Lean Product Management @ SDEC13, Winnipeg

Lean Product Management
And why I should care

agile42 | We advise, train and coach companies building software

www.agile42.com |

All rights reserved. Copyright ©2007-2013

“No matter how good the team or how
efﬁcient the methodology, if we’re not
solving the right problem, the project fails.”
Woody Williams


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Understanding
depends on
Length of Feedback Cycle


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Length of Feedback Cycle
driven by
Cost of Change x Cost of Validation


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Economists
In November 2007,
economists in the
Survey of Professional
Forecasters —
examining some 45,000
economic-data series —
foresaw less than a 1in-500 chance of an
economic meltdown as
severe as the one that
would begin one month
later.

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vs Weatherman

http://www.nytimes.com/2012/09/09/
magazine/the-weatherman-is-not-amoron.html

In 1940, the chance of
an American being
killed by lightning was
about 1 in 400,000.
Today, it’s 1 in 11
million.


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Cost of Change


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Assembly Line Manufacturing
has a high cost of change

http://www.archives.gov.on.ca/english/on-line-exhibits/d-day/big/big_03_airline_assembly.aspx
Archives of Ontario, Reference Code: C 190-5-0-0-21

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Inclusive thinking
• In software development high
cost of change leads to inclusive
thinking
• Any and every idea has to be
captured in the ﬁrst version of a
requirements speciﬁcation
• Creates waste - bloated
documents, unwanted features
and entitlement thinking

Feature usage in
enterprise software
Never
Rarely
Sometimes
Often
Always

7%
13%

45%

16%

19%

Standish Group - CHAOS Report, 1995, 2002

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Cost of
Change

Hypothesized
Requirements

Capture all
possible needs

Detail of
Requirements

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New programming languages and versions released
110

104

88
66

10
x

44

50
41

25

22
0

11

1954-1959

12

1960-1964

1965-1974

Increasing Choice in
Technology Environments

1975-1984

1985-1994

1995-2004

Language types and versions released per
decade, taken from O’Reilly’s Programming
Language Timeline
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All rights reserved. Copyright © 2007 - 2009.

Object-oriented
languages

Software Development has
commoditized cost of change

Ruby on Rails

jquery

Coffeescript
Continuous Delivery


Iterative &
Incremental
Methods
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Cost of
Change

Hypothesized
Requirements
Evolving
Requirements

Capture all
possible needs

Emerging needs
as development
progresses

Detail of
Requirements

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Cost of Validation


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Shifting Paradigms

B.G.|A.G.
“I know that half of
my advertising
budget is wasted,
but I’m not sure
which half”
Lord Leverhulme
http://www.marketingprofs.com/charts/2009/3161/more-smbs-use-online-media-than-traditional
http://marketing.blogs.ie.edu/archives/2011/01/trends-in-online-advertising-in-2011-in-the-united-states.php

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Usability Testing - c.2006


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Usability Testing - today

http://welovelean.wordpress.com/2012/01/29/15-essential-tools-every-lean-startup-cant-li/

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Changing paradigms
• If change is cheap, requirements
can change continuously
• We can evolve our thinking as
we learn more about the product
we are building
• Maximizing Return-onInvestment means validating new
ideas early, before the total
investment cost has been spent


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Designed by KISSmetrics


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Cost of
Change

Hypothesized
Requirements
Evolving
Requirements
Validated
Requirements

Capture all
possible needs

Emerging needs
as development
progresses
Lean Startup
experiments

Detail of
Requirements

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5 Levels of Learning


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Five Levels of Planning
Annually

Deﬁne a vision

Roadmap
Planning

Bi-‐annually

Rank features in order of
delivery

Release
Planning
Vision
Planning

Quarterly

Plan stories to be delivered
during next release cycle

Bi-‐weekly

Sprint planning, focussing on
delivery of sprint goal

Daily

Focus on daily planning of
team activities

Vision
Planning

Roadmap
Planning
Itera3on

Release
Planning
Planning

Daily

Planning

5 Levels of Agile Planning: From Enterprise Product Vision to Team Stand-up, Hubert Smits (2006)

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Product Vision
Customer Behavioural Models


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Five Levels of Planning Learning
Vision
Planning

Roadmap
Planning

Release
Planning
Vision
Planning

Long-‐term

Validate understanding with
Medium-‐term Lean (or Customer
Experience) Canvas
Regularly

Minimum Viable Product.
Validate ideas before fully
committing investment

Bi-‐weekly

Product Owners, Delivery
Team

Daily

Team

Roadmap
Planning
Itera3on

Release
Planning
Planning

Daily

Planning

Deﬁne & reﬁne behavioural
models we are testing?
Pivots happen here.


