Summary: Lean Analytics

Review and Analysis of Croll and Yoskovitz' Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• ISBN:
  9782511024140
• Topic: Economics
• Subtopic: Statistics for Business & Economics
• Index: Economics

The must-read summary of Alistair Croll and Benjamin Yoskovitz’s book: “Lean Analytics: Using Data to Build a Startup Faster”.

This complete summary of the ideas from Alistair Croll and Benjamin Yoskovitz’s book “Lean Analytics” shows how you can definitively determine what to sell and find out what customers really want to buy. The authors explain how you can turn questions about the business into statistical measures and discover the truthful answers. This book is a must-read for any start-up entrepreneur with practical and real-life information that will lead you to success.

Added-value of this summary:
• Save time
• Understand the key concepts
• Expand your business knowledge

To learn more, read “Lean Analytics” to find out how you can ensure the success of your start-up by finding out what customers really want.

Summary of Lean Analytics (Alistair Croll and Benjamin Yoskovitz)

1. Stop guessing or lying to yourself – get data

To succeed in business, you need to follow where the data leads. Get familiar with the basic building blocks of analytics and you have a methodology which can help you learn how to succeed. Don’t work on wishes – get definitive data and learn how to interpret it.

“Let’s face it: you’re delusional. We’re all delusional — some more than others. Entrepreneurs are the most delusional of all. Entrepreneurs are particularly good at lying to themselves. Lying may even be a prerequisite for succeeding as an entrepreneur—after all, you need to convince others that something is true in the absence of good, hard evidence. You need believers to take a leap of faith with you. You need to lie to yourself, but not to the point where you’re jeopardizing your business. That’s where data comes in.”

– Alistair Croll and Benjamin Yoskovitz

The whole philosophy of lean analytics is whenever you come up with what you think is a good idea, you devise a way to test that idea quickly and with minimal investment.

In other words, you gather data to punch holes in your reality distortion field – your personal beliefs about what should work. The lean analytics approach demands that you define what success looks like beforehand and then gather data which either proves or disproves your hunch. By using data rather than conjecture, you base your actions on cold hard facts rather than on your hopes and beliefs.

When it comes to tracking data, you’ve got to be careful to avoid tracking vanity metrics like the number of hits to your Web site, time on site and so on. Instead, you have to track real metrics – which are defined as metrics which are actionable and which lead you to act differently in the future. Make sure you use metrics which will inform you and guide you as you work to improve your business model in the future. Real metrics are typically:

• Comparative – measured over multiple time periods.
• Understandable and applicable to what you do.
• Expressed as a ratio or a rate.
• Clear enough to change the way you act in the future.

In deciding what metrics make sense for you to use, one good approach is to bring everything together in a one-page visual business plan. (This is available online at www.leancanvas.com.) By doing this, you have a framework which will help you to identify the areas of greatest potential risk and to evaluate whether or not you have a realistic business opportunity to pursue.

By bringing everything together in something like a one-page visual business plan, you can focus on the three key questions which you always need to ask when launching any new business venture:

1. Have I identified a problem worth solving?
2. Is my proposed solution the right one and is it better than what’s already there?
3. Do I actually want to solve this problem? That is, will I make enough money for the business to be sustainable and enjoyable?

The whole point of lean analytics is to be data-driven rather than being merely data-informed. You don’t want to gather so much information that you fall prey to analysis paralysis but you use solid data to succeed in building a sustainable long-term operation.

“We sometimes remind early-stage founders that, in many ways, they aren’t building a product. They’re building a tool to learn what product to build. This helps separate the task at hand — finding a sustainable business model — from the screens, lines of code, and mailing lists they’ve carefully built along the way. Lean Startup is focused on learning above everything else, and encourages broad thinking, exploration, and experimentation. It’s not about mindlessly going through the motions of build > measure > learn — it’s about really understanding what’s going on and being open to new possibilities.”

– Alistair Croll and Benjamin Yoskovitz

“Markets that don’t exist don’t care how smart you are.”

– Marc Andreesen

“Lean, analytical thinking is about asking the right questions, and focusing on the one key metric that will produce the change you’re after.”

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