(2024-10-19) Maurya Continuous Innovation Mindsets

Ash Maurya has a series of lessons on Continuous Innovation Mindsets.

Mindset 1: How to Document Your Plan A

Don’t write a business plan. Create a business model instead. (Lean Canvas)

Mindset #1: Your business model is THE PRODUCT.

Old Way: Analyze - Plan - Execute.
New Way: Model - Prioritize - Test

CI Mindset #2: Love the Problem, Not Your Solution

This is why you’ll see a much bigger Problem box before the Solution box on the Lean Canvas. We’re all pretty good at coming up with solutions, but you have to start with the right problems.

Too many entrepreneurs unconsciously invent problems to justify the solution they’ve already decided to build

To help you overcome this bias, I devised an antidote I call the Innovator’s Gift.

The basic premise of the Innovator’s Gift is simple:
New problems worth solving come from old solutions.

Every new solution had a predecessor (old solution). And the reason the new solution got adopted wasn’t because it solved a new problem but an old one. (2018-06-19) Maurya My New Project Unpacking The Innovators Gift Love The Problem

I want you to make a case for why your solution needs to exist, not by articulating its features and benefits but instead by making a case for problems with the existing alternatives. Problems big enough to cause customers to want to switch to your better new way.

CI Mindset #3: Traction is The Goal

Traction is the Goal, Everything Else is Distraction

while many stakeholders ask for financial metrics like revenue and profit, these aren’t the right traction metrics.

Good traction metrics, on the other hand, are leading indicators of progress, i.e., they help you predict future business model growth. (AARRR)

Traction is the rate at which a business model creates monetizable value from its customers.

The Customer Factory Blueprint (aka Traction Roadmap)

For lesson 3, download the Customer Factory Blueprint and map your traction metrics for your specific business model.

CI Mindset #4: Right Action, Right Time

How to Maximize Speed, Learning, and Focus

Premature optimization is one of the top killers of startups.

The opposite of wrong action, wrong time is right action, right time.

1. Apply Systems Thinking

In any system, there is always a single bottleneck or constraint

You might recognize this as the Theory of Constraints (TOC).

2. Time is Your Scarcest Resource

bootstrapping has nothing to do with being cheap. Bootstrapping is about being efficient with your resources. A bootstrapper’s primary objective is getting to customer revenue quickly. Speed of learning, not frugality, is their true unfair advantage.

sweat equity is the most expensive type of equity and should be reserved for your unique contribution — something others cannot easily replicate. This is your super-power or personal unique value proposition (UVP). Everything else can and should be delegated — provided the ROI is there.

One way to value sweat equity is by using the opportunity cost of working on your startup at your going hourly rate.

When working on a startup, your time is worth $1,000/hr.

You can’t just look for a 1x or 2x salary return. You have to think 10x.

CI Mindset #5: Tackle Your Riskiest Assumptions in Stages

How to Practice Right Action, Right Time

The flat part of the hockey stick curve is where these founders uncovered key insights or secrets that allowed them to build something unique and valuable.

By definition, insights and secrets are non-obvious. They require continuous discovery, learning, and experimentation on the right things at the right time.

breaking the hockey stick into a few distinct stages

• Problem/Solution Fit,
• Product/Market Fit, and
• Scale.

Stage 1: Problem/Solution Fit

The goal here is to find a problem worth solving.

During this stage, The counter-intuitive driving principle focuses on finding a problem worth solving and even getting paying customers without first building out a fully functioning product (solution).

This isn’t just possible with B2C products. I’ve successfully used this approach with products ranging from $10 books to $100,000 B2B products.

Stage 2: Product/Market Fit

The goal here is to demonstrate a working business model at small scale. You do this by building the first iteration of your product (MVP or Minimum Valuable Product) and refining it through customer feedback to continuously deliver value.

The counter-intuitive driving principle here is that you don't need lots of users to navigate this stage - just a few good early adopters.

Stage 3: Scale

The driving principle here is less about continually optimizing your product but shifting focus to finding and optimizing your rocket(s) of growth.

Once you identify your stage, focus on the riskiest assumptions and key constraints holding you back.