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“In a nutshell, the job of the product
organization is to make that vision a
reality. So we don't work for a few
weeks or even a few months and then
just declare it's not happening and we
should do a pivot. We will typically
work hard for many months on a
product vision and not even entertain
the possibility of giving up.”
Marty Cagan
http://www.infoq.com/news/2013/07/pivoting-product-development

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Validated Learning

• Understand the problem a
feature will solve
• Decide how to ask if your
customer cares
• Validate before investing
complete cost

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The Scientiﬁc Method
Theory

Use the theory
to make a
prediction

Modify or change
your theory

Observe

Prediction
Design an
experiment to
test the

Run the
experiment

Experiment
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prediction


The Theory of General Relativity
Gradual acceptance of
General Relativity over
Newtonian Mechanics

Einstein’s Theory of
General Relativity

Einstein’s
prediction
(1907)

Observations validated
General Relativity

Light bends in a
gravitational ﬁeld
Wait for 1919 solar

Arthur Eddington

eclipse to observe

observed that Light did

whether or not light

bend around the sun

Solar Eclipse of 1919

bends around the sun

http://thethoughtstash.wordpress.com/2011/01/03/how-eddington-demonstrated-that-einstein-was-right/

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Applied to an Online Experience
User Model

Use the model
to make a
prediction

Modify or change
your user model

Validate

Prediction
Design an
experiment to
test the

Run the
experiment

Experiment
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prediction


Requirements Deﬁnition
User Story Mapping and the Lean Canvas


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Five Levels of Planning Learning
Vision
Planning

Roadmap
Planning

Release
Planning
Vision
Planning

Long-‐term

Validate understanding with
Medium-‐term User Story Mapping and
Lean Canvases
Regularly

Minimum Viable Product.
Validate ideas before fully
committing investment

Bi-‐weekly

Team

Daily

Team

Roadmap
Planning
Itera3on

Release
Planning
Planning

Daily

Planning

Deﬁne & reﬁne behavioural
models we are testing?
Pivots happen here.


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User Story Mapping is a
powerful tool for understanding
your product from the
perspective of the user

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Known Unknowns
Recognize there are gaps in your
vision/business model, and look to
ﬁll those gaps in as quickly as
possible

Map of Africa, 1824

http://culturalstudieslectures.blogspot.com/2012/01/
lecture-one-on-question-what-is.html
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Lean Canvas: Ash Maurya
1.
Problem

4.
Solu-on

top
3
problems

top
3
features

Exis3ng

alterna3ves

8.
Key

metrics

3.
Unique
9.
Unfair

2.
advantage Customer

value

Not
easily
copied

proposi-on or
bought
segments
Clear
compelling

message.
Why

makes
you

diﬀerent?

e.g.
AARRR

5.
Channels
Path
to
customers

Target
customers

Early
adopters?

7.
Cost
Structure

6.
Revenue
streams

Customer
acquisi3on,
distribu3on,
people,

etc.

Revenue
model,
life
3me
value,
revenue,

gross
margin

Product

Market

Lean
Canvas,
from
Ash
Maurya:
Running
Lean.
Licensed
under
Crea3ve
Commons-‐APribu3on-‐Share
Alike
3.0

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Lean Project Canvas
<Title
/
headline>

Problem

Leading
and
lagging

indicators

Channels
Path
to

customers

Business
value
1.
User
&
business
value
2.
Cost
of
Delay
(urgency)
3.
risk
reduc-on/opportunity
enablement
+
Objec-ve
jus-fica-on
1,2,3,5,8,13,21

Market

Possible

solu-ons

linear

time

Business

readiness
What
is
needed

to
deploy
and

support
the

solu3on?

Key
features
&

benefits
for

customers
&

business

(Staff,
budget,
training,

systems,
support,
opera-ons

dependencies
on
projects/
vendors)

Costs

Cost
of
delay
delay cost

Exis3ng
/
alterna3ve

solu3ons

Success

metrics

Early
adopters?

Top
3
problems

Customer

segments

People,
training,
capital,
marke-ng,
etc.
+
Objec-ve
jus-fica-on
1,2,3,5,8,13,21

Product
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Interaction Model

Backlog
To Do

For <target group>

Validation
Doing

Observation

Execution
Validated?

