Today’s business is very dynamic and demands immediate business value delivery and decreasing time-to-market. What does this mean for essential supporting services like IT? They just have to adapt to these demands. To better support the business IT departments have already become Agile, now a new trend is entering the enterprise: The Lean Startup. Built upon the iterative nature of Agile software development, but focused upon discovering the end-users value first, it seems to match with today’s market dynamics.
Corporate organisations and customer centric Innovation do not match
One of the most important understandings that corporations have accepted is the fact that a startup is not just a small version of a company. Steve Blank, the intellectual father of the Customer Development methodology, described it well by saying: “In a startup, no business plan survives first contact with customers”.
Corporate processes are set out towards operational excellence and efficiency. They in general develop through evolution. This might not be very functional for a creative, unpredictable and discovery-driven approach that is often the mode of operation of startups.
Facilitate innovation within enterprise by adopting startup best practices
Get out of the building to validate your ideas, that is on a very high level one of the messages that Eric Ries expresses in his book “The Lean Startup”. Initially designed for startups, this approach towards new product development is also gaining ground within enterprises.
“In a startup, no business plan survives first contact with customers.”
More and more industries are confronted with the ‘innovate or die’ principle, and feel the pressure from startups that aim to disrupt their business. In contrast to lean startups they often feel obstructed towards innovation by existing processes and structures that are expensive, formal and take a long time to initiate and execute. In the last few years however corporations have started to get more entrepreneurial, by investing in intrapreneurial programs (finding entrepreneurs within the corporation), accelerator/incubator programs (facilitating the development of new startups) and even incorporating the lean startup within their new product development processes.
Only a real problem deserves a solution
For corporates the main trap is that they believe that all the knowledge and expertise is within the company (inside the “building”) and that they know exactly what their customer needs. Although this is partially true, they will have to realize that a product is only a solution if it solves a problem for the customer that he is willing to pay for. And the only one to confirm this is ….. the client.
It’s high time to realize that the development of a new product based on this flawed internal knowledge leads to a disappointment in the end. A solution has been built, huge amounts of time and money have been spent and once shown to the end-user, it appears not to match their needs.
The Lean Startup dictates to start with the customer and their needs. It primarily focuses on finding a problem worth solving before even thinking of a solution. Also the way in which any conclusions are drawn is different. It starts with the creation of assumptions which have to be validated with the customer. Once we know what the end-user needs, we are certain that what we build is a satisfactory answer to his needs.
No need to wait with validating the solution till the solution is ready!
Building the right solution through customer validation
The Lean Startup aims to validate ideas very quickly by presenting so-called Minimal Viable Products (MVP’s). Such an MVP can be a sketch of a potential product or a mock-up of the user interface of a future (mobile) application. These are not necessarily really working prototypes, that’s something for a later stage. The MVP is the perfect tool to gather user input. This validation process ensures neither time nor money will be wasted.
Once we have validated the idea, and we are convinced it will add sufficient value, the development of the solution can start. To maintain involvement of the customer we prefer an Agile approach like Scrum to build the solution. In short iterations (2 weeks) product increments are being delivered. After every iteration a new working solution will be presented.
This process follows the so-called Build-Measure-Learn feedback loop.
It’s all not that new
Honestly, the lean approach is nothing new. It was documented for the first time around 1600. In the 1940’s Toyota started focusing on reducing “waste” by working in a lean way. On this blog we wrote about it in 2010. Currently, other industries are becoming aware of the potential advantages of this approach. Meanwhile, they are afraid as well. The traditional way of working delivered many good things and let them keep control. Who will guarantee that this new lean way of working will deliver results and won’t disappear as just another fashionable thing? This is what we will discuss in our next post which will appear online soon.
Entrepreneur, co-founder & Managing Director of Goyello and Webmerce. Sociologist and electrotechnical engineer, a great combination that stimulates him to look for working solutions. Passionate about converting great ideas into new solutions. He is married and a proud father of 3 great sons. Participating in (and training for) triathlons to stay fit.
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