Review

An informative book for founders or entrepreneurs new to product. The Lean Canvas is a useful tool - like painting with a roller it can help you make quick progress. The rest of the book answers the question, what do I do next? The author provides a framework to think about product development and growth - which does a good job of baking in the theory of constraints, continuous improvement and a sensible order of operations.

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Key Takeaways

The 20% that gave me 80% of the value.

Traction is evidence that people other than you and your team care about your idea. Traction is evidence of a working business model. Traction is the goal.

The business model is the product.

Start with problems before solutions. Customers don’t care about your solution, they care about their problems.

Prioritise testing what’s riskiest versus what’s easiest. Tackle your riskiest assumptions in stages. Answer ‘Should we build it?’ before you answer ‘can we build it?’.

You don’t need a working product to uncover problems worth solving - or even to land customers.

A minimum viable product (MVP) is the smallest solution that creates, delivers and captures customer value.

Most new products fail. Most startups that succeed (66%) had to drastically change their plans to do so. Starting with a great plan is less important than finding a plan that works before running out of resources. It’s important to have a process to quickly separate good ideas from bad ideas.

A Lean Canvas can replace a business plan and deconstruct your idea into clearly articulated assumptions.

The canvas doesn’t place emphasis on the solution and prompts you to think more broadly. Customers care about problems, Investors care about traction. You need to own the entire business model and make all the pieces fit.

The Business Model Design Playbook

1. Deconstruct your idea on a (Lean Canvas)
2. Test for desirability (Lean(er) Canvas)
3. Test for viability (Fermi Estimate)
4. Test for feasibility (Traction Roadmap)
5. Communicate your idea clearly and concisely (Business model pitch)

Tips for filling out the Lean Canvas

• Sketch the canvas end to end in 20 minutes, think of it as a broad brush stroke
• Complete as individuals first before discussing as a group
• You can leave boxes blank and come back to them
• Be concise - respect the constraints of the single page, brevity can provide clarity
• The time horizon should be immediate - what are you going to do next?
• You can complete in any order. Loop back on yourself to make sure things stick together
• Don’t confuse customers with users

Your unique value proposition should answer: Why is your product different and worth paying attention to? Distill the essence of your product into a few words that could be the headline on your landing page.

• Focus on outcomes. Benefits over features:
• Feature: professionally designed templates
• Benefit: eye-catching resume that stands out
• Outcome: landing your dream job
• Answer what, why and who

When you try to reach everyone you reach nobody. Identify your first customers.

Price is part of the product, it defines your customers. Getting paid is a big part of idea validation.

Use outcome metrics versus output metrics (MRR, LTV, New Customers). Use leading metrics where you can - so you can see how things are doing in real-time.

Stress Test Your Idea for Desirability

The best way to get a customers’ attention is by leading with your unique value proposition. A compelling UVP promises a better desired outcome, a better way of achieving the desired outcome or both. Focus on who you’re targeting and the problems that stop them from achieving their desired outcomes.

The innovators gift: new problems come from old solutions. Frame the problem as existing obstacles with old solutions that prevent customers from achieving their desired outcomes.

Once upon a time, there was a [customer]. Whenever they needed to get a certain [job] done, they would pick [existing alternative]. One day, that existing alternative broke because of [switching trigger]. Because of that, the [customer] realised that the [existing alternative] wasn’t the best choice for the [job] because of these [problems]. This realisation pushed the [customer] to search for a better solution and consider other alternatives. Until finally they found a [new solution] that helped them get the [job] done better.

Cause a switch by anchoring new solutions against problems caused by old solutions.

A switching trigger is when we realise our existing solution is no longer good enough to get the job done.

The Customer Focus Model describes the casual forces (Push, Pull, Inertia and Friction) that shape how people select and use a solution for a specific job-to-be-done:

• A switching trigger provides a motivation to switch (a bad experience, change in circumstance, or an awareness event)
• Inertia and resistance to change means new solutions need to be much better (3-10x better) than the status quo to overcome the friction associated with switching.
• A switch starts when attractor forces are greater than the detractor forces: Push + Pull > Inertia + Friction

Stress Test Your Idea for Viability

The trap of financial projections is focusing on the outputs not the inputs. Its the inputs to the business model that matter.

Don’t create a financial forecast → use a fermi estimate instead. A bottom-up approach, starting with a set of inputs, roughly estimated with assumptions. Then test the assumptions. We can stress test viability with just 5-7 key metrics. Traction is the goal. Traction is the rate at which a business model captures monetisable value from its customers. Monetisable value doesn’t have to be revenue, but it’s a future indicator of revenue

Testing viability with a Fermi estimate:

1. Define a minimum success criteria MSC. The smallest outcome that would make you deem your project a success. If a startup frame it as ARR(Annual Recurring Revenue).
2. Assess if your customer funnel can deliver on this goal? Input your best-guess estimates for the pirate metrics (AARRR). Estimate the active customers you’ll need, your customer acquisition rate, churn, customer lifetime value, estimate the number of leads, estimate your referral loop.
• If you have an MSC goal of achieving $10m ARR in three years to achieve that goal you’ll need to acquire one of the following:
• 1 million customers paying you $10/yr
• 100,000 customers paying you $100/yr
• 10,000 customers paying you $1,000/yr
• 1,000 customers paying you $10,000/yr
• 100 customers paying you $100,000/yr
• 10 customers paying you $1,000,000/yr
3. If things don’t look promising, redefine your model. It’s better to invalidate your model in 5 minutes than to spend 5 months pursuing it. A Fermi estimate also helps identify the riskiest assumptions.

Stress Test Your Idea for Feasibility

Don’t create a product roadmap - use a traction roadmap instead. Product roadmaps assume you know what you’re building traction roadmaps don’t.

If you set your success criteria (e.g. how many active customers do you want 3 years out) you can work backwards by assuming different growth rates to demonstrate how many customes you’ll need at each point. Note lower growth rates require more customers earlier / higher customer acquisition rate at the beginning.

