At IMVU, the cost of customer acquisition through our five-dollar-a-day AdWords campaign was less than twenty-five cents. Our revenue from those same customers was more than a dollar.
Vanity metrics wreak havoc because they prey on a weakness of the human mind.
The goal of a startup is to figure out the right thing to build – the thing customers want and will pay for – as quickly as possible.
The one envelope at a time approach is called “single-piece flow.
They will ask to go back to the old way of working, in which they had the opportunity to “stay efficient” by working in larger batches and passing work between departments.
Think big. Start small. Scale fast.
The two most important assumptions entrepreneurs make are what I call the value hypothesis and the growth hypothesis.
Most important, teams working in this system begin to measure their productivity according to validated learning, not in terms of the production of new features.
Every extra feature is a form of waste, and if we delay the test for these extra features, it comes with a tremendous potential cost in terms of learning and cycle time.
Should this product be built?” and “Can we build a sustainable business around this set of products and services?” To answer those questions, we need a method for systematically breaking down a business plan into its component parts and testing each part empirically.
Thus, the right way to think about the product development process in a Lean Startup is that it is responding to pull requests in the form of experiments that need to be run.
The Toyota Way.
The common tendency of product development is to skip straight to the fourth question and build a solution before confirming that customers have the problem.
Toyota discovered that small batches made their factories more efficient. In contrast, in the Lean Startup the goal is not to produce more stuff efficiently. It is to-as quickly as possible-learn how to build a sustainable business.
In the twenty-first century, we face a new set of problems that Taylor could not have imagined. Our productive capacity greatly exceeds our ability to know what to build. Although.
If a competitor can outexecute a startup once the idea is known, the startup is doomed anyway. The reason to build a new team to pursue an idea is that you believe you can accelerate through the Build-Measure-Learn feedback loop faster than anyone else can.
They had “achieved failure” – successfully, faithfully, and rigorously executing a plan that turned out to have been utterly flawed.
I was finally ready to turn to the last resort: talking to customers. Armed.
Learning to see waste and then systematically eliminate it has allowed lean companies such as Toyota to dominate entire industries.
A pivot is a special kind of change designed to test a new fundamental hypothesis about the product, business model, and engine of growth.
Third, many entrepreneurs are afraid. Acknowledging failure can lead to dangerously low morale. Most entrepreneurs’ biggest fear is not that their vision will prove to be wrong. More terrifying is the thought that the vision might be deemed wrong without having been given a real chance to prove itself.