I had the pleasure of attending Eric Ries's "Lean Startup Strategies" Skillshare talk last night. I greatly enjoyed his book, and seeing him in person highlight a lot of the key points and bring up many additional examples was really useful.

Below are some of main takeaways  (some are highlights of his main book points and others are more supplementary).

Intro

• Started out as a programmer
• Programmed amazing technology that nobody was using
• Entrepreneurship is a domain of extreme uncertainty

Part 1: Vision

• Entrepreneurial management (photo montage that's usually skipped over in movies)
  
• Different from general management
• Lean manufacturing inspiration
• Difference between value and waste
• Whose eyes do you use to evaluate the product line (when don't know your customer yet)?
• Goal of a startup: figure out the right thing to build (what customers want and will pay for) as quickly as possible
• Was afraid to launch IMVU, but then no one even downloaded the product
• Even though used agile, had to throw away tons of code
  
• "Learning" is oldest excuse in book when fail
• Could've learned the same lesson with 1 landing page or 1 IM network connected instead of connecting to all 6
• Pivot = a change in strategy, not a change in vision
• Change in product = optimization
  
• Startup = human institution designed to create a new product or service under conditions of extreme uncertainty
  
• Validated learning vs. plain learning
  
• Reality distortion field (entrepreneurs and sociopaths)
  
• Cohort metrics
  
• Spent $5/day; bought traffic from Google at $0.05/click
• Consistently saw 1% conversion rate
• Value vs. waste: only things that contribute to learning are valuable
  
• Making money, press, awards: not valuable, just consequence of learning
  
• Audacity of zero: easier to get resources when never tried to get users
  
• From alchemy to science: experiment to test which strategy makes sense and which is crazy
  
• Scientific method vs. product astrology
  
• Eric's law of Google Analytics: no matter how bad you're destroying your company, there is at least one graph in Google Analytics that is up and to the right.
• Goal: not best analytics, but best product (and learning to get there)
  
• Split testing
• Rolling out lean to team: incubate in one small division then roll out to entire group
• Add "validated" column to scrum board
• Kanban: capacity constrain size of each bucket
• Will be painful because team will grind to a halt until everyone gets validated learning; will instill culture of only seeking validated learning

Part 2: Steer

• Build-measure-learn feedback loop
  
• 2 hypotheses: value hypothesis, growth hypothesis
• Beyond "the right place at the right time"
  
• Genchi gembutsu (go and see for yourself)
  
• Basing strategy decisions on firsthand understanding of customers
  
• Minimum viable product: not smallest product imaginable; just the fastest way to get through build-measure-learn loop
• Video MVP (took 2 years to build Dropbox's magic technology)
• Concierge MVP
• Little fear to launching MVP
• Try your best to get your idea stolen; no big company will do it
• innovation accounting
• It's better to have bad news that is true, than good news that we just made up.
• in general management, forecasts and operating plans work because they have long and stable operating history.
  
• 3 learning milestones: establish the baseline, tune the engine, pivot or persevere
• "10% of visitors signing up for free trial" should not be in 2 point font in Appendix B of business plan; it is a leap of faith assumption; it should be a red banner in the office saying, "If 10% of our visitors do not sign up, then our company will cease to exist."
• Metrics: actionable (showing cause and effect), accessible, auditable
• Innovation accounting leads to faster pivots
• Pivot = strategic hypothesis

Part 3: Accelerate

• Small batches in entrepreneurship
  
• Sustainable growth: new customers come from actions of past customers; when you have to buy customers, you trade equity (permanent) for growth (transient)
• Growth through word of mouth
• Growth as a side effect of product usage (viral or publicly shown good)
• Engines of growth: sticky engine, viral engine, paid engine
• Product/market fit: binary; if you're asking if you have it, you don't

Less than a year after my grandfather Izya passed away, my grandmother Stasya followed her husband to be with him in the next life as well. I wanted to write a quick note in her memory and share what lessons (positive and negative) I learned from her.

