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The Lean Startup methodology is a framework developed by Eric Ries for building businesses and products through validated learning, rapid experimentation, and iterative development. Its central goal is to reduce waste and uncertainty by replacing traditional business planning with a cycle of hypothesis testing. Ries in...
At the heart of the Lean Startup is the Build-Measure-Learn feedback loop. Teams build an experiment, usually in the form of a Minimum Viable Product, measure the results with data, and learn whether their hypotheses are correct. Critically, the loop should be planned in reverse: start by deciding what you want to lear...
After running experiments, every team faces a pivot-or-persevere decision. To persevere is to continue on the current strategic path because experiments confirm that the hypotheses are correct and the approach is working. A pivot, by contrast, is a structured course correction: changing one element of the business mode...
To organize hypotheses about a business, founders use a set of canvases. The Business Model Canvas, created by Alexander Osterwalder, is a strategic tool with nine building blocks that describe how a company creates, delivers, and captures value. These blocks are: Customer Segments, Value Propositions, Channels, Custom...
Product-market fit, or PMF, is the point at which a product satisfies a strong market demand. Customers are buying, using, and recommending it, and the company can barely keep up. Marc Andreessen famously described PMF as something you can always feel: it is unmistakable when product/market fit is not happening, and un...
Before and after achieving product-market fit, founders must size their opportunity and raise capital. Market sizing typically distinguishes three layers. The Total Addressable Market, or TAM, is the total revenue opportunity available if the product achieved 100% market share, the broadest measure of market size. The...
Once a startup has product-market fit, growth becomes the central question. Eric Ries describes three engines of growth, each with its own key metrics. The Sticky Engine is driven by high customer retention; its key metric is churn rate, and growth occurs when new customer acquisition exceeds churn. The Viral Engine is...