

Chapter 6. The Major Benefits of Going Lean

Chapter 7. Deciding if Six Sigma Is Right for Your Company

Chapter 8. Knowing Which Goals to Set

Chapter 9. Kaizen

Chapter 10. The Importance of Flow

Chapter 11. Lean Concepts and Tools

Chapter 12. Methodology of Lean and Six Sigma

Chapter 13. Simplify Lean with Focus

Chapter 14. Lean in the IT Sector

Chapter 15. Lean Manufacturing Concepts to The Office

Chapter 16. Six Sigma Vs. Lean Manufacturing

Chapter 17. How Can a Business Identify Value with Lean

Chapter 18. How to Foster Learning and Experimentation through Lean

Chapter 19. Four Most Important Letters in Lean

Chapter 20. How to Apply the Idea of Kanban to Your Workflow

Conclusion

LEAN ANALYTICS

Introduction

Chapter 1. What Is Lean Analytics?

Chapter 2. Introduction to Six Sigma

Chapter 3. Analytic Data for Business Intelligence in Service Management

Chapter 4. How to Harness Lean to Foster Innovation and Develop New Ideas

Chapter 5. How to Promote Learning and Experimentation through Lean

Chapter 6. Effectively Implementing Lean Analytics in Your Organization

Chapter 7. Public Sector and Lean Training

Chapter 8. The One Metric That Matters

Chapter 9. The Opposition and Words of the Wise

Chapter 10. The Data for Your Analytics

Chapter 11. Key Metrics and Your Own Targets

Chapter 12. Data-Driven Approaches

Chapter 13. Organize the Value Stream According to the Product Groups

Chapter 14. Don’t Be Data-Driven. Yes, You Read That Right.

Chapter 15. What Lean Thinking Can Do for Entrepreneurs

Chapter 16. Simple Analytical Tests to Use

Chapter 17. How Can a Business Identify Value with Lean

Chapter 18. Tips to Make Lean Analytics More Successful for You

Conclusion

AGILE PROJECT MANAGEMENT

Introduction

Chapter 1. Scrum

Chapter 2. Kanban

Chapter 3. Extreme Programming

Chapter 4. Use of Kanban Systems

Chapter 5. How to Use Kanban to Improve the Full Value Chain

Chapter 6. Setting up Your Agile Environment and the Team Composition

Chapter 7. Scaling Agile Projects

Chapter 8. Common Errors behind Agile Failure

Chapter 9. The Authenticity of Agile Management

Chapter 10. Common Misconceptions About Agile Project Management

Chapter 11. How to Create a Product Vision

Chapter 12. Learning More about Scrum and Agile Principles

Chapter 13. The Skills of a Great Master

Chapter 14. Moving to Agile

Conclusion

LEAN SIX SIGMA

Introduction

Chapter 1. What Is Lean Six Sigma?

Chapter 2. Understanding Lean Thinking

Chapter 3. Advantages and Disadvantages of Lean

Chapter 4. Lean Six Sigma Certification

Chapter 5. The Implementation of the Lean Six Sigma System

Chapter 6. Knowing Your Goals and Your Needs

Chapter 7. Determine Who Is Responsible for Each Project Part

Chapter 8. Common Issues with Implementing Six Sigma

Chapter 9. Kanban and How It Fits into the Lean Methodology

Chapter 10. What Are the 5S’s and How They Work

Chapter 11. Overall Equipment Efficiency

Chapter 12. Services Using Lean Six Sigma

Chapter 13. Improving Customer Satisfaction

Chapter 14. The Analyze Phase

Chapter 15. A New Strategy for the 21st-Century Corporation

Chapter 16. Common Six Sigma Critiques

Chapter 17. Comparison between Lean & Lean Six Sigma

Conclusion

KAIZEN

Introduction

Chapter 1. What Is Kaizen?

Chapter 2. Continuous Improvement

Chapter 3. Application of Kaizen in the Toyota Production System

Chapter 4. Changes Are Incremental

Chapter 5. Why Lean Matters to Your Enterprise

Chapter 6. The Five S’s of Kaizen

Chapter 7. A Step-By-Step Kaizen Guide for Startups and Small Businesses

Chapter 8. Kaizen Event Types

Chapter 9. Developing Your Self-Esteem

Chapter 10. Creating A Kaizen Culture at Home

Chapter 11. Ten Action Steps Successful People Do for Continuous Improvement

Chapter 12. Organizational Kaizen

Chapter 13. Getting Organized the Kaizen Way

Chapter 14. Getting Fit, The Kaizen Way

Chapter 14. Kaizen Way to Adopt a New Diet Plan

Chapter 15. Maximizing Your Kaizen Results

Chapter 16. Single Vs. Multi-Tasking

Conclusion

LEAN STARTUP

A One Step at a Time Entrepreneur's Mindset Guide to Building and Continuously Scaling up Your Small Business; Boost Productivity and Achieve Goals and Success by Using Agile Strategies

Introduction

Many people already wrote books about this topic. Why still write one if that’s the case? That’s because of the explosion of information about this topic. It made it inevitable for people to generate different and new interpretations. Their words can confuse individuals who want to learn about it.

