1 Book down – The Lean Startup

18 Mins read

One of this years Goal is to read 6 books. Accomplished it 🙂

The book is `The Lean Startup`.  I wish I had read this book a year back and deeply regret for postponing this all this time. It’s an amazing read. Could relate to my last 1.5 years of struggle very much. Loads learned and time to unleash the learning.

Lean Startup book cover image

Some highlights from the Book:

  1. What is a Startup? – Human institution designed to create new products and services under conditions of extreme uncertainty.
  2. Build, Measure, Learn Loop. Validation Learning and Innovation Accounting.
  3. Author’s (touching) intent of writing this book: What makes the failures of Startups particularly painful is not just the economic damage done to individual employees, companies and investors; they are also a collosal waste of our civilization’s most precious resource: the time, passion and skill of its people. Hence this book is his contribution in the mission of minimizing that wastage.

The book covered various topics explained with real world stories of businesses around the world.

Next in the reading list is `Mastering Bitcoin` by my Crypto guru Andreas M. Antonopoulos.

My Notes:

Copied from my Evernote. Might be useful to those who already read the book, in doing a quick revision.  

  1. Part 1: Vision
    1. 5 Principles
      1. Entrepreneurs are everywhere – Human institution designed to create new products and services under conditions of extreme uncertainty.
      2. Entrepreneurship is management – Startup is an institution, not just a Product.
      3. Validated learning – To learn how to build sustainable business.
      4. Build, Measure, Learn – Accelerate the feedback loop
      5. Innovation Accounting – How to measure progress, Setup milestones, how to Prioritize work
  2. Part 1: Chapter 1: Start
    1. Entrepreneurial Management
      1. What makes these failures particularly painful is not just the economic damage done to individual employees, companies and investors; they are also a collosal waste of our civilization’s most precious resource: the time, passion and skill of its people.
    2. The Roots of the Lean Startup
      1. From Lean Manufacturing revolution from Toyota
      2. Comprehensive theory of Entrepreneurship should address all functions of early stage venture.
      3. It must allow Entrepreneurs make testable Predictions
      4. Ex. of recommendation of cross functional teams rather than strict functional departments
      5. A New way of looking at the development of Innovative new products that emphasizes fast Iteration and customer insight, a Huge vision, and a great Ambition, all at the same time.
    3. Engine of Growth
      1. Every new version of Product, every new feature, every new marketing program is an attempt to improve this Engine of growth
      2. Much of the time in Startup’s life is spent turning the engine by making improvements in Product, Marketing and Operations
      3. Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustments with a steering wheel called `Build-Measure-Learn` feedback loop.
      4. Once we have an Engine that’s revved up, the Lean startup offeres methods to scale and grow the business with maximum acceleration.
      5. Product -> Optimization, Strategy -> Pivot, Vision
  3. Part 1: Chapter 2: Define
    1. Who, exactly, is an Entrepreneur?
      1. From young visionaries with little backing but great ideas to seasoned visionaries within larger companies and the People who hold them accountable.
    2. If I’m an Entrepreneur, what’s a Startup?
      1. Human institution designed to create new products and services under conditions of extreme uncertainty
      2. Institution -> Startups are full of activities associated with building an Institution -> Human Enterprise
      3. Product -> Anything that customers experience from their Interaction with a company should be part of the company’s product.
      4. Innovation -> Novel scientific discoveries, Repurposing existing tech for new use, devising new business model that unlocks value that was hidden, or simply bringing a product or service to a new location.
      5. Context in which the Innovation happens -> Situations of extreme uncertainty
    3. The SnapTax Story
    4. A 7000 Person Lean startup
      1. When you have only one test, you don’t have Entrepreneurs. You have Politicians, Out of 100 good ideas, you’ve got to sell your idea. So you build up a society of politicians and sales people. When you have 500 tests, then everybody’s ideas can run. And then you can create Entrepreneurs who run and learn and can retest and relearn as opposed to Society of politicians.
      2. Developing these experimentation systems is the responsibility of senior management; they have to be put in by the leadership.
