This document summarizes key points from a business book club discussion on lean startup principles. It discusses how startups can use the build-measure-learn feedback loop to test hypotheses through minimum viable products and validated learning. Key aspects include establishing baselines through MVPs, tuning the engine of growth, using innovation accounting to measure what matters, and deciding when to pivot or persevere based on learning. The goal is for organizations to become more adaptive through an experimental mindset of continuous learning and improvement.

1. Create your business advantage by reading, sharing
and applying the latest thinking from some of the best
minds in business…
Co-Learning Lab
(Business Book Club)
@ The Foundry
The Foundry, East Belfast
Enterprise Business Centre,
68-72 Newtownards Road
Belfast, BT4 1GW

2. Objectives
Support the development of a learning organisation
Build a sustainable social learning environment
Support the creation of a strong collaborative
organisational culture

3. If you want to teach people a new way of
thinking, don’t bother trying to teach them.
Instead give them a tool the use of which will
lead to new ways of thinking –
Buckminster Fuller
Co-Learning Lab
(Business Book Club)
@ The Foundry

4. Co Learning Lab - Collaborate
“in front of the new complexity of business, the only solution is
the interplay, how the parts work together. The connections,
the interactions, the synapses. It is not the skeleton of
boxes, it is the nervous system of adaptiveness and
intelligence. you could call it cooperation. Whenever people
cooperate, they use less resources”
Yves Morieux

6. Knowledge emerges in response to
compelling questions
Powerful questions help attract collective energy,
insight and action as they move throughout a system
World Cafe

7. Generative Capacity
capacity to challenge
guiding assumptions …, to raise
fundamental questions regarding that which is
'taken for granted' and thereby furnish new
alternatives for action

8. QUESTIONS
 What are the key learning points from the book?
 What have I learned that is Important for me?
 What’s working?
 What’s not working?
 What do I need to know more about?
 How would I apply the key learning points to my business and or job?
 How would I measure successful implementation of the key learning
points?
 What questions have I that others might be able to help me with?
Learning
Log

9. Vision
• Start
• Define
• Learn
• Experiment
Steer
• Leap
• Test
• Measure
• Pivot
Accelerate
• Batch
• Grow
• Adapt
• Innovate
Play

10. 1. Entrepreneurs are everywhere
2. Entrepreneurship is management
3.Validated Learning
4. Build –Measure –Learn
5. Innovation Accounting

11. A startup is a human institution designed to create a
new product and service under conditions of extreme
uncertainty….
Nothing to do with size of company, sector of the economy, or industry

12. 3. VALIDATED LEARNING

14. EXPERIMENT
If you cannot fail you cannot learn!
…….basis of the scientific method

15. 4.
Build
MeasureLearn
Minimising the total time through this feedback loop is key!
Ideas
Data
Product

16. Anything a customer experiences from and
interaction with a company should be
considered part of the ‘Product’ ….this is true
for a grocery store an ecommerce website, or a
not for profit organisation…
In every case the organisation is dedicated to
uncovering a new source of ‘Value’ for
customers…The Lean Startup

17. 5. INNOVATION ACCOUNTING
Enables startups to prove objectively that they are learning
how to grow a sustainable business…
By identifying which engine of growth a
startup is using, it can then direct energy
where it will be most effective in growing the
business. Each engine requires a focus on
unique metrics to evaluate the success of
new products and prioritize new
experiments.

18. 5. INNOVATION ACCOUNTING
A quantitative approach that allows us to see whether our
engine-tuning efforts are bearing fruit, it allows us to create
learning milestones, which are an alternative to traditional
business and product milestones…
Sustainable growth follows one of three
engines of growth: 1.Paid ….. 2.Viral …..
3. Sticky

19. Innovation accounting (IA): We all need a disciplined, systematic
approach to figuring out if we are making progress and discovering if
we are actually achieving validated learning.
It and begins by turning the leap-of-faith assumptions into a
quantified financial model. IA works in three steps:
1. Use a MVP to establish real data on where the company is right
now
2. Startups must attempt to tune the engine of growth from the baseline
toward the ideal.
3. After the startup has made all the micro changes and product
optimisations it can move its baseline toward the ideal, the
company reaches a decision point: pivot or preserve.

