We're All Lean Startups Now

Eric Ries' Lean Startup started on a blog, became a best-selling book, and is now a thriving global movement. (There's a slick overview of the evolution here.) Despite the title, and some of Ries' arguments, its popularity can't be attributed merely to the relentless startup mania and the armies of 20-year-olds burning white-hot with dreams of instant Instagram billions.

In the book, Ries defines a startup as "A human institution designed to create a new product or service under conditions of extreme uncertainty."

He allows that anyone leading such an endeavor should be considered an entrepreneur, whether s/he's a product manager working with a team of 100s at GE or in a garage with angel funding. And yet he does attempt to exclude "most businesses -- large and small alike" on the basis that they don't "confront situations of of extreme uncertainty." He continues:

"To open a new business that is an exact clone of an existing business all the way down to the business model, pricing, target customer, and product may be an attractive economic investment, but it is not a startup because its success depends only on execution."

The problems is that Ries' characterization of the execution-centric business applies fully to only one very particular kind of undertaking -- namely, franchises -- and not to "most businesses." (Moreover, even if the success of, say, a new Taco Bell is largely a matter of sticking to plan, I can assure you that the bright men and women at Yum Brands (which owns Taco Bell, KFC, and Pizza Hut) are working feverishly (and successfully) to constantly innovate and respond to new challenges across their global consumer touchpoints as well as internal employee experiences.)

So despite the half-hearted attempt to exclude most businesses, Ries seems to recognize that "extreme uncertainty" is the environment in which virtually any business (or government) organization exists today. (And Tim O'Reilly states it outright in his blurb for the book.) Regardless of what you call it or what aspect you focus on -- the empowered era, the age of the consumer, the period of transition to systems of engagement -- today's business climate mocks predictability, repeatable value production, and the five year strategic plan. (Five years ago, there was no iPhone, no Android OS, no Twitter, and Facebook was seven months old as a public site.)

We all -- organizations and individuals -- live in an extreme uncertainty era. (The EUE!) The only certainty is that things will almost certainly be more uncertain tomorrow. Discussing intranet, collaboration, and customer-engagement projects with Forrester clients, I frequently find myself saying that today, the primary business requirement is the ability to respond quickly to modified, new, or wholly unanticipated business requirements.

Lean Startup thinking holds that the point of a startup is not (or should not be) to follow a business plan laid out by the founders and validated by the investors. Rather, the lean startup exists to "figure out the right thing to build . . . as quickly as possible." The catch is that this "right thing" -- the product or service that the customers/users really want -- is located somewhere between what the customers think they want and what you think the customers want. Customer surveys and whiteboard product design sessions are both important but will not reliably arrive at what customers really want whether deployed alone or together.

The way to build the right thing as quickly as possible is a process of iterative experimentation that Ries calls "validated learning."  In effect, every startup is in the same business -- the business of validated learning. The experiments proceed rapidly because they are conducted with purposefully incomplete rough drafts of the innovation. These minimum viable products (MVPs) may be buggy and ugly, and they ought to be cheap, but they need only be complete enough to allow you to meaningfully test fundamental assumptions about the innovative product or service. This "build-measure-learn" cycle is repeated until the startup finds the "right thing." (Or pivots. Or dies.)

Here are just two of the many ways that Content & Collaboration professionals can apply lean startup methods to their initiatives.

1. MVPs for a "lean startup intranet." User-centric design practices such as focus groups, card-sorting exercises, and persona development should inform requirements and design decisions for any intranet project. (See my report, "Pump Up Intranet Adoption With User-Centric Design.") This should include frequent user testing of design prototypes and early builds in order to validate the deliverables and determine, "Are we delivering on the requirements?" A lean startup approach to the intranet initiative would however also discover, test, and refine the requirements with a series of minimum viable products. Since the MVPs have to be created quickly and inexpensively, consider using free or low-cost versions of cloud-based products such as Box or Huddle, which allow you to experiment with information architectures, content flows, and social functionalities. (The technologies you leverage for the MVPs are not at all necessarily those you use in the final product.)

2. Validated learning for enterprise social. Here is an increasingly frequent discussion with Forrester clients. Forrester: "Have you used enterprise social tools?" Client: "We tried something last year and it didn't work." Forrester: "Interesting. Why didn't it work?" Client: "We don't know. It just didn't have much adoption." This exchange narrates the opposite of validated learning. Experimentation is crucial, but "Let's toss it out there and see what happens" is not a productive strategy. The lean startup approach requires that experiments should be designed in advance to test, measure, and collect feedback for the next iteration. In short: An enterprise social failure that produces validated learning is actually a success; a success without learning is a failure (because you don't know how to reproduce it); and an experiment without prior planning for learning is just a waste of time.

What do you think? My sense it that Ries' lean startup princiles are widely understood among organizations of all sizes. Do you see the value of deploying them in your own projects?

Comments

Great post! So right. Should

Great post! So right. Should be mandatory read for many...

The answer is a resounding yes!

I think the Lean Startup was revolutionary for creative entrepreneurs- who are more driven by their vision, than by the economics of business. As Eric states in the book, one of the big reasons he started the movement was because he didn't want to see the passion and sweat of passionate idea-makers go to waste. I'm in this category, with 3 years of battle scars to show for it. I am very glad I was introduced to the concepts in this book, which now put me in the appropriate mindset to be more methodical about testing the most important assumptions of my vision and business model.