Who <has a specific need>

Doing

Deployed

Idea
#1.1

The <product name>
Is A <product category>
That <key benefit>

Idea
#1.2

Unlike <primary competitors>
Our Product <additional
advantages>

Pathway
#1

Pathway
#2

Idea
#1.4

Idea
#1.3

Idea
#1.5

Idea
#1.6

Idea
#2.3

Idea
#2.1
Idea
#2.4

Idea
#2.2

Level of Detail / Close to done
•Visualize your User Interaction Model
and adjust it as you learn
•Come up with ideas for each pathway
•Prioritize experimental testing
•Spend time on measurement
infrastructure (a test without ability to
measure = an unvalidated feature)

•Always revisit validation tests for size

•The execution board is equivalent to
the team’s task board, but at the Idea
Card level

Release Planning - the Minimum Viable Product


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Zappos famously launched
without stock, selling shoes from
their local specialist show store


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Minimum Viable Product
A Minimum Viable Product may be an entire product or a sub-set of product (such
as a feature):
• Product - The canonical MVP strategy for a web application is to create a mock
website for the product and purchase online advertising to direct trafﬁc to the
site. The mock website may consist of a marketing landing page with a link for
more information or purchase. The link is not connected to a purchasing system,
instead clicks are recorded and measure customer interest.
• Feature - A link to a new feature in a web application might be shown in a
prominent location on the website. The feature is not implemented, rather an
apology, mock-up, or marketing page is provided. Clicks of the link are recorded
and provide an indication as to the demand for the feature in the customer base.

It is ALWAYS smaller than you think!

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Sticky Note Moment


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Validate Everything


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One test is worth a
thousand expert
opinions.
Wernher Von Braun


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“I can’t say it any better, HiPPO’s rule the world, they over rule
your data, they impose their opinions on you and your
company customers, they think they know best (sometimes they
do), their mere presence in a meeting prevents ideas from
coming up.
The solution to this problem is to depersonalize decision
making, simply don’t make it about you or what you think. Go
outside, get context from other places. Include external or
internal benchmarks in your analysis. Get competitive data (we
are at x% of zz metric and our competition is at x+9% of zz
metric).
Be incessantly focussed on your company customers and
dragging their voice to the table (for example via
experimentation and testing or via open ended survey
questions). Very few people, HiPPO’s included, can argue with a
customer’s voice, the customer afterall is the queen / king! : )”

Avinesh Kaushik, kaushik.net

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Depersonalize
Decision Making
• “HiPPO’s” rule the business world
• It is never about you, it can’t be
about you
• Benchmarking is awesome
• Leverage competitive analysis
• Experimentation / testing rock
• Execution strategy:
• Transparency, standardization,
looking outside in
• Be a slave to customer
centricity (its about your
customers (internal & external))

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“Data is like garbage. You’d
better know what you are going
to do with it before you collect it.”
Mark Twain


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Vanity vs. Actionable Metrics
Vanity metrics (like web hits or number of
downloads) which only serve to
document the current state of the
product but offer no insight into how we
got here or what to do next.

An actionable metric is one that ties
speciﬁc and repeatable actions to
observed results.

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get good at
celebrating
learning

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How Much Effort on Validation
• In 2009, Google ran
approximately 12,000
experiments, of which about
10% led to business changes

Feature usage in
enterprise software
Never
Rarely
Sometimes
Often
Always

7%

• Linus Pauling famously said,
"The best way to have a good
idea is to have a lot of ideas."
• Focus on minimizing the
incremental cost of testing ideas
with your customers/users

13%

45%

16%

19%

Standish Group - CHAOS Report, 1995, 2002

www.agile42.com |


Feedback loops make
all the difference
In 1940, the chance of an
American being killed by
lightning was about 1 in
400,000.
Today it’s 1 in 11 million.

http://www.nytimes.com/2012/09/09/
magazine/the-weatherman-is-not-amoron.html


In November 2007,
economists in the Survey of
Professional Forecasters —
examining some 45,000
economic-data series —
foresaw less than a 1-in-500
chance of an economic
meltdown as severe as the
one that would begin one
month later.
www.agile42.com |


“The race doesn’t go to the one with the best idea,
but to the one with the most tested ideas”

Lean Product Management
• Agile drives incremental cost of change down
• Lean Startup leverages falling cost of validation
• Feedback means nothing without a model
Photo: ESA
http://www.nbcnews.com/id/50677062/ns/technology_and_science-space reserved. Copyright ©2007-2013
www.agile42.com | All rights

“Coming together is a beginning.
Keeping together is progress.
Working together is success.”
Henry Ford

thank you
dave.sharrock@agile42.com
twitter: @davesharrock
slides: slideshare.net/davesharrock

www.agile42.com |


Lean Product Management @ SDEC13, Winnipeg

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Lean Product Management @ SDEC13, Winnipeg