Scaling Lean

The key in multisided models is establishing the derivative currency exchange rate early.

Business Model Archetypes

a subtle but important distinction between making happy customers and making customers happy

Even though everyone was working tirelessly to optimize their local metrics (local optima), it was at the expense of the overall system throughput (global optima). Her teams should have instead invested effort first toward identifying the weakest link or constraint in their business model, and then collectively focused on solutions for breaking just that constraint.

We can derive two further insights from this. The first is that reinforcing the weakest link will eventually yield zero returns, because another link will eventually take its place as the constraint or the bottleneck, limiting the performance of the entire chain. The second takeaway is that because we cannot predict where the constraint will move, we need to constantly monitor the entire system in search of the next weakest link. Blindly optimizing a single part of the system—even if it was once the weakest link—will eventually lead to waste. This is the local optimization trap.

Trying to reinforce all the links at once is wasteful because it will not make the chain stronger as a whole. This is the premature optimization trap.

One of the most groundbreaking books in the world of manufacturing was undoubtedly The Goal, the 1984 business novel by Israeli physicist Eliyahu Goldratt

when applied to innovation, the problem isn’t one of finding waste, but rather prioritizing the biggest areas of waste

Incorrect prioritization of risks is one of the top contributors to waste.

two additional complementary models: a traction model and a customer factory model. They will show you how to effectively measure and communicate the output of a working business model.