20. The engine of growth is the mechanism that startups use to achieve
sustainable growth. Sustainable growth is characterised by one simple rule:
New customers come from the actions of past customers. There are four
primary ways past customers drive sustainable growth:
1. Word of mouth. Embedded in most products is a natural level of growth
that is caused by satisfied customer’s enthusiasm for the products.
2. As a side effect of products usage. Fashion or status, such as luxury
goods products, drive awareness of themselves whenever they are used.
3. Through funded advertising. As long as the cost of acquiring a new
customer (marginal cost) is less than he revenue that customers generates
(marginal revenue), the excess (marginal profit) can be used to acquire
more customers. The more marginal profit, the faster the growth.
4. Through repeat purchase or use. Like subscriptions or voluntary
repurchases.

21. Innovation accounting (IA): Why?
Only 5 % of entrepreneurship is the big idea, the business
model, the whiteboard strategizing, and the splitting up of
the spoils. The other 95 % is the gritty work that is measured
by innovation accounting: product prioritising decisions,
deciding which customers to target or listen to, and having
the courage to subject a grand vision to constant testing and
feedback

22. MINIMUM VIABLE PRODUCT
Is a version of the product that enables a full turn of the Build-Measure-
Learn loop… must be able to measure its IMPACT on customers… you
need to get in front of potential customers and gauge their reactions… we
may even try selling them the prototype….
MinimumViable
Service?

23. MINIMUM VIABLE PRODUCT
Its goal is to test fundamental business
hypotheses…
Test riskiest assumptions first!
An MVP allows a startup to test its starup
assumptions and establish baseline
measures for each assumption. It fills in
real baseline data in its growth model –
conversion rates, sign-up etc.

24. In the Lean Startup model, every product, every feature,
every marketing campaign –everything a startup does, is
understood to be an experiment designed to achieve
validated learning…
Today organisations must learn to master a
management portfolio of sustainableAND
disruptive innovation.

25. The point is NOT to find the average customer, but to find the
early adopters; the customers who feel the need for the product
most acutely….. Those customers tend to be more forgiving of
mistakes and are especially eager to give feed back….
An experiment (MVP) is a ‘product’ in
its own right

26. FOUR KEY QUESTIONS!
1. Do customers recognise that they have a problem you are trying to solve?
2. If there was a solution would they buy it?
3. Would they buy it from us?
4. Can we build a solution for that problem?
Should this product be built?
Can we build a sustainable business around this set of products and services?

27. SUSTAINABLE
Our goal is to create an
institution, not just a product
or service!

28. The goal of every startup experiment is to
discover how to build a sustainable business
around that vision

29. By building a product albeit a simple one, the
company learned much more……
“Instead of writing a specification for a new feature
that described it in technical terms…. write a story
that described the feature from the point of view of
the customer”

30. LEAP OF FAITH
ASSUMPTIONS
RISK

31. External customer data: the facts that we
need to gather about customer exist only
outside the building.
“Go and see for yourself”. Means that
business should be based on deep first-
hand knowledge. Until you have seen
something for yourself first-hand you
cannot be sure you really understand any
part of the business problem.
“leap of faith assumptions: will break
or make your business”
We must always ask; “what if the user
doesn’t care about the design in the
same way we do?”
We must be willing to set aside some
of our traditional “professional
standards” to start the process of
validated learning as soon as possible.

32. The value hypothesis
tests whether a product or service really delivers value to
the customer once they are using it….
The true test of the value hypothesis is always a
voluntary exchange of value between the customer
and the organisation… value can be monitory and
non monitory…

33. The growth hypothesis
tests how new customers will discover a product or
service….

34. LEARNING MILESTONE
The MVP provides the first example of a learning milestone. An MVP
allows a startup to fill in real baseline data in it growth model – conversion rates. Sign up
and trial rates, customer life value, this is valuable as the foundation for learning
about customers and their reactions to a product….

