The founding team [of Dropbox] was made up of engineers, as the product demanded significant technical expertise to build … the founders wanted feedback from customers about what really mattered to them … The challenge was that it was impossible to demonstrate the working software in a prototype form. The product required that they overcome significant technical hurdles … he made a video. The video is banal, a simple three minute demonstration of the technology as it is meant to work … Drew recounted, ‘It drove hundreds of thousands of people to the website. Our beta waiting list went from 5,000 people to 75,000 people literally overnight. It totally blew us away.” … In this case, the video was the minimum viable product.
Eric Ries, Lean Startup, (p. 97-99)
For example, consider a service sold with one-month free trial. Before a customer cn use the service, he or she has to sign up for the trial. One obvious assumption, then, of the business model is that customers will sign up for a free trial once they have a certain amount of information about the service … Somewhere in the business model, probably buried in a single cell in a spreadsheet, it specifies the ‘percentage of customers who see the free trial offer who then sign up.’ … It really should be represented in giant letters in bold red font: WE ASSUME 10 PERCENT OF CUSTOMERS WILL SIGN UP. Most entrepreneurs approach a question like this by building the product and then checking to see how customers react to it. I consider this to be exactly backward because it can lead to a lot of waste.
Eric Ries, Lean Startup, (p. 96)
Groupon wasn’t originally meant to be about commerce at all. The founder, Andrew Mason, intended his company to become a ‘collective activism platform’ called The Point. Its goal was to bring people together to solve problems they couldn’t solve on their own … The Point’s early results were disappointing … they were determined to keep the new product simple … ‘We took a WordPress Blog and skinned it to say Groupon … The actual coupon generation that we were doing was all FileMaker. We would run a script that would e-mail the coupon PDF to people. It got to the point where we’d sell 500 sushi coupons in a day, and we’d send 500 PDFs to people with Apple Mail.’ … A Minimum Viable Product (MVP) helps entrepreneurs start the process of learning as quickly as possible.
Eric Ries, Lean Startup, (p. 92-93)
At Toyota, the manager responsible for the design and development of a new model is called the chief engineer … The 2004 Sienna was assigned to Yuji Yokoya, who had very little experience in North America, which was the Sienna’s primary market … he proposed an audacious entrepreneurial undertaking: a road trip spanning all fifty U.S. states, all thirteen provinces and territories of Canada, and all parts of Mexico … In small town and large cities, Yokoya would rent a current-model Sienna, driving it in addition to talking to and observing real customers. From those first hand observations, Yokoya was able to test his critical assumptions … ‘If I learned anything in my travels, it was the new Sienna would need kid appeal.’ … Yokoya spent an unusual amount of the Sienna’s development budget on internal comfort features, which are critical to a long-distance family road trip (such trips are more common in America than in Japan).
Eric Ries, Lean Startup, (p. 86-87)
Every business plan begins with a set of assumptions … The first challenge for an entrepreneur is to build an organization that can test these assumptions systematically. The second challenge, as in all entrepreneurial situations, is to perform that rigorous testing without losing sight of the oomph’s overall vision … Many assumptions in a typical business plan are unexceptional. These are well-established facts drawn from past industry experience or straightforward deductions … Hidden among these mundane details are a handful of assumptions that require more courage to state… we assume that customers have a significant desire to use a product like ours, or we assume that supermarkets will carry our product. Acting as if these assumptions are true is a classic entrepreneur superpower. they are called leaps of faith.
Eric Ries, Lean Startup, (p. 81)
Zappos began with a tiny, simple product. It was designed to answer one question above all: is there already sufficient demand for a superior online shopping experience for shoes? However, a well designed startup experiment like the one Zappos began with does more than test a single aspect of a business plan. In the course of testing his first assumption, many other assumptions were tested as well. To sell the shoes, Zappos had to interact with customers: taking payment, handling returns, and dealing with customer support. This is decidedly different from market research. If Zappos had relied on existing market research or conducted a survey, it could have asked what customers thought they wanted. By building a product instead, albeit a simple one, the company learned much more.
Eric Ries, Lean Startup, (p. 57-58)
Founder Nick Swinmurn was frustrated because there was no central online site with a great selection of shoes … Swinmurn could have waited a long time, instead on testing his compete vision complete with warehouses, distribution partners, and the promise of significant sales … Instead, he started by running an experiment. His hypothesis was that customers were ready and willing to buy shoes online. To test it, he began by asking local shoe stores if he could take pictures of their inventory. In exchange for permission to take the pictures, he wold post the pictures online and come back to buy the shoes at full price if a customer bought them online.
Eric Ries, Lean Startup, (p. 57)
Out of a hundred good ideas, you’ve got to sell our ideas So you build up a society of politicians and salespeople. When you have five hundred tests you’re running, then everybody’s ideas can run. And then you create entrepreneurs who run and learn and can retest and relearn as opposed to a society of politicians.
Eric Ries, Lean Startup, (p. 33)
Flash-forward to 2002. Cook was frustrated … Simply put, too many of its new products were failing … he came to a difficult conclusion: the prevailing management paradigm he and his company had been practicing was inadequate to the problem of continuous innovation in the modern economy … Because TurboTax does most of its sales around tax season in the United States, it used to have an extremely conservative culture. Over the course of the year, the marketing and product teams would conceive one major initiative that would be rolled out just in time for tax season. now they test over five hundred different changes in a two-and-a-half-month tax season.
Eric Ries, Lean Startup (p. 32–33)
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