My presentation on how to apply lean startup methodology in a big corporation. How to quickly build digital services. Innovation, internal startups and customer centricity on Agile 2017 conference May 2017.

1. INTERNAL STARTUPS – HIT
THE SWEETSPOT AND
SHORTEN THE CYCLE TIME
Jukka Märijärvi, Landon Oy

2. “Why should big companies change?
What is the startup world the big
companies are meeting?
Case: not included in this version

3. “ We were looking at Sales when
we should have looked a lot
further ”
➤ Jorma Ollila in an
interview:
“The Difficulty lies not so much
in developing new ideas as in
escaping from the old”
➤ John Maynard Keynes
“NOBODY EVER GOT FIRED
FOR CHOOSING IBM"

4. BIG COMPANY CHALLENGES IN INNOVATION
Bad Habit #1: The current business model dominates the agenda
Bad Habit #2: One-size-fits-all decision making hurts speed & inventiveness
Bad Habit #3: Insisting on untested and detailed business plans
Bad Habit #4: Opinions and past experience matter more than evidence
Bad Habit #5: Outsourcing customer discovery and testing
Bad Habit #6: Lack of senior leadership participation
Bad Habit #7: Obsession of competitor rather than customers
Bad Habit #8: Predominant focus on technology risk at the expense of other risks
Bad Habit #9: Innovation is career suicide in most organizations
Bad Habit #10: The innovation engine is siloed from the execution engine
Bad Habit #11: Integrate new ideas into the execution engine too quickly
11 corporate habits that kill your company’s innovation engine
http://blog.strategyzer.com/posts/2016/10/10/11-corporate-habits-that-kill-your-companys-innovation-engine

5. INTERNAL STARTUP - THIS IS WHAT YOU NEED
➤ Top Mgmt approval for the internal startup concept
➤ definition of the rules (brand, compensation, independence,
customers etc)
➤ Ideas - best is to start from “strategy & vision work leftovers”
➤ Suitable cross functional team
➤ the whole operation needs to be totally independent
➤ Team leader (“CEO”) and Company godfather (“VC” but also
protects, helps and channels the team into the company)
➤ Separately allocated money and patience for the results
➤ Different way to manage and different HR policies
➤ Advisory board

6. WHY INTERNAL STARTUP?
➤ Big company competence is only
a call away - legal, pre-
production, marketing, …
➤ Team does not expose to same
risk level (nor rewards either)
➤ Great advisory board from own
company Execs
➤ Easy to get access to channels for
MVP and potential customers
➤ Brand opens doors
➤ “Easy” to get financing and
budget
➤ Optimal team “easy” to do

7. WHAT HAPPENED WITH PIVO - OP FINANCIAL SYSTEMS
➤ 5 years ago they saw that Mobile Banking will be hot
➤ This came as a bi-product of vision and strategy work
➤ No included in this version
➤ TODAY: Pivo is a success with 4,5/5 rating, it has +700 000
users, 33% use daily, 66% weekly

8. RESULTS FROM GE (SOURCE: GE)
➤ GE - 2012 lean startup start, 150 full time coaches (4/2016)
➤ Not included in this version

9. F-SECURE EXPERIENCE
➤ F-Secure:
➤ Lokki
➤ Freedome

10. F-Secure KEY
Material courtesy Harri Kiljander, F-Secure

11. 20122013
August: Strategy
project kick-off
November: Family
location sharing concept
December:
Launch date: 11th Aug 2013
January:
Productization decision
November:
Online surveys of
people protection
September: Product
concepts design
April:
Team operational,
SW development
begins
July:
1.0 release to
iTunes, internal beta
August: 1.1 live in iTunes
and Google Play on 12th of
August
February:
“Work like a startup!”,
family focus groups
March:
Concept design,
team building
June:
Internal alpha,
product naming
May:
1st demo to company
Leadership Team,
school survey
September: 2.0
Movember: pivot
December: 3.0
Material courtesy Harri Kiljander, F-Secure

12. FREQUENTLY ASKED QUESTIONS
➤ Separate company vs. internal startup
➤ Compensation?
➤ Startups have time-to-exit - how in Internal Startup?
➤ Does customer understand what is going on?
➤ “Answer to our 100 page RFQ for next week” etc
➤ People issues:
➤ Overtime compensation might be a problem
➤ Staff might be afraid that this is an exit path …

13. IF YOU CANNOT CHANGE THE COMPANY - THEN IDEAS YOU COULD USE “IN THE SMALL”
➤ First question - we could build the product, but should we?
➤ All starts from customer pain points, we are not creating a product where we
then later look markets for,
➤ Before you know who your customers are, you won’t know what is valuable to
them!
➤ You collect empirical information on what is valuable to your customers
➤ What customers say is often very different than what they do
➤ Have a vision - (you became the customer as you know so much)
➤ Write assumptions - Use understanding to make hypothesis that you
test
➤ Test the assumptions with fast pilots – create a MVP (Minimum Viable
Product)
➤ Do not be afraid to fail! You only gain experience

14. HTTP://WWW.N4S.FI/PUBLICATION/COOKBOOK-SUCCESSFUL-INTERNAL-STARTUPS/
➤ Our book on the topic.
➤ Try it, it is free and
no registration needed

15. CLOSING REMARKS … EXPERIMENTS
The old way is just too slow for rapidly moving world:
➤ Rather than making a single big, strategic bet, manage multiple initiatives.
➤ Try out new business models with low sunken cost, killing off the losers, and scaling up the
winners - BCG