1. What is the difference between learning and validated learning?
Validated learning is learning that has been tested empirically against users/the marketplace.
2. True or false: “According to the author, a startup with exponential growth in metrics like revenue and number of customers is doing well.” Explain your answer.
False. This is only true if those metrics imply a path of long-term sustainable profitability. If the startup in question is Github, it probably does. If it’s Groupon.....
3. Finish the sentence: “almost every lean startup technique we’ve discussed so far works its magic in two ways:”
By reducing inventory and increasing validated learning.
4. Ries argues that startups should pay more attention to innovation accounting than traditional accounting. Name two ways in which startups can change their financial metrics to accomplish innovation accounting.
(a) Estimate the value of patents/trade secrets and track on an internal balance sheet. (b) Require VoI calculations and add such numbers to an internal balance sheet.
5. Describe, concretely, what a car company’s supply chain would look like if it used push vs pull inventory.
Push: Each supplier pumps out parts, which are stockpiled in storerooms and warehouses. Each factory will regularly, e.g.: be shipped all the stuff it needs for the next month. Pull: Each factory keeps just a few days of parts needed, places frequent orders for the next few day’s worth.
6. Ries applies the pull inventory model to startups. But what is the unit that is being pulled, and where does it obtain the “pull signal”?
The unit is “aspects of the business that deliver value to customers.” The initial pull is validated market demand, which then translates to internal demand for features/process.
7. True or false: “Lean manufacturing is meant to give manufacturers an advantage in domains of extreme uncertainty”. Explain your answer.
True. Lean manufacturing allows manufacturers to retool and change their production much faster, greatly cheapening the cost of creating a suboptimal or unwanted product.
8. True or false: “Lean manufacturing is about harnessing the power of economies-of-scale.”
False. Lean manufacturing cheapens the cost of small runs, making the manufacturer more competitive at a lesser scale.
9. Ries discusses an anecdote of a family folding letters. The dad folds, stamps, and seals one letter at a time; whereas the kids begin by folding all letters, then stamping all, etc. Name two reasons Ries’ considers the dad’s method superior.
a) Not having to manage the intermediate outputs. b) Can discover issues later in the pipeline earlier.
10. True or false: “A consequence of lean manufacturing is that the performance of each employee as an isolated unit, in terms of output per unit of time, might *decrease*.” Explain your answer.
Lean manufacturing comes with much higher switching costs. An employee’s output might shrink, but more of it will go towards useful ends.
11. Give an example of what a “large batch death spiral” might look like in practice.
My game team is running behind schedule. To catch up, I ask the artists to produce assets without waiting for them to be tested. This then creates a large batch of work for the programmers to implement the graphics, which produces a large back of comments. This gets passed back to the artists, who do a huge number of revisions at once. The cycle continues.
12. According to Ries, the “Five why’s” method is a control system (though he doesn’t say so explicitly). What does it control, and how?
It puts a damper on major failures; it creates a mechanism by which a failure is turned into a systematic, mitigating change.
13. Explain the meaning of Toyota proverb “Stop production so that production never stops”
Do regular maintenance and improvement work to prevent larger future problems.
1. What is the difference between learning and validated learning?
Validated learning is learning that has been tested empirically against users/the marketplace.
2. True or false: “According to the author, a startup with exponential growth in metrics like revenue and number of customers is doing well.” Explain your answer.
False. This is only true if those metrics imply a path of long-term sustainable profitability. If the startup in question is Github, it probably does. If it’s Groupon.....
3. Finish the sentence: “almost every lean startup technique we’ve discussed so far works its magic in two ways:”
By reducing inventory and increasing validated learning.
4. Ries argues that startups should pay more attention to innovation accounting than traditional accounting. Name two ways in which startups can change their financial metrics to accomplish innovation accounting.
(a) Estimate the value of patents/trade secrets and track on an internal balance sheet. (b) Require VoI calculations and add such numbers to an internal balance sheet.
5. Describe, concretely, what a car company’s supply chain would look like if it used push vs pull inventory.
Push: Each supplier pumps out parts, which are stockpiled in storerooms and warehouses. Each factory will regularly, e.g.: be shipped all the stuff it needs for the next month. Pull: Each factory keeps just a few days of parts needed, places frequent orders for the next few day’s worth.
6. Ries applies the pull inventory model to startups. But what is the unit that is being pulled, and where does it obtain the “pull signal”?
The unit is “aspects of the business that deliver value to customers.” The initial pull is validated market demand, which then translates to internal demand for features/process.
7. True or false: “Lean manufacturing is meant to give manufacturers an advantage in domains of extreme uncertainty”. Explain your answer.
True. Lean manufacturing allows manufacturers to retool and change their production much faster, greatly cheapening the cost of creating a suboptimal or unwanted product.
8. True or false: “Lean manufacturing is about harnessing the power of economies-of-scale.”
False. Lean manufacturing cheapens the cost of small runs, making the manufacturer more competitive at a lesser scale.
9. Ries discusses an anecdote of a family folding letters. The dad folds, stamps, and seals one letter at a time; whereas the kids begin by folding all letters, then stamping all, etc. Name two reasons Ries’ considers the dad’s method superior.
a) Not having to manage the intermediate outputs. b) Can discover issues later in the pipeline earlier.
10. True or false: “A consequence of lean manufacturing is that the performance of each employee as an isolated unit, in terms of output per unit of time, might *decrease*.” Explain your answer.
Lean manufacturing comes with much higher switching costs. An employee’s output might shrink, but more of it will go towards useful ends.
11. Give an example of what a “large batch death spiral” might look like in practice.
My game team is running behind schedule. To catch up, I ask the artists to produce assets without waiting for them to be tested. This then creates a large batch of work for the programmers to implement the graphics, which produces a large back of comments. This gets passed back to the artists, who do a huge number of revisions at once. The cycle continues.
12. According to Ries, the “Five why’s” method is a control system (though he doesn’t say so explicitly). What does it control, and how?
It puts a damper on major failures; it creates a mechanism by which a failure is turned into a systematic, mitigating change.
13. Explain the meaning of Toyota proverb “Stop production so that production never stops”
Do regular maintenance and improvement work to prevent larger future problems.