Unlike those books written before this, this book aims to serve as a short guide. Treat it as a supplementary source of information if you will. It will not pander on claiming that this is the one single book you need to master the subject. 

Many people have already jumped on the bandwagon. They created websites with domain names using the words Lean, startup, and analytics. Visit them, and all they want is to get something from you instead of them giving anything worthwhile. It’s easy for people to get misinformed when they research because of those sites. Not to mention that the web isn’t precisely moderated and curated for its accuracy.

Aside from that, other factors complicate things:

Experience and application of the theory resulted in a different realization

Different backgrounds of people influence a different opinion

Excessive recycling of facts and opinions passed from one person to the next

The goal of this book is to give its readers a primer about Lean Startup. I’d be honest here: it’s not actually complex. It will only become complex if you put it in action, and you already have a lot of data to analyze. 

Since that’s out of the way, here’s a short story I want to tell you.

As you might have already guessed, I’m an entrepreneur. My first business flopped. I wasted my savings and the money I loaned. And I learned little from my experience after the business fell.

Let me tell the optimistic people that the failure wasn’t worth it. It’s like learning that a wooden bridge will collapse if you walk on it by walking on it. You could have saved yourself by asking the guy living near the bridge if it’s stable enough.

A failed first business is like that. You are going to enter unfamiliar territory. The first thing you should do is to ask the people who are already in that place. It should’ve been common sense.

People should stop preaching that it’s normal to fail on your first attempt. It’s plain wrong. If you believe that, you’re actually getting yourself into an expensive failure. 

What I did after the blunder was to cool myself down for a while. I took some jobs to pay for the loan. Some of those loans came from friends and relatives. Of course, I also needed to have money for the usual daily expenses and the dreadful monthly bills. It’s a painful and shameful experience. 

I cleared all the baggage that came with the failed startup. I decided that it was time to look back on what happened. I wanted to know if it’s still possible for me to be the businessman I aspired to be.

As I found out, I was wrong with everything. That wounded my ego. But I suppressed it, believing it’s already too late for me to whine about something that’s passed. There’s no use crying over spilled milk, especially if it’s already dried and spoiled. 

Going back to my postmortem, there were two primary things that attributed to my failure.

I failed to perform intensive research. I thought the knowledge of relatives and friends was enough. I asked the ones who have established businesses. I was wrong.

But it doesn’t mean that what they taught me was wrong. Those principles don’t work anymore. I could have succeeded if I started my business two decades ago. But the entrepreneurship landscape has changed a lot in the past few years.

Let me use my previous analogy. My friends were miles away from the bridge I was going to cross. I asked them if I can cross the bridge that appears to be already collapsing. They said yes, having no idea about what I was talking about. That was dumb of me.

I relied on instinct. I was confident. I thought I could delve into the mind of my customers. I thought that I could predict their behavior. I was, again, dead wrong. And it was my fatal mistake.

It was stupid of me. Why do I need to do that in the first place? I should have asked the customers themselves. Why try to emulate them if they’re already there waiting for me to ask them.

Of course, I wasn’t able to think of those things right off the bat. I was able to get some help. And the support I got was in the form of a book, The Lean Startup, written by Eric Ries. 

But before I delve into that, I want you to know that both Lean Startup and Analytics helped me with my new venture. It’s not that my business became one of the Fortune 500, but running it feels different and much better.

During my first venture, I always lacked sleep. I always pushed myself harder every day, thinking about all the things going on with the business. And despite the effort and sacrifices, nothing worked out.

I was borderline depressed after the catastrophe, which was my first business. But now, I didn’t have to do too much. Well, I still do more since I’m running Lean. I don’t have full-time employees; instead, I have a few freelancers.

But I don’t have to overthink. Instead of scrambling my brain on how I can improve my business, I can ask my customers. They are more than willing to tell me what I need to do and what they want. I do what they say, and I can sustain them and make them loyal.

I don’t have to dizzy up myself with numbers, trying to measure if I am doing the right things or not. Currently, my Only Metric That Matters is sales count. If I have more sales, I’m doing better. If there’s few, then that’s the time I need to put in more effort.

There are no guessing games anymore or prioritization. My business expenses are also a lot lower now. I don’t rent an office or warehouse anymore. Everything’s done at home. When it comes to logistics and other services, I hire the right businesses and people that can do the task I need to do.

I guess that’s enough stories for now. 

What I can promise you is this. Doing Lean Startup and Lean Analytics can make your mind rest easy. It’s not the surefire success method; I admit that. Because if it is, I won’t even bother to write this book. I would instead enjoy my vacations and earned money.

