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
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Early capital raised was $250k
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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 2000
Pets.com
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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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How Does this Apply to Agile?
Iteration Plan
24 Hours
2-4 Weeks
Product
Product Backlog
Inspect & Adapt
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The Myth of the Product Owner
Iteration Plan
•
•
•
•
•
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The single, wring able neck
24 Hours
The voice of the Customer
The decider
Responsible for the Return on Investment
Able to answer requirement questions
Always knows what to do next
2-4 Weeks
Product
Product Backlog
Exactly how is the product owner
supposed to do all of this? Inspect & Adapt
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Key Principles of Lean Startup
• Entrepreneurs are everywhere
• Entrepreneurship is management
• Validated learning is valuable in its
own right
Learn
• We can measure progress with
innovation accounting
Idea
Build
Data
Product
Measure
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Lean Startup isn’t for Everything
Complicated
Complex
Good Practice
Emergent
Probe
Sense
Respond
Work with experts to
inform our hypothesis
Run experiments to gain
new knowledge
Act
Sense
Respond
Chaos
Novel
Cynefin framework by David Snowden,
© 2013 BigVisible Solutions
Cognitive Edge
Sense
Analyze
Respond
Sense
Categorize
Respond
Simple
Best Practice
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This is All Great, But…
You don’t work for a startup!
 “Experiments are risky for us”
 “We don’t sell directly to
customers in high quantities”
 “Releases take us a long time”
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Build
Idea
Learn
Build
Data
Product
• 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
Measure
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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
Learn
Build
Data
Product
Measure
• Focus on actionable metrics
to inform decisions
• Beware vanity metrics that
just flatter us
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Not All Metrics are Created Equal
Which of these metrics provide the most
insight into a product?
a.
b.
c.
d.
e.
1,000,000 unregistered unique visits
500,000 visitors who view 2+ pages
250,000 visitors who engaged for 10+ seconds
20000 users with registered email address
1000 monthly subscribers
Source: Adapted from Dave McClure
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An Example…
Let’s talk about this box…
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Identify Measures for Learning
AARRR!!!
Start Up Metrics for Pirates
• Acquisition
• Activation
• Retention
• Referral
• Revenue
Source: adapted from Dave McClure
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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
Learn
Build
Data
Product
• Test hypothesis and learn
based on collected data
• Be aware of our cognitive
biases when constructing
tests and evaluating results
Measure
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Source: Alex Osterwalder
© 2013 BigVisible Solutions
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Level 1
Checklist
© 2013 BigVisible Solutions
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For whom
are we
creating
value?
Source: Alex Osterwalder
© 2013 BigVisible Solutions
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What value
do we deliver
to the
customer?
Source: Alex Osterwalder
© 2013 BigVisible Solutions
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How do we create &
maintain relationships
with our customers?
How do we
deliver the value
we create to the
customer?
Source: Alex Osterwalder
© 2013 BigVisible Solutions
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How much will
this cost to create
and maintain?
Source: Alex Osterwalder
How much will
these customers
pay for the value
we create?
© 2013 BigVisible Solutions
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What will we do
with these
resources to
build value
Who and what
will we need to
create this value
Source: Alex Osterwalder
© 2013 BigVisible Solutions
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29
Who would we
partner with that
will provide us with
Key Resources or
Key Activities
Source: Alex Osterwalder
© 2013 BigVisible Solutions
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This level of
understanding
is a good
starting point.
© 2013 BigVisible Solutions
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Level 2
Hypothesis
© 2013 BigVisible Solutions
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32
“I wonder how much of this is reality…”
?
?
?
?
?
?
?
?
?
?
?
?
Source: Adapted from Alex Osterwalder
© 2013 BigVisible Solutions
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Level 3
Validation
© 2013 BigVisible Solutions
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“Let’s validate our riskiest assumptions”
?
?
?
?
?
?
?
?
?
?
?
?
Source: Adapted from Alex Osterwalder
© 2013 BigVisible Solutions
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This is most
likely your
Riskiest
Assumption
Source: Adapted from Alex Osterwalder
© 2012 BigVisible Solutions
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This is most
likely your
other
Riskiest
Assumption
© 2012 BigVisible Solutions
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What happens when we
subtract costs from revenue?
Source: Adapted from Alex Osterwalder
© 2012 BigVisible Solutions
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Putting It All Together…
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A View of Value Delivery
Watch for Gold Plating
Value
Prioritize Value
Prioritize Learning
Time
© 2013 BigVisible Solutions
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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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Questions?
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Hemant Elhence
hemant@synerzip.com
469.322.0349
44
Synerzip in a Nut-shell
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Software product development partner for small/mid-sized
technology companies
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Dedicated team of high caliber software professionals for each
client
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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
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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
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
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Our Clients
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Thanks!
Call Us for a Free Consultation!
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Hemant Elhence
hemant@synerzip.com
469.322.0349
47