Formulate a Now-Next-Later rollout plan. Avoid premature optimisation - prioritising the wrong things at the wrong time. At any given point there are only a few key actions that can have the biggest impact on your business model:

• Now: Problem/Solution fit (3-6 months):
• Uncover customer needs
• Identify what your MVP needs
• Secure tangible commitments
• You don’t need a working product to acquire paying customers
• Aim for an evidence-based go/no go decision to move forward to the build stage.
• Next: Product/Market fit (18-24 months):
• Build the first iterations
• Demonstrate value delivery
• Improve product continuously
• You don’t need lots of users at this stage
• Later: Scale
• Pursue growth
• You only need to focus on one engine of growth at a time

Communicate Your Idea Clearly and Concisely

An elevator pitch is a quick overview of your idea that you can present in 30 seconds. Most fall flat because they assume too much and are too solution centric. Instead focus on why your product needs to exist.

Part 2: Validation

The Continuous Innovation Framework: Addressing your weakest link is the only thing that matters, everything else is premature optimisation. Identify problems → generate a diverse set of solution candidates → make bets on the most promising ones → test → decide on next actions.

Validate Your Idea Using 90-Day Cycles

Baseline your system, find the limiting constraint and get to the root cause behind the limiting constraint. This should expose the riskiest assumptions of your business model. Once you’ve moved the constraint start the cycle again.

Generative or discovery experiments uncover key insights that help you formulate better hypotheses, which you then verify through evaluative or traction experiments.

• Seven habits for highly effective experiments:
1. Declare your expected outcomes upfront
2. Make declaring outcomes a team sport (first as individuals, then as a team)
3. Emphasise estimation, not precision
• Search for analogs
• Use your traction roadmap and AARRR model
• Start with ranges instead of absolutes
4. Measure actions not words
5. Turn assumptions into falsifiable hypothesis
6. Time-box experiments
7. Always use a control group

Problem/Solution Fit Playbook:

• Before building your product you should demonstrate there is sufficient demand for it.
• Use a Demo-Sell-Build process to create customers without creating a product.
• Use smoke tests, landing pages, webinars, preorders, crowdfunding, direct sales or mafia offers to to validate demand.
• You’re done with problem/solution fit when you can make an evidence-based go or no-go decisions on whether to move forward with your business model to stage 2. You can:
• Repeatedly attract, activate, and cause a switch with your early adopters (Desirability).
• Secure sufficient tangible commitments (e.g., advance payments, letters of intent) from early adopters, as defined by your traction roadmap (Viability).
• Clearly define the smallest thing you need to build (your MVP) to deliver value to your early adopters.
• A mafia offer is an offer your customers cannot refuse because it solves their top problem(s) and provides a clear way to get started. Steps to build a mafia offer:
1. Understand the problem through customer interviews.
2. Define the solution that directly addresses the problem.
3. Test the offer through campaigns before building the MVP.
4. An offer includes a unique value proposition, a demo, and a call-to-action (CTA).
• You don’t need a working product to start selling; instead, focus on selling the promise.
• Conduct face-to-face interviews to uncover the real pain points and problems of customers.

Use the Customer Forces Canvas to capture insights from discovery sprints:

• PUSH (motivation for progress): Identify what changed in the interviewees’ environment that pushed them to get a job done:
• Triggering Event: the thoughts and events that moved them from passively looking, to actively looking for a solution.
• Switching Trigger: The causal event that caused them to switch. Typically a bad experience, change in circumstances or an awareness event.
• Desired Outcome: What’s the desired outcome at the start? How would they measure success?
• What’s at Stake: What were the consequences (if any) for ignoring the triggering event(s) and doing nothing?
• PULL (attraction of the chosen solution): what’s attracted them to their chosen solution:
• Consideration Set: What other existing alternatives were considered for the job?
• Chosen Solution: The chosen solution that was hired for the job and how they found it
• Unique Value Proposition (Promised Outcome): the specific appeal of the chosen solution? Why did they pick it over alternatives?
• Expected Outcome: What did they expect to achieve with the chosen solution? What specific metric(s) would they use to measure success?
• INERTIA (resistance to changing the status quo)
• Existing Solution: how are they currently getting the job done?
• What’s Broken: Problems with existing solution as a result of the switching trigger?
• Barriers to Switching: Any existing habits or switching costs
• FRICTION (resistance to using the chosen solution)
• Anxieties: fears or worries the person expressed as they started using their chosen solution.
• Barriers to Adoption: challenges the person encountered with the chosen solution during usage.
• Additional Details: any additional insights about the chosen solution.
• WHAT’S NEXT
• Actual Outcome: What was the actual outcome after using the chosen solution?
• Next Summit: What’s the next action for this person? Was the job done well enough? Will they continue using their chosen solution or consider using a new solution?

Design Your Solution to Cause a Switch

A product that causes a switch offers customers a better way to achieve their goals without the existing problems.

The MVP must significantly outperform existing alternatives, with a 3x–10x improvement needed to provide a strong incentive to switch.

Identifying the primary struggle in the customer journey is the first step in designing an MVP. Primary struggles often arise from dissatisfaction, friction during usage, or friction during solution selection.

Crafting a compelling promise involves shifting focus to what is different and better about your product. Identify key attributes to improve and map them to your product’s strengths, such as speed, performance, or simplicity. It’s important to align with customer values and not just focus on functionality.

Defining switching triggers is key to targeting the right customers; they could be experiencing bad outcomes or looking for a better way.

Consider the three common MVP approaches: Concierge MVP, Wizard-of-Oz MVP, and Foot-in-the-Door MVP.

Ensure that your MVP addresses a specific problem, delivers a compelling promise, is priced fairly, targets the right people, and is packaged for quick deployment.

Deliver a Mafia Offer Your Customers Cannot Refuse

A Mafia Offer is an offer your customers can’t refuse. The goal of the mafia offer is to secure enough tangible commitments from early adopters to warrant building your MVP.

A good pitch acknowledges popular existing alternatives (the competition) and demonstrates how your solution is better. A strong narrative will help your pitch. Consider using a storytelling template like the Hero’s Journey.

Practice, active listening, constant testing and iteration will result in a great pitch.

