Enabling Innovation using Lean Startup

Keynote At Smidig Conference 2012 in Oslo, Norway.

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Learn more at http://spark59.com/

Transcript

1. Using Lean Startup & Innovation Accounting LUKAS FITTL @lfittl spark59.com ENABLING INNOVATION Lean Startup is trademarked by Eric Ries and used with permission. Business Model Canvas is created by Alex Osterwalder and licensed under CC-BY-SA.
2. About Myself & Spark59 Founded 2 tech startups, worked with many others
3. Innovation in an Agile Environment
4. Waterfall Release! Risk Time BUILD BUILD BUILD
5. Agile / XP / SCRUM Risk Time Release! BUILD Release! BUILD Release! BUILD Release! BUILD
6. Are we making our product better or worse?
7. Are we efficient? vs Are we effective?
8. The Definition of Done should include testing customer behaviour
9. Validated Learning
10. IDEAS PRODUCT DATA MEASURE BUILD LEARN Experiment
11. “State, before you do the work, this is what I believe will happen, and when you do the the work see whether it happens or not.” - Jabe Bloom
12. Hypotheses instead of Requirements
13. Requirement: Users can create 3D avatars.
14. We believe that users will create a 3D avatar and spend more time on other users profiles. Hypothesis:
15. 50% of newly signed up users will create a 3D avatar, Avg time spent on user profiles will go from 30s to 1min+ Falsifiable Hypothesis:
16. Be closer to reality, and avoid bias & comfort zones
17. User Stories != Experiments Missing the “Measure” Stage No Way to Validate the Learning
18. Deploy != Launch if $rollout.active?(:chat, current_user) ... else ... end
19. Deploy Every Commit Release To A Small Set of Customers Launch The New Feature When Ready
20. Experiments need to be shown to actual customers Not just to your team!
21. Lean Stack: Experiment Reports Tools & Tactics
22. Background EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment?
23. Background EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment?
24. Give Context. Why is this relevant? Background What are you trying to learn or achieve?
25. Quantify Your Goals Falsifiable Hypothesis Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome]
26. Set Scope & Timebox Experiment Scope How long will the experiment last? Minimum Build Plan List the build plan step by step to get your measurement and experiment.
27. 1. Context - Why is this relevant? 2. Quantify Your Goals 3. Set Scope & Timebox Planning an Experiment
28. Test your Value and your Growth Hypothesis first
29. Validated Learning: Define Hypothesis, Build & Launch Experiment, Learn from the Results
30. Concepts for making this work: 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing
31. 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing Hierarchy Anarchy Lean Startup
32. 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing
33. Cross-Functional Team Product Owner Customers Centralized Product Ownership
34. Cross-Functional Team Business Stakeholder Customers Distributed Product Ownership
35. Product Ownership is about Defining Customer Value, not Aesthetics
36. Business Experiments instead of (just) Development Tasks
37. Experiments are Owned By A Team Member
38. Draws Expert Resources as needed (e.g. through pairing)
39. 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing
40. Why? are we doing what we’re doing
41. Team needs to Understand The Impact of their work
42. “Shared understanding is about getting everyone to walk in the other person’s shoes a little.” Bill Scott - UX at Netflix, PayPal This includes the business owner’s shoes!
43. Are we making progress towards our business goal?
44. Company-Wide Metrics Dashboard Tools & Tactics
46. Actionable Accessible Auditable
47. Actionable Tie specific repeatable actions to observed results.
48. Accessible Let everyone in the company see and understand whats going on.
49. Auditable Tie the numbers back to actual customers, so you can verify the metric and believe in it.
50. You need all three AUDITABLE ACCESSIBLE ACTIONABLE
51. Unit Economics instead of Gross Revenue
52. ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a reat first experience? Do users come back? How do you make money? Do users tell others? Dave McClure’s AARRR Metrics
53. ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL Value Metrics How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others?
54. ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Growth Metrics
55. Cross-Functional Pairing Tools & Tactics
56. Weekly Strategy Meeting Part 1: Ideation Tools & Tactics
57. Avoid Brainstorming. It causes Premature Convergence Around One Idea.
58. http://www.lostgarden.com/2010/08/visualizing-creative-process.html By Daniel Cook
59. Design Studio by Will Evans @semanticwill
60. Observe & Explain To The Group Ideate Alone Discuss In the Group Sketch & Write down!
61. Review Experiments Only In Weekly Meeting Focus On Efficiency In Daily Stand-ups
62. 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing
63. Lean Stack: Validated Learning Board Tools & Tactics
64. IDEAS PRODUCT DATA MEASURE BUILD LEARN Build Measure Learn ✓ ✘ Kan-ban Board
65. Build Measure Learn ✓ ✘
66. 1 experiment per team member
67. Separate Task Board for tracking the details Swimlane for each Experiment
68. Weekly Strategy Meeting Part 2: Review Tools & Tactics
69. Review Experiment Results Challenge the Interpretation Kill / Restart overdue Experiments
70. Background EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment?
71. Actual data you Measured, based on your Hypothesis. Results Enter the data.
72. Validated Invalidated Inconclusive Validated Learning Summarize your learning from the experiment. + Why?
73. What will you do next based on your learning? Next Action Whatʼs the next experiment?
74. ✘ Failure is good. Validated Learning is our Measurement of Progress.
75. 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing
76. Timeboxing
77. Build Measure Learn ✓ ✘
78. Build Measure Learn ✓ ✘ Experiment Scope
79. Startups don’t starve, they drown. Open-ended learning is dangerous, always timebox.
80. Interviews/Prototypes: 1-2 Weeks Qualitative Tests: 1 Month Quantitative Tests: 2-3 Months Recommended Timeboxes:
81. Inside-the-Building Comfort Zone Customer Interview (Paper) Prototype MVP “The Perfect Product”
82. Customer Interview (Paper) Prototype MVP “The Perfect Product” Get-out-of-the-Building Reality
83. Justify the Cost of MVPs with Proof
84. Understand Problem: Explorative Customer Interviews De ne Solution: User Testing With Prototypes Validate Qualitatively: Release MVP and hand-collect feedback 10s to 100s of customers Verify Quantitatively: Partial Rollout or Split Test and measure improvement 100s to 10,000s of customers
86. In Summary
87. 0. Validated Learning 1. Product Ownership 2. Shared Understanding 3. Accountability 4. Scoping & Timeboxing
88. Experiment Reports Company-wide Dashboard Validated Learning Board Weekly Strategy Meeting Tools & Tactics
89. Thanks! leanstack.com lukas@spark59.com