  4. Part 1: Chapter 3: Learn
    1. `Learning` is the oldest excuse in the book for a failure of execution
    2. It’s what the managers fall back on when they fail to achieve the promised results.
    3. You can’t take learning to the bank, spend it or invest it
    4. Learn the truth about which elements of our Strategy are working and which are just crazy.
    5. `Validated Learning` is not after the fact rationalization or a good story designed to hide failure.
    6. Validation learning at IMVU
      1. Brilliant Strategy
        1. 3D video games and virtual worlds to IM market.
        2. Addon to existing IM clients, so users need not switch to all new IM
      2. 6 months to Launch
        1. Product was not complete as planned. But we didnt Postpone.
      3. Launch
        1. Launched a incomplete product, but none used it, even enough to uncover the Incompleteness, bugs
        2. Continuous shipping, bug fixes -> Didn’t help
      4. Talking to Customers
        1. Brought potential customers to Office and asked them to use the Software
        2. Customers behavior tore apart seemingly brilliant strategy, bit by bit and gave invaluable Insights
      5. Throwing my work away
        1. Thrown away all code built and started making a Stand alone IM platform
      6. Value vs Waste
        1. Which of our efforts are value creating and which are wasteful?
        2. Value -> Providing benefit to the customer. Anything else is waste
        3. Could have conducted an experiment, offering customers the chance to try something and then measuring their behavior
        4. Validated learning is backed up by empirical data collected from Real customers
      7. Where do you find Validation?
        1. We had fascinating theories about what we had done wrong and what we needed to do to create a more successful product. However, the proof did not come until we put those theories into practise and built subsequent versions of the product that showed superior results with actual customers.
        2. Adopted the view that our Job was to find a synthesis between our vision and what customers would accept
        3. In 1 experiment, we changed our entire website to replace `Avatar chat` with `3D Instant messaging` and new customers were split automatically between these 2 versions of the site.
      8. The Audacity of Zero
      9. Lessons beyond IMVU
        1. Lean startup is not a collection of individual tactics. It is a principled approach to  new product development.
        2. In lean startup model, every product, every feature, every marketing campaign, every thing a startup does is understood to be an experiment designed to achieve `Validated learning`
  5. Part 1: Chapter 4: Experiment
    1. From Alchemy to Science
      1. The Lean startup methodology reconceives a startup’s efforts as experiments that test its strategy to see which parts are brilliant and which are crazy.
    2. Think big, Start small
      1. Zappos begin with tiny, simple product: Designed to answer 1 question above all: `Is there already sufficient demand for a superior online shopping experience for shoes?`
      2. If Zappos had relied on existing market research or conducted a survey, it could have asked what customers thought they wanted. By building a product instead, The company learned much more
        1. Accurate data on customer demand
        2. Position to interact with real customers andl learn about their needs
        3. Allowed itself to be surprised when customers behaved in unexpected ways, like `Returning the shoes`
    3. For long term change, experiment immediately
      1. Caroline Barlerin -> Director of global social innovation division at HP
      2. HP -> 300,000 employee + $100 billion in annual sales
      3. Vision is to take 100s of 1000s of employees in the company and transform them into a force for social good
      4. How to change the behavior of 100s of 1000s of people in more than 170 countries?
      5. 2 Assumptions
        1. Longtime employees would feel a desire to reaffirm their values of giving back to the community by volunteering
        2. They would find it more satisfying and therefore more sustainable to use their actual workplace skills in a volunteer capacity
      6. LS Model offers way to test these hypothesis rigorously, immediately and thoroughly
    4. Break It Down
      1. 2 important assumptions that entrepreneurs make are 1) Value hypothesis 2) Growth hypothesis
