Author Archives: Rachel Balik

Running A Lean Startup within GE

Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

As the oldest company on the stock exchange, GE might not seem like a candidate for most innovation, but to Johanna Wellington, CEO of GE Fuels, it makes perfect sense. “You don’t survive that long if you don’t continually reinvent yourself,” she explained.

Johanna, who has worked at GE for years, says Lean Startup principles are truly embraced at GE, by leadership and employees alike. That’s one reason why her unique career path was possible: she started managing GE’s standard business divisions, but a new position within their Global Research Center meant her role became essentially that of an internal VC angel, focusing on projects to support within the company.

Because of GE’s Lean culture, every department and employee is encouraged to have big ideas, which have the potential to then gain support and funding from the research team.  One of those big ideas Johanna eventually supported zeroes in on the potential of fuel cell technology. GE’s plan is now to build industrial-size, highly efficient oxide fuel cells that may positively impact the environment.  Ultimately, the concept was good enough merit its own startup structure within the company, and Johanna stepped forward to lead it.

In her talk at the Lean Startup Conference 2015, “Running a Lean Startup Inside a Big Corporation”,  Johanna shared her experience as the CEO of GE Fuel Cells, providing insight not only on running lean within a giant corporation, but also at a giant manufacturing company.

Although GE embraces Lean culture across the organization, there were some notable differences when it came to running a true startup within the corporation.

The Known Unknown  

At big corporations, forecasting and accurate predictions are an integral part of business operations. Working on a completely new technology meant that Johanna frequently had to accept and admit, both to her team and her superiors, that she simply didn’t know certain things – whether it was how long a project would take or whether a method would work at all. It also meant that she prioritized figuring how to do things right over just getting it done. Sometimes, that means missing milestones rather than moving forward with a flawed process. At the same time, Johanna notes the lack of a rigid roadmap makes the day-to-day more exciting; in her leadership role, she is making big decisions every day with the help of her team.

Planning for Failure

At a company like GE, most business units are expected to be hitting goals and benchmarks. In contrast, in the startup environment, you actually have to plan for failure. At a minimum, that means building time for failure into any project plan. It also must be factored in when having conversations with execs, specifically when it comes to managing expectations. Instead of making promises, Johanna is more likely to let her bosses know ahead of time that, somewhere along the road, things are probably going to break. Finally, it changes how she interacts with her team. Creating an environment where honesty and problem-solving are more valued than “quick wins” is critical to a startup’s success.

Re-Thinking the MVP

There are all sort of creative ways to approach the MVP, and not all of them have to resemble the final product. For GE Fuel Cells, producing even a prototype was a massive undertaking, due to its demand for complex hardware and technology. So when Joanna first approached customers to get feedback, her MVP was simply a data sheet. She used it to validate the need and consider basic requirements before she went about building the product itself. The next iteration of her MVP was also unique, consisting of the process for building the fuel cells. Testing and validating whether they could make the fuel cells at scale was the biggest priority for the startup, and so the MVP had to be process rather than product.

Leveraging Internal Resources

Despite the challenges, there are some big advantages to having the support of a big company behind your startup, and one of them is access to internal resources. Johanna’s familiarity with many teams at GE and the GE catalogue enable her to execute more efficiently and effectively. Plus, GE’s lean, innovative culture means she’s not afraid to ask a favor from someone in another GE business unit, even when the project or favor might not be specifically tied to their own goals. That level of corporate support empowers her to move quickly once a concept is validated and is ready to go.

Overall, GE has created an environment where each of its divisions can work the way it needs to in order to reach its set targets. As Johanna explains, the bigger company is like an ocean liner. It shouldn’t move quickly or turn too fast because it might capsize. On the other hand, she says, illustrating her startup’s need for flexibility, “I’m a motorboat. I have to hit a bunch of points, and if I can’t move fast, I’m going to run out of gas before I get there.”


Learn more about GE Fastworks at Lean Startup Labs: Enterprise Summit in New York City on Feb 25. Or immerse yourself in a full week of Lean Startup methodology and entrepreneurship at Lean Startup Week in San Francisco, Oct 31 – Nov 6.