Be prepared to run 2 sprints over 4 weeks and pitch to 20-30 people. You should get to a 60-80% conversion rate from qualified leads to your customer specific call to action.

3 steps to run an offer delivery sprint: Assemble, deliver and optimise your offer.

Use your existing components: triggering event, the stakes, the problems, your unique value proposition then end with a strong call to action.

Demo your new, better way. Showcase your UVP with the smallest thing possible in order to maximise the speed of learning.

Position your MVP as a prize (use ‘early access’ not Beta). Charge from day one (include your pricing model in the call to action). Make a logical case for how you arrived at a fair price anchored against existing alternatives and the value you deliver.

Look for the key constraint, and look for ways to improve it.

90-day Cycle Reviews

• Collect and update your artefacts: elevator pitch, lean canvas, traction roadmap.
• Assemble a progress report pitch deck. Include the following slides:
1. Review of the 90-day cycle objectives
2. Elevator pitch
3. Lean Canvas snapshot
4. Traction roadmap snapshot

What we did:

5. Validation campaigns you selected
6. Experiments you ran

What you learned:

7. Insights and key learnings
8. Traction: summarise the results from your campaign

What’s next:

9. Current constraint in your business model
10. 3P Next Action: Persevere, pivot or pause.
• Invite your key stakeholders
• Deliver your progress update in 10 minutes (20% of the meeting) leave 80% of the meeting for feedback and decisions.
• Solicit advice. Avoid success theatre.

Part 3: Growth

Get Ready To Launch.

Once you have your first couple of customers, it’s tempting to shift your focus from acquisition to product development (adding features). Instead get just enough traffic to support learning, then focus on key constraints - many of which are likely to be in the acquisition funnel (e.g. replacing high-touch interactions with automated touchpoints).

Be razor focused on getting to MVP release. Set a nonnegotiable launch date and fight scope creep.

Create a company wide dashboard so you can assess how your business model / funnel is performing (AARRR). Use fewer metrics to help you focus on the right things. Strive for actionable metrics. Use cohorts to measure and visualise the effectiveness of your business model / funnel over time - by pitching one batch of users against another. Cohorts can help you home in on causality - by inspecting what changed for that batch

Make Happy customers

Focus on helping customers achieve their desired outcomes. Once you’ve got some level of repeatable acquisition focus on activation. Acquisition is where happy customers are made - get them to the ‘Aha moment’. Creating happy customers improves retention, revenue and referral.

If you have 5 sprints, focus 2 on getting customers to the aha moment, and 3 on getting to their switching moment (retained them enough times to go all in on your solution).

Immediately after launch 80% of your time should be spent measuring and improving existing features, rather than chasing new shiny features.

Outlearn the competition: speed of learning is the new unfair advantage.

Trigger your customers: set the right expectations, use reminders, share best practice, prompt the next JTBD once the previous one is completed. Establish regular touchpoints (weekly activity reports). Nudge with email. Integrate your product into their existing routines.

Help your customers make progress: reduce the paradox of choice, allow them to experiment and provide high-touch support. Continuously improve your product. Share customer case studies. Make giving feedback easy.

Reinforce progress: show progress indicators, celebrate customer wins, give meaningful gifts.

Find your Growth Rocket

• Once your customer segments demonstrate regular use of the product and are making progress toward their desired outcomes → it’s time to focus on growth.
• In the growth phase you have to move from high-touch to more scalable paths to customers.
• The Rocket Ship Growth Model
• Three key parts:
• Payload: your core product
• One or more booster rockets: non-scalable customer acquisition channels
• Spacecraft: your primary scalable customer acquisition channel
• Each part has it’s own fuel (time, money, content, users) and helps you gain altitude (traction). The range of the rocket is determined by the efficiency of its engine and fuel.

Growth rockers utilise a flywheel (growth loop) in their engine design that regenerates propellant, which drives sustainable growth (traction).

• Three stage process:
• Define your mission. Sketch out how many boosters you need (non-scalable channels) and how you’ll power your spacecraft (scalable channel).
• Validate your design assumptions before lifting off (desirability, viability, feasibility)
• Identify, test and utilise non-scalable booster rockets (PR, direct sales, events)
• Optimise your core happy customer loop.
• Introduce additional boosters as needed until you achieve product/market fit
• Fire your growth rocket - your sustainable flywheel or growth loop
• You can attract new customers from the actions of past customers if you reinvest part of the value you capture into customer acquisition:
• E.g. Money, Content, Data, Referrals, Retention
• If using money make sure LTV (Customer Lifetime Value) is higher than CAC (Cost of customer acquisition).
• Building a growth rocket requires a renewable propellant and an efficient engine.

Deep Summary

Longer form notes, typically condensed, reworded and de-duplicated.

Running Lean - Iterate from Plan A to a Plan That Works

• Traction is evidence that people other than you and your team care about your idea. Traction is evidence of a working business model. Traction is the goal.
• The business model is the product.
• Start with problems before solutions. Customers don’t care about your solution, they care about their problems.
• Prioritise testing what’s riskiest versus what’s easiest. Tackle your riskiest assumptions in stages.
• Answer ‘Should we build it?’ before ‘can we build it?’
• You don’t need a working product to uncover problems worth solving - or even to land customers.
• A minimum viable product (MVP) is the smallest solution that creates, delivers and captures customer value.
• The 90-day Model-Prioritise-Test cycle allows a team to systematically search for a repeatable scalable business model:
• Update and review the Lean Canvas and Traction Roadmap
• Prioritise the riskiest assumptions and propose a number of validations strategies
• Make number of small bets / experiments. Double down on what’s working
• The only way to ensure you build what customers want is to engage them continuously.

The Continuous Innovation Roadmap:

• Design: Focus on creating a business model as the true product of your startup, deconstructing your vision to avoid common pitfalls and communicate your idea clearly.
• Validation: Iteratively test your business model with 90-day cycles, starting with validating problem/solution fit using evidence-based methods like the Demo-Sell-Build process.
• Growth: After validating your product, launch your MVP and iterate toward product/market fit by focusing on what’s riskiest, using a staged launch to ensure scalability and repeatability.