      2. Value hypothesis – Really delivers value to customers once they are using it?
        1. Better than survey the customers, gauge in real time
          1. Retention rate of employees in Volunteering?
      3. Growth hypothesis – Tests how new customers will discover a product or service?
        1. Would early adopters actively spread the word to other employees?
      4. Concierge minimum viable product
        1. How many of 1st volunteers actually complete their volunteer assignments?
        2. How many volunteer for 2nd time?
        3. How many are willing to recruit a colleague to participate in subsequent volunteering activity?
      5. Test these Qs with a small sample of People. Even 10
        1. If all 10 complete their first assignement
        2. What if all 10 early adopters decline to volunteer again?
      6. An experiment is a Product
        1. In LS model, an experiment is more than just a theoretical inquiry, it is also a 1st product.
        2. If any experiment is successful, it allows the manager to get started with a campaign:
          1. Enlisting early adopters,
          2. Adding employees to each further experiement and
          3. Eventually start to build a product
        3. By the time the product is ready to be distributed widely,
          1. it will already have established customers,
          2. it will have solved real problems and
          3. offers detailed spec on what needs to be built
        4. Traditionally Product managers say “I just want this”. Engineer says “I’m going to build it”. Instead I try to push my team to first answer 4 questions:
          1. Do consumers recognize that they have the problem you are trying to solve?
          2. If there was a solution, would they buy it?
          3. Would they buy it from us?
          4. Can we build a solution for that problem?
        5. Success is not delivering a feature; Success is learning how to solve the customer’s problem
    5. The Village Laundry Service
      1. From Consumer grade laundry machine on the back of a Pickup truck
      2. To 3×4 feet mobile Kiosk that included energy efficient consumer grade washing machine, a dryer and an extra long extension cord.
    6. A Lean starup in Government? – Consumer Federal Protection Bureau
      1. Treat CFPB as an experment, identify the elements of the plan that are assumptions rather than facts, and figure out ways to test them. Using these insights, we could build a MVP and have the agency up and running – on a micro scale – long before the official plan was set in motion
      2. Do in small geography -> Only couple of city blocks
  6. Part 2: Steer
    1. Althought we write the feedback loop as `Build-Measure-Learn` because the activities happen in that order, our planning really works in the reverse order:
      1. we figure out what we need to learn,
      2. use innovation accounting to figure out what we need to measure to know if we are gaining validated learning and
      3. then figure out what product we need to build to run the experiment and get the measurement
  7. Part 2: Chapter 5: Leap
    1. Strategy is based on Assumptions
      1. 1st challenge is to build Organizations that can test these assumptions systematically
      2. 2nd challenge is to perform that rigorous testing without losing sight of the company’s overall vision
    2. Analogs and Antilogs – In perspective of Steve jobs
      1. Analog – Sony – Will people listen to Music in a public place using Earphone
      2. Antilog – Napster – Will that people pay for Music?
    3. Beyond “The Right Place at the Right Time”
    4. Value and Growth
      1. Value creating, Value destroying product / service
      2. Value destroying growth
    5. Genchi Gembutsu -> Go and see for yourself
      1. You cannot be sure you really understand any part of any business problem unless you go and see for yourself firsthand.
      2. It is unacceptabe to take anything for granted or to rely on the reports of others.
      3. Sienna Minivan
        1. Yuji Yokoyo was assigned to produce the Sienna minivan, who primary market is North America and Yuji had very little experience in North America.
        2. To learn the market, he took a Road trip spanning all 50 states and logged 53,000 miles of driving.
        3. In every city, he would rent a Sienna Minivan and driving in addition to talking and observing real customers.
        4. From those firsthand observations, New minivan was launched and was a great success
    6. Get out the building
      1. The facts that we need to gather about Customers, markets, etc., exist only “outside the building”
      2. Cook, Intuit cold called People randomly from public Phone books. And confirmed If they had the problem.
    7. Design and the Customer Archetype
      1. With such customer interaction, we can draft a Customer Archetype document
      2. But new breed of designers under the banner `Lean User Experience` recognize Customer archetype is a hypothesis. It should be considered provisional, until the strategy has shown via validated learning that we can serve this type of customer in a sustainable way.