I can't say that it’s a surefire method to prevent your business from failing. But I can promise that it will reduce the risk of losing your business.

Sure, some say that the amount of success is relative to the risk you are willing to take. I take that as truth. I will instead be a semi-successful businessman if it means I can keep my sanity. I wouldn't want to live a life filled with anxiety thinking how I can repay my loans when my business fails.

For those who want to start a business, I recommend running Lean. It doesn’t matter if you’re a layman who wants to turn his life around and be the boss or if you’re a business graduate. Running Lean is the best way to start a business today. 

With that said, the book contains information on how you can correctly do that. I would like to repeat that this book is a result of research and experience. But I promise you that after you finish this book, you’ll have a different perspective as an entrepreneur who wants to establish a startup business.

Chapter 1. What Is the Lean Startup Methodology

Eric Ries said that startups could be a success if they follow a specific process. This means that the process can always be learned, and those who have experience can also teach them. Every entrepreneur will always wonder whether a startup will fail. 

If you wish to begin a Lean startup, you must identify a small gap in the market using time and money effectively. 

You will need to use different techniques to ensure that your product or service reaches the market in a faster way while also avoiding the production or manufacture of products that no consumer will want. 

Most amateur entrepreneurs feel that they are taking a shot in the dark when they are identifying a product or service they can offer to their potential consumers. 

But, it does not always have to be a trial and error proposition. If you adopt Lean Thinking, you will be able to develop ideas and refine them to meet market standards. 

Let me show you some principles that will give a start-up a higher chance of making a profit and becoming a success within a limited budget. 

Principles of Lean Startup

CONTROLLED USE AND deployment of resources

One of the essential principles of a Lean startup is that the startup must use every one of its resources effectively and efficiently. Since most startups do not have enough investment, they use the Lean business model to encourage the effective deployment and continuous development of the resources that the company does have. 

A Lean startup must continuously evaluate how the initial investment can be used to meet its targets and customer requirements. The startup must also ensure that it does not spend more than what is necessary to test, evaluate, and refine its products. 

If the costs are kept at a minimum, the startup can maximize its profits whenever there is a sale. 

Every Lean startup is dependent on organic growth since it does not have a huge capital investment. When the profits made at the early stages are reinvested in the company, the startup can scale its operations up in a controlled manner without sacrificing quality. This is commonly called innovation accounting.

Entrepreneurs are everywhere

Eric Ries believes that every individual in the world is an entrepreneur. Some successful entrepreneurs have built their organization in their garage. You can find entrepreneurs in Hollywood, in the IRS, and even in well-established organizations. These people are always looking for a way to develop products that increase value to the customer. 

Entrepreneurship is management

It is important to remember that every startup is not defined by its products but is an institution. Therefore, there must be a management team in place to understand and develop the startup.

Validated learning

A startup does not exist only to build products for the customers or to make money. It exists only when the management learns how to build a sustainable business. The learning can be validated through statistic measures by running experiments that test the startups' vision.

Innovation accounting

A startup must focus on the following to improve outcomes and also hold every entrepreneur accountable:

•   How can progress be measured

•   How can milestones be set

•   How can work be prioritized 

Build-Measure-Learn

Every startup looks for ways to convert its ideas into a product or service and measure how its customers receive that product or service. When they understand the response, they will know whether they need to pivot or persevere.

Chapter 2. Lean Startup Models

The Lean Startup model was introduced in the year 2011, and its impact on the economy has been enormous. The book written by Eric Ries gained immense publicity, and many companies use the information in the book to develop their startups. 

However, the ideas in the book are not new; most entrepreneurs have forgotten these ideas since success is always measured in numbers in the business world. The methods and approaches in the book are valuable to startups as well as well-established organizations. 

In his book, Eric Ries has defined a startup as a human institution whose goal is to create a new service or product under uncertain conditions.

Build-Measure-Learn

THE WAY DIFFERENT COMPANIES pursue innovation in today’s market has been affected by the idea of using specific scientific or statistical methods to handle or calculate uncertainty. 

This means that the company must define a hypothesis, build a product or service to test that hypothesis, use that product or service and learn what happens and finally adjust the attributes of the product or service to increase the value for customers. 

The Build-Measure-Learn methodology can be applied to almost anything. You do not have to use this methodology to test new products alone. You have to carry out a test and validate the initial hypothesis to ensure that you have enough data to assess the value of the product to the customer. 

The aim of every company should be to move through this methodology quickly. You have to identify if the product or service developed is worth going through another cycle or if you should come up with a new idea. This means that you must define a specific idea that you want to test with minimum criteria that can be used for measurement. 

When it comes to products, you have to test whether your customers want to purchase your product or if they need it. You have to learn what your customers want and not trust what they think or say they want. 

Minimal Viable Product (MVP)

A TRADITIONAL COMPANY will first have to define the specifications of every product it wants to produce or manufacture and then assess the significant cost and time that will be invested to produce that product. The Lean startup methodology encourages every startup to build the required amount of product through one loop of the Build-Measure-Learn loop. 

