The Roots of Lean Startups and turning Instant Gratification to your advantage

☕ Good Morning! Sippers,

Here are this week’s notes!

The Roots of the Lean Startup

The Lean Startup concept takes inspiration from the Lean Manufacturing revolution developed by Taiichi Ohno and Shigeo Shingo at Toyota. Lean Manufacturing focuses on reducing waste and improving quality by involving workers, using smaller batches, and being efficient with time and resources. This approach has revolutionized the way supply chains and production systems are run and has taught the world the difference between value-creating activities and waste.

The Lean Startup adapts the principles of Lean Manufacturing to the context of entrepreneurship. It proposes that entrepreneurs should judge their progress differently from other types of ventures. Progress in manufacturing is measured by the production of high-quality physical goods, whereas in entrepreneurship, progress should be measured by scientific learning and eliminating sources of waste.

To be successful in entrepreneurship, a comprehensive theory should address all the functions of an early-stage venture, including vision and concept, product development, marketing, sales, scaling up, partnerships, distribution, structure, and organizational design. It should provide a method for measuring progress in the context of extreme uncertainty and offer clear guidance on how to make trade-off decisions, such as investing in the process, creating infrastructure, partnering, responding to feedback, and scaling the business. Most importantly, it should allow entrepreneurs to make testable predictions to increase their chances of success.

The Lean Startup is a methodology that challenges people to rethink how they measure productivity in the early stages of building a startup. Rather than prioritizing timely and budget-friendly product development, the focus is on quickly figuring out what customers want and will pay for. This requires an emphasis on fast iteration and customer insight, along with a vision for ambitious growth.

However, developing new products and features is not a linear process, and many changes made may not necessarily improve the business. The Lean Startup aims to guide entrepreneurs on how to drive their startup with constant adjustments through a Build-Measure-Learn feedback loop. This method provides a way to pivot or persevere, depending on the results of these constant adjustments.

Once the startup engine is revved up, the Lean Startup provides methods for scaling and growing the business at maximum acceleration. Throughout the driving process, entrepreneurs must maintain a clear idea of where they are headed, persevering even in the face of obstacles like detours or wrong turns.

Startups also have a true north, a destination in mind: creating a thriving and world-changing business. Called a startup’s vision. To achieve that vision, startups employ a strategy, which includes a business model, a product road map, a point of view about partners and competitors, and ideas about who the customer will be. The product is the end result of this strategy.

In entrepreneurship, product optimization is constant while strategy changes less frequently. The vision rarely changes, and setbacks are opportunities to learn. Startups are a portfolio of activities, balancing engine running, tuning, and steering. Even small startups must balance supporting customers and innovating, and established companies must invest in innovation to avoid becoming obsolete. As companies grow, the mix of these activities in their portfolios changes.

Via, The Lean Startup: How Constant Innovation Creates Radically Successful Businesses

How to turn Instant Gratification to your advantage

To make a habit stick, it’s important to feel successful even in small ways. This feeling of success tells you that your effort was worth it. In the beginning, it can be hard to keep up with a new habit because you may not see results right away. That’s why it’s important to have immediate rewards to keep you motivated while you wait for the long-term benefits to kick in. Reinforcement is a way to use immediate rewards to make it more likely that you’ll stick with your habit. This can be especially helpful if you’re trying to break a bad habit, like avoiding frivolous purchases or alcohol. Without immediate rewards, it can be hard to feel satisfied and stick with your habit.

When you resist something tempting, like buying something unnecessary, it doesn’t feel very satisfying. One way to make it feel better is to make it visible. For example, you can open a savings account and label it with something you really want, like a leather jacket or a trip to Europe. Every time you resist temptation, you can put the same amount of money into the account. It’s like a reward system for yourself, and it feels good to see your savings grow toward something you really want. It’s more satisfying than just saying “no” to yourself all the time. One couple did this by putting money into their “Trip to Europe” fund every time they cooked instead of going out to eat, and it helped them save up for their vacation.

Selecting Short-Term Rewards that Reinforce Your Identity

• Select short-term rewards that reinforce your identity

• Avoid rewards that conflict with your goals

• For example, taking a bubble bath or going on a leisurely walk are good rewards for financial independence

• Rewards for exercising should not conflict with your health goals

• Massage can be a good reward for taking care of your body

• Intrinsic rewards like better mood and reduced stress reinforce habits

• Identity becomes the reinforcer, you do it because it feels good to be you

• Incentives can start a habit, identity sustains it

• Evidence accumulates over time for a new identity to emerge

• Immediate reinforcement helps maintain motivation in the short term

• Wait for long-term rewards to arrive.

In summary, a habit needs to be enjoyable for it to last. Simple bits of reinforcement—like soap that smells great or toothpaste that has a refreshing mint flavor or seeing $50 hit your savings account—can offer the immediate pleasure you need to enjoy a habit. And change is easy when it is enjoyable.

Via, Atomic Habits, James Clear.