    8. Analysis Paralysis
      1. Too much analysis is dangerous, but none can lead to failure
  8. Part 2: Chapter 6: Test
    1. MVP helps entrepreneurs start the process of learning as quickly as possible
    2. MVP is a fastest way to get through Build – Meausre – Learn feedback loop with minimum amout of effort.
    3. MVP answers not just product design or tech questions, but It’s a goal to test fundamental business hypothesis
    4. Why first products aren’t meant to be perfect
      1. Early adopters use their Imagination to fill in what a product is missing
      2. Additional features or polish beyond what early adopters demand is a form of wasted resources and time
    5. Dropbox: The video MVP
      1. A Video that demonstrates the Problem and Solution can be a MVP.
    6. The concierge MVP
      1. Personalized manual service by the Founders, which is not a Product but a learning activity designed to test leap of faith assumptions.
      2. Automation, Product development kicks in later.
    7. Pay NO attention to the 8 people behind the curtain
    8. The role of Quality and design in an MVP
      1. MVPs sometimes are perceived as low quality by customers.
      2. But it is an opportunity to learn what attributes customers care about
      3. Many famous products were released in a “low quality” state
      4. Customers dont care how much time something takes to build. They care only if it serves their needs.
      5. MVPs require the courage to put one’s assumption to the test.
      6. Remove any feature, process or effort that does not contribute directly to the learning you seek.
    9. Speed bumps in building MVP
      1. Legal issues
        1. Consult with Legal expert
      2. Fears about competitors
        1. Accelerate through Build – Measure – Learn feedback loop faster than anyone else can. If this can’t be done, the Startup has much bigger problems and secrecy wont fix them.
        2. The only way to win is to learn faster than anyone else.
      3. branding risks and the impact on morale.
      4. From the MVP to Innovation accounting
        1. Startups are at risk when outside stakeholders and investors have a crisis of confidence.
  9. Part 2: Chapter 7: Measure
    1. A startup’s job is to
      1. rigorously measure where it is right now, confronting hard truths that assesment reveals and
      2. devise experiments to learn how to move the real numbers closer to the ideal reflected in the business plan
    2. Why something as seemingly dull as Accounting will change your life
      1. Startups have a strong need for a new kind of accounting geared specifically to disruptive innovation. That’s what Innovation accounting is.
    3. An accountability framework that works across Industries
      1. Innovation accounting begins by turning leap of faith assumptions into a quantitative financial model.
      2. Applicable for any Growth model
    4. How Innovation accounting works – 3 learning milestones
      1. Establish the baseline – Use MVP to establish real data on where the company is right now
        1. Single MVP to test most of the Assumptions
        2. or separate MVPs to get feedback on one assumption at a time
        3. Test the riskiest assumptions first
      2. Tune engine from the baseline towards the goal
        1. A design change must improve the activation rate of new customers.
      3. Pivot or Preserve
        1. Over time, a team that is learning its way toward a sustainable business will see the numbers in its model rise
          1. from the horrible baseline, established by MVP
          2. to the ideal one, established in business plan
        2. A startup that fails to do so will see that ideal recede ever farther into the distance -> Sure sign to Pivot
    5. Innovation accounting at IMVU
      1. Improving a Product on 5 dollars a day
        1. Funnel metrics – Customer Registration, Download of our App, Trial, Repeat usage, Purchase
        2. $5 / day minimal budget for Ads, to get minimal numbers to analyse above Funnel
      2. Cohort Analysis
        1. With cohort Analysis, we understood that none of our Product improvements over 7 months is showing result
        2. Every company depends for its survival on sequences of customer behavior called flows. Customer flows govern the interaction of customer with the Company’s products. They allow us to understand a business quantitatively and have much more predictive power than do traditional gross metrics.
        3. Cohort analysis made us from shifting our focus from Product improvements to Turning to our customers and ask Right questions. Helped us Pivot from Add on to IMs to separate Product
    6. Vanity Metrics; A word of Caution
      1. Gross metrics that give the rosiest picture possible. Avoid them at all costs
      2. Actionable Metrics vs Vanity Metrics
        1. Unlike many visionaries who cling to their original vision no matter what, Farb was willing to put his vision to the test.