If the company can identify such a product, it becomes a minimal viable product. This product is manufactured or developed using minimal effort and less development time. 

Every startup does not necessarily have to write a code to automate processes to create an MVP. An MVP could be as simple as a slide deck or design mockups. You have to ensure that you run these products by your customers to get enough validation to pass this product through the next cycle. 

Validated Learning

EVERY STARTUP MUST test or validate a hypothesis with the right idea in mind; learn from what is observed. There are times when startups have focused on vanity metrics that made them believe that they were indeed making progress. This is not the right approach since you must always look at parameters that will give you some insight on the product and how it can be changed to increase its value to the customers. 

For example, the number of accounts opened on Instagram is a vanity metric for that platform. The actual metric would be the number of hours spent scrolling through Instagram by each account holder. This will give the developers the real value of the product. 

In the book Lean Startup, Eric Ries has provided an example of his own. A company called IMVU always showed a chart that showed a good picture to its management and investors. Many registrations were being made every single day. 

However, this graph did not show if the customers or users value the service. The figure did not show the costs that went into marketing to acquire new users. This chart only looked at vanity metrics and was not designed to test a hypothesis. 

Innovation Accounting

THROUGH INNOVATION accounting, a startup can prove that it is learning to grow and sustain itself as a business. A company can do this in the following ways. 

Establish a baseline

The startup can run an MVP test and collect data that will enable it to set some benchmark points. You can use a smoke test where you can market the product or service you want to offer and assess your customers’ interests. 

This includes a sign-up form to understand if the customers want to purchase the product or service. Using that information, you can set the baseline for the first iteration of the Build-Measure-Learn cycle. It is alright to make mistakes or have low numbers since that will help you improve. 

Tuning the product

Once the baseline has been established, you should identify one change that must be made to the product and test that improvement. Do not make all the changes at once, as it can lead to chaos. 

You can try to see how a change in the design of the form attracts more customers when compared to the earlier model. This step must be carried out slowly to ensure that every hypothesis is tested out carefully. 

Persevere or pivot

When you have made several iterations through the cycle, you have to move up from the initial baseline towards the goal that was set out in the business plan. If you are unable to reach that goal, you must learn why using the data collected at every step. 

Pivot

A successful entrepreneur is one who has the foresight, the tools, and the ability to identify which parts of the business plan are indeed working for the company. They also learn to adapt to changes in the market, and to modify their strategies according to the data collected during the iterations.

One of the hardest aspects of the Lean startup method is to decide to pivot since every entrepreneur and founder is emotionally attached to the product they have created. They spend a lot of money and energy to get to where they are. If a team uses vanity metrics to test its products and hypothesis, it can go down the wrong path. 

If the hypothesis selected is not defined clearly, then it is possible that the company may fail since the management does not know that the endeavor is not working. If you, as the management, decide to launch the product entirely in the market and then assess the outcome, you will see what happens, and there is a higher probability that you may fail.

If you choose to pivot, it does not mean that you have failed. It means that you will change the hypothesis that you started out with. The following variations are often used when a startup chooses to pivot. 

Zoom-in Pivot: A single feature in the product that sets it apart from other products becomes the actual product. 

Zoom-out pivot: This is the opposite of the above definition, where an entire product is used as a new feature in a larger product. 

Customer segment pivot: The product designed was correct. However, the customers that were selected were wrong for the product. The startup can change the customer segment and sell the same product.

Customer need pivot: When the startup follows the principles of validated learning, it will identify the problem that needs to be solved for the customer who was initially selected. 

Platform pivot: most platforms start off as applications. When the platform becomes a success, it transforms into a platform ecosystem. 

Business Architecture Pivot: Based on Geoffrey Moore’s idea, the startup can choose to switch to low margin and high-volume products from a high margin and low-value products. 

Value Capture Pivot: When you decide to measure the value differently, you will be able to change everything about the business right from the cost structure to the final product. 

The engine of Growth Pivot: According to Ries, most startups follow a paid, viral, or sticky growth model. It would be more prudent for the company to switch from one model to the other to grow faster. 

Channel Pivot: In today’s world, advertising channels and complex sales have reduced since the Internet provides a vast platform for a company to advertise its products. 

Technology Pivot: Technological advancements are being made every day, and any new technology can help to reduce the cost and increase performance and efficiency.

Small Batches

THERE IS A STORY WHERE a father had asked his daughters to help him stuff newsletters into a document. The children suggested that they fold every newsletter, put a stamp on the envelope, and write the address on the envelope. They wanted to do every task one step at a time. 

The father wanted to do it differently; he suggested that they finish every envelope entirely before they moved on to the next envelope. The father and daughters competed with each other to see which the better method was. 

