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Showing posts with label Glossary. Show all posts
Showing posts with label Glossary. Show all posts

Lean Startup Terminology

minimum viable product (mvp)
A minimum viable product (mvp) is the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort" (similar to a pilot experiment). The goal of an MVP is to test fundamental business hypotheses (or leap-of-faith assumptions) and to help entrepreneurs begin the learning process as quickly as possible.

As an example, Ries notes that Zappos founder Nick Swinmurn wanted to test the hypothesis that customers were ready and willing to buy shoes online. Instead of building a website and a large database of footwear, Swinmurn approached local shoe stores, took pictures of their inventory, posted the pictures online, bought the shoes from the stores at full price, and sold them directly to customers if they purchased the shoe through his website.Swinmurn deduced that customer demand was present, and Zappos would eventually grow into a billion dollar business based on the model of selling shoes online.

[Note: Compare a minimum viable product (mvp) to a Maximum Value Product (MVP) which typically results from mvp iterations over time.]

Continuous deployment (only for software development)
Continuous deployment, similar to continuous delivery, is a process "whereby all code that is written for an application is immediately deployed into production," which results in a reduction of cycle times. Ries states that some of the companies he's worked with deploy new code into production as often as 50 times a day. The phrase was coined by Timothy Fitz, one of Ries's colleagues and an early engineer at IMVU.

Split testing
A split or A/B test is an experiment in which "different versions of a product are offered to customers at the same time." The goal of a split test is to observe differences in behavior between the two groups and to measure the impact of each version on an actionable metric.

A/B testing can also be performed in serial fashion where a group of users one week may see one version of the product while the next week users see another. This can be criticized in circumstances where external events may influence user behavior one time period but not the other. For example a split test of two ice cream flavors performed in serial during the summer and winter would see a marked decrease in demand during the winter where that decrease is mostly related to the weather and not to the flavor offer.

Actionable metrics
Actionable metrics can lead to informed business decisions and subsequent action.[1][24] These are in contrast to vanity metrics—measurements that give "the rosiest picture possible" but do not accurately reflect the key drivers of a business.

Vanity metrics for one company may be actionable metrics for another. For example, a company specializing in creating web based dashboards for financial markets might view the number of web page views[20] per person as a vanity metric as their revenue is not based on number of page views. However, an online magazine with advertising would view web page views as a key metric as page views are directly correlated to revenue.

A typical example of a vanity metric is 'the number of new users gained per day'. While a high number of users gained per day seems beneficial to any company, if the cost of acquiring each user through expensive advertising campaigns is significantly higher than the revenue gained per user, then gaining more users could quickly lead to bankruptcy.

Pivot
A pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."[1] A notable example of a company employing the pivot is Groupon; when the company first started, it was an online activism platform called The Point.[3] After receiving almost no traction, the founders opened a WordPress blog and launched their first coupon promotion for a pizzeria located in their building lobby.[3] Although they only received 20 redemptions, the founders realized that their idea was significant, and had successfully empowered people to coordinate group action.[3] Three years later, Groupon would grow into a billion dollar business.

Steve Blank defines a pivot as "changing (or even firing) the plan instead of the executive (the sales exec, marketing or even the CEO)."

Innovation accounting
This topic focuses on how entrepreneurs can maintain accountability and maximize outcomes by measuring progress, planning milestones, and prioritizing.

Build–Measure–Learn
The Build–Measure–Learn loop emphasizes speed as a critical ingredient to product development. A team or company's effectiveness is determined by its ability to ideate, quickly build a minimum viable product of that idea, measure its effectiveness in the market, and learn from that experiment. In other words, it's a learning cycle of turning ideas into products, measuring customers' reactions and behaviors against built products, and then deciding whether to persevere or pivot the idea; this process repeats as many times as necessary. The phases of the loop are: Ideas –> Build –> Product –> Measure –> Data –> Learn.

This rapid iteration allows teams to discover a feasible path towards product/market fit, and to continue optimizing and refining the business model after reaching product/market fit.

Business Model Canvas
The Business Model Canvas is a strategic management template invented by Alexander Osterwalder and Yves Pigneur for developing new business models or documenting existing ones. It is a visual chart with elements describing a firm's value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.[30]

Lean Canvas
The Lean Canvas is a version of the Business Model Canvas adapted by Ash Maurya specifically for startups.[28] The Lean Canvas focuses on addressing broad customer problems and solutions and delivering them to customer segments through a unique value proposition.