        2. A disciplined team can experiment with its own working style and draw meaningful conclusions.
      3. Cohorts and Split tests
        1. Gross metric -> Cohort metric
        2. Each feature is launched as Split test experiment (A/B Testing)
        3. Althought Split tests require extra accounting and metrics to keep track of each iteration, it always saves tremendous amounts of time in the long run by eliminating work that doesn’t matter to customers.
    7. Kanban
      1. User stories were not considered complete until they led to Validated learning
      2. Stories can be catalogued as
        1. Product backlog
        2. Actively being built
        3. Done -> From technial perspective
        4. In Process of being validated
      3. `Validated` usually come in the form of Split test showing customer behavior change, but also might include customer interviews or survey.
      4. Team working in this system begin to measure their productivity according to Validated learning, not in terms of the production of new features.
    8. Hypothesis testing at Grockpit
      1. Split test enabled them to discover Lazy registration is not impacting the Registration rate at all, which is a big surprise. Removing it reduce a lot of waste in Development effort.
    9. Three A’s: Actionable
      1. Must demonstrate clear Cause and Effect
      2. Vanity metrics stop at 40K hits / month. But actionable metrics answer
        1. Where the hits are coming from?
        2. From any specific segment of customers?
        3. Result of any new marketing campaign or feature release?
      3. When Cause and effect is clearly understood, People are better able to learn from their actions.
      4. Human beings are innately talented learners when given a clear and objective assessment
    10. Three A’s: Accessible
      1. Departments too often spend their energy learning how to use data to get what they want rather than as a genuine feedback to guide their future actions.
      2. Antidote: Make reports as simple as possible
      3. Cohort based reports are the gold standard of learning metrics: They turn complex actions into people based reports.
        1. Among the People who used our product in this period, here’s how many of them exhibited each of the behaviors we care about.
        2. It’s hard to visualise what it means if the number of hits goes down from 250K to 200K in a month. But most people understand immediately what it means to lose 50K customers.
      4. Widespread access to this reports
        1. Every day their system generated a document containing the latest data for every single one of their split test experiments and other leap of faith metrics.
        2. The document was mailed to everyy employee of the company.
        3. At IMVU, Reports and Data is part of the product itself, owned by Development team. When people needed evidence to support something they had learned, they would bring a prinout with them to the relevant meeting, confident that everyone they showed it to would understand its meaning.
    11. Three A’s: Auditable
      1. Must ensure that Data is credible to the employees.
      2. Too often Data reporting systems lack a way to test if the data is consistent with reality, since they are built by Managers/Analysts rather than Product dev team.
      3. Managers need the ability to spot check the data with real customers.
        1. Also gives 2nd benefit: To gain insights into why customers are behaving the way the data indicate.
      4. Mechanisms that generate the reports shouldn’t be too complex.
      5. Whenever possible, reports should be drawn directly from the Master data, rather than from an Intermediate sytem.
    12. Only 5% of the Entrepreneurship is the big idea, business model, etc., Other 95% is the gritty work that is measured by Innovation Accounting.
  10. Part 2: Chapter 8: Pivot (Or Preserve)
    1. Companies that cannot bring themselves to pivot to a new direction can get stuck in the land of living dead, where they consume resources and commitment from employees, but not moving ahead.
    2. Innovation accounting leads to faster Pivots
      1. David’s initial concept involved 4 big leaps of faith
        1. Customers would be interested enough in the social network to sign up – Registration
        2. Votizen would be able to verify them as registered Voters – Activation
        3. Customers who were verified voters would engage with the site’s activism tools over time – Retention
        4. Engaged customers would tell their friends about the service and recruit them into civic causes – Referral
      2. First MVP – 3 months – $1200
      3. Pivot to Iteration 2 – 2 months – $5000
      4. Pivot to Iteration 3 – 5 months – $15000
      5. Land of living dead – When a company has achieved mediocre success – just enough to stay alive – but is not living to the expectations of the founders and investors.
