Online store for test 2

What is a startup? | An entrepreneurial venture aimed at innovating a new concept or disrupting an existing paradigm, often built around an idea without a proven delivery method, with rapid planning to get to market quickly

Which industries are startups most common in? | Tech or service industries. Product based startups are more likely DTC than B2C

Why do startups favour a lower cost, minimalist approach? | Because of their higher risk factor

What role does management usually play in a startup? | They actively participate in production or delivery

How do startups usually fund growth? | Outside investment rather than debt. Investors often also act as mentors to management

Who developed the original Lean Methodology and for whom? | Taiichi Ōno, for Toyota in the 1950s

Name four methodologies that grew out of Lean | Agile Scrum (software), Lean UX (design), Lean Services (service industries and health care), Six Sigma (business improvement)

Muda | Wastefulness

Mura | Unevenness

Muri | Overburdening

Kaizen | Continuous improvement of systems, processes and products, leading to an iterative process of building, observing and revising

What are the common threads of Lean methodologies? | Reducing muda, mura and muri; focusing on actions that produce immediate value; kaizen; favouring clear visual tools over time consuming documentation

Who formally defined the Lean Startup Methodology and when? | Eric Ries, in 2011

What startup failure rate did Ries observe? | 75% to 90% depending on the market, during the late 90s to early 2000s tech boom

What two reasons for startup failure did Ries identify? | 1. The rigid, time consuming traditional business plan delayed market entry. 2. A long realization gap where tangible customer feedback only came after major investment of time and money

Which two methodologies did Ries borrow from? | Lean Software Development (LSD) and Steve Blank's Customer Development methodology

What was Steve Blank's key idea? | Startups should search for business models instead of executing smaller versions of what large companies do, by forming hypotheses about customer needs and verifying them through testing and metrics

What is the stated purpose of the Lean Startup method? | To learn what customers want and will pay for, as quickly as possible

Which LSD concepts did Ries add to Lean Startup? | The MVP approach, just in time development, and iterative refinement

What are the four core concepts of Lean Startup? | The Build-Measure-Learn loop, the Minimum Viable Product (MVP), the ability to pivot, and the Lean Canvas

What two attitudes are built into Lean Startup? | An emphasis on objective data and key metrics for decisions, and an embrace of change and willingness to be wrong

What is the Build-Measure-Learn loop? | A lean iteration that tests the hypothesis that your offering has merit, based on the premise that the best way to test assumptions is to launch a product

What is emphasized in the Build phase? | Rapid development and deployment of the core product or service (the MVP)

What happens in the Measure phase? | Solicited feedback plus metrics from natural usage are collected to support or refute the hypothesized problem and solution

Why shouldn't data only be used to validate hypotheses? | Feedback may reveal new directions or a better understanding of the problem or users

Valuable metrics for a transactional business | Cart size, abandonment rates and completion rates

Valuable metrics for a collaborative or social business | Passive vs active usage and ratio of content types

Valuable metrics for SaaS | Conversion, attrition and retention rates

Valuable metrics for media | Unique views, length of views and share rates

Valuable metrics for games | Aggregate time spent per user, return rates and in app purchases

Valuable metrics for mobile apps | Ratings, reviews, active users and uninstall rates

What is a vanity metric? | A metric that looks attractive but doesn't support or oppose the hypothesis or give context for usage. Example: app downloads

What is the purpose of the MVP in Lean Startup? | To verify assumptions and test the concept, not mainly to make revenue or build a base

Which methodology's MVP is closest to the Lean Startup MVP? | Lean UX, since resources aren't fully deployed until value and viability are established

What is the minimum awesome product? | The goal of Lean Startup iterations, and often the point where startups start looking for investors

What two options does a business have when the MVP disproves the hypothesis? | Persevere or pivot

What does it mean to persevere? | Modify the hypothesis or the product and keep testing

What is a pivot? | A structured course correction that dramatically changes or discards the hypothesis without throwing away the whole business concept or resources

What does a company try to keep when it pivots? | Market understanding, practical assets like code or equipment, and relationships with customers, businesses or other entities

Customer segment pivot | Targeting a different audience for the same problem and solution

Customer need pivot | Targeting a different problem or revised solution for the same target market

Zoom in / zoom out pivot | Narrowing or expanding the feature set

Business architecture pivot | Shifting between high margin/low volume and low margin/high volume

Technological pivot | Moving the same concept to a new platform that is faster, cheaper or otherwise better

Groupon pivot example | Started as The Point, a social activism platform. After little traction it reused the infrastructure to become a social deal service, valued at $13.1B in 2011

In the Lean Startup cycle, what links Ideate to Build? | A leap of faith

In the Lean Startup cycle, what links Build to Measure? | The MVP

In the Lean Startup cycle, what links Measure to Learn? | Gathering insight

In the Lean Startup cycle, what happens after Learn? | Either preserve (back to Build) or pivot (back to Ideate)