The father’s method won since he used an approach called single-piece flow, which is common in Lean manufacturing. It is better to repeat a task over and over again to ensure that you master that task. You will also learn to do the job faster and better. 

You have to remember that an individual’s performance is not as important as the performance of the system. You lose time when you should go back to the first task and restack the envelopes. If you consider the process as a unit, you will be able to improve your efficiency. 

Another benefit of using small batches is that you will be able to spot the error immediately. If you fold all the newsletters and then find out that that newsletter does not fit into the envelope, you will need to wrap all the newsletters again. This approach will help you identify the error at the beginning and improve your process.

The advantage of working with small batches is that you will be able to identify the problems soon. 

Andon Cord

THE ANDON CORD IS A method that was used by Taiichi Ohno in Toyota, which allowed an employee to stop the process if he or she identified a defect in the process. If the fault continues longer in the process, it is harder to remove that defect, and there is a higher cost involved. 

It is highly efficient to spot the defect at an early stage, even if it means that the process will need to stop to address the defect. This method has helped Toyota maintain high quality. 

Eric Ries mentioned in his book that the company IMVU used a set of checks that ran every day to check if the site worked accurately. This meant that they were able to identify and address any production error quickly and automatically. 

There were no changes made to the production until the defect was addressed. This was an automated Andon Cord. 

Continuous Deployment 

CONTINUOUS DEPLOYMENT is a scenario that is unimaginable and scary for most startups. The idea of this method is that the startup must update the production systems regularly. 

IMVU was regularly updating its production system by running close to fifty updates. This was made possible since they invested in test scripts. 

Over 14000 test scripts would run at least 60 times a day and simulate everything from a click on the browser to running the code in the database. 

Eric Ries also talks about Wealthfront, which is a company that operates in an environment regulated by the SEC. However, this company practices continuous deployment and has more than ten production releases a day. 

Kanban 

KANBAN IS A TECHNIQUE that was borrowed from the world of Lean manufacturing. It was developed by Taiichi Ohno in the late 1980s to improve the manufacturing unit of Toyota automobiles. Eric Ries mentions the company Grockit, which is an online tool that helps one build skills for standardized tests. 

This tool creates a story in the development process, which is then used to develop a feature. Ries also mentions to the user what the outcome or benefit of the tool is. These stories are validated to see how they work for different users. A test is conducted to see how this tool benefits the customer. There are four states: 

Backlog: The tasks that can be worked on but have not yet been started

In Progress: The tasks that are currently being developed

Built: The tasks that have been completed and are ready for the customer

Validated: Products that have been released and have been approved by the customers.

Chapter 3. The Startup Vision

Strict Budgeting    

According to Hive9’s mission, they want to help you create a budgeting plan that you can stick to, one that directly correlates to the complex projects you have going on. They understand how stressful it can be to juggle marketing, which is ever-changing, with budget planning.

Growing your startup is undoubtedly going to be a challenge—but it’s a challenge worth taking.

Product Development

LISTEN AND LISTEN WELL: Listening is fundamental to a Lean Startup. Listening is what gets you to notice your customers’ needs.

It includes listening to devotees and skeptics; your fans will fuel your endeavors and reassure you of all your goodness; skeptics will provide you food for thought on angles perhaps obscured.

Listening will provide you with the secret to unlocking success and make sense of the noise and valuable feedback that will impact your design iterations, remodeling, and execution.

Educate yourself on laws, regulations, business etiquettes, and many other considerations in your industry.

Your first customers: You must be a die-hard fan of your first customers. After all, they are the ones who were the early adopters, the ones who chose to trust you for the product you introduced to them. And keep selling to them again and again.

Most of the time, startups spend and are more than willing to contribute to attract new customers. They forget about their existing customers and do not give importance to re-attracting, reselling, and retaining them.

As a Lean Startup company, your fastest way to feedback for improving your product is the customer who bought it from you at the very start. They tried out your product and knew what was required to make it better for them and many others. Also, your existing happy customers are most likely to spread the word amongst their acquaintances. And referrals are the most authentic and impactful method to increase sales than many other paid programs you are likely to invest in as a startup.

Thus, get feedback from your existing customers and introduce your improved products to them to try out and give you more feedback.

Turn them into loyal customers who will set a precedent of customer value and care for your startup.

Organic outreach: Get to know your customers and let them know you. This is a piece of timeless and evergreen advice for you to grow your Lean Startup faster.

Understand what an SEO audit is and invest in one for your website and social media platforms. An SEO audit will help you create and understand your startup’s penetration in the market. Leverage organic outreach and give something of great value to your customers.

A simple combination of unique content creation, customer feedback, and input will create a measurable impact on your organic outreach. Therefore, ensure that you create exciting content making use of the many simple tools available in the market.

Content marketing: We are avid fans of content marketing and know that content is here to stay—but only great content.

A great content marketing strategy and strategist will make you think of creating resources that are useful to your consumers. Great content will introduce your business correctly, talk about its uniqueness, products, and how people think it is doing.