Bringing the Lean Process to Big Finance Corporations

22677936217_af0cfc75f3_k
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

The Lean Startup methodology is often associated with innovative, small companies, but Andrew Breen, VP of Product Delivery at American Express, says he actually considers it a somewhat conservative approach. Not because it doesn’t enable change, but because its data-driven, customer-driven framework and systematic approach to product development actually make it an ideal way to bring innovation to big, established companies.

Previously, product management was somewhat of a “dark art,” explained Andrew in his presentation at The Lean Startup Conference 2015. While it’s imperative that big corporations change from predictable environments to responsive ones, such evolution can present a huge challenge, especially without a framework for innovation. Building transparency and communication into product development is essential at organizations that aren’t used to being nimble.

When AmEx recognized the need to make a shift in order to stay current in the fast-growing payments world, they brought in Andrew to implement a Lean process right in the heart of the company’s customer service department. AmEx made the important decision to innovate within their existing framework, rather than create a separate labs division. This critical and strategic choice ensures new product development is woven into the fabric of the organization, leading to a more responsive culture overall.

Placed right in the thick of daily operations, Andrew set to work shifting the company’s mindset by implementing processes to facilitate change.

De-risking innovation

At big companies, there’s no shortage of new ideas, but there can be little incentive or opportunity to execute on them. What results is lots of conversation, and very little change. Lean Startup provides a framework for evaluating and mitigating the risk of new ideas. That means a focus on customer validation and understanding the requirements of the MVP. Once those are completed, it’s easy to grasp both the impact and the risk of a project.

Re-thinking the role of the customer

Many big companies have a process for testing a concept that isn’t likely to yield the most valuable information. For example, using employees to test products is fine for QA, but not if you’re truly seeking to build products that will increase customer engagement and satisfaction. Similarly, vetting a new concept with the customer advisory board or a group of most valued customers might make them feel good, but it won’t necessarily tell you what you need to know. Innovation requires validating new ideas with a large group of users (think thousands) and picking customers who aren’t already your biggest fans. That’s where you’ll find the insight that drives growth.

Breaking Down Departmental Silos

Part of the reason product development happens slowly at big companies is because teams are set up to function as an assembly line rather than a collaborative group. They suffer from what Andrew calls the “throw it over the wall mentality.” Product tosses it to design, who tosses it to engineering. A better way to approach development is with Lean Squads, where one member of each functional team joins a project/product team and collaborates with the other stakeholders from the get-go. Not only does this help you work smarter, with better ideas and efficient troubleshooting, it can also help you work faster, as each member of the team fully understands the project and their specific role.

Above all, there is shift in culture and mentality that needs to take place in order for an organization to make the transition to Lean. It’s a shift that must happen at the managerial level, so that employees understand they need to do more than just deliver. Across the organization, everyone must be measured on the actual performance of products. That doesn’t mean they can’t fail, it means that experimentation and learning are smaller, valuable goals on the path of production. Creating smaller projects where testing and learning are not only supported but mandated is the best way for big companies to make significant transformations.


Hear Andrew Breen speak about changing the corporate culture for innovation at Lean Startup Labs: Enterprise Summit in New York City on Feb 25. Or immerse yourself in a full week of Lean Startup methodology and entrepreneurship at Lean Startup Week in San Francisco, Oct 31 – Nov 6.

How to Avoid Building Bad Products with Rapid Validation

target
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

 

Despite our best efforts, there are a lot of products out there that aren’t so great. We know from Lean Startup that one of the ways to avoid going down the rat hole with bad products is to be willing to fail fast, but Amir Shevat, Director of Developer Relations at Slack, former Googler and Entrepreneur, believes that there are ways to avoid building bad products in the first place.

In his session at the Lean Startup Conference 2015, Amir explained how rethinking the way we experience products can help us to get feedback faster. The key is thinking about interactions with products as a conversation, and measuring how well that conversation is going.

To demonstrate his point, he called a member of the audience up to the stage, said “hello” and then promptly asked for the man’s personal information. The volunteer was briefly caught off guard, as anyone might be if abruptly propositioned for a phone number or address. In the context of social conversation, we can easily see that such a request is awkward, but we still build apps that immediately ask for a username and a password without first engaging the user or explaining what the user will get out of the app.

Amir next quizzed the audience by presenting two user experiences that a family-photo-sharing app had tested for their sign up process. The first flow was much shorter, while the second was longer and prompted the user to add connections and post a photo.

Almost the whole audience guessed that the first flow was more successful, but they turned out to be wrