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Lean Startup in the Enterprise

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John Wolpert

on 24 May 2014

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Transcript of Lean Startup in the Enterprise

Lean Startup in the Enterprise
Beyond Buzzwords
What is a Lean Startup?

A temporary organization designed to find a repeatable, scalable business model under conditions of extreme uncertainty.

Steve Blank
Eric Ries
Alex Osterwalder
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.

Customer development

Hypothesis testing business model
assumptions

Rapid experimental design
Validated Learning

Minimally Viable Product (MVP)

Pivoting
CIO > 10k
Employees
Reduce
server load
per
transaction
1-1 Client
Rep. Visits
+Support
Outside
Sales
Developers
SMB
Reduce
development
time to deploy
application
Community
Forum
Chat
Web
GitHub
Validated Learning:

The real trick for enterprises.

Pivot
How to build a lean enterprise:
Identify cases of extreme uncertainty in portfolio.
Test hypotheses.
Evidence-based innovation.
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.
Executive contract:
evidence based decisions
pivot rules
Seek Uncertainty
Test Hypotheses
How to test hypotheses without...
Getting slowed down by NDAs & other legal
Confusing customers and investors
Violating business conduct rules
Four experiment methods
Explore
Pitch
Concierge
Prototype
Explore
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.
Pitch
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.)
Prototype
Only build the minimially
viable
aspects:
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.
Concierge
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
Day
Days
Weeks
-
Weeks
-
Puppet Principles:
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.
launchpadcentral.com
javelin.com
quickmvp.com
jwolpert@us.ibm.com
With a little creativity, enterprises can...
reduce risk

increase speed

be nimble...
...like a Lean Startup
Image credit: businessmodelgeneration.com
ELA-error
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

@jwolpert
Link me on LinkedIn: linkedin.com/in/johnwolpert
innosanity.com
Buzzword
Alert
BlueMix
Garage
Full transcript