Scaling Lean: Mastering the Key Metrics for Startup Growth (Ash Maurya)

Best quotes and notes:

"Building a scalable and successful business starts with knowing what to measure and how."

"You are the first investor in your business idea. You invest with time, which is more valuable than money."

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"the top reason products fail is not a failure to build out the product, but rather a failure to build a repeatable and scalable business model."

"You don’t need lots of numbers, but a few key actionable metrics."

"While running experiments is a key activity in the Lean Canvas business model, you have to know how to design them for breakthrough learning."

"Scientists first build a model. Then they use experiments to validate (or invalidate) their model."

"“The essence of strategy is choosing what not to do.” —MICHAEL PORTER"

"Specifically, it teaches you how to effectively define, measure, and communicate progress with your internal and external stakeholders using the six-step meta-framework shown below: 1) Goal 2) Observe and Orient 3) Learn, Leverage, or Lift 4) Experiment 5) Analyze 6) Next Actions"

"No methodology can guarantee success. But a good methodology can provide a feedback loop for continual improvement and learning."

"There is no business in your business model without revenue."

"Traction is the rate at which a business model captures monetizable value from its users."

"Making happy or badass customers gets you paid. Doing this repeatedly and sustainably is the universal goal of every business."

"Customer throughput is the rate at which nonpaying users are processed into paying customers."

"Lifetime Value (LTV) is the projected revenue that a customer will generate during his lifetime."

"Before you rush to declare customer segment A the more valuable group, don’t forget to factor in the cost of raw materials or the Cost of Customer Acquisition (COCA)."

"Your business model, NOT your solution, is the product."

"Your minimum success criteria are the smallest outcomes that would deem the project a success for you X years from now."

"If you could double your pricing, and not lose more than half your customers, you would still come out ahead."

"Projected customer lifetime = 1 / (monthly churn rate)"

"While ideas are cheap, acting on them is quite expensive."

"An offer is made up of three things: your unique value proposition, a demo, and pricing."

"An MVP is the smallest solution that creates and captures monetizable value from users."

"You don’t need lots of users, just a few good customers."

"You don’t need lots of users to validate a business model."

"Twitter found that its aha moment is when people start following at least ten people."

"Cohorts help you measure relative progress by pitting one batch of users against another."

"At any given point in time, the throughput of a system is limited by only a single constraint. —ELIYAHU GOLDRATT, THEORY OF CONSTRAINTS"

"Money only lets you do more of whatever you are already doing."

"Every process works well until you add people."

"Test your ideas through experiments. These ideas or plans are then tested through one or more small, fast, additive experiments using the Build/Measure/Learn cycle."

"Constraints Create Space for Innovation"

"Correctly identifying the “real” constraint will often drive the right next action you take."

"Five Whys is a question-asking method used to explore the cause/effect relationships underlying a particular problem or undesirable effect."

"Macro metrics help locate where the hot spots lie, while micro metrics help troubleshoot why."

"An effective approach is comparing how the behaviors of your users who stay differ from those of users who leave. Yes, this is a kind of cohort analysis. Facebook, for instance, found that users who added at least seven friends in the first ten days were much more likely to stay engaged. It"

"Learning experiments are for hypothesis generation, while throughput experiments are for hypothesis validation."

"How can I without ?"

"“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” —SUN TZU"

"Strategy is a proposal for how to increase customer throughput from point A to point B within a time frame X."

"A single experiment can never completely validate a strategy, but it can completely invalidate it."

"People so hate to be proven wrong that in crucial decision-making moments, they’ll take the safe or neutral route."

"Any estimation is better than no estimation."

"“The right process will produce the right results.” —JEFFREY LIKER, THE TOYOTA WAY"

"There is no such thing as a failed experiment, only experiments with unexpected outcomes. —BUCKMINSTER FULLER"

"A live customer conversation is often the best way to uncover what you don’t know that you don’t know."

"“To raise new questions, new possibilities, to regard old problems from a new angle, requires creative imagination.” —ALBERT EINSTEIN"

"“The efficiency of a team is approximately the inverse of the square of the number of members in the team.” —MARC HEDLUND"

"“The two pizza team rule: Any team should be small enough that it could be fed with two pizzas.” —JEFF BEZOS, AMAZON"

"because people can read faster than you can talk."

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