ENABLINGINNOVATIONUsing Lean Startup &Innovation Accounting                                                               ...
About Myself Founded 2 tech startups,worked with many others                            &   Spark59
Innovation in anAgile Environment
WaterfallRisk                         BU ILD                BU ILD       B UILD                                       Time...
Agile / XP / SCRUMRisk       BUILD    BUILD     BUILD    BUILD                                                Time        ...
Are we making our     product better or worse?
Are we efficient?       vsAre we effective?
The Definition of Doneshould include testing customer behaviour
Validated Learning
IDEASLEARN             BUILD DATA              PRODUCT        MEASURE                  Experiment
“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 ...
Hypotheses instead ofRequirements
Requirement:Users can create 3D avatars.
Hypothesis:We believe that users will create a 3Davatar and spend more time on other           users profiles.
Falsifiable Hypothesis:  50% of newly signed up users will create a 3D avatar,Avg time spent on user profiles will go from...
Be closer to reality,      and avoidbias & comfort zones
User Stories != Experiments Missing the “Measure” StageNo Way to Validate the Learning
Deploy != Launchif $rollout.active?(:chat, current_user)   ...else   ...end
Deploy Every CommitRelease To A Small Set of CustomersLaunch The New Feature When Ready
Experiments need to beshown to actual customers   Not just to your team!
Tools & Ta                       c   tics    Lean Stack:Experiment Reports
EXPERIMENT REPORT                              Title: [TITLE]                                  Author: [NAME]             ...
EXPERIMENT REPORT                              Title: [TITLE]                                  Author: [NAME]             ...
Background  What are you trying to learn or achieve?Give Context.Why is this relevant?
Falsifiable Hypothesis   Your list of statements on the expected outcome of   the experiment.   Use this format:   [Specific...
Experiment Scope   How long will the experiment last?  Minimum Build Plan   List the build plan step by step to get your  ...
Planning an Experiment1. Context - Why is this relevant?2. Quantify Your Goals3. Set Scope & Timebox
Test yourValue and your Growth   Hypothesis first
Validated Learning:     Define Hypothesis,Build & Launch Experiment,  Learn from the Results
Concepts for making this work:1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
Hierarchy               1. Product Ownership               2. Shared Understanding  Anarchy               3. Accountabilit...
1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
Centralized Product OwnershipCross-Functional   Product                             Customers     Team           Owner
Distributed Product Ownership Business     Cross-Functional                                 CustomersStakeholder        Team
Product Ownership is about  Defining Customer Value,       not Aesthetics
Business Experiments  instead of ( just) Development Tasks
Experiments are    Owned By A Team Member
Draws ExpertResources as needed  (e.g. through pairing)
1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
Why? are we doingwhat we’re doing
Team needs toUnderstand The Impact    of their work
“Shared understanding is aboutgetting everyone to walk in the other person’s shoes a little.”   Bill Scott - UX at Netflix...
Are we making progresstowards our business goal?
Tools & Ta                      c   tics Company-WideMetrics Dashboard
ActionableAccessibleAuditable
ActionableTie specific repeatable actions toobserved results.
AccessibleLet everyone in the companysee and understand whats going on.
AuditableTie the numbers back to actualcustomers, so you can verify the metricand believe in it.
You need all three            ACTIONABLEAUDITABLE                ACCESSIBLE
Unit Economics  instead ofGross Revenue
Dave McClure’s AARRR Metrics       ACQUISITION   How do users find you?        ACTIVATION   Do users have a reat first exper...
Value Metrics              How do users find you?      ACQUISITIONDo users have a great first experience?   ACTIVATION      ...
Growth Metrics              How do users find you?      ACQUISITIONDo users have a great first experience?   ACTIVATION     ...
Tools & Ta                     c   ticsCross-Functional     Pairing
Tools & Ta                          c   ticsWeekly Strategy Meeting   Part 1: Ideation
Avoid Brainstorming.      It causesPremature Convergence   Around One Idea.
By Daniel Cookhttp://www.lostgarden.com/2010/08/visualizing-creative-process.html
Design Studio   by Will Evans   @semanticwill
Observe & Explain      Ideate       Discuss  To The Group          Alone     In the Group                     Sketch &    ...
Review ExperimentsOnly In Weekly Meeting Focus On Efficiency  In Daily Stand-ups
1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
Tools & Ta                           c   tics       Lean Stack:Validated Learning Board
Kan-ban Board         IDEAS              Build   Measure   LearnLEARN             BUILD                        ✓          ...
Build   Measure   Learn                   ✓                   ✘
1 experimentper team member
Separate Task Boardfor tracking the detailsSwimlane for each Experiment
Tools & Ta                          c   ticsWeekly Strategy Meeting    Part 2: Review
Review Experiment Results    Challenge the InterpretationKill / Restart overdue Experiments
EXPERIMENT REPORT                              Title: [TITLE]                                  Author: [NAME]             ...
ResultsEnter the data. Actual data you Measured, based on your Hypothesis.
Validated LearningSummarize your learning from the experiment.                                + Validated Invalidated     ...
