Running Lean: How To Iterate From Plan A to a Plan That Works

What is “Running Lean”?

“Running Lean” is a book written by Ash Maurya, which was published in 2012. The book is a part of the Lean Startup movement, which focuses on creating successful startups and businesses by applying principles of lean thinking and iterative development.

In “Running Lean,” Ash Maurya provides a practical framework for entrepreneurs and product managers to validate their startup ideas and build sustainable businesses. The book offers a step-by-step guide to creating and testing a business model, including concepts like the Lean Canvas, problem-solution fit, product-market fit, and actionable metrics. It emphasizes the importance of customer feedback, continuous improvement, and data-driven decision-making in the startup process.

Key concepts and Themes

1. Lean Canvas: Maurya introduces the Lean Canvas as a one-page business model framework, which is a more agile and actionable alternative to traditional business plans.
2. Problem-Solution Fit: The book emphasizes the need to deeply understand customer problems and develop solutions that address those problems effectively.
3. Product-Market Fit: Maurya discusses the critical phase of finding the right product-market fit, where your product or service resonates with a specific target audience.
4. Build-Measure-Learn Loop: The core of the Lean Startup methodology, this loop involves building a minimum viable product (MVP), measuring its performance using actionable metrics, and learning from the results to make informed adjustments.
5. Continuous Validation: The book encourages a relentless focus on customer feedback and validation, helping entrepreneurs avoid wasting time and resources on ideas that won’t work.
6. Metrics that Matter: Maurya discusses how to choose and track actionable metrics that provide valuable insights into the health and progress of your business.

Part 1: Design

Chapter 1: Deconstruct Your Idea on a Lean Canvas

Theory: This chapter introduces the concept of the Lean Canvas, a one-page business model framework. The theory behind it is to provide a more agile and actionable alternative to traditional business plans. The Lean Canvas helps entrepreneurs quickly and effectively outline their startup idea, addressing key components of a business model.

Key Concepts:

• Customer Segments: Identifying the specific groups of people or organizations your product or service aims to serve.
• Problem: Clearly defining the problem your solution intends to solve.
• Unique Value Proposition (UVP): Highlighting what makes your solution different and valuable to customers.
• Solution: Outlining how your product or service addresses the identified problem.
• Channels: Determining the channels through which you will reach your target customers.
• Revenue Streams and Cost Structure: Understanding how your business will make money and the associated costs.
• Key Metrics: Identifying the critical metrics that will help you measure the success of your business.
• Unfair Advantage: Recognizing what gives your startup an edge over competitors.

Examples:

• Dropbox: One of the examples given is Dropbox’s Lean Canvas, which highlighted their initial focus on the problem of file synchronization and sharing.
• Zappos: Zappos’ Lean Canvas emphasized their unique value proposition of delivering an exceptional online shoe shopping experience.

Chapter 2: Stress Test Your Idea for Desirability

Theory: This chapter delves into the concept of desirability, emphasizing the need to thoroughly understand customer problems and desires. The theory is based on the idea that successful startups begin by addressing genuine customer needs.

Key Concepts:

• Innovator’s Bias: Acknowledging that innovators often have a bias toward their own ideas and solutions.
• Innovator’s Gift: Understanding that customers have the “gift” of insight into their own problems and desires.
• Customer Segments: Keeping customer segments simple and focused.
• Early Adopters: Identifying early adopters who are open to trying new solutions.
• Existing Alternatives: Recognizing the alternatives customers currently use to solve their problems.
• Unique Value Proposition (UVP): Crafting a UVP that persuades customers to switch from existing solutions to your product.

Examples:

• Steve’s Hammer Problem: An example is Steve, who believed his hammer product was the solution to everyone’s problem, failing to recognize the diverse needs of different customer segments.
• Zynga: The chapter discusses how Zynga understood the desirability of social gaming, tapping into the desires of users on Facebook to connect and play games with friends.

Chapter 3: Stress Test Your Idea for Viability

Theory: This chapter introduces the concept of viability, emphasizing the importance of a business model that can sustain itself financially. The theory is that startups must create a model that can generate revenue and achieve traction.

Key Concepts:

• Fermi Estimate: Rather than creating complex financial forecasts, use a simplified Fermi estimate to assess the viability of your idea.
• Traction: Understanding what traction means for your business and setting specific throughput goals.
• Target Throughput Goal: Define the level of customer acquisition or revenue generation needed for your startup to succeed.
• Customer Factory: Recognizing that successful startups operate as customer factories, efficiently acquiring and retaining customers.
• Business Model: Understanding that your business model is the core of your product.