      6. 2 Advantages of David
        1. Launch early and Iterate
        2. Identified his leap of faith questions (actionable metrics) explicitly at the outset
      7. Pivot to Iteration 4 – 4 months – $30000 – Zoom in Pivot
        1. Change revenue model to get Payment from Individual activists
      8. Pivot to Iteration 5 – Customer segment Pivot
        1. Changed revenue model to get pay from Large organizations, Professinoal fund raisers
      9. Pivot to Iteration 6 – 1 month – Platform Pivot
      10. Acceleration of MVPs – Learning critical things about Customer, market and strategy
    3. Startup’s Runaway in the number of Pivots it can still make
    4. Pivots require Courage
      1. Every entrepreneur will tell u that they wish they had made the Pivot decision sooner. 3 Reasons for it.
      2. Reason 1: Vanity metrics and living in their own reality
      3. Reason 2: When under unclear hypothesis, it’s almost impossible to experience complete failure and without failure Pivot doesnt happen.
      4. Reason 3: Entrepreneurs are afraid
    5. The Pivot or Preserve meeting
      1. Have regular Pivot or Preserve meeting, between less than a few weeks to more than few months
    6. Failure to Pivot – Disastrous
    7. Catalog of Pivots
      1. Zoom in Pivot – One single features becomes the Product
      2. Zoom out Pivot – The whole product turns into a Single feature, which other features getting added to the system
      3. Customer segment Pivot – Identified the customer base with a problem. But the problem initially identified is different from what the customer actually needs. Change of Product
      4. Platform Pivot – Application to a generic Platform or vice versa
      5. Business Architecture Pivot – B2B to B2C or vice versa
      6. Value capture Pivot – Change in revenue model
      7. Engine of growth Pivot – Switch between Viral, Sticky, Paid growth models.
      8. Channel Pivot – Change in sales Channel
      9. Technology Pivot
    8. A Pivot is a Strategic Hypothsis
  11. Part 3: Chapter 9: Batch
    1. Story of stuffing newsletters into Envelopes
    2. Small batches at IMVU
      1. Switched from monthly releases of Feature updates, bug fixes to Multiple small number of updates per day.
      2. Automated Tests -> Immune system
      3. Continuous Deployment -> When Immune system detects a problem, number of things happen immediately:
        1. Defective change is removed immediately and automatically
        2. Everyone on relevant team is notified of the Problem
        3. The team is blocked from introducing any futher changes, preventing problem from being compounded by future mistakes
        4. Until the root cause of the problem is found and fixed.
    3. The large batch Death spiral
      1. Too much work goes into a single stage of pipeline, without getting validation from others further down the Pipeline or the Market.
    4. Pull, dont push
    5. The Startup way
      1. People
      2. Culture
      3. Process
      4. Accountability
  12. Part 3: Chapter 10: Grow
    1. Collectible and Database company: Early growth had flatlined
    2. Sustainable Growth: New customers come from the actions of Past customers
      1. Word of mouth
      2. Side effect of Product usage
      3. Through funded Advertising
      4. Through repeat Purchase or use
    3. 3 Engines of growth
      1. Sticky engine of growth
        1. Track churn rate very carefully.
          1. Churn rate is the fraction of customers in any period who fail to remain engaged with the company’s product.
          2. Rate of New customer acquisition is greater than Churn rate, Product grows.
      2. Viral engine of growth
        1. Hotmail, Tupperware
        2. Powered by Feedback loop that can be quantified
        3. Viral coefficient measures how many new customers will use a product as a consequence of each new customer who signs up.
        4. Viral Coefficient of 0.1 is not sustainable. 100 ppl will bring 10 and those people will bring 1 and deadend
        5. Viral Coefficient greater than 1.0, will grow exponentially
        6. Viral products don’t charge customers directly. Can’t afford to have any friction impede the process of signing customers up.