What you’ll learn:

• Deconstruct an idea into a business model
• Test whether the idea is worth pursuing
• Identify and prioritise the riskiest assumption
• Stress test his riskiest assumptions using small fast experiments
• Use customer interviews to learn from customers
• Achieve traction without a product
• Pitch to customers so they buy
• Operate and make decisions under conditions of extreme uncertainty.

Part 1: Design

• Most new products fail. Most startups that succeed (66%) had to drastically change their plans to do so.
• Starting with a great plan is less important than finding a plan that works before running out of resources.
• It’s important to have a process to quickly separate good ideas from bad ideas.
• A Lean Canvas can replace a business plan and deconstruct your idea into clearly articulated assumptions.

• The canvas doesn’t place emphasis on the solution and prompts you to think more broadly. Customers care about problems, Investors care about traction. You need to own the entire business model and make all the pieces fit.

The Business Model Design Playbook

1. Deconstruct your idea on a (Lean Canvas)
2. Test for desirability (Lean(er) Canvas)
3. Test for viability (Fermi Estimate)
4. Test for feasibility (Traction Roadmap)
5. Communicate your idea clearly and concisely (Business model pitch)

Chapter 1: Deconstruct your Idea on a Lean Canvas

• A Lean Canvas can describe a business model, product release or a single feature.
• A business model describes how you create, deliver and capture value from customers.
• Tips for filling out the Lean Canvas
• Sketch the canvas end to end in 20 minutes, think of it as a broad brush stroke
• Complete as individuals first before discussing as a group
• You can leave boxes blank and come back to them
• Be concise - respect the constraints of the single page, brevity can provide clarity
• The time horizon should be immediate - what are you going to do next?
• You can complete in any order. Loop back on yourself to make sure things stick together
• Don’t confuse customers with users
• When to split your canvas:
• Split if you’re trying to capture too many business model stories on a single canvas.
• You can capture a multisided business model on one canvas (e.g. audience + advertiser)
• Your unique value proposition should answer: Why is your product different and worth paying attention to? Distill the essence of your product into a few words that could be the headline on your landing page.
• Focus on outcomes - benefits over features:
• Feature: professionally designed templates
• Benefit: eye-catching resume that stands out
• Outcome: landing your dream job
• Answer what, why and who
• When you try to reach everyone you reach nobody. Identify your first customers.
• Don’t focus on the solution too much, you’ll need to validate the problems first
• Price is part of the product, it defines your customers. Getting paid is a big part of idea validation.
• Use outcome metrics versus output metrics (MRR, LTV, New Customers). Use leading metrics where you can - so you can see how things are doing in real-time.
• Unfair Advantage examples: privileged information, expert endorsements, team expertise, personal authority, network effects, platform effects, community, existing customers, SEO ranking

Chapter 2: Stress Test Your Idea for Desirability

• Desirability: Do customers want this?
• The best way to get a customers’ attention is by leading with your unique value proposition (UVP).
• A compelling UVP promises a better desired outcome, a better way of achieving the desired outcome or both.
• Focus on who you’re targeting and the problems that stop them from achieving their desired outcomes.
• If you don’t get ‘Customer Segments, Problem and Unique Value proposition’ right nothing else will matter.

• Start with problems not solutions, else everything will look like a nail to your hammer.
• The innovators gift: new problems come from old solutions. Frame the problem as existing obstacles with old solutions that prevent customers from achieving their desired outcomes.

Once upon a time, there was a [customer]. Whenever they needed to get a certain [job] done, they would pick [existing alternative]. One day, that existing alternative broke because of [switching trigger]. Because of that, the [customer] realised that the [existing alternative] wasn’t the best choice for the [job] because of these [problems]. This realisation pushed the [customer] to search for a better solution and consider other alternatives. Until finally they found a [new solution] that helped them get the [job] done better.

1. Old way → Passive Looking → Active Looking → Deciding → Evaluating → Consuming → New Way
2. Innovation is a bout causing a switch from the old way to a new way
3. Cause a switch by anchoring new solutions against problems caused by old solutions
• Existing JTBD (Jobs to be Done) theory didn’t capture the author. The definitions of JTBD are circular, polymorphic or vague. Case studies felt hard to replicate with a new products.
• Their take on JTBD:
• A job-to-be-done is the instantiation of an unmet need or want in response to a trigger.
• From a current reality to a new reality
• E.g. When I’m tired → I want to rest/sleep so I hire my bed for 8 hours
• A trigger defines the context that shapes the JTBD.
• Hiring a solution is selecting and using a solution in response to a job we find ourselves needing or wanting to do (it’s not the same as buying, you can buy and not use). Continue to hire a solution and you might build a habit.
• A switching trigger is when we realise our existing solution is no longer good enough to get the job done.
• The Customer Focus Model describes the casual forces (Push, Pull, Inertia and Friction) that shape how people select and use a solution for a specific job-to-be-done:
• A switching trigger provides a motivation to switch (a bad experience, change in circumstance, or an awareness event)
• Inertia and resistance to change means new solutions need to be much better (3-10x better) than the status quo to overcome the friction associated with switching.
• A switch starts when attractor forces are greater than the detractor forces:
• Push + Pull > Inertia + Friction
• Being functionally better is about addressing unmet needs - positioning can help cause a if unmet needs are understood by your customers.
• To be emotionally better focus on the the bigger context and your customers’ desired outcomes.