Examples:

• Mary’s Coffee Shop: The chapter uses the example of Mary’s Coffee Shop to illustrate the Fermi estimate approach to assess the viability of her coffee shop idea.
• Airbnb: Airbnb’s early efforts to gain traction and build a viable business model are discussed.

Chapter 4: Stress Test Your Idea for Feasibility

Theory: This chapter focuses on the feasibility of turning your idea into a reality. It emphasizes the importance of planning the stages of development and rollout for your product or service.

Key Concepts:

• Traction Ramp: Visualizing the stages of growth, from initial traction to scaling.
• Now-Next-Later Rollout Plan: Dividing the product development and rollout into stages: Now (Problem/Solution Fit), Next (Product/Market Fit), and Later (Scale).
• Wizard-of-Oz MVPs: Understanding that you can create the illusion of a fully functional product while manually handling certain aspects.
• Right Action, Right Time: Recognizing the importance of timing and prioritization in startup development.

Examples:

• Steve’s Traction Roadmap: The chapter uses Steve’s traction roadmap as an example of how to chart the stages of development and rollout.
• Zappos: Zappos’s early focus on delivering exceptional customer service, even when their backend systems were not fully automated, illustrates the concept of a Wizard-of-Oz MVP.

Chapter 5: Communicate Your Idea Clearly and Concisely

Theory: This chapter emphasizes the importance of effective communication of your startup idea. It explores how different stakeholders perceive your idea and how to create a compelling elevator pitch.

Key Concepts:

• Elevator Pitch: Crafting a concise and persuasive description of your business that can be delivered in the time it takes to ride an elevator.
• Worldviews: Understanding that different stakeholders (investors, customers, advisors) have distinct perspectives and interests.
• Business Model Pitch Deck: Outlining your business model pitch, emphasizing desirability, viability, and feasibility.
• Customer Story Pitch: Creating a narrative that communicates the value of your product or service to customers.

Examples:

• Steve’s Elevator Pitch: The chapter explores how Steve improves his elevator pitch to effectively communicate his business idea.
• The iPad: The iPad’s success is attributed to Apple’s ability to communicate its value proposition clearly and concisely, emphasizing how it enhances users’ lives.

These chapters in Part I of “Running Lean” lay the foundation for entrepreneurs to design, evaluate, and communicate their startup ideas effectively. They provide a practical framework for turning ideas into viable business models, emphasizing customer desirability, financial viability, and feasible execution.

Part 2: Validation

Chapter 6: Validate Your Idea Using 90-Day Cycles

Theory: This chapter introduces the concept of validating startup ideas through a structured and time-bound approach. The theory is that by breaking the validation process into 90-day cycles, entrepreneurs can systematically test their assumptions and gather valuable insights.

Key Concepts:

• 90-Day Cycle: The core concept is structuring your startup’s validation efforts into 90-day cycles, making it more manageable and measurable.
• Expected Outcomes: Declaring the expected outcomes upfront helps clarify the goals and results you aim to achieve within the cycle.
• Falsifiable Hypotheses: Emphasizing the importance of creating hypotheses that can be tested and proven false.
• Control Group: Using a control group to compare the outcomes of experiments and validate hypotheses more rigorously.
• Regular Reporting Cadence: Establishing a regular schedule for reporting progress and outcomes.

Examples:

• Mary’s Coffee Shop: Mary applies the concept of 90-day cycles to test various aspects of her coffee shop business, such as pricing, menu offerings, and marketing strategies.
• Dropbox: Dropbox’s early efforts to validate their product included using controlled experiments to test hypotheses about user behavior and engagement.

Chapter 7: Kick Off Your First 90-Day Cycle

Theory: This chapter guides entrepreneurs on how to initiate and structure their first 90-day validation cycle effectively. The theory is that a well-planned and executed first cycle sets the stage for successful validation.

Key Concepts:

• Problem/Solution Fit Playbook: Defining the playbook for achieving problem/solution fit by focusing on customer problems and solutions.
• Mafia Offer Campaign: Developing and running a campaign that presents a compelling offer to early customers.
• Customer Story Pitch: Crafting a narrative that communicates the value of your product or service to customers effectively.
• Surveys and Focus Groups: Avoiding reliance on surveys and focus groups and favoring direct interaction with customers for feedback.

