Fast & Frugal Webinar - Running a Lean Startup with AWS

This was a multipart webinar series that Amazon AWS hosted. I thought that the speakers would shed some light into a few notions that are critically important to small business owners, primarily what a lean startup is, how these startups are using AWS for their business, and how to take this knowledge from webinar to execution. Some parts were way too technical for a mixed business audience. 

"A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty." --Eric Ries, author of The Lean Startup

"Lean" is a concept that is closely associated with manufacturing, and according to Wikipedia it is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. Essentially, lean is centered on preserving value with less work.

The Toyota Way, an example of a lean process

Recommendations for Lean Startups:

Use innovation accounting with three learning milestones. (1) establish the baseline to build a minimum viable product and measure how customers behave right now. (2) tune the engine and experiment to see if we can improve metrics from the baseline towards the deal. (3) pivot or persevere when experiments reach diminishing returns, it's time to pivot.

Leverage AWS. Why? Your server infrastructure needs will change. If you are able to run on the same infrastructure at launch and a year later, you overbuilt your launch infrastructure, or even worse, your business is not scaling. Goal: find a Scalable Business Model.

Build your Minimum Viable Product (MVP). Toss the vanity metrics (ones use in frilly reports to senior management, shareholders, or key stakeholders) and instead measure key assumptions that answer what we are trying to prove with this startup. Use 3rd party SaaS metrics or Amazon's elastic mapreduce. Goal: learn from the process, iterate or pivot in a new direction.

Use the building blocks AWS provides. It is on demand, available, elastic (use as much or as little as needed), pay as you go, low cost, no contracts, no upfront payments, and no cap-ex. 

Vertical scaling - increase hardware, cpu, memory
Horizontal scaling - increases instance number, master/slave replications
Database sharding - indexes partial customer datasets

Goal: stay lean by using only what you need and reduce costs.