Who created the Business Model Canvas and when? | Alexander Osterwalder, in 2005

What is the Business Model Canvas? | A single page strategic management tool with nine sections that captures a business model in relation to the value proposition it offers customers

What is the BMC theatre metaphor? | Front stage is what the customer sees (right side). Back stage is the unseen work (left side)

Which side of the BMC should you map and validate first? | The front stage, to make sure you're creating value for the customer

Name the five front stage blocks of the BMC | Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams

Name the four back stage blocks of the BMC | Key Resources, Key Activities, Key Partnerships, Cost Structure

Key Resources vs Key Activities | Key Resources are what you have (assets you control). Key Activities are what you do (most important operations)

IKEA's value proposition | Affordable, well designed furniture you can take home today

How does flat pack logistics support IKEA's model? | Customers pick items from warehouse shelves and take them home without large delivery trucks, reducing logistics costs

Who created the Lean Canvas? | Ash Maurya, who modified the BMC to focus on the unknowns of a startup

What do box sizes represent on the Lean Canvas? | How much time and effort Maurya believed the entrepreneur should spend on each topic

What are the three core jobs of the Lean Canvas? | Create value (UVP, Customer Segments, Problem), Deliver value (Solution, Channels), Capture value (Cost Structure, Revenue Streams)

What two extra jobs does the Lean Canvas describe? | Measure value (Key Metrics) and Defend value (Unfair Advantage)

What is Maurya's suggested order for filling out a Lean Canvas? | 1 Customer Segments, 2 Problem, 3 UVP, 4 Solution, 5 Channels, 6 Revenue Streams, 7 Cost Structure, 8 Key Metrics, 9 Unfair Advantage

Why does Maurya compare the Lean Canvas to a jigsaw puzzle? | Start with the boxes you understand best and build out, since some sections only become clear once others are done

What should the Customer Segments box focus on? | The revenue generators (customers). Other actors can be listed but the focus stays on customers

What if a business has multiple customer types? | Create a separate model for each, like sellers and buyers on an Etsy style business

What are early adopters? | A subset of customer segments, also known as your ideal customer profile

Why start with the problem instead of the solution? | Entrepreneurs often start with the solution, but the model recommends understanding the problem first

How many problems should a Lean Canvas list? | 1 to 3. Brainstorming should be kept as a separate process

What are existing alternatives? | How the problems are solved today, in the marketplace or not

What is the Unique Value Proposition (UVP)? | The centre box: a single clear headline saying what the offering is and who it's for, with a sub headline on why it's valuable. Benefits over features

Why is the UVP considered the hardest box? | It's the most important and hardest to get right, and often needs revising as the model develops

What is a high level concept? | An "X for Y" analogy comparing your offering to a well known example plus its differentiator, like "LinkedIn for artists"

Why is starting with the solution risky? | Passion causes tunnel vision, customers care more about their problems, investors care more about traction, and the solution is the most likely part to change

What is traction? | Customer engagement, which investors care about more than the solution

How are channels reached in early Lean Startup testing? | Usually through customer discovery and interviews rather than organic capture

What should you consider about channels as a business grows? | Their accessibility, viability and scalability, which can affect the Cost Structure

What is the most important validator of a solution? | Revenue. If people won't pay, the solution isn't meaningful enough for the price point

How can price relate to the UVP? | Price affects customer perception and market size, and can be a key part of the UVP

Why consider how costs scale? | It reveals when growth will require outside investment, so costs can be planned around growth milestones

Outcome metrics vs output metrics | Outcome metrics show customer traction and should be prioritized on the canvas over output metrics

Leading vs trailing indicators | Leading indicators show how operations are doing before sales reports come in, and should be prioritized early

What is an unfair advantage, according to Jason Cohen? | Something that cannot be copied and cannot be bought

What did Jason Cohen say about copying? | Anything worth copying will be copied

Examples of unfair advantages | Exclusive or regional rights, specialized talent or skillsets, an existing customer base, or existing branding

What does Maurya say about "first to market"? | It shouldn't be the key to your success

Is it okay to leave Unfair Advantage blank? | Yes, while you refine the model in search of a strong one

Amazon's high level concept | The biggest bookstore in the world

Amazon's key metrics | CAC, user traffic and website ROI

Amazon's unfair advantage | No premises and less overhead for lower prices, plus no competitors in the domain

Uber's high level concept | Tap the app, get a ride

Uber's unfair advantage | Not required to pay the same licenses and regulatory fees as taxis

Uber key metric example | Number of people making at least 5 trips a month

Uber's revenue streams | Commission on every ride and surge pricing during peak demand

Why might a traditional business plan not suit a startup? | It's rigid and slow, delays market entry, and assumes a known model while startups still need to search for and test theirs

What is Assignment 2 based on? | Establishing an online B2C or DTC business, which becomes the basis for the final project unless you team up