Next ActionWhatʼs the next experiment? What will you do next based on your learning?
✘   Failure is good. Validated Learning is ourMeasurement of Progress.
1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
Timeboxing
Build   Measure   Learn                   ✓                   ✘
Experiment ScopeBuild      Measure   Learn                      ✓                      ✘
Startups don’t starve,       they drown.Open-ended learning is dangerous,        always timebox.
Recommended Timeboxes:Interviews/Prototypes:   1-2 WeeksQualitative Tests:       1 MonthQuantitative Tests:      2-3 Months
Customer Interview               (Paper) Prototype                            MVP            “The Perfect Product”Inside-t...
Get-out-of-the-Building Reality            Customer Interview              (Paper) Prototype                           MVP...
Justify the Cost of MVPs       with Proof
Understand Problem:          Explorative Customer Interviews                  Define Solution:            User Testing Wit...
In Summary
0. Validated Learning1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
Tools & Ta                             c   tics  Experiment ReportsCompany-wide DashboardValidated Learning BoardWeekly St...
Thanks!leanstack.comlukas@spark59.com
Enabling Innovation using Lean Startup
Enabling Innovation using Lean Startup
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Enabling Innovation using Lean Startup

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Keynote At Smidig Conference 2012 in Oslo, Norway. All rights reserved.

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Transcript of "Enabling Innovation using Lean Startup"

  1. 1. ENABLINGINNOVATIONUsing Lean Startup &Innovation Accounting LUKAS FITTL @lfittl spark59.com 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. 2. About Myself Founded 2 tech startups,worked with many others & Spark59
  3. 3. Innovation in anAgile Environment
  4. 4. WaterfallRisk BU ILD BU ILD B UILD Time Release!
  5. 5. Agile / XP / SCRUMRisk BUILD BUILD BUILD BUILD Time Release! Release! Release! Release!
  6. 6. Are we making our product better or worse?
  7. 7. Are we efficient? vsAre we effective?
  8. 8. The Definition of Doneshould include testing customer behaviour
  9. 9. Validated Learning
  10. 10. IDEASLEARN BUILD DATA PRODUCT MEASURE Experiment
  11. 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. 12. Hypotheses instead ofRequirements
  13. 13. Requirement:Users can create 3D avatars.
  14. 14. Hypothesis:We believe that users will create a 3Davatar and spend more time on other users profiles.
  15. 15. Falsifiable Hypothesis: 50% of newly signed up users will create a 3D avatar,Avg time spent on user profiles will go from 30s to 1min+
  16. 16. Be closer to reality, and avoidbias & comfort zones
  17. 17. User Stories != Experiments Missing the “Measure” StageNo Way to Validate the Learning
  18. 18. Deploy != Launchif $rollout.active?(:chat, current_user) ...else ...end
  19. 19. Deploy Every CommitRelease To A Small Set of CustomersLaunch The New Feature When Ready
  20. 20. Experiments need to beshown to actual customers Not just to your team!
  21. 21. Tools & Ta c tics Lean Stack:Experiment Reports
  22. 22. EXPERIMENT REPORT Title: [TITLE] Author: [NAME] Created: [DATE]Background ResultsWhat are you trying to learn or achieve? Enter the data.Falsifiable Hypothesis Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Validated Learning VALIDATED or INVALIDATED Summarize your learning from the experiment.Experiment Scope How many and/or how long will the experiment last?Minimum Build Plan List the build plan step by step to get your measurement and experiment. Next Action Whatʼs the next experiment? Lean Stack by Spark59.com
  23. 23. EXPERIMENT REPORT Title: [TITLE] Author: [NAME] Created: [DATE]Background ResultsWhat are you trying to learn or achieve? Enter the data.Falsifiable Hypothesis Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Validated Learning VALIDATED or INVALIDATED Summarize your learning from the experiment.Experiment Scope How many and/or how long will the experiment last?Minimum Build Plan List the build plan step by step to get your measurement and experiment. Next Action Whatʼs the next experiment? Lean Stack by Spark59.com
  24. 24. Background What are you trying to learn or achieve?Give Context.Why is this relevant?
  25. 25. Falsifiable Hypothesis Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome]Quantify Your Goals
  26. 26. Experiment Scope How long will the experiment last? Minimum Build Plan List the build plan step by step to get your measurement and experiment.Set Scope & Timebox
  27. 27. Planning an Experiment1. Context - Why is this relevant?2. Quantify Your Goals3. Set Scope & Timebox
  28. 28. Test yourValue and your Growth Hypothesis first
  29. 29. Validated Learning: Define Hypothesis,Build & Launch Experiment, Learn from the Results
  30. 30. Concepts for making this work:1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
  31. 31. Hierarchy 1. Product Ownership 2. Shared Understanding Anarchy 3. Accountability 4. Scoping & TimeboxingLean Startup
  32. 32. 1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
  33. 33. Centralized Product OwnershipCross-Functional Product Customers Team Owner
  34. 34. Distributed Product Ownership Business Cross-Functional CustomersStakeholder Team
  35. 35. Product Ownership is about Defining Customer Value, not Aesthetics
  36. 36. Business Experiments instead of ( just) Development Tasks
  37. 37. Experiments are Owned By A Team Member
  38. 38. Draws ExpertResources as needed (e.g. through pairing)
  39. 39. 1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
  40. 40. Why? are we doingwhat we’re doing
  41. 41. Team needs toUnderstand The Impact of their work
  42. 42. “Shared understanding is aboutgetting everyone to walk in the other person’s shoes a little.” Bill Scott - UX at Netflix, PayPalThis includes the business owner’s shoes!
