The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries

117478738 Crucial Lessons for Fledgeling and Mature Companies

I started reading Eric Ries's blog, "Startup Lessons Learned," back in October 2008. I was quickly impressed by his technical acumen and the simplicity of his writing. I also enjoyed the breadth of topics covered and how engaging they were.

Needless to say, I was glad to hear that he was going to distill all his knowledge into a book, and now that I read the book, I'm glad to say that he didn't disappoint.

The book defines a startup as a 1) a human institution designed to 2) create a new product/service under conditions of 3) extreme uncertainty.

Notice how the definition doesn't address the size of the venture or its backers or its origins. As long as it is a team building a product with high uncertainty, it is a startup.

The book also covers the entire life cycle of a lean startup, Figure 1.

Lean-startup

Figure 1.
Build-Measure-Learn Feedback Loop that's at the core of the lean startup (image source)

Eric puts a huge emphasis on "validated learning" as opposed to "failure as a way of learning." He says, "a failure to deliver results is due to either a failure to plan adequately or a failure to execute properly." He's all about accountability, which is sorely lacking in so many institutions these day, with the most egregious being Wall Street.

Eric goes on to explain the principles of the lean startup with andecodotes of successes and failures in business. One of the most fascinating and very telling for me was the SnapTax story. The fact that a giant company like Intuit could spawn an innovative startup (i.e. a team + a product + high uncertainty) was a nice validation for my unsuccessful push for an R&D department within the companies at which I worked in the past. SnapTax was a team of five individuals that was given freedom to experiement while held accountable throughout the process. The results were impresssive.

If nothing else, the reader, especially those running mature companies, should pay close attention to Eric's conclusion. He stresses the points of validating assumptions, rapid testing of ideas, and most importantly, "stop wasting people's time."

I think that's the most valuable lesson in the entire book. Mature companies that continue to waste their talents' time with banal and insipid tasks are bound to lose those talents and will only be left with lazy, oftentime overpaid individuals that are too comfortable, too politically secure that they can't produce anything new or original even if they tried.

Startups are a "human institution" first and foremost. If the right team isn't in place, you do not have a startup. Nurture those talents and don't waste their time. Only then will the trappings of success adorn your business and you.

The Mesh: Why the Future of Business is Sharing by Lisa Gansky

The Mesh: Why the Future of Business is Sharing by Lisa Gansky

A Look at How Sharing Defines The Success of Businesses in the Future

The book discusses the increasingly recurring themes of openness and platform that have been discussed in other books like Open Leadership by Charlene Li and Where Good Ideas Come From by Steven Johnson.

The core premise of Mesh businesses is: "When information about goods is shared, the value of those goods increases, for the business, for individuals, and for the community."

The author says that, "fundamentally, the Mesh is based on network-enabled sharing–on access rather than ownership. The central strategy is, in effect, to "sell" the same product multiple times. Multiple sales multiply profits, and customer contact. Multiple contact multiply opportunity–for additional sales, for strengthening a brand, for improving a competitive service, and for deepening and extending the relation with customers."

The book also references a recent study, which concluded that, "a recommendation from a "trusted source" like a friend or family members was fifty times more likely to persuade someone to buy a product or try a new brand. The same study reported that word of mouth is the "primary factor" behind between 20 and 50 percent of purchases, and emphasized the expanded role of information networks in driving this development."

WHAT IS THE MESH

The 4 Characteristics of a Mesh Business as listed in the book are:

  1. Sharing a high code, frequently used goods
  2. Advanced Web and Mobile Information Networks
  3. Focus on Physical Goods and Materials
  4. Engage with Customers Through Social Networks

"The Mesh model is based on a series of transactions, on sharing something over and over. Creating a share platform is the first, necessary-but-not-sufficient building block of the Mesh. The second is to create information infrastructure that takes advantage of mobile, Web, and social networks. Then each interaction, and transaction, becomes an opportunity to gather and exchange information with a customer."