• Customer segments: capture the Total Addressable Market (TAM). Keep them simple (e.g. entrepreneur, homeowner, coffee drinker).
• Early Adopters: list the least number of distinguishing traits that cause people to buy from you
• Existing alternatives: You always have competition, even if that’s email, excel or ‘do nothing’
• Problems: List what’s broken about the old way of doing things.
• UVP: Anchor your value proposition against the problems of existing solutions

Chapter 3: Stress Test Your Idea for Viability

• The trap of financial projections is focusing on the outputs not the inputs. Its the inputs to the business model that matter.
• Saying you’ll capture 1% of a large market gives you a false sense of comfort, how will you get to 1%? Are you sure 1% is the right number?
• Don’t create a financial forecast → use a fermi estimate instead.
• A bottom-up approach, starting with a set of inputs, roughly estimated with assumptions. Then test the assumptions.
• We can stress test viability with just 5-7 key metrics
• Revenue and profit are lagging indicators.
• Traction is the goal. Traction is the rate at which a business model captures monetisable value from its customers.
• Where monetisable value doesn’t have to be revenue, but it’s a future indicator of revenue
• The Pirate metrics (or AARRR Acquisition, Activation, Retention, Revenue, Referral) are five macro steps that represent the leading key metrics that can be used to measure traction in any kind of business.
1. Acquisition: From unaware visitor into prospect.
2. Activation: Interested customer has first gratifying experience
3. Retention: repeated use or engagement with the product
4. Revenue: measures the events that get you paid (in future)
5. Referral: feedback loop from happy customers driving new prospects to your product

• Focus on systems not goals. Goals focus on outputs, systems focus on inputs.

Testing viability with a Fermi estimate:

1. Define a target throughput goal
• Think of it as a minimum success criteria MSC. E.g. the smallest outcome that would you make you deem your project a success three years from now, framed as ARR (Annual Recurring Revenue)
2. Can your customer steps deliver on this goal?
• Input your best-guess estimates for the pirate metrics (AARRR)
• Estimate the required number of active customers (your early adopter segment should be about 16% of your TAM)
• Estimate the required minimum customer acquisition rate (the rate at which growth overpowers churn. E.g 5% monthly churn on 10k users is 500 customers a month
• Estimate churn and customer lifetime value
• Estimate the required number of leads (by estimating acquisition rate, activation rate and revenue rate)
• Estimate your referral loop too
• If you have an MSC goal of achieving $10m ARR in three years. Find that line on the chart, and you’ll see that in order to achieve that goal you’ll need to acquire one of the following:
• 1 million customers paying you $10/yr
• 100,000 customers paying you $100/yr
• 10,000 customers paying you $1,000/yr
• 1,000 customers paying you $10,000/yr
• 100 customers paying you $100,000/yr
• 10 customers paying you $1,000,000/yr
3. If not, redefine your model
• There’s nowhere to hide with a Fermi estimate
• Revise your goal or fix your business model
• It’s better to invalidate your model in 5 minutes than to spend 5 months pursuing a flawed model.
• Levers to a business model:
• Revisit pricing
• Revisit problems
• Consider different customer segments
• A Fermi estimate of your business model should identify the riskiest assumptions.

Chapter 4: Stress Test Your Idea for Feasibility

• Feasibility: can you build this?
• Don’t create a product roadmap - use a traction roadmap instead
• Product roadmaps assume you know what you’re building traction roadmaps don’t
• If you set your success criteria, a lower growth rate actually requires a higher customer acquisition rate at the beginning.
• Plot your Traction Roadmap:

• Formulate a Now-Next-Later rollout plan.
• Avoid premature optimisation - prioritising the wrong things at the wrong time.
• At any given point there are only a few key actions that can have the biggest impact on your business model:
• Now: Problem/Solution fit (3-6 months):
• Uncover customer needs
• Identify what your MVP needs
• Secure tangible commitments
• You don’t need a working product to acquire paying customers
• Aim for an evidence-based go/no go decision to move forward to the build stage.
• Next: Product/Market fit (18-24 months):
• Build the first iterations
• Demonstrate value delivery
• Improve product continuously
• You don’t need lots of users at this stage
• Later: Scale
• Pursue growth
• You only need to focus on one engine of growth at a time

Chapter 5: Communicate Your Idea Clearly and Concisely

• Many products fail because they don’t get the right buy-in from stakeholders (your team, early customers, advisors and investors).
• An elevator pitch is a quick overview of your idea that you can present in 30 seconds. Most fall flat because they assume too much and are too solution centric.
• Don’t try and explain your solution - just pique interest and then they’ll ask.
• Focus on why your product needs to exist
• Elevator Pitch Template:
• When [customers] encounter [a triggering event]
• they need to do [job-to-be-done] in order to achieve [desired outcome]
• They would normally use [existing alternatives]
• but because of [switching trigger] these [existing alternatives] no longer work because of [these problems]. Left unaddressed, than [what’s at stake].
• So we build a solution that helps [customers[
• achieve a [desired outcome] by helping them [unique value proposition]
• Think about people’s worldview before you communicate:
• Investors: TAM, cost structure and revenue streams, unfair advantage
• Customers: Unique value proposition, customers (who is it for), problem (what does it solve).
• 10 Slide Pitch Deck:
1. Desirability (why now, switching trigger)
2. What’s at stake (market opportunity)
3. What’s broken (the problem)
4. The fix (your solution)
5. Your moat (unfair advantage)
6. How you make money (revenue stream)
7. Key milestones (metrics)
8. Current progress (rollout plan)
9. How you’re going to pull it off (the team)
10. Your call to action (the ask)

Part 2: Validation

• The Continuous Innovation Framework:
• Addressing your weakest link is the only thing that matters, everything else is premature optimisation
• Identify problems → generate a diverse set of solution candidates → make bets on the most promising ones → test → decide on next actions

Chapter 6: Validate Your Idea Using 90-Day Cycles

• Baseline your system, find the limiting constraint and get to the root cause behind the limiting constraint. This should expose the riskiest assumptions of your business model. Once you’ve moved the constraint start the cycle again.
• Every 90 days review where you are and make sure you’re working on the right constraint.
• A 90 day campaign is made up of six 2 week sprints:
• Goal: Defines the mission
• Campaign: The strategies for achieving the goals
• Sprints: test the strategies
• The 90 day cycle:
• Model and Prioritise (2 weeks)
• Model: - align on goals, assumptions and constraints
• Prioritise: Place your bets on most promising campaigns
• Campaign Pitching: Identify causes for constraint, summarise the underlying problem with supporting evidence, propose a possible solution, declare expected outcomes
• Testing Phase (10 weeks, 5x 2 Week Sprints)
• Design experiments
• Form subteams - assign tasks
• Run experiments to validate assumptions:
• Evaluative: (If i Do x, I expect to get y)
• Generative: help you uncover insights or secrets
• Consider DAARRRT
• Discovery: Is there an underlying problem worth solving?
• Acquisition: Are enough people interested/impacted?
• Activation: Does it deliver value?
• Retention: Do people come back?
• Revenue: What’s the impact (on revenue or some other meaningful metric)?
• Referral: Do people tell others?
• Traction: Did traction go up?