Your social media and website should have sufficient content, updated timely, and posted regularly to keep things fresh and relevant. Therefore, ensure that you create interesting content making use of the many simple tools available in the market.

A robust online presence with an effective SEO strategy and great content will not only help your startup to attract new customers but will also retain existing ones.

Ask your customers to chip in: A great strategy to grow fast is to involve your customers in building a prototype with you. Your business model facilitates a fluid and comfortable relationship with your market. And this close relationship can spark valuable and insightful market research.

The Lean methodology begins with a correct hypothesis; a reasonably accurate guesstimate to solve a problem with a product. Introduce the model to your customers and ask them to give you feedback on the usability of the product.

Feedback: Since Lean Startup companies are firmly attached to their customers, you will relatively have a more convenient time developing content and resources for your customers and prospective audience. Your business model facilitates a fluid and comfortable relationship with your market. And this close relationship can spark valuable and insightful market research.

Ask your customers for feedback on what they think you are doing regarding selling your products, providing support, quality management, and areas for improvement. Listen carefully and make sure you create a list of their feedback and ideas.

Customer Onboarding and Satisfaction

AS A STARTUP, KNOW your customers personally. Create opportunities to meet them. Many small business brands send handwritten notes with their products to customers to make them feel welcome and part of the family. Send birthday cards, season greetings, etc. to engage your customers.

Share stories of growth, challenges, and outcomes: Your content marketing strategy must include the changes you make, big or small, for example, a new and improved design or a slight color variation, or updating a new phone number to manage queries to the addition of new members in your sales team, etc.

Tell your customers when you make changes to your products based on their feedback, as it will create a circle of trust and reliability, which will ultimately affect your bottom line.

Sharing information this way will establish a culture code in your startup and communicate your value proposition via meaningful actions to both your customers and prospective customers.

Accept mistakes: There will be mistakes made on the way. Own them and seek to clarify and apologize appropriately.

Paid Outreach

AT TIMES, PAID MARKETING and outreach can work brilliantly for a startup. However, you will need to think through before executing this strategy.

The sure sign of a well-paid outreach is profit. You should be making more money with paid outreach per customer than you would in acquiring one. Even if the ratio is 2:1, paid outreach is working.

By the end of the day, your goal is to make customers happy. When your customers are satisfied with your product, they will refer you to their friends and family, and you will continue to succeed in your endeavors.

And this leads us to our suggestion of looking into influencer marketing. Influencer marketing will involve your happy customers to become your brand ambassadors and talk about your product in their social circles to co-build your brand.

It is a win-win for you, your existing customers, and your potential customers who will have been influenced by their friends or influencers. This way, your startup’s value proposition travels smoothly into the market.

Build a Great Team

KEEP GOOD PEOPLE AROUND you. Keep people who know what they are doing. Keep people who thrive on the feedback and know how to use that feedback for growth and improvement; this is key to the interactive model of improving your product and keeping it relevant to your customers’ needs.

Learn from examples: These are some examples of well-known companies who did not want to waste their time, their customers’ time, or that of their investors. They got down to developing the product that would fulfill the needs of their customers.

After approaching local shoe stores and grabbing photos of their shoes with consent, the owner of Zappos tested his hypothesis of whether an online shoe-selling site would work. And it did! When Dropbox came across the Lean methodology, the company began thinking about its product, which at the time of its inception was competing with many other similar products. Zappos is now the largest online shoe store with over 1000 brands featured.

They learned how to test new products with their customers and incorporated their feedback. From 100,000 registered users, Dropbox went over 4,000,000 in only 15 months with the Lean Startup principles.

The giant General Electric also went into the Lean methodology to develop faster solutions with FastWorks, a complete mindset-changing program to how things usually worked at GE. A viral example was the development of a gas turbine two years faster with 40% less cost. The Lean methodology is not only for startups, after all!

The ideas above are reasonably consistent with the ideas you hear every day. You learned these at business schools, through books and blogs, and friends and colleagues. Simple as they may sound, it is always the more straightforward ideas that are key to excellent outcomes.

Chapter 4. Steer

Leap

IMVU is a social network where customers can create their avatars, which are actually their virtual characters. Thanks to these avatars, customers can chat and thus interact with one another. When IMVU started their business, their initial idea was to integrate IMVU’s experience into already existing instant messaging platforms, such as AOL Instant Messenger. They succeeded in doing that by using add-ons, which allowed people to share their IMVU experiences with their friends, thus spreading IMVU through the instant messaging network.

It took six months for Ries and his team to work on that add-on. To meet the deadline, IMVU had to cut some things which were meant to be included in the program. Because of this, the program was filled with bugs. Even though Ries was tempted to postpone the launch of the program, he knew that the delay would give them negative feedback and so they launched the product.