Examples:

• Steve’s Coffee Shop: Steve’s cafe initiates its first 90-day cycle by using the Mafia Offer Campaign playbook to test its initial offering and gather feedback.
• LinkedIn: LinkedIn’s early approach to building problem/solution fit involved offering a simple, compelling value proposition to early users.

Chapter 8: Understand Your Customers Better Than They Do

Theory: This chapter focuses on the importance of deeply understanding your customers’ needs and problems to create a product or service that truly resonates. The theory is that empathizing with customers and uncovering their “jobs-to-be-done” leads to better solutions.

Key Concepts:

• Innovator’s Bias: Acknowledging and overcoming the innovator’s bias by actively listening to customers.
• Problem Discovery Interviews: Conducting interviews with potential customers to uncover their pain points and unmet needs.
• Jobs-to-be-Done Framework: Exploring the “jobs” or tasks customers are trying to accomplish and identifying opportunities for improvement.
• Problem Discovery Sprints: Structuring focused efforts to uncover customer problems, including broad-match and narrow-match sprints.

Examples:

• Steve’s Coffee Shop: Steve conducts problem discovery interviews with potential customers to understand their preferences, which helps refine the cafe’s offerings.
• Drill Bit Example: The book discusses how understanding the broader context of the “job-to-be-done” led to the development of better drill bits.

Chapter 9: Design Your Solution to Cause a Switch

Theory: This chapter focuses on designing solutions that are compelling enough to cause customers to switch from existing alternatives. The theory is that a well-designed solution should not only meet customers’ needs but also surpass current alternatives.

Key Concepts:

• Concierge MVP: The concept of providing a highly personalized, manual version of your product or service to early customers.
• Solution Design Sprint: A structured approach to designing and refining your solution, considering desirability, viability, and feasibility.
• Addressing Desirability, Viability, and Feasibility: Ensuring your solution is not only desirable to customers but also financially viable and feasible to implement.
• Five P’s of MVP: The five components that make up a Minimum Viable Product: Purpose, Priority, Plan, Process, and Prototype.

Examples:

• Steve’s Coffee Shop: Steve uses a concierge MVP to offer personalized coffee recommendations to customers, demonstrating the value of the cafe’s expertise.
• iPad: The chapter references the iPad’s success in offering a user-friendly, seamless experience that caused many customers to switch from traditional laptops or computers.

Chapter 10: Deliver a Mafia Offer Your Customers Cannot Refuse

Theory: This chapter explores the concept of delivering a compelling “Mafia Offer” that customers find irresistible. The theory is that a well-crafted offer can drive early customer adoption and loyalty.

Key Concepts:

• Offer Delivery Sprint: A structured approach to developing and delivering the Mafia Offer.
• Customer Story Pitch: Creating a persuasive narrative that conveys the value of your offer to customers.
• Customer Factory Metrics: Identifying and tracking key metrics that indicate the success of your offer.
• Constraint Breaking: Formulating strategies to overcome constraints in your customer acquisition process.

Examples:

• Steve’s Coffee Shop: Steve’s cafe delivers a Mafia Offer by offering customers free coffee for a week, creating a buzz and encouraging initial adoption.
• Apple: The chapter mentions how Apple’s launches, such as those of the iPhone, were accompanied by compelling offers and narratives that drove customer enthusiasm and loyalty.

Chapter 11: Run a 90-Day Cycle Review

Theory: This chapter emphasizes the importance of regular review and reflection on the progress made during the 90-day validation cycle. The theory is that reviewing and learning from your efforts are critical for continuous improvement.

Key Concepts:

• Pre-Review Meeting: A meeting to prepare for the 90-day cycle review.
• Progress Report Pitch Deck: Creating a concise presentation summarizing the progress and outcomes of the cycle.
• Constraint Identification: Identifying constraints or bottlenecks that may have limited progress.
• Iterative Learning: Embracing a culture of learning and iteration to refine your startup approach.

Examples:

• Steve’s Coffee Shop: Steve conducts a pre-review meeting with Mary to prepare for the cycle review, which includes analyzing customer feedback and identifying constraints.
• Startup X: The book provides an example of a startup using the review process to pivot its strategy based on the lessons learned during the 90-day cycle.

These chapters in Part II of “Running Lean” provide practical guidance for entrepreneurs to systematically validate their startup ideas, gain a deep understanding of customer needs, design compelling solutions, and deliver offers that drive customer adoption. The 90-day cycle framework and continuous learning are central themes to ensure startups are on the path to success.

