The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Customer Segment Pivot In this pivot, the company realizes that the product it is building solves a real problem for real customers but that they are not the type of customers it originally planned to serve. In other words, the product hypothesis is partially confirmed, solving the…

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Customer Need Pivot As a result of getting to know customers extremely well, it sometimes becomes clear that the problem we’re trying to solve for them is not very important. However, because of this customer intimacy, we often discover other related problems that are important and can be solved by our team. In many cases, these related problems ma

Platform Pivot A platform pivot refers to a change from an application to a platform or vice versa. Most commonly, startups that aspire to create a new platform begin life by selling a single application, the so-called killer app, for their platform. Only later does the platform emerge as a vehicle for third parties to leverage as a way to create t

Engine of Growth Pivot As we’ll see in Chapter 10, there are three primary…

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Imagine another pair of businesses. The first makes $1 on each customer it signs up; the second makes $100,000 from each customer it signs up. To predict which company will grow faster, you need to know only one additional thing: how much it costs to sign up a new customer. Imagine that the first company uses Google AdWords to find new customers on

You should be able to spot the many problems with this situation: the use of vanity metrics instead of actionable metrics, an overly long cycle time, the use of large batch sizes, an unclear growth hypothesis, a weak experimental design, a lack of team ownership, and therefore very little learning.

1. Do consumers recognize that they have the problem you are trying to solve? 2. If there was a solution, would they buy it?

This has led to two problems: (1) business systems became overly rigid and thereby failed to take advantage of the adaptability, creativity, and wisdom of individual workers, and (2) there has been an overemphasis on planning, prevention, and procedure, which enable organizations to achieve consistent results in a mostly static world.

The goal of such early contact with customers is not to gain definitive answers. Instead, it is to clarify at a basic, coarse level that we understand our potential customer and what problems they have. With that understanding, we can craft a customer archetype, a brief document that seeks to humanize the proposed target customer.

With an internal startup team, the sequence of accountability is the same: build an ideal model of the desired disruption that is based on customer archetypes, launch a minimum viable product to establish a baseline, and then attempt to tune the engine to get it closer to the ideal.