Lean Startup, Business Models & Growth Strategy: Lecture and Chapter 4

What is the Lean Startup loop?

Build → Measure → Learn, done as fast as possible.

What are the four steps of customer development?

Customer discovery, customer validation, customer creation, company building.

What does a business model describe?

How a company creates, delivers, and captures value.

What is the formula for a business model?

Business model = revenue model − cost model.

What are the nine blocks of the Business Model Canvas?

Customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partners, cost structure.

What is the Lean Canvas?

The startup version of the Business Model Canvas, used initially by startups.

What is an MVP?

The minimum set of features needed to test your current hypothesis.

What is the purpose of customer interviews in the Lean Startup methodology?

To gather qualitative and quantitative data about the problem and value proposition.

What is a pivot in the context of startups?

A change of course based on what you learned; it is not a failure.

What are the eight proactive pivots?

Customer problem, market segment, product feature, product vs services, channel, resource, major competitor, and revenue model.

What is the LTV:CAC ratio benchmark?

LTV:CAC ≥ 3:1.

What does LTV stand for and how is it calculated?

Lifetime Value; LTV = average revenue per customer × average customer lifetime.

What does CAC stand for and how is it calculated?

Customer Acquisition Cost; CAC = sales and marketing spend ÷ number of new customers.

What is the difference between TAM, SAM, and SOM?

TAM is total market, SAM is the part you can reach, and SOM is the part you can actually win.

What are the four types of resources for a startup?

Human, physical, intellectual, and financial.

What is the first-mover myth?

Being first isn't enough; you must also grow fast and create switching costs.

What is the Long-tail theory?

Lots of niche products together add up to big sales.

What is a winning strategy in business?

Better, cheaper, and faster than competitors.

What is the purpose of escalating market tests?

To test cheaply before a big launch.

What are common growth strategies for startups?

Franchising, adding products, geographic expansion, and international growth.

What is the Blue Ocean Strategy?

Creating a new market by being different and cheaper at the same time.

What is an example of a freemium model?

Skype, where free users are supported by premium users.

What is the one-for-one model exemplified by TOMS?

Giving away a pair of shoes for every pair sold.

What is an ad-supported model?

A service that is free for users and paid for by advertisers.

What is the purpose of tracking key metrics in a startup?

To measure performance and guide decision-making.

What is an unfair advantage in business?

Something hard to copy, like intellectual property or a strong brand.