Part 3: Growth

Chapter 12: Get Ready to Launch

Theory: This chapter focuses on the final steps before launching a startup. The theory is that launching a product or service requires careful planning, preparation, and attention to detail to ensure a successful market entry.

Key Concepts:

• Customer Factory: The concept of continuously acquiring and retaining customers in a systematic and efficient manner.
• Automation: Identifying opportunities to automate aspects of your customer acquisition and retention processes.
• Value Delivery: Ensuring that your product or service delivers value to customers as promised.
• MVP Batches: The idea of rolling out your Minimum Viable Product (MVP) in batches rather than all at once to gather feedback and make improvements.
• Metrics Dashboard: The importance of tracking key metrics to monitor the performance of your startup.

Examples:

• Altverse Team: The book follows the Altverse team as they prepare to launch their concierge MVP, highlighting the steps they take to ensure a successful launch.
• Amazon: The chapter discusses how Amazon focuses on value delivery to create happy customers, offering fast and reliable shipping as a key part of its value proposition.

Chapter 13: Make Happy Customers

Theory: This chapter explores the concept of creating and maintaining happy customers. The theory is that satisfied customers are more likely to become loyal and refer others, contributing to sustainable growth.

Key Concepts:

• Behavior Design: Understanding how to design products or services that influence customer behavior positively.
• The Happy Customer Loop: Exploring the cycle of customer satisfaction, loyalty, and referrals.
• Feature Prioritization: Applying the 80/20 rule to prioritize features and improvements based on customer impact.
• Habit Formation: Learning how to leverage behavioral science to create habits among customers.
• Customer Progress Roadmap: Charting a path for customers to achieve their desired outcomes through your product or service.

Examples:

• Altverse Team: The Altverse team learns about behavior design and applies it to their concierge MVP, focusing on creating habits among users.
• LinkedIn: LinkedIn’s approach to feature prioritization and habit formation is discussed as an example of a company that focuses on making customers happy.

Chapter 14: Find Your Growth Rocket

Theory: This chapter introduces the concept of finding a “Growth Rocket,” a strategy or channel that can drive rapid and scalable growth for your startup. The theory is that identifying and optimizing a growth strategy is crucial for long-term success.

Key Concepts:

• Growth Rockets: The idea that certain strategies or channels can act as “rockets” to propel your startup’s growth.
• Rocket Ship Growth Model: Understanding the dynamics of exponential growth, where each user brings in more users.
• Growth Loops: Exploring the three types of growth loops: Revenue Growth Loop, Retention Growth Loop, and Referral Growth Loop.
• Primary Growth Rocket: Identifying the most promising growth strategy as your primary focus.
• Short-Listing Growth Rocket Candidates: Evaluating and selecting potential growth strategies.

Examples:

• Altverse Team: The chapter follows the Altverse team as they explore potential growth rockets and conduct experiments to validate their primary growth strategy.
• Facebook: Facebook’s early growth through user referrals and the viral spread of the platform is presented as an example of a powerful growth loop.

Chapter 15: Epilogue

Theory: The book concludes with an epilogue that encapsulates key principles and insights for entrepreneurs. The theory is that these principles serve as a guide for aspiring entrepreneurs and reinforce the importance of a Lean Startup approach.

Key Concepts:

• The BOOTSTART Manifesto: A set of 16 principles that summarize the core tenets of the Lean Startup approach, including concepts like focusing on customer problems, avoiding unnecessary planning, and embracing continuous learning.
• Entrepreneurial Mindset: Encouraging readers to adopt the mindset of an entrepreneur, emphasizing the idea that anyone can start and build a successful business.
• Permissionless Entrepreneurship: Reinforcing the idea that you don’t need permission from others to start a business, and that taking action is the first step toward success.
• Problem-Centric Approach: Emphasizing the importance of focusing on customer problems rather than falling in love with a specific solution.
• Act on Your Ideas: Encouraging readers to take action on their entrepreneurial ideas and not wait for the “perfect” moment.

Examples:

• Various Examples: The epilogue draws upon the examples and experiences shared throughout the book to illustrate the principles of the BOOTSTART Manifesto.
• Historical Entrepreneurs: The epilogue may reference historical entrepreneurs who embodied the principles of Lean Startup thinking, such as Steve Jobs, Jeff Bezos, or Elon Musk.

