The goal of a startup is to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible.

Measure your productivity differently – rather than 8 solid hrs of work, use learning milestones. Tangible results vs. intangible results. Build-measure-learn feedback loop. Pivot or persevere. Learning is the measure of progress for a startup.

An entrepreneur is an organization designed to create new products and services under conditions of extreme uncertainty.

Validated learning: learning by failing, but not using it as a fallback or justification for failing.

Value vs waste: The effort that is not absolutely necessary for learning what customers want can be eliminated. Validated learning is backed up by empirical data from real customers.

Experiment: in the Zappos case, the founder built a product and attempted to sell it to his customers wanted it. He did not do a market study or customer survey asking what they “thought” they wanted. Big difference. Treat your business/product as an experiment. Identify elements of the plan that are assumptions versus facts and test them out.

Value hypothesis: gauge how your vision can add value to its customers – will people come back and for how long? ie. Facebook.

Growth hypothesis: how does the idea grow – is it viral?

Strategies based on assumptions – those leap of faith assumptions. Strategies based on analogy is a bad way to strategize.

Genchi Gembutsu – go and see for yourself so you have deep firsthand knowledge. Gembetsu, a developer at Toyota, drove a minivan around the contiguous United States to get a feel for the product he was designing for his customers.

Early conversations should be to understand our potential customers and what problems they have.

Minimum Viable Product (MVP): better to sometimes Just Do It (JDI) and send it out to get early adopters who will recognize the value. Remove any feature process or effort that does not contribute directly to the learning you seek.

The only way to beat competitors is to out learn them.

“Down that road—after many iterations—you may learn that some element of your product or strategy is flawed and decide it is time to make a change, which I call a pivot, to a different method for achieving your vision.”

Innovation Accounting:

Vanity metrics: associated with huge marketing/advertising budgets rather than real growth.

Actionable Metrics: Grockit changed the metrics they used to evaluate success in two ways. Instead of looking at gross metrics, Grockit switched to cohort-based metrics, and instead of looking for cause-and-effect relationships after the fact, Grockit would launch each new feature as a true split-test experiment. Actionable, accessible, auditable.

Pivot or Persevere. There are many different ways to pivot.

Accelerate: do tasks in small batches over huge batches. This will allow the agility to change and recognize mistakes quicker. It is also faster. You need a natural feedback loop.

Adapt: if you have a technical problem, use the investigative method “the five whys” to boil it down to the human problem. Meaning, ask yourself “why” five times consecutively. For example, if you “want to be a millionaire,” ask “why?” – this helps you get down to the root of your wants and needs.

Innovate scarce but secure resources, independent development authority, a personal stake in the outcome.