Product bookclub met for the third time last Tuesday with beer, wine and beautiful antipasto (thanks Brainmates!) to talk through the themes of Ash Maurya’s Scaling Lean. Bookclub generally starts with confessions of kindle percentages read, but this time we achieved a record for completed reads. I’ll take that as testament to the readibility and traction of Maurya’s book.
Scaling Lean is the follow up to Maurya’s first book Running Lean which introduced the Lean Canvas to the world of startup and Product Managers everywhere. Where Running Lean focused on bringing an idea to life and getting to MVP, Scaling Lean looks at what happens after MVP, sizing business model and the metrics of success.
Key points from the book
Thanks to Liam who took us through a verbal summary of the book focusing on these takeaways:
- “Traction is the one metric that matters above everything else.” What is traction? “The rate at which you create customers (customer throughput) is traction.” “Traction is the only macro measure of progress.”
- Beyond traction, the metric that matters is customer lifetime value.
- Every problem and strategy can be tested through experimentation.
Liam also brought his own understanding of lean, summarising the intent of lean as validating a problem before trying to solve it, and how to recommend and assess the change you intend to make.
Smoke screens and MVP
The conversation kicked off on the topic of scale and staged rollouts. We discussed the examples from the book of Tesla and Facebook and how a staged rollout works to automatically prioritise risk by limiting scale. This progressed naturally to a debate of how to define Minimum Viable Product (MVP). Maurya defines an MVP as “the smallest solution that creates and captures monetisable value from users.”
But the idea that most captivated the group was smoke screens masquerading as product. Fake features. Call to action buttons that lead to an “oops, this isn’t built yet” page and google ads leading to a 404. Or Amazon’s “just do it” mantra, which faked (hard-coded) the “customers also bought”. Smoke screens to test interest before investing valuable development resources.
Multi-sided business models
For many in the group, the most interesting insight from the book was Maurya’s analogy of the customer factory and the development of the analogy into multi-sided business models, where the user ≠ customer. In this model, the user creates a derivative asset the customer pays to access.
There was quite a debate on whether the paying customer’s needs or the user’s needs should come first. On one side, the customer brings revenue, and the book defines traction as customer creation or throughput. On the other some argued that in any consumer product, the “user should always come first” because users are your lifeblood. If you don’t treat your users right, you don’t have a product.
Monetisable value… and other objectives
The tussle between customer and user needs led to an interesting discussion around government and not-for-profit products. The book touches on not-for-profits, but uses a single example of fundraising-driven charities where donors may be considered customers. A couple of us working in government and not-for-profit wanted to see how the customer factory could be applied when creating customers is not the primary objective.
It was an eye-opening moment in the conversation – for those of us who had never used growth or revenue as a measure for success and those of us who took those success metrics for granted.
It’s a wrap!
It was a great night of conversation and lovely to see new faces join the conversation. The next book will be Product Leadership by Richard Banfield, Martin Eriksson and Nate Walkingshaw. See you September 12! Join us at https://www.meetup.com/Sydney-Product-Bookclub/