After they launched the product, they saw that the customers did not even want to download it. After a conversation with customers, the team found out that most of customers did not even know what the add-on was for. Many customers did not want to invite their friends to IMVU because many customers were teenagers who did not want to get involved in something that did not look interesting enough. Before they would invite their friends, they wanted to try the product on their own. To deal with this issue, the team created something that they called single-player mode. With this, customers could try out the product alone, but, of course, the use of single-player mode was low, because nobody wanted to talk to themselves.

Another step, which was really a desperate measure, was the creation of Chat Now, an app that allowed customers to chat with another randomly connected customer. Finally, the feedback was positive, because customers had fun using Chat Now.

However, when the IMVU team suggested adding these new customers to their AOL messenger list, the feedback was once again negative. The reason for this is that the customers wanted a new messaging program, which would be separate from their already existing IMVU messaging program.

The team assumed that nobody would want another instant messaging network, but this assumption was wrong. Because of that, the team had created one big waste: they made a product that nobody wanted. After all, what the author wanted to know was why the learning process takes so long and whether some things could have been prevented if they had learned things faster.

Test

WHEN PEOPLE FAIL IN doing something, many say something like: at least we learned something. But, even though that may be true, a failure, especially in business, is also a massive waste of money, resources, and effort. But, for a startup to succeed, certain things must be learned. A startup needs to know what exactly the customers want and how to give it to them.

One way a startup can know whether it is making progress or making things right is by using something that the author calls validated learning. According to Ries, validating learning consists of two ideas:

Scientific methods for measuring results and testing hypotheses with key metrics.

Constant focus on how to reduce waste.

That is why startups should run constant and frequent experiments in order to test their hypotheses about their customers and their products. Also, startups should identify key metrics for measuring whether their assumptions were correct or not.

In Lean manufacturing, value is defined as providing benefit to the customer, while everything else is a waste. The main problem here is that it is hard to determine what a customer may find valuable. That is why the main goal is discovering what the customer values.

Measure

THE REASON FOR THIS is while no numbers invoke dreams and possibilities, small numbers invoke fear that these big numbers will never happen. This creates the temptation that collecting market feedback should be delayed, but that is also not the right choice, because there are significant consequences to delaying feedback. These include wasted work and, of course, creating something that nobody wants.

With validated learning, we actually battle this inclination, because we use data to prove that regardless of everything, real progress is still being made, despite the fact that the numbers are small.

That is why startups should focus their efforts on real progress and resist the temptation to use vanity metrics (metrics that look better than they are but still do not matter). This way, startups will avoid the success theater; an appearance of success when, in reality, there is none.

Pivot (or Persevere)

FOR A STARTUP TO LEARN what the customer needs and wants, many startups do the same thing: they study their markets, and they do all kinds of surveys and focus groups.

But according to Ries, there are four reasons why experiments can be as good as, if not better than, research.

The first reason is that many times, market studies and surveys are inaccurate. This means that many customers either do not know what they want or do not know how to say what they want. If we use experiments, we will see what the customers actually want and not what they think that they want.

The second is that Lean startup experiments are quick and cheap.

The third is that all sorts of different kinds of feedback from many customers are equally valuable. By experimenting, what a startup does is interacting directly with the real customers, thus learning what their real needs are.

The fourth reason why experiments are a better solution than research is that the experiment is the first product. This means that a successful experiment can be a prototype of a product and something that will attract early customers. Then when a product is ready for launch, it will already have established customers and supporters.

But for an experiment to be successful, three steps need to be followed. Preparation is the first step. The second thing to do is a test. Tests should be created and run as quickly and cheaply as possible. The third and final thing to do before experimenting is measuring. By measuring, the author means the collection of both data and customer feedback. After doing this, we will be able to see if the results make the hypothesis valid or invalid.

Key Takeaway: The Principal Goal of Lean Startup is to minimize the total time spent on the build-measure-learn loop.

Early-stage startups can steer their growth by speeding up the build-measure-learn feedback loop. The faster the startup teams go through the loop, the faster it discovers what works, and the quicker it creates a sustainable business.

Build: Out of the vision, out of the team’s innovative ideas and base assumptions; the startup builds a minimum viable product. This is a product with minimum acceptable features, a product that will enable the team to measure its value and growth prospects with minimum effort.

Measure: The team uses qualitative and quantitative data to ascertain if the product built is valuable to customers, and if it has growth prospects.

Learn: The team determines progress by learning milestones, not by the time taken or resources expended. If its initial hypothesis is right, it perseveres. If the assumption is wrong, it uses the lessons learned to make significant changes to the product or strategy.

Key Takeaway: Make extensive interactions with potential customers to test value and growth assumptions.

For early-stage startups, the first order of business is to test the assumptions made in the business plan. These initial assumptions are leaps of faith because the success of the product depends on their validity. The typical startup, for example, assumes its product offers a solution customers want or assumes distributors will carry its product. For a startup, nearly all estimations and projections made in the business plan are assumptions, not facts.