[Attribution: Wikipedia]

[2.10]

Glossary

A good way to learn a lot about a topic through language ... what are the key terms that define a particular topic? Here are some of the key innovation and entrepreneurship terms ...
  • Accounting: the action or process of keeping financial records relating to a particular period or purpose
  • Advertising: describe or draw attention to a product service or event in a public medium in order to promote sales or attendance
  • Benefit: an advantage or profit gained from something
  • Better: a more excellent or effective type or quality
  • Budget: an estimate of income and expenditure for a set period of time
  • Business: an organization focused on the work that has to be done to profitably solve customer problems
  • Business Model: a design for the successful operation of a business identifying revenue sources customer base products and services operational processes and details of financing
  • Business Plan: a formal statement of a set of business goals the reasons they are believed attainable the plan for reaching those goals and information about the organization or team attempting to reach those goals
  • Cash Flow: the total amount of money being transferred into and out of a business especially as affecting liquidity
  • Change: become or make different
  • Core Competency: a defining capability or advantage that distinguishes a venture from its competitors
  • Cost: an amount that has to be paid or spent to buy or obtain something
  • Critical Success Factor (CSF): an element that is necessary for a venture to achieve its mission
  • Desire: strong feeling of wanting to have something that is not absolutely needed
  • Earn: obtain money or other value in return for products or services
  • Elevator Pitch: a short summary used to quickly and simply define a venture product service organization or event and its value proposition
  • Enterprise: a project or venture typically one that is difficult or requires effort initiative and resourcefulness.
  • Entrepreneur: a person who organizes and operates a venture
  • Entrepreneurial Mindset: the ability to recognize opportunities for innovation and enterprise
  • Entrepreneurship: the process of starting a business venture or other organization
  • Environment: the setting or conditions in which a particular activity is carried on
  • EPSCPBC: an acronym for "Earn a Profit Solving Customer Problems Better than the Competition" ... something every business venture must do to survive and thrive
  • Executive Summary: a short document or section of a document that summarizes a longer report or proposal or a group of related reports in such a way that readers can rapidly become acquainted with a large body of material without having to read it all
  • Exit Plan: a means of leaving a current situation after a predetermined objective has been achieved
  • Forecast: a prediction or estimate of future events
  • Goal: a long-term aim or desired result
  • Ideation: the formation of ideas or concepts
  • Income Statement: a financial document that gives operating results for a specific period; it typically includes sales revenue cost of sales gross income operating expenses and earnings
  • Innovation: make something new and better or improvements in something by introducing new methods ideas products services processes market positions or paradigms
  • Input: a contribution of work information money or material
  • I-P-O: abbreviation for Inputs-Process-Outputs
  • IPO: abbreviation for Initial Public Offering
  • Judgment: the ability to make considered decisions or come to sensible conclusions
  • Management: the process of dealing with or controlling things or people
  • Margin: an amount of something included so as to be sure of success or safety
  • Market: a demand for a particular commodity or service and the customers that create that demand
  • Marketing: the action or business of identifying promoting and selling products or services to selected markets
  • Mission Statement: a statement of the purpose of a venture or organization and its reason for existing; the mission statement should guide the actions of the organization spell out its overall goal provide a path and guide decision-making
  • Need:  something that is a necessity
  • Operations: the harvesting of value from assets owned by a business; manufacturing production and delivery of goods and services
  • Organization: the structure of related or connected people places and things to achieve specified objectives
  • Output: the amount of something produced by a venture
  • Plan: a detailed proposal for doing or achieving something
  • Price: the amount of money expected in payment for something
  • Problem: a matter or situation regarded as unwelcome or harmful and needing to be dealt with and overcome
  • Process: a series of actions or steps taken in order to achieve a particular end
  • Profit: a financial gain especially the difference between the amount earned and the amount spent in buying operating or producing something
  • Research & Development: work directed toward the creation innovation improvement and introduction of products and processes
  • Resources: a stock or supply of money materials staff and other assets that can be drawn on by an organization in order to function effectively
  • Reward: something received as a result of achievement
  • Risk: the possibility that something unpleasant or unwelcome will happen
  • Sales: the exchange of a product or service for money; the action of selling something; the organization within a venture responsible for the selling activities
  • Social Responsibility: an obligation to act in ways that benefit society at large
  • Something: a product service process position or paradigm
  • Solution: products services or processes designed to meet particular need wants and desires
  • Strategic Position: the orientation of a venture in relation to the environment in particular the competition
  • Team: two or more people working together
  • Technology: the application of scientific knowledge for practical purposes
  • Time: the indefinite continued progress of existence and events in the past present and future regarded as a whole
  • Timing: the choice judgment or control of when something should be done
  • Transformation: a qualitative change from one set of elements into another by a predetermined process utilizing a set of resources
  • Value:  the importance worth or usefulness of something
  • Value Equation: Value equals Benefits divided by Price (V = B/P)
  • Value Proposition: a promise of value to be delivered and a belief from the customer that value will be experienced
  • Venture: a business enterprise involving risk but with a significant reward for success
  • Vision: the ability to think about or plan the future with imagination or wisdom
  • Want: a strong wish for something
  • Work: activity involving mental or physical effort done in order to achieve a purpose or result

Basic Business Glossary

  • Accounting: the action or process of keeping financial records relating to a particular period or purpose
  • Advertising: describe or draw attention to a product, service, or event in a public medium in order to promote sales or attendance
  • Assignments: a task given to someone as part of a job