35. Tuning the Engine of Growth
Once the baseline has been established, the startup can work
toward the second learning milestone: tuning the engine. Every
product development, marketing, other initiative that a startup
undertakes should be targeted at improving one of the drivers of it
growth model.

36. MEASURE
Measure what matters most!

37. MEASURE
Good measures, derived from Purpose,
ACCESSIBLE, ACTIONABLE, AUDITABLE

38. PIVOT OR PERSEVERE
Upon completing the Build –Measure –
Learn loop, we confront the most difficult
question any entrepreneur faces: whether
to pivot the original strategy of persevere.
What is a Pivot? Its a structured course correction
designed to test a new fundamental hypothesis about
the product, strategy and engine of growth. A pivot
requires that we keep one foot rooted in what we have
learned so far, while making a fundamental change in
strategy in order to seek even greater validated
learning.
it is not necessary to throw out
everything that came before and start
over. Instead, it is about repurposing
what has been built and what has
been learned to find a more positive
direction.

39. PIVOT OR PERSEVERE
Vanity metrics prevents pivoting: Vanity metrics can allow
entrepreneurs to form false conclusions and live in their own
private reality.When an entrepreneur has an unclear
hypothesis, it’s almost impossible to experience complete
failure, and without failure there is usually no impetus to
embark on the radical change a pivot requires…
A Pivot is a special kind of structured change
designed to test a new fundamental hypothesis
about the product, business model and engine of
growth. It is the heart of the lean startup
method.

40. ADAPTIVE ORGANISATION
An adaptive organization, one that automatically adjusts
its process and performance to current conditions.
Although the primary changes that are required in an
adaptive organization are in the mindset of its employees,
changing the culture is not sufficient, you also need to
consider processes, procedures, policies ??….
Look Up (busyness epidemic)
Look Out, Look In….

41. INNOVATE
Create space and time for
innovation
It does not matter how fast we can build. It does
not matter how fast we can measure.What
matters is how fast we can get through the
entire Build, Measure, Learn feedback loop.
Purpose, Measure , Method
By deriving measures from purpose (defined from the
customers' viewpoint), you liberate method:
Innovation and Improvement in the execution of work
follow
John Seddon

42. LEADERSHIP

43. “We can see our forests vanishing, our water-powers going to
waste, our soil being carried by floods into the sea; and the end
of our coal and our iron is in sight. But our larger waste of
human effort, which go on every day through such of our acts
as are blundering, ill-directed or inefficient…. Are less visible,
less tangible, and are but vaguely appreciated”….

44. “We would respond to failures and setbacks with honesty and
learning, not with recrimination and blame….. We would
dedicate ourselves to the creation of new institutions with a
long-term mission to build sustainable value and change the
world for the better”…
Most of all, we would stop wasting people’s time….

45. QUESTIONS
 What are the key learning points from the book?
 What have I learned that is Important for me?
 What’s working?
 What’s not working?
 What do I need to know more about?
 How would I apply the key learning points to my business and or job?
 How would I measure successful implementation of the key learning
points?
 What questions have I that others might be able to help me with?
Learning
Log

46. “Wanderer, your footsteps are the road, and nothing more;
wanderer, there is no road, the road is made by walking. By
walking one makes the road, and upon glancing behind one sees
the path”

47. November meeting date will be announced soon…
Books for November is ‘Contagious’ by Jonah Berger
Why are some products and ideas talked about more than others?Why do some articles make the most emailed
list?Why do someYouTube videos go viral?Word-of-mouth! Whether through face-to-face conversations, emails
from friends, or online product reviews, the information and opinions we get from others have a strong impact on
our own behaviour… Indeed, word-of-mouth generates more than twice the sales of paid advertising and is the
primary factor behind 20-50% of all purchasing decisions.
How will you leverage word-of-mouth to promote your ideas; improve your business and
engage customers and supporters?
Come along in November to discuss, Eventbrite circulated soon…
Co-Learning Lab
(Bus ines s Book Club)
@ The Foundry
T h e F o u n d r y, E a s t B e l f a s t E n t e r p r i s e B u s i n e s s C e n t r e ,
6 8 - 7 2 N e w t o w n a r d s R o a d B e l f a s t , B T 4 1 G W