You can’t speculate whether a product creates value—or whether it has growth prospects—in the office. The only way to find out is to go to the market and see the product in use. Early contact with mainstream customers offers valuable insight into their needs and concerns, both of which guide the product development process.

Key Takeaway: Roll out a minimum viable product to expedite learning.

Launching a minimum viable product (MVP) as soon as it’s complete enables you to test basic assumptions and move through the build-measure-learn loop quickly and with minimum effort. There’s nothing to learn if you wait until you have a perfect product to take to the market. Whether you succeed or fail, you can’t pinpoint the features or processes that led you to your fate. The goal of starting with an MVP is to prove something works before scaling it. This approach is efficient and has a high rate of success compared to the backward approach of inventing a complete product and hoping customers will like it as it is.

The MVP approach works partly because of the nature of early adopters. Early adopters are, above all else, eager to be the first to try a new product. They don’t care much about a perfect product; what they need is a product that solves a significant part of their problems, one they can show off. Early focus on quality only pays off if product developers know what the customer exactly wants. In the early phases of the startup, product developers have to test a lot of assumptions before they even know what constitutes quality.

A minimum viable product could be anything from an advertisement with a call to action (to see if customers would order the product) to a simple prototype that creators take to the market. Scaling is more likely to succeed if it is based on changes informed by the behaviors of real customers.

Key Takeaway: Use innovation accounting to measure progress objectively.

If there is to be any growth, startups have to continuously assess where they are in the present and find ways to move toward their market and financial projections.

For a startup, completed product milestones and increased revenues say little about growth. In the unpredictable environment a startup operates in, entrepreneurs can’t tell if new revenues are driven by the new milestones completed or by changes made to the product in the past. If early features are what’s really driving growth, to measure growth by the impact of new features is to rely on a flawed metric.

Innovation accounting enables startups to model customer behavior over time and ascertains that the growth lessons they are learning are objective and likely to lead to more and sustainable growth. Innovation accounting has three learning milestones:

Establish the baseline—the current status of the startup, as indicated by data from the minimum viable product. Is the MVP living up to the critical assumptions made?

Run experiments on different value drivers to move the product away from the baseline and closer to the ideal in the business plan. This may include efforts to improve the design if that is what will increase sign-up rates, and only if they are low. Developing the product in ways that don’t add to the baseline data only creates waste.

Decide whether to pivot or persevere. If the changes made to the product improve baseline data and move it closer to projections, the entrepreneur can persevere because the startup is growing. If they don’t, it’s time for a change in strategy. 

Key Takeaway: Use actionable, auditable metrics to assess growth, not vanity metrics.

When a startup realizes a marked growth in customers or revenues, it’s easy to attribute this growth to current development efforts. Yet this growth could be purely driven by past efforts or media mentions. If this were true, it would mean that the startup is busy making changes that don’t matter to customers.

To measure growth objectively, a startup has to decide—from the start—what key assumptions it is making and how it will test those assumptions. The disciplined entrepreneur will stick to metrics whose correlation to value and growth can be proven, not metrics that only boost egos.

Teams who use split-test experiments can easily prove if the changes they make to a product have any effect on customer behavior. In these experiments, teams give different groups of customers different versions of the same product. They then observe the response of the two groups to determine which product variations are of value to customers. These experiments work exceptionally well in uncovering product features that developers think are important, but which don’t matter to customers.

Good metrics are actionable, accessible, and auditable. Actionable means they can demonstrate a clear relationship between changes made to a product and changes in customer behavior. Accessible means they are simple, are defined in concrete terms, and are easily understood by everyone who uses the data. Auditable means they are traceable to real customer conversations or actions.

Vanity metrics are any metrics that give a rosy picture of the business but which can’t be used to make informed business decisions.

Key Takeaway: Pivot to test new value and growth hypotheses.

One of the hardest things entrepreneurs have to do is settle on a course of action when a startup is neither growing nor dying. The decision to pivot or persevere is only more straightforward if the business has gone through the learning milestones. Even then, the clarity of the decision hinges on the clarity of the initial hypothesis. You can’t tell whether you failed—and, consequently, whether you need a change of direction—if you had no hypothesis to begin with, or if your theory was ambiguous.

To pivot means to draw on lessons learned to make radical changes to the original strategic plan. A business could pivot by refocusing on an overlooked feature that customers are more interested in, targeting a different category of customers, or incorporating new technology into the existing product. Pivots are not just the refuge of the startup stuck in a rut; they are also invaluable to established companies looking for new sources of growth. Whichever the case, any pivot made must be based on the feedback and actions of potential customers. If done well, each subsequent pivot should take less time to execute.

The length of the Lean startup’s runway is not defined by the time it has before it runs out of funds, but by the pivot opportunities, it still has. This means a startup has a longer runway if it accelerates the build-measure-learn feedback loop. It can only accelerate this loop if entrepreneurs dare to test their product