CI Mindset #6: Constraints Are a Gift

How to Use Propelling Questions to Break Constraints

From a systems perspective, however, constraints are gifts. Every system always has a constraint, and correctly identifying that single constraint is key to practicing “right action, right time.”

embrace the constraint AND still achieve your goal.

key propelling question: How do I achieve “the goal” without acquiring more of the limiting resource (constraint)?

How do you win Le Mans without a faster car?

They won the race, not by building a faster car, but a more efficient car.

By putting diesel technology into their race cars, Audi reduced the number of pitstops their car had to make which was the edge they needed to win.

How do you build what people want without a product?

You don’t need to build a product first to uncover what people want.

Customers don’t care about your solution but your offer. Build that instead. You don’t need lots of time, money, or people to test an offer. (MAFIA offer)

Think demo-sell-build versus build-demo-sell.

CI Mindset #7: Hold Yourself Externally Accountable

Two Strategies for Seeing Past Your Blindspots

Cognitive biases are mental shortcuts that sometimes help us make good decisions quickly and other times result in irrational decision-making.

We saw one of these biases in lesson 2: The Innovator’s Bias or our premature love for solution. There are dozens of others - confirmation bias, selection bias, hindsight bias, probability bias, recency bias, etc.

In today’s lesson, I’m going to share two strategies I use for keeping biases in check.

1. Timeboxing

To hold myself externally accountable, I schedule quarterly 3P progress reports on my calendar where I review the business model progress of my idea. (quarterly review)

90 days is long enough to make significant enough progress on a business model, yet short enough to allow for course corrections if/when needed.

Each meeting culminates in a 3P decision:
Pivot: Change your validation strategy based on newly acquired learning.
Persevere: Stay the course.
Pause: Stop or kill the project based on evidence that invalidates your idea. Pick a new idea.

2. External accountability

You need “trusted” advisors, who are ideally external to your core team and can call your B.S.

setting up a peer-to-peer group of entrepreneurs (a mastermind group) at the same stage, works.

The agenda of a 3P Progress meeting is to share
What you thought?
What you did?
What you learned?

CI Mindset #8: Place Many Small Bets

Search Versus Execution

Traditional heavy-weight business planning processes consume a lot of time and resources, typically resulting in making a few big bets at a time.

This also makes the failures bigger, which creates a vicious cycle.

The number two reason why products fail is not starting.

you need to embrace a search versus execution mindset where you
consider multiple models,
test them in parallel, and
double-down on your most promising model.

A visual is worth a thousand words:

CI Mindset #9: Make Evidence-based Decisions

One of the major challenges with early ideas is that at the outset, they all seem amazing.

can also turn the journey into a faith-based one driven by dogma.

Faith = blind belief i.e. not based on proof

There is no room for faith — not even in the continuous innovation framework itself.

Decouple faith in yourself with faith in your beliefs

You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be

Be ruthless with your ideas

“In God we trust. All others bring data." - W Edwards Deming
This is the essence of evidence-driven decision-making.

CI Mindset #10: Breakthrough Requires Unexpected Outcomes

Remove Failure From Your Vocabulary

Penicillin, microwave, X-ray, gunpowder, plastics, and vulcanized rubber? Yes, they were all accidental discoveries.

But because they were accidental, dismissing them as lucky breaks is easy. However, there was more than luck at play. All these discoveries started as failed experiments.

instead of throwing away their “failed” experiments, they did something very different from most people: they asked Why.

The hockey-stick trajectory has an extended flat portion at the beginning, NOT because the founders are lazy and not working hard, but before you can find a business model that works, you must go through lots of stuff that doesn’t.

Most entrepreneurs, however, run away from failure.

At the first sign of failure, they rush to course correct without taking the requisite time to dig deeper and get to the root cause of the failure.

A “pivot” is often used to justify this course correction. But this, of course, is a misuse of the term.

You need to remove the word “failure” from your vocabulary completely.
“There is no such thing as a failed experiment, only experiments with unexpected outcomes.”- Bucky Fuller
...And replace "failing" with "learning.”