Bio

My grandmother was a "gold medalist" in school and became an economist and industrial engineer. When she was little, her whole family was sent to one of Stalin's concentration camps, where she suffered injuries that stayed with her all her life. After the war ended, she returned home to a small city in Ukraine and started her own family.

She was always proud of how she could stay home, cook, and provide a warm home for her family. In this way, she was very, very traditional (but had a very strong character). Talking to her was sometimes like answering a police deposition (though the daily subjects were what I ate and how many pieces, what clothing I was wearing and its thickness, and what time I would be home at the end of the day).

When she moved to the United States, she learned English, and while she tried to be as active as she could, her medical problems kept her mostly at home, and so I feel she never quite adjusted to American life. For example, she never really understood why people like to eat in restaurants (What, your food at home is bad or you don't like my food?).

Her biggest character trait of all was caring (sometimes to a frustratingly high degree of detail); she loved and cared for those around her and needed to know everything about them (and worried about every detail of their lives, even when she could do little about it).

Lessons

I learned a number of things from grandma, both examples of behaviors I wanted to replicate and also examples where I wanted to be different. Even though I felt a generational and cultural gap between me and her, I knew that I could still learn a lot from her, even despite (or perhaps directly due to) these differences.

• Fearing the unknown or new things. This is logical given her experience with the camps. But for myself, I want to feel like I can face uncertainty and am open to new experiences.
  
• Huge value on physical warmth and food (she always asked what I ate). I agree with this but not with the same level of importance my grandma attributed to it.
  
• The importance of education (grades, tests). I definitely continue this focus.
  
• Lots of questioning and deep inquiry. She really cared and always wanted to know more. She had a very good memory for my friends' names and constant awareness of the locations and health status of everyone in the family. Sometimes her questions got to be too much, but I think I could learn to be a bit more like her in making sure I stay up to date with the critical details of those around me I care about.
  
• Tradition and careers. She definitely had a very narrow range of career choices in the Soviet Union and carried those over to the US in thinking that the only honorable professions are in medicine and law. Business and engineering didn't seem like "professions" ever to her, and I found myself explaining to her my work and what "entrepreneurship" and "computers" were all about almost every time we spoke.
  
• Little individuality or aspirations. I felt like my grandma was always "on the side" and had few hopes and desires for herself; she always focused on others and on family and almost never expressed her own wishes. I wonder how she was different growing up. Was this due to her decreased social interaction here? Was this due to her aging? I always felt bad about this and wanted to hear her own hopes and some spark of life there inside her. I hope I can maintain that in myself as I age.

My grandmother was a very special person, and I will miss her greatly.

Having enjoyed the author's previous books, I decided to check out Great by Choice by Jim Collins. The audio edition was read by Jim, which I always enjoy, since I get to literally hear how the author intended the book to be read. The audio edition also included a nice FAQ section comparing this book to the others in the series. I personally found the overall style of the book (study looking at great companies against comparison set and picking out various character traits that help explain differences) very similar to the past books. The examples in this book and study were interesting, though I felt there was not enough justification given for the choices the authors made in coming up with their results or conclusions. I understood the methodology and company selection, but I didn't understand how they went from data to conclusions in picking out the behaviors they teach in this book.

Ch. 1: Thriving in uncertainty

• Began research for book in 2002 after 9/11
  
• Some companies thrive by 10x better than index in uncertainty
  
• Southwest Airlines did better in past 30 years than any other stock in index
  
• Extreme environment
  
• In this book as compared to the others, the cases were selected by the extremity of environment (not just great companies in general)
  

Ch. 2: The 10x companies

• Must over prepare and practice for every emergency and train hard
  
• South pole adventure story
  
• Different behaviors between great company and comparison in same crazy environment
  
• Embrace control and non-control
  
• Formula: Fanatic discipline + empirical creativity + productive paranoia
• Level 5 ambition
  