Generative or discovery experiments uncover key insights that help you formulate better hypotheses, which you then verify through evaluative or traction experiments.

• Tips for 90 day Campaigns:
• Assemble the right team (have a hacker, hustler and
• Forget traditional departments
• Start with a minimum viable team (communication is easier, you build less and keep costs low)
• Good teams overlap on super powers (designer, hacker, hustler)
• Hold yourself accountable
• Utilise good coaches
• Report regularly (Cycle Kick off, Sprint Planning, Daily Standup, Sprint Review, Cycle Review)
• Seven habits for highly effective experiments:
1. Declare your expected outcomes upfront
2. Make declaring outcomes a team sport (first as individuals, then as a team)
3. Emphasise estimation, not precision
• Search for analogs
• Use your traction roadmap and AARRR model
• Start with ranges instead of absolutes
4. Measure actions not words
5. Turn assumptions into falsifiable hypothesis
6. Time-box experiments
7. Always use a control group

Chapter 7: Kick Off Your First 90-Day Cycle

90-Day Cycle Framework:

• Weeks 1-2: Review models, prioritise campaigns, and plan the 90-day cycle.
• Weeks 3-12: Conduct sprints to achieve problem/solution fit, including:
• Sprint 1-2: Problem discovery.
• Sprint 3: Solution design.
• Sprint 4-5: Offer delivery.
• End of Week 12: Conduct a 90-day cycle review and plan the next cycle.

Problem/Solution Fit Playbook:

• Before building your product you should demonstrate there is sufficient demand for it.
• Use a Demo-Sell-Build process to create customers without creating a product.
• Use smoke tests, landing pages, webinars, preorders, crowdfunding, direct sales or mafia offers to to validate demand.
• You’re done with problem/solution fit when you can make an evidence-based go or no-go decisions on whether to move forward with your business model to stage 2. You can:
• Repeatedly attract, activate, and cause a switch with your early adopters (Desirability).
• Secure sufficient tangible commitments (e.g., advance payments, letters of intent) from early adopters, as defined by your traction roadmap (Viability).
• Clearly define the smallest thing you need to build (your MVP) to deliver value to your early adopters.
• It’s tempting to scale quickly with other campaigns like crowdfunding or landing pages, but starting with a mafia offer campaign yields higher conversion rates, even if it requires more effort initially.

• A mafia offer is an offer your customers cannot refuse because it solves their top problem(s) and provides a clear way to get started. Steps to build a mafia offer:
1. Understand the problem through customer interviews.
2. Define the solution that directly addresses the problem.
3. Test the offer through campaigns before building the MVP.
4. An offer includes a unique value proposition, a demo, and a call-to-action (CTA).
• Customers don’t buy products, they buy a promise of something better.
• You don’t need a working product to start selling; instead, focus on selling the promise.
• Surveys assume you know the right questions to ask, which might not be the case early on. Surveys don’t help you discover the "why" behind customer problems; interviews are more effective for deep insights. Instead of surveys, engage in direct customer interviews to explore unknowns and gather actionable insights.
• Focus groups often suffer from groupthink and aren't representative of the broader market.
• Conduct face-to-face interviews to uncover the real pain points and problems of customers.
• Avoid jumping straight to solution-building without deeply understanding the problem through customer discovery.

Chapter 8: Understand Your Customers Better Than They Do

• If you describe your customers’ problem better than they can - you’re the expert.
• Uncovering problems is hard: they may not know what they are, they might not want to tell you, you can bias their response, they might describe a solution not the problem.
• Scope the Bigger Context:
• Features live in the product context, while outcomes and jobs live in the bigger context.
• Start with the immediate functional benefit your solution provides
• If within the solution space still, keep levelling up by searching for what comes after
• Stop when answers get out of scope. It’s better to level up until you get out of scope than to stay stuck in the weeds.
• Quarter-inch drill bit 5 why’s example:
• Why do DIY homeowners buy a quarter-inch drill bit?
• To get a quarter-inch hole (functional step, not desirable yet).
• Why do they want a quarter-inch hole?
• To secure a hook (functional step, not desirable yet).
• Why do they want to fasten a screw?
• To hang a painting (job, desirable).
• Why do they want to hang a painting?
• To decorate their house (job, desirable)
• Why do they want to decorate their house?
• To express themselves (job, desirable)
• Why do they want to express themselves?
• Starting to get metaphysical 🚧

Running a problem discovery sprint involves three steps:

1. Finding prospects:
• Look for customers who encounter your ‘triggering event’ or use your ‘existing alternative’
• Target prospects who have either used or purchased an existing alternative in the last 90 days
• Tips: Learn don’t pitch. Start with people you know. Ask for introductions. Play the local card. Give something back. Compensate people for interviews.
2. Conducting interviews
• Do them face to face. Pick a neutral location. Ask for sufficient time. Consider outsourcing interview scheduling. Conduct interviews in pairs (so one can take notes).
• Ask questions, don’t make assertions. Could you elaborate on that more? What did you mean by that?
• Focus on facts, not hypotheticals (when was the last time you did x)
• Don’t ask customers about problems - get them to speak about existing alternatives and points of friction.
• Chase the bigger context (search for desired outcomes)
• Recreate a timeline of events if talking about a specific switch or purchase events
3. Capturing insights
• Use the customer forces canvas to capture insights.