  43. 43. Are we making progresstowards our business goal?
  44. 44. Tools & Ta c tics Company-WideMetrics Dashboard
  45. 45. ActionableAccessibleAuditable
  46. 46. ActionableTie specific repeatable actions toobserved results.
  47. 47. AccessibleLet everyone in the companysee and understand whats going on.
  48. 48. AuditableTie the numbers back to actualcustomers, so you can verify the metricand believe in it.
  49. 49. You need all three ACTIONABLEAUDITABLE ACCESSIBLE
  50. 50. Unit Economics instead ofGross Revenue
  51. 51. Dave McClure’s AARRR Metrics ACQUISITION How do users find you? ACTIVATION Do users have a reat first experience? RETENTION Do users come back? REVENUE How do you make money? REFERRAL Do users tell others?
  52. 52. Value Metrics How do users find you? ACQUISITIONDo users have a great first experience? ACTIVATION Do users come back? RETENTION How do you make money? REVENUE Do users tell others? REFERRAL
  53. 53. Growth Metrics How do users find you? ACQUISITIONDo users have a great first experience? ACTIVATION Do users come back? RETENTION How do you make money? REVENUE Do users tell others? REFERRAL
  54. 54. Tools & Ta c ticsCross-Functional Pairing
  55. 55. Tools & Ta c ticsWeekly Strategy Meeting Part 1: Ideation
  56. 56. Avoid Brainstorming. It causesPremature Convergence Around One Idea.
  57. 57. By Daniel Cookhttp://www.lostgarden.com/2010/08/visualizing-creative-process.html
  58. 58. Design Studio by Will Evans @semanticwill
  59. 59. Observe & Explain Ideate Discuss To The Group Alone In the Group Sketch & Write down!
  60. 60. Review ExperimentsOnly In Weekly Meeting Focus On Efficiency In Daily Stand-ups
  61. 61. 1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
  62. 62. Tools & Ta c tics Lean Stack:Validated Learning Board
  63. 63. Kan-ban Board IDEAS Build Measure LearnLEARN BUILD ✓ ✘ DATA PRODUCT MEASURE
  64. 64. Build Measure Learn ✓ ✘
  65. 65. 1 experimentper team member
  66. 66. Separate Task Boardfor tracking the detailsSwimlane for each Experiment
  67. 67. Tools & Ta c ticsWeekly Strategy Meeting Part 2: Review
  68. 68. Review Experiment Results Challenge the InterpretationKill / Restart overdue Experiments
  69. 69. EXPERIMENT REPORT Title: [TITLE] Author: [NAME] Created: [DATE]Background ResultsWhat are you trying to learn or achieve? Enter the data.Falsifiable Hypothesis Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Validated Learning VALIDATED or INVALIDATED Summarize your learning from the experiment.Experiment Scope How many and/or how long will the experiment last?Minimum Build Plan List the build plan step by step to get your measurement and experiment. Next Action Whatʼs the next experiment? Lean Stack by Spark59.com
  70. 70. ResultsEnter the data. Actual data you Measured, based on your Hypothesis.
  71. 71. Validated LearningSummarize your learning from the experiment. + Validated Invalidated Why? Inconclusive
  72. 72. Next ActionWhatʼs the next experiment? What will you do next based on your learning?
  73. 73. ✘ Failure is good. Validated Learning is ourMeasurement of Progress.
  74. 74. 1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
  75. 75. Timeboxing
  76. 76. Build Measure Learn ✓ ✘
  77. 77. Experiment ScopeBuild Measure Learn ✓ ✘
  78. 78. Startups don’t starve, they drown.Open-ended learning is dangerous, always timebox.
  79. 79. Recommended Timeboxes:Interviews/Prototypes: 1-2 WeeksQualitative Tests: 1 MonthQuantitative Tests: 2-3 Months
  80. 80. Customer Interview (Paper) Prototype MVP “The Perfect Product”Inside-the-Building Comfort Zone
  81. 81. Get-out-of-the-Building Reality Customer Interview (Paper) Prototype MVP “The Perfect Product”
  82. 82. Justify the Cost of MVPs with Proof
  83. 83. Understand Problem: Explorative Customer Interviews Define 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
  84. 84. In Summary
  85. 85. 0. Validated Learning1. Product Ownership2. Shared Understanding3. Accountability4. Scoping & Timeboxing
  86. 86. Tools & Ta c tics Experiment ReportsCompany-wide DashboardValidated Learning BoardWeekly Strategy Meeting
  87. 87. Thanks!leanstack.comlukas@spark59.com

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