The document provides an overview of how Agile and Lean Startup principles and practices originated and can be applied at scale in large organizations. It discusses how Agile methods emerged in response to the limitations of traditional "Waterfall" development practices. Lean Startup was later developed to address the need to align product development with customer needs and market feedback. The document then outlines how large companies can structure themselves, use tools, and develop a culture more like startups to foster innovation at scale through practices such as cross-functional teams, rapid experimentation, and a focus on learning over outputs.

1. How to Innovate
Like a Startup
Applying Agile and Lean Startup
to power your innovation strategy
Sam McAfee - Author, “Startup Patterns”
startuppatterns.com
@sammcafee

2. About Me
• 17 years in tech startup industry.
• Founded a consulting firm, ran it for a decade.
• Early adopter of both Agile + Lean Startup.
• Coaching enterprise product and tech teams.
• Worked on 6 startups. Doing my 7th now.
• Writing a book on it: startuppatterns.com.

3. Agenda
• About Me √
• Lean + Agile, Historically
• Innovation at Scale

4. Agile + Lean, historically…
• W. Edwards Deming (1900 - 1983)
• Worked under Shewhart at Bell Labs 1930s
• Developed statistical method for quality control.
• Also developed PDCA cycle, an iterative process.

5. • 1950s Deming + Taichii Ohno (Toyota), brought PDCA to Japan.
• Japanese methods inspired by Deming. Lots of collaboration.
• Union of Scientists and Engineers still give the “Deming Prize”.
Agile + Lean, historically…

6. • As post-war boom led to mass production, statistical control abandoned in USA.
• By 1980s, US boom was over. Companies worried.
• US companies began importing ideas from Toyota, etc.
• John Krafcik coined it “Lean” production in an article in 1988. The term stuck.
Agile + Lean, historically…

7. • Jeff Sutherland reads an article in HBR on Japanese teamwork in product
development. Scrum was an analogy in the article.
• Sutherland picks “Scrum” to describe his approaches to software development.
• Kent Beck was developing “Extreme Programming” with similar team principles.
Agile + Lean, historically…

8. • Steve Blank developed Customer Development in 1990s
to better align product development and customer.
• In 2000s, Eric Reis, his student, recognizes similarity to
Agile and Lean. Coins it “Lean Startup”.
Agile + Lean, historically…

9. Meanwhile, at the
Pentagon…

10. “Waterfall” is Born
• Software systems engineering started post-WWII.
• US Department of Defense historically purchased most
software. Companies followed, but DoD pushed
innovation and set standards.
• 1950 to 1980 systems engineering mostly chaotic.
• Late 1970s, early 1980s, attempts to rein in chaos lead
to “sequenced process” of software development.
• Later known as “Waterfall”.

11. Example: Waterfall
Sequences
• Each phase (design, build, test) is discrete.
• Each dependent on previous phase.
• Time-line (and budgets) set in advance.

12. What could go wrong?
• Mistakes cascade downstream.
• Schedule and cost overruns bleed over.
• Requirements do change. So do markets.
• Basically, it’s slow, error-prone, and expensive.

13. Enter Agile…

14. Enter Agile
• Allow requirements to change. That’s good!
• Close the gap between engineer and user.
• Build smallest pieces first, and release them.
• Use technical practices to keep code quality
high and easy to change.

15. Agile’s Impact
• Agile software delivery is orders of magnitude
more stable and reliable across the industry.
• Users are getting more of the features they want
more quickly.
• Engineers have learned how to rapidly iterate
based on user feedback.

16. But…
• Somehow, projects are still failing in the market.
• Even if a product is built perfectly, who cares if
customers don’t buy it?
• Something was still missing…

17. Enter Lean Startup
• Steve Blank published "4 Steps to the Epiphany"
in 2003.
• Eric Reis started blogging “Startup Lessons
Learned” around 2009.
• It’s been about ten years!

18. Lean Startup Basics
• Solve real problems that real customers have.
• Reduce bigger risks into smaller risks.
• Iterate quickly based on market feedback.
• Be data-informed, and challenge your deeply-
held assumptions continuously.

19. Practicing Lean Startup
• Turn assumptions into hypotheses to be tested.
• Emphasize learning > building things.
• MVP: Minimal Viable Product.
• The Build -> Measure -> Learn loop.
• Metrics -> Only the ones that matter.

20. Agenda
• About Me √
• Lean + Agile, Historically √
• Innovation at Scale

21. Innovation at Scale
• Technology is disrupting every industry.
• Change happens faster every year.
• Startups are pushing big incumbents aside,
taking their marketshare.
• Consumers are demanding better design,
faster response times, more integration.

22. The Right Structure
• Startups iterate faster, not just because they are
smaller…
• Cross-functional!
• Co-located!
• Dedicated!

23. The Right Tools
• Startups use open source, existing tools.
• Slack and other tools speed communication.
• Cloud services are fast and easy to build.
• Dev-Ops enables rapid, continuous deployment.
• Metrics dashboards keep the team on track.

24. The Right Culture
• Everyone involved is values-aligned.
• The vision and strategy are crystal clear.
• Safe-to-fail experiments are encouraged.

25. Innovation at Scale
• Executive-led change initiatives (e.g. digital
transformations, agile adoption, etc.)
• Accelerators to partner with startups.
• Incubators to experiment with new ideas.

26. Agenda
• About Me √
• Historical Perspective √
• Lean Startup in Different Contexts √

27. Thank You!