• PUSH (motivation for progress): Identify what changed in the interviewees’ environment that pushed them to get a job done:
• Triggering Event: the thoughts and events that moved them from passively looking, to actively looking for a solution.
• Switching Trigger: The causal event that caused them to switch. Typically a bad experience, change in circumstances or an awareness event.
• Desired Outcome: What’s the desired outcome at the start? How would they measure success?
• What’s at Stake: What were the consequences (if any) for ignoring the triggering event(s) and doing nothing?
• PULL (attraction of the chosen solution): what’s attracted them to their chosen solution:
• Consideration Set: What other existing alternatives were considered for the job?
• Chosen Solution: The chosen solution that was hired for the job and how they found it
• Unique Value Proposition (Promised Outcome): the specific appeal of the chosen solution? Why did they pick it over alternatives?
• Expected Outcome: What did they expect to achieve with the chosen solution? What specific metric(s) would they use to measure success?
• INERTIA (resistance to changing the status quo)
• Existing Solution: how are they currently getting the job done?
• What’s Broken: Problems with existing solution as a result of the switching trigger?
• Barriers to Switching: Any existing habits or switching costs
• FRICTION (resistance to using the chosen solution)
• Anxieties: fears or worries the person expressed as they started using their chosen solution.
• Barriers to Adoption: challenges the person encountered with the chosen solution during usage.
• Additional Details: any additional insights about the chosen solution.
• WHAT’S NEXT
• Actual Outcome: What was the actual outcome after using the chosen solution?
• Next Summit: What’s the next action for this person? Was the job done well enough? Will they continue using their chosen solution or consider using a new solution?

• Jobs-Based Segmentation: People who share triggering events, desired outcomes and existing alternatives tend to behave similarly and can be grouped together as a segment.

Chapter 9: Design Your Solution to Cause a Switch

• A solution design sprint is conducted over a two-week period with the goal to design the first iteration of an MVP that causes a switch.
• MVPs should balance desirability, viability, and feasibility to ensure the right solution and successful business outcomes.
• Desirability in MVP design focuses on solving customer problems and delivering a compelling UVP (Unique Value Proposition).
• A product that causes a switch offers customers a better way to achieve their goals without the existing problems.
• The MVP must significantly outperform existing alternatives, with a 3x–10x improvement needed to provide a strong incentive to switch.
• Identifying the primary struggle in the customer journey is the first step in designing an MVP. Primary struggles often arise from dissatisfaction, friction during usage, or friction during solution selection.
• Dissatisfaction occurs when a job is not done well enough, and a better outcome is needed.
• Friction during usage can manifest in pain points like workarounds, usability issues, or pet peeves.
• Friction during selection occurs when customers struggle with choosing the right solution due to complexity or positioning.
• Crafting a compelling promise involves shifting focus to what is different and better about your product.Identify key attributes to improve and map them to your product’s strengths, such as speed, performance, or simplicity.
• It’s important to align with customer values and not just focus on functionality.
• Consider both the emotional and practical aspects of better, and choose axes for improvement that resonate with customers.
• Identifying ideal early adopters involves finding customers most likely to consider switching based on the timeline of their needs. The best time to offer a solution is when the customer is experiencing pain or struggle.
• Early adopters often act when a triggering event disrupts their current situation, pushing them towards considering new solutions. Examples of triggers include dissatisfaction with the current product, changes in circumstances, or the emergence of new needs.
• Defining switching triggers is key to targeting the right customers; they could be experiencing bad outcomes or looking for a better way.
• When designing the MVP - consider whether it can be built and launched within two months.
• Start small with the rollout to test the solution with a subset of early adopters before scaling.
• Consider three MVP approaches: Concierge MVP, Wizard-of-Oz MVP, and Foot-in-the-Door MVP.
• The 5 P’s of MVP design are Problem, Promise, Price, People, and Packaging.
• Ensure that your MVP addresses a specific problem, delivers a compelling promise, is priced fairly, targets the right people, and is packaged for quick deployment.
• Align your MVP’s desirability, viability, and feasibility to create a solution that causes a switch and supports your business model.

Chapter 10: Deliver a Mafia Offer Your Customers Cannot Refuse

Running an Offer Delivery Sprint:

• A Mafia Offer is an offer your customers can’t refuse. The goal of the mafia offer is to secure enough tangible commitments from early adopters to warrant building your MVP.
• In just 2 weeks, assemble and pitch your product one-on-one to qualified early adopters.
• A good pitch acknowledges popular existing alternatives (the competition) and demonstrates how your solution is better.
• A strong narrative will help your pitch. Consider using a storytelling template like the Hero’s Journey.
• Practice, active listening, constant testing and iteration will result in a great pitch.
• Be prepared to run 2 sprints over 4 weeks and pitch to 20-30 people.
• You should get to a 60-80% conversion rate from qualified leads to your customer specific call to action.
• 3 steps to run an offer delivery sprint:
• Assemble your offer:
• Deliver your offer:
• Optimise your offer:
• Pitch using a storyline template like the hero’s journey or a 3 act structure (setup, confrontation, resolution).
• Use your existing components: triggering event, the stakes, the problems, your unique value proposition then end with a strong call to action.
• Break the existing alternatives. Name your true competition and list the problems.
• Demo your new, better way. Make the demo realisable, realistic, modifiable, minimise waste, keep it short.
• Showcase your UVP with the smallest thing possible in order ot maxximise the speed of learning.
• Digital products: Verbal demo > Screenshots or mockups > Clickable prototypes > Working prototype
• Physical products: Verbal demo > Sketches or CAD diagrams > Physical prototype > Working prototype
• Service products: Verbal demo > Process diagram to demonstrate how it works > Sample deliverable (e.g., a report)
• Don’t lower sign-up friction raise it - you want to find people who are as passionate as you about the idea.
• Position your MVP as a prize (use ‘early access’ not Beta).
• Charge from day one (include your pricing model in the call to action).
• Build your pricing story. Make a logical case for how you arrived at a fair price anchored against existing alternatives and the value you deliver.
• Prior to launch, define and optimise your funnel (post launch you’ll define them differently):
1. Acquisition: Number of new leads (prospects)
2. Activation: Number of demo calls booked
3. Retention: Number of follow-ups post-demo (complex sale)
4. Revenue: Number of people that accepted the offer
5. Referrals: Number of leads that came through referrals
• Look for the key constraint, and look for ways to improve it.