Fanatic discipline

• Progressive Insurance
  
• Progressive decided to not publish earnings guidance; instead just monthly financials
  
• Consistency of action and values
  
• Discipline
  
• Nonconformists
  

Empirical creativity

• Intel
• Instead of looking to others, rely on your own observation and evidence (similar to lean's "get out of the building" and "see for yourself" principles)

Productive paranoia

• Microsoft
• Constantly believe events will turn against them when everything going well

Level 5 ambition

• Zany personalities
  
• Ferocity of will
  
• Not about themselves but about goal
  

Ch. 3: Twenty mile march

• Stryker vs. USSC
  
• Discipline in sticking to one concrete plan in good and bad times instead of big shifts in energy
  
• Their goalw as 20% consistent growth no matter what (including never growing too much in any year)
  
• Need both lower and upper bound
  
• Hit step-wise performance markers consistently over time
  
• High performance in difficult conditions
  
• Hold back in good times
  
• Southwest: small deliberate steps out of initial TX geography
  
• Standard of consistent performance: profit every year
  
• Elements of good 20 mile march: 7 characteristics
• 1. Use performance markers of lower bound thresholds
  
• 2. Self-imposed constraints and upper bound
  
• 3. Tailored to the enterprise and environment
• 4. Lies within your control to achieve
• 5. Has a "goldilocks" timeframe (just right)
  
• 6. Designed and self imposed by the enterprise
• 7. Achieved with great consistency (not intentions)
• Progressive Insurance: "Combined Ratio" target for insurance
• Like a company law; rigorous standard to be achieved every year for many years
  
• Cannot abandon goal due to events

Ch. 4: Fire bullets then cannon balls

• Southwest airlines literally copied PSA
  
• But PSA died
  
• No connection between innovation and 10x
  
• Need creativity and discipline to be 10x
  
• Fire bullets to figure out what will work
  
• Bullet = low cost + low risk + low distraction
• Just meant to find out if will work (sounds like lean...)
  
• Then fire calibrated cannonballs
  
• Empirical validation
  
• Apple getting on track
  
• Increased discipline and testing
  
• Not about innovation or predictive genius
  
• Just need to be above innovation threshold
  

Ch. 5: Leading above the death line

• Productive paranoia
  
• Pack extra supplies
  
• Don't break protocol/discipline
  
• Build cash reserves and buffers to prepare for bad events
  
• Large ratio of cash to revenue, assets to liabilities
  
• Bound risk
  
• Death line risk: could kill
  
• Asymmetric risk: downside bigger than upside
  
• Uncontrollable risk
  
• Time risk
  
• Zoom out then zoom in
  
• Not all time in life is equal
  
• Some moments critical
  
• 10x people respond in those moments
  
• Prepare for black swans
  

Ch. 6: SMaC

• Specific
  
• Methodical
  
• and
  
• Consistent
  
• Southwest's 10 Points by Putnam
  
• Very few changes over 20 years to recipe
  
• Apple fell behind when changed from original recipe; when came back, company turned around
  
• Durable operating practices
  

Ch. 7: Return on what

• Role of luck (first study to examine this scientifically)
  
• Luck event: 3 tests
  
• 1. Some significant aspect independent of key actors
  
• 2. Significant consequence
  
• 3. Unpredictable
• Luck comes in form of "who"
  
• Authors coded 230 luck events for data
  
• "Return on Luck"
  
• Taking advantage of luck events based on triangle of behaviors
  
• 4 combos
  
• Good luck, good behavior = Return on luck (Bill Gates)
  
• Good luck, bad behavior = Squandering of luck (AMD's poor execution)
  
• Bad luck, good behavior = Great returns on bad luck (Progressive Insurance turnaround from bad law/Prop 103)
  
• Bad luck, bad behavior = Poor returns
  
• 10x companies credit luck for success, themselves for failure
  

Epilogue

• Focus on what you do and keeping discipline, not hopeless resignation that outcomes just about luck
  
• Greatness is a matter of choice, not circumstance