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Lean Startup in the Enterprise
Transcript of Lean Startup in the Enterprise
What is a Lean Startup?
A temporary organization designed to find a repeatable, scalable business model under conditions of extreme uncertainty.
What does this have to do with the enterprise?
Extreme uncertainty...not just for startups anymore.
Seeking new business models to replace maturing LOBs.
Focus on net new revenue opportunities.
Hypothesis testing business model
Rapid experimental design
Minimally Viable Product (MVP)
CIO > 10k
time to deploy
The real trick for enterprises.
How to build a lean enterprise:
Identify cases of extreme uncertainty in portfolio.
Create Business Model Canvas for each opportunity in your portfolio or investment thesis.
Check which ones don't have solid evidence for customer segment, value proposition, key activities, etc.
Consider Lean Startup methods for these projects.
Develop experts in business model experimental design.
Prioritize hypotheses (identify riskiest assumption).
Run high-speed experiments on these hypotheses.
Get "out of the building" and avoid vanity metrics.
Enterprise Live Fire Testing
That’s what we need
Testing in a Startup vs the Enterprise
Startup Live Fire Testing
Like startups, many enterprises today:
Don't know who their next customers will be.
Don't know what those prospective customers really want.
Don't know how to motivate them to change behavior and pay.
If you want to deliver a great product to known customers through known channels on a well-established value proposition, you don't need Lean Startup...
...use design thinking and agile development.
evidence based decisions
How to test hypotheses without...
Getting slowed down by NDAs & other legal
Confusing customers and investors
Violating business conduct rules
Four experiment methods
Interviews, Observations, Reenactment
Design thinking: "Sponsor Customers"
No need for NDAs if you stay focused on questions about the user's experience and avoid talking about your specific product idea...and it's just a better way to Explore.
Getting verifiable, real sign of commitment:
Money, time, personal information (email), letter of intent.
Must avoid POCs and the "would you buy this if" conversation. (Often requires creative methods in enterprise context.)
Only build the minimially
Spend more time on building-in ways to measure behavior than on feature-completeness. (e.g., Tealeaf)
Remember you are testing the hypothesis, not building the product...but basics may be required.
Testing customer satisfaction:
Deliver the value of the offering face-to-face with little-to-no product development.
"Wizard of Oz" mockup: manual or light scripting behind-the-scenes. (Tricky for enterprises to do with real customers.)
Special Testing Techniques for Enterprises
Brand isolation: release MVP under separate brand.
External incubator: TechStars Powered-by Program.
"Lean Puppet": special contract team, invest in startup, spin-out, isolated test market.
Tools and Help
Every company has different issues:
if firm avoids equity investments, consider contract team.
Must be able to hire the right team for the project fast, and terminate just as fast (often requires external talent).
Consistent cadence: 3, 6, 12-month checkpoints where assumption is project will terminate unless hypotheses are proven or a pivot is accepted.
With a little creativity, enterprises can...
...like a Lean Startup
Image credit: businessmodelgeneration.com
Quick stuff about me:
Work for Jerry Cuomo, IBM Fellow
Third time back at IBM - can't get enough
Started three companies and spun two of them out of really big companies. Started a lot of enterprise transformations.
Teach Lean Startup In Enterprise at UC Berkeley
Link me on LinkedIn: linkedin.com/in/johnwolpert