In conclusion, Part III of “Running Lean” by Ash Maurya guides entrepreneurs through the critical stages of preparing for launch, creating happy customers, and identifying growth strategies. These chapters emphasize the importance of continuous improvement, customer-centricity, and the adoption of a Lean Startup mindset to build and sustain a successful business.

Additional Reading

1. “The Lean Startup” by Eric Ries: This book is considered one of the seminal works on lean startup methodology, providing insights into building successful businesses by continually testing and iterating.
2. “Zero to One” by Peter Thiel: In this book, venture capitalist Peter Thiel explores the concept of creating startups that go from zero to becoming monopolies, offering valuable insights on innovation and entrepreneurship.
3. “Lean Analytics” by Ben Yoskovitz and Alistair Croll: This book delves into the importance of data-driven decision-making for startups and provides practical guidance on measuring success and growth.
4. “Traction” by Gabriel Weinberg and Justin Mares: The authors discuss various channels for gaining traction and customer acquisition, offering a framework to help startups find the right distribution strategy.
5. “The Startup Owner’s Manual” by Steve Blank and Bob Dorf: This comprehensive guide outlines the step-by-step process for building a successful startup, emphasizing the importance of customer development and validation.
6. “Good to Great” by Jim Collins: While not strictly focused on startups, this book examines what makes some companies excel and provides valuable lessons in building sustainable businesses.
7. “Lean Thinking” by James P. Womack and Daniel T. Jones: This book explores lean principles in manufacturing and how they can be applied to other industries, including startups and entrepreneurship.
8. “The Art of Start 2.0” by Guy Kawasaki: Guy Kawasaki shares insights and advice for aspiring entrepreneurs, covering topics such as fundraising, marketing, and product development.
9. “Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne: This book introduces the concept of creating uncontested market spaces (blue oceans) rather than competing in crowded markets (red oceans), providing a strategy for innovation.
10. “Sprint” by Jake Knapp: While primarily focused on product design and development, this book outlines a five-day process for solving critical business problems and launching new products or services.

These books offer a wealth of knowledge and strategies for entrepreneurs and innovators looking to build successful businesses, refine their startup ideas, and navigate the challenges of the business world. Each book brings its unique perspective and insights to the table, catering to different aspects of entrepreneurship and business growth.

Additional Reading

1. “Lean UX” by Jeff Gothelf and Josh Seiden: This book explores how to apply lean principles to the user experience (UX) design process, emphasizing collaboration, feedback, and iterative design in product development.
2. “Lean Branding” by Laura Busche: Laura Busche provides guidance on building a strong brand identity for startups and small businesses using lean principles, with a focus on rapid experimentation.
3. “The Innovator’s Dilemma” by Clayton Christensen: This classic work examines the challenges faced by established companies in disruptive markets and offers insights into innovation and staying competitive.
4. “Hooked: How to Build Habit-Forming Products” by Nir Eyal: This book delves into the psychology of building products that create user habits, offering strategies for building and retaining a loyal customer base.
5. “The Lean Product and Lean Analytics Collection” by Ben Yoskovitz and Alistair Croll: This collection includes “Lean Analytics” and “Lean Product and Lean Product and Lean Analytics,” providing a comprehensive guide to data-driven decision-making and product development.
6. “The Innovator’s Solution” by Clayton Christensen: Building on “The Innovator’s Dilemma,” this book offers actionable advice on how to create new markets and sustain growth through disruptive innovation.
7. “Nail It, Then Scale It” by Nathan Furr and Paul Ahlstrom: The authors present a framework for validating and scaling startup ideas, emphasizing the importance of achieving product-market fit before scaling.
8. “Business Model Generation” by Alexander Osterwalder and Yves Pigneur: This visually engaging book introduces the Business Model Canvas, a tool for designing, analyzing, and innovating business models.
9. “Traction: A Startup Guide to Getting Customers” by Gabriel Weinberg and Justin Mares: In addition to the book mentioned earlier, the authors offer a comprehensive guide to various marketing channels and strategies for achieving traction.
10. “The Lean Entrepreneur” by Brant Cooper and Patrick Vlaskovits: This book explores how to apply lean principles to entrepreneurship, emphasizing experimentation, customer feedback, and continuous improvement.

These books cover a range of topics related to entrepreneurship, product development, and business strategy, providing valuable insights and practical advice for startup founders and innovators. Each book offers a unique perspective on achieving success in the world of startups and business innovation.