The 7 Keys to Building Trust in the Mesh:

  1. Say What You do
  2. Use Trials
  3. Do What You Say
  4. Perpetually Delight Customers
  5. Embrace Social Networks and Go Deep
  6. Value transparency, but protect privacy
  7. Deal with negative publicity and feedback promptly and skillfully

WHY THE MESH

Tomorrow’s business leaders recognize that trust in a business’s environmental and social practices increasingly drives informed consumers’ decisions. Successful Mesh businesses harness information from customers, combine it with data from physical products and social networks, and then use that information to satisfy customers, and their friends, in ways never before dreamed of. Good Mesh businesses are smart about combining more frequent customer contact with enhanced information sources to create and refine superior experiences, partnerships, products, and offers.

MESH COMPANIES HIGHLIGHTS

Zipcar is one of the companies profiled in the book.  The author says that, "The robust information platform and focus on building the brand distinguished Zipcar from early car-sharing companies that were merely long on good intentions, many of which failed. In fact, Zipcar is primarily an information business that happens to share cars."

So if you’re in the information business, you are a Mesh business whether you realize it or not.

TCHO, a chocolate company in SF, produces "beta editions” of its dark chocolate. “Based on customer feedback and continuous flavor development, new versions of the chocolate emerge as often as every thirty-six hours. Version 1.0 went through 1,026 iterations in a year."

Why did Netflix slaughter Blockbuster? Blockbuster was late in acknowledging customer resentments, and late in understanding the spreading power of social networks to shape brand perception. They created a share platform, but neglected other elements that make Mesh businesses so competitive.

This is an excellent book that could help realign the business perspective on how to succeed in the future. Embracing openness, sharing and focusing on customer satisfaction are some of the key practices that could catapult your business from mediocre to stellar now and in the future.

What Top Engineers Want

Good insight into what top talent is looking for in a job. The economy might be bad, but not for those who bring their technical and interpersonal talents to work with them everyday. Yes, technical acumen alone no longer qualifies you as a "top talent." You need the interpersonal skills to back it up.

As an engineer myself, I find that I do my best when I'm afforded a) autonomy and b) power to make consequential decisions. I consider myself very lucky to have been afforded both in my career, and I know many of the engineers I admire and respect have had the same experience. Top engineers are leaders by nature and what they really want is to be treated as such. Great read:

What did I learn that engineers wanted? The people I spoke with were remarkably clear and consistent in their priorities.

  1. Team – top engineers place huge value on the caliber of their future colleagues when making a decision to join.
  2. Size of Opportunity – market size, revenue or usage, exit outcome and their ability to get equity early are all important.
  3. Product Passion – to many engineers, they have to be stoked about the idea to work there.
  4. Culture – a fun, collegial work atmosphere.
  5. Social Good – a surprisingly high percentage of engineers I spoke with placed importance on having a positive impact on a community or society.
  6. Programming Language – many top engineers I spoke with prefer python and don’t like working in PHP.
  7. Personal Lifestyle – commute is a factor in their decision process.

via How I Found a Great CTO – The Huffington Post

Open Leadership: How Social Technology Can Transform the Way You Lead by Charlene Li

Open Leadership: How Social Technology Can Transform the Way You Lead by Charlene Li

Leadership in the Age of Demanded Transparency
My review on Amazon.com

How do you lead effectively in a world that is extremely connected and where ideas flow fast and with passion between individuals? How do you manage control in an era where grievances about your business are broadcast the moment they're experienced? Business leaders will get their answers reading this book. Moreover, I think the ideas in this book are beyond the scope of business and leadership; They are pointers for being an effective Open entity in today's world.

Companies like to think of themselves as "open, transparent and authentic," without actually doing the hard work that is required to accomplish that. Charlene Li, a Social Media expert and the author of this book, contends that it takes a lot of rigor and discipline to be "open, transparent and authentic." She argues that it takes a well thought-out plan, commitment and resilience to live up those ideals.

The anecdotal narratives provided in this book are very interesting and draw conclusions that support Li's guidelines for openness. The stories heavily emphasize the importance of the feedback loop between a company and its clients. Allowing the client to set the level of trust required in the relationship is a paramount shift in the way we thought of trust and its place in business.

When United Airlines broke a guitar, they were awakened rather abruptly by their client who felt that he wasn't being treated properly and that United broke not only his guitar, but also the unspoken, unidentified trust code it had with him.

What happened to United was unfortunate but not uncommon. Entities that resist the state of openness of our world are either left behind or, like United, are burnt by their unwillingness to participate. 

To remain relevant and thrive by today's standards, you need to apply these principles to yourself, relationships and businesses. It's that good.