Lean Startup and the Enterprise

Applying Lessons from Entrepreneurs to Large Organizations

Brian Bozzuto

Many Startups Began Pretty Lean

Dell• Founded 1984• Started with about $300k from family members• Sold 2013 for $24 Billion

Apple

► Founded 1976

► Early capital raised was $250k

► Currently worth ~ $400 Billion

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Tech Startups Weren’t Always Lean…

• Founded 1999• Raised $375 Million• Closed 2001

► Founded 1998

► Raised $80 Million

► Closed 2000Pets.com

► Founded 1998

► Raised $280 Million

► Closed 2001

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And then…

Google Finance

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Why Lean & Startups?

Assembly line at Motomachi Plant (1959), Toyota

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What Can We Learn from Startups?

The goal of a startup is to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible.

Ries, Eric (2011-09-13). The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (p. 20). Random House, Inc.. Kindle Edition.

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Iteration Plan

How Does this Apply to Agile?

Product

Product Backlog

2-4 Weeks

Inspect & Adapt

DesignBuildTest

24 HoursPlan

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Iteration Plan

Product

Product Backlog

2-4 Weeks

Inspect & Adapt

DesignBuildTest

24 HoursPlan

The Myth of the Product Owner• The single, wring able neck• The voice of the Customer• The decider• Responsible for the Return on Investment• Able to answer requirement questions• Always knows what to do next

Exactly how is the product owner supposed to do all of this?

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Key Principles of Lean Startup

• Entrepreneurs are everywhere• Entrepreneurship is management• Validated learning is valuable in its

own right• We can measure progress with

innovation accounting

Idea

Build

Product

Measure

Data

Learn

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Lean Startup isn’t for Everything

© 2013 BigVisible Solutions 10

SimpleBest Practice

ComplicatedGood Practice

ComplexEmergent

ChaosNovel

Work with experts to inform our hypothesis

Run experiments to gain new knowledge Sense

AnalyzeRespond

SenseCategorizeRespond

ProbeSense

Respond

ActSense

Respond

Cynefin framework by David Snowden, Cognitive Edge www.synerzip.com

This is All Great, But…

“Experiments are risky for us” “We don’t sell directly to

customers in high quantities” “Releases take us a long time”

You don’t work for a startup!

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Build

Idea

Build

Product

Measure

Data

Learn

• Agile practices help us build faster

• Sometimes “production ready code” is too much

• Lean practices look to build the simplest thing to test our theories

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Make it Safe to Test

Testing has some risks…• Cost incurred of testing• Negative impact to brand• Making the wrong

decision• Perception of failed tests

as “failure in general”

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Playing in Sandboxes

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A Sandbox May be Theoretical

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Wizard of Oz Testing

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Measure

Idea

Build

Product

Measure

Data

Learn

• Focus on actionable metrics to inform decisions

• Beware vanity metrics that just flatter us

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Which of these metrics provide the most insight into a product?

Source: Adapted from Dave McClure

a. 1,000,000 unregistered unique visitsb. 500,000 visitors who view 2+ pagesc. 250,000 visitors who engaged for 10+ secondsd. 20000 users with registered email addresse. 1000 monthly subscribers

Not All Metrics are Created Equal

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An Example…

Let’s talk about this box…

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Identify Measures for Learning

Start Up Metrics for Pirates• Acquisition• Activation• Retention• Referral• RevenueSource: adapted from Dave McClure

AARRR!!!

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Identifying B2B and Internal Metrics

Behavior Driven• Adoption• Usage patterns• User behaviors

User Feedback• Net Promoter Score• User Journaling

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Learn

Idea

Build

Product

Measure

Data

Learn• Test hypothesis and learn

based on collected data• Be aware of our cognitive

biases when constructing tests and evaluating results

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© 2013 BigVisible Solutions 23Source: Alex Osterwalder www.synerzip.com

© 2013 BigVisible Solutions 24

Level 1

Checklist

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© 2013 BigVisible Solutions 25Source: Alex Osterwalder

For whom are we

creating value?

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© 2013 BigVisible Solutions 26Source: Alex Osterwalder

What value do we deliver

to the customer?

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© 2013 BigVisible Solutions 27Source: Alex Osterwalder

How do we deliver the value we create to the

customer?

How do we create & maintain relationships with our customers?

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© 2013 BigVisible Solutions 28Source: Alex Osterwalder

How much will these customers pay for the value

we create?

How much will this cost to create

and maintain?

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© 2013 BigVisible Solutions 29Source: Alex Osterwalder

Who and what will we need to

create this value

What will we do with these

resources to build value

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© 2013 BigVisible Solutions 30Source: Alex Osterwalder

Who would we partner with that

will provide us with Key Resources or

Key Activities

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© 2013 BigVisible Solutions 31

This level of understanding is a good starting point.

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© 2013 BigVisible Solutions 32

Level 2

Hypothesis

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“I wonder how much of this is reality…”

© 2013 BigVisible Solutions 33

? ? ???

?

??

?

?

??

Source: Adapted from Alex Osterwalder

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© 2013 BigVisible Solutions 34

Level 3

Validation

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“Let’s validate our riskiest assumptions”

© 2013 BigVisible Solutions 35

? ? ???

?

??

?

?

??

Source: Adapted from Alex Osterwalder

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© 2012 BigVisible Solutions 36

This is most likely your Riskiest Assumption

Source: Adapted from Alex Osterwalderwww.synerzip.com

© 2012 BigVisible Solutions 37

This is most likely your other Riskiest Assumption

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© 2012 BigVisible Solutions 38

What happens when we subtract costs from revenue?

Source: Adapted from Alex Osterwalder

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Putting It All Together…

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A View of Value Delivery

© 2013 BigVisible Solutions 40

Valu

e

Time

Prioritize Learning

Prioritize Value

Watch for Gold Plating

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One Small Thing You can Do Tomorrow

Map out your organization’s business model canvas

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Another Small Thing You can Do Tomorrow

Add a column to validate assumptions after you build something

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Thank you!

To Learn More• You can read more on our

blog (www.BigVisible.com)• Email us at

info@bigvisible.com

Any Question?

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Hemant Elhence hemant@synerzip.com

469.322.0349

Questions?

• Software product development partner for small/mid-sized technology companies

• Exclusive focus on small/mid-sized technology companies, typically venture-backed companies in growth phase

• By definition, all Synerzip work is the IP of its respective clients• Deep experience in full SDLC – design, dev, QA/testing, deployment

• Dedicated team of high caliber software professionals for each client

• Seamlessly extends client’s local team, offering full transparency• Stable teams with very low turn-over• NOT just “staff augmentation”, but provide full mgmt support

• Actually reduces risk of development/delivery• Experienced team - uses appropriate level of engineering discipline• Practices Agile development – responsive, yet disciplined

• Reduces cost – dual-shore team, 50% cost advantage• Offers long term flexibility – allows (facilitates) taking offshore

team captive – aka “BOT” option

Synerzip in a Nut-shell

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Our Clients

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Call Us for a Free Consultation!

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Hemant Elhence hemant@synerzip.com

469.322.0349

Thanks!