      3. Paid engine of growth
        1. Customers willing to pay more for product than it costs us to reach them via Advertising
        2. Customer Lifetime Value (LTV)
        3. Cost per Acquisition (CPA)
        4. LTV > CPA for Growth
        5. Not just Advertising costs, but Sales force cost, Foot traffic cost also comes under this model, as they add to the CPA
        6. Focus on 1 engine of growth at a time. Specialize in everything that is required to make it work.
    4. Engines of growth determine Product/Market fit
    5. When engines run out
      1. Find new sources of Growth, Adap
  13. Part 3: Chapter 11: Adapt
    1. Building an Adaptive organization -> One that automatically adjusts its process and performance to current conditions
    2. Can you go too fast?
    3. The wisdom of the 5 Whys – At the root of every seemingly tech problem lies a Human problem
      1. Why this new release disabled a feature for Customers? Because a particular server failed
      2. Why did the server fail? Because an obscure subsystem was used in a wrong way
      3. Why was it used in the wrong way? The engineer who used it didn’t know how to use it properly.
      4. Why didnt he know? Because he was not trained
      5. Why wasn’t he trained? Becuse his manager dont believe in training new Engineers because he and his team are “too busy”.
    4. Make a proportional Investment
      1. Invest smaller when symptom is minor
      2. Invest larger when symptom is more painful
    5. 5 Whys is a Automatic Speed regulator
    6. The curse of 5 blames
      1. The 5 Whys is to help us see the objective truth that chronic problems are caused by bad process and not bad people.
      2. To avoid 5 blames, Involve all people from Junior Dev, to Tech lead, to Customer care executive who identified the issues via Complaint to CEO. So blame is not put onto anyone involved, whose is not present in the meet.
    7. Effectiveness of the Training Process established via 5 Whys
      1. We ask new Engineers to make changes to Production environment on Day 1
      2. If the production environment is so fragile that you can break it on your first day of work, shame on us for making it so easy to do so.
      3. If they manage to break it, we will immediately would have them lead the effort to fix the problem as well as the effort to prevent the next person from repeating their mistake.
      4. For new hires coming from different companies/cultures, this was a stressful initiation. But everyone came through it with a visceral understanding of our values.
    8. Getting Started with 5 Whys – Facing unpleasant Truths
      1. Prepare for the fact that 5 Whys is going to turn up unpleasant facts about Organization
      2. Need strong support of Leader to go through the process and not turn it into 5 Blames.
    9. Start small, Be specific with 5 Why meetings
    10. Appoint a 5 Whys master
    11. Adapting to smaller Batches
      1. Intuit Quickbooks -> Annual release cycle
      2. Year one: Achieving Failure
        1. 20 points drop in Net Promoter Score
        2. Case of `Successfully executing a flawed plan`
      3. Year two: Muscle Memory
        1. Hard for people to unlearn old habits
        2. Coulnd’t cut release cycle to 6 months
      4. Year three: Explosion – More customer satisfaction, Shorter release cycles
  14. Part 3: Chapter 12: Innovate
    1. How to nurture disruptive Innovation
      1. Scare but secure resources
      2. Independent development authority
      3. A personal stake in the outcome
    2. Creating a platform for Innovation
      1. Protecting the parent organization
      2. Rational Fears
      3. The dangers of hiding Innovation inside the Black box
      4. Creating an Innovation Sandbox
        1. Any team can create true split test experiment
        2. The team must see the whole experiment through from end to end
        3. No experiment can run longer than specified amount of time
        4. No experiment can affect more than a specified number of customers
        5. Every experiment has to be evaluated on the basis of a standard report of 5 to 10 actionable metrics
        6. Every team that works inside the sandbox and every product that is built must use the same metrics to evaluate the success
        7. Any team that creates an experiment must monitor the metrics and customer reactions while the experiment is in progress and abort if something catastropic happens
      5. Innovation team should be empowered to build, market and deploy products in the sandbox without prior approval.
    3. Cultivating the Management portfolio
      1. Entrepreneur is a Job title
      2. Becoming the Status quo
  15. Part 3: Chapter 13: Waste not
    1. Taylor’s The Principles of Scientific management published in 1911
    2. Organizational superpowers
    3. Putting the system first: Some dangers
    4. Product development Pseudoscience
    5. A New research program
    6. The long terms Stock exchange
    7. In Conclusion
    8. Stop wasting People’s time

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