Chapter 11: Run a 90-day Cycle Review

• Collect and update your artefacts: elevator pitch, lean canvas, traction roadmap.
• Assemble a progress report pitch deck. Include the following slides:
1. Review of the 90-day cycle objectives
2. Elevator pitch
3. Lean Canvas snapshot
4. Traction roadmap snapshot

What we did:

5. Validation campaigns you selected
6. Experiments you ran

What you learned:

7. Insights and key learnings
8. Traction: summarise the results from your campaign

What’s next:

9. Current constraint in your business model
10. 3P Next Action: Persevere, pivot or pause.
• Invite your key stakeholders
• Deliver your progress update in 10 minutes (20% of the meeting) leave 80% of the meeting for feedback and decisions.
• Solicit advice. Avoid success theatre.

Part 3: Growth

• The journey to product/market fit has three substages:
• MVP Launch: Get the MVP ready for launch, and the foundation for continuous learning
• Solution/Customer fit: Validate your value delivery hypothesis. Demonstrate you can repeatedly activate and retain early customers
• Product/Market fit: Finding a sustainable engine for growth.

Chapter 12: Get Ready To Launch

• Separate your product launch from your marketing launch. Do a soft launch to early adopters with the objective of validating your value delivery. Wait until you can repeatedly demonstrate value delivery before doing a bigger marketing launch.
• Once you have your first couple of customers, it’s tempting to shift your focus from acquisition to product development (adding features). That can be a big mistake:
• Acquisition activities operate like a flywheel, they take a lot of effort to get going again
• You need to establish a baseline and have a continuous flow of new users flowing through the system so you can optimise it (in your search for repeatable growth)
• Get just enough traffic to support learning
• You need to focus on key constraints - many of which are likely to be in the acquisition funnel (e.g. replacing high-touch interactions with automated touchpoints)
• Be razor focused on getting to MVP release:
• Set a nonnegotiable launch date and stick to it
• Fight scope creep
• Reduce scope to the first 90 days of usage (defer non-core features to later)
• Adopt continuous delivery using small short cycles.
• Avoid premature optimisation
• Get feedback from your early-access customers along the way
• Create a company wide dashboard so you can assess how your business model / funnel is performing (AARRR).
• Using fewer metrics helps you focus on the right things - keep to a single page if you can.
• Strive for actionable metrics.
• Use cohorts to measure and visualise the effectiveness of your business model / funnel over time - by pitching one batch of users against another.
• Cohorts can help you home in on causality - by inspecting what changed for that batch

Chapter 13: Make Happy Customers

• Focus on helping customers achieve their desired outcomes.
• Once you’ve got some level of repeatable acquisition focus on activation.
• Acquisition is where happy customers are made - sometimes called the ‘Aha moment’.
• Creating happy customers improves retention, revenue and referral.
• You need to repeatedly deliver value to customers over multiple interactions to cause a real switch. Most of your attention should be on
• If you have 5 sprints, focus 2 on getting customers to the aha moment, and 3 on getting to their switching moment (retained them enough times to go all in on your solution).

In a great market - a market with lots of real potential customers - the market pulls the product out of the startup. Marc Andreessen

• Listen to your customers but be wary of implementing what they ask for, focus on their desired outcomes and what’s preventing them from achieving it. Implement the 80/20 rule:
• Immediately after launch 80% of your time should be spent measuring and improving existing features, rather than chasing new shiny features.
• Get the job done better than the competition. Deliver on the promise of your unique value proposition.
• Outlearn the competition: speed of learning is the new unfair advantage. Study the switch motives Push and Pull of your early adopters. Reduce friction they experience before achieving their desired outcome.
• To get users to adopt your product you need to change their behaviour and get them to build new habits around your product
• Charles Duhigg’s: Cue/Trigger → Routine → Reward
• BJ Fogg Model: Behaviour = motivation & ability & prompt.
• Behaviour happens when motivation, ability and a prompt converge at the same point.
• Aim to deliver your first aha moment in under 30 minutes.
• Focus on intrinsic rewards (when the customer sees themselves making progress toward their goals) over extrinsic rewards
• Prefer doing over learning. Make it easier for your customers to take action.
• Progressively level up on desired outcomes with each summit → mastery of each new summit should take roughly twice the time and effort as the previous one.
• Trigger your customers: set the right expectations, use reminders, share best practice, prompt the next JTBD once the previous one is completed. Establish regular touchpoints (weekly activity reports). Nudge with email. Integrate your product into their existing routines.
• Help your customers make progress: reduce the paradox of choice, allow them to experiment and provide high-touch support. Continuously improve your product. Share customer case studies. Make giving feedback easy.
• Reinforce progress: show progress indicators, celebrate customer wins, give meaningful gifts.

Chapter 14: Find your Growth Rocket

• Once your customer segments demonstrate regular use of the product and are making progress toward their desired outcomes → it’s time to focus on growth.
• In the growth phase you have to move from high-touch to more scalable paths to customers.
• The Rocket Ship Growth Model
• Three key parts:
• Payload: your core product
• One or more booster rockets: non-scalable customer acquisition channels
• Spacecraft: your primary scalable customer acquisition channel
• Each part has it’s own fuel (time, money, content, users) and helps you gain altitude (traction). The range of the rocket is determined by the efficiency of its engine and fuel.

Growth rockers utilise a flywheel (growth loop) in their engine design that regenerates propellant, which drives sustainable growth (traction).

• Three stage process:
• Define your mission. Sketch out how many boosters you need (non-scalable channels) and how you’ll power your spacecraft (scalable channel).
• Validate your design assumptions before lifting off (desirability, viability, feasibility)
• Identify, test and utilise non-scalable booster rockets (PR, direct sales, events)
• Optimise your core happy customer loop.
• Introduce additional boosters as needed until you achieve product/market fit
• Fire your growth rocket - your sustainable flywheel or growth loop
• You can attract new customers from the actions of past customers if you reinvest part of the value you capture into customer acquisition:
• E.g. Money, Content, Data, Referrals, Retention
• If using money make sure LTV (Customer Lifetime Value) is higher than CAC (Cost of customer acquisition).
• Building a growth rocket requires a renewable propellant and an efficient engine.