Ash Maurya
This book presents a systematic process for iterating from Plan A to a plan that works before running out of resources. (Location 686)
Your list of customer segments should represent the total addressable market (TAM) for your idea, while your early adopters represent a specific subset of your TAM. This is your ideal starting customer segment (also called your ideal customer profile). (Location 829)
The 10-Slide Business Model Pitch Deck (Location 2580)
First, the goals are different. Scientists seek perpetual truths in order to uncover the mysteries of the universe, while entrepreneurs seek temporal truths in order to uncover the secrets (insights) that make a business model work. (Location 3084)
Our goal is to quickly latch on to the right signal in the noise and then double down on the signal. (Location 3089)
[Specific testable action] will drive [expected measurable outcome]. (Location 3199)
6. Time-Box Your Experiments Say you run the experiment and decide to check on the results in a week. After a week, you have 20 sign-ups. You might decide it’s a good start and leave the experiment running for another week. Now you have 50 sign-ups, which is right at the halfway point of your desired goal of 100 sign-ups. What should you do? (Location 3203)
The solution is time-boxing your experiment. We can then rewrite the expected outcome as: Writing a blog post will drive >100 sign-ups in 2 weeks. Establishing a time box like this sets up a nonnegotiable tripwire for a future discussion with your team, (Location 3209)
However, be wary that when you first launch an MVP, lots of things can and do go wrong. When that happens, it’s easy to slip back into viewing your solution as the product. The typical reaction is to want to build more stuff—especially when it comes disguised as a customer feature request. In short order, your simple and focused MVP quickly devolves into a bloated monster. (Location 5251)
More specifically, you need to continue running 90-day cycles where you: Define 90-day goals using your traction roadmap Identify the key constraints holding you back Make bets on campaigns for breaking these constraints Systematically test your campaigns using sprints Make evidence-based 3P (pivot, persevere, pause) decisions (Location 5257)
the journey from problem/solution fit to product/market fit takes roughly 1–24 months. (Location 5264)
The key deliverable of problem/solution fit was getting your customer factory up and running—i.e., establishing repeatable acquisition. As you optimize your customer factory to achieve product/market fit, you can tackle this optimization process in stages. (Location 5272)
Once your value delivery hypotheses are validated, your focus then shifts toward accelerating growth. This starts your search for a sustainable engine of growth, which can take another 6–12 months to achieve. (Location 5287)
Keep Your Customer Factory Running Once you’ve secured your first batch of early customers, it’s tempting to completely shift your focus to delivering value to them and wind down your broader customer acquisition activities in order to focus on product development. This is a mistake. (Location 5347)
Optimizing any one part of a system in isolation often ends up hurting your overall system throughput. This is the local optimization trap. (Location 5357)
In order to optimize the overall throughput of your customer factory, you need a steady stream of users constantly flowing through the system. (Location 5359)
Establishing repeatability is a prerequisite for growth (Location 5361)
You can’t scale a business model that isn’t repeatable. Getting to your first 10 customers, while an achievement, isn’t repeatable if you don’t know where your next 10 customers will come from. In order to get to repeatability, you need to keep your customer factory always running. (Location 5365)
Look for opportunities to replace any high-touch interactions in your acquisition and activation steps with more automated touchpoints. (Location 5375)
Adopt a continuous delivery strategy Instead of trying to cram every aspect of your product into your MVP, embrace a just-in-time continuous delivery strategy. (Location 5391)
Avoid premature optimization All your energy needs to be channeled toward accelerating learning. Speed is key. Don’t waste any effort trying to optimize your servers, code, database, etc. for the future. Chances are quite high that you will not have a scaling problem when you launch. (Location 5400)
Start with your customer factory metrics Revisit your customer factory and remap each step to one or more specific actions your users will take with your product. (Location 5428)
Acquisition: Signed up for a free account Activation: Completed a Lean Canvas Retention: Came back and used the product Revenue: Upgraded to a paid account Referrals: Invited others to their project (Location 5432)
All businesses, irrespective of business model type (B2B, B2C, digital, hardware, services, etc.), share a common universal goal: make happy customers. Making happy customers is not the same thing as making customers happy. Making customers happy is easy—just give them lots of stuff for free. But that doesn’t lead to a working business model. Making happy customers, on the other hand, is not just about making customers feel good. It’s about helping customers to achieve results (desired outcomes). (Location 5512)
The Happy Customer Loop Once you’ve established some level of repeatable acquisition in your customer factory, the next most important step is activation. This is where value is created for your customers. (Location 5556)
Once you start to see predictable repeatability in your happy customer loop—that is, when your initial customer segments continue to demonstrate regular use of the product and are making measurable progress toward their desired outcomes, as evidenced by customer check-in interviews, dashboards, etc.—it’s time to shift some of your focus toward growth. By “growth,” I mean building a scalable channel or a growth rocket. (Location 5829)
The Three Types of Growth Loops According to Eric Ries, author of The Lean Startup, sustainable growth is characterized by one simple rule: New customers come from the actions of past customers. (Location 5951)
There are generally three types of value (assets) you capture from existing customers: Money (revenue) Content and data (byproducts of retention and engagement) Referrals (Location 5959)
The Revenue Growth Loop A revenue growth loop reinvests revenue generated from existing customers to drive new customer acquisition (see Figure 14-2). Money or capital is the propellant here, which is used to buy ads or hire people to run these campaigns. (Location 5964)
Finding your primary growth rocket is typically a multicycle process that, like a validation campaign, typically involves: Short-listing growth rocket candidates Validating your growth rocket Optimizing your growth rocket The first two steps can typically be fit into a 90-day cycle, after which you either invalidate the growth rocket and search for another one, or commit to doubling down on the growth rocket. Let’s walk through these steps. Short-Listing Growth Rocket Candidates Remember that building a growth rocket requires two things: A renewable propellant An efficient engine Start picking possible growth rocket candidates by: Selecting a renewable propellant (Location 6021)
Analyzing your current engine’s efficiency Analyze your current customer factory metrics and use the gap between where you are now and where you need to be to select an appropriate growth rocket candidate that is up to the task. For instance: (Location 6037)
There is only one metric that matters —traction. Traction is the rate at which you capture monetizable value from customers. Don’t ask people what they think of your idea. Only customers matter. Don’t ask customers what they think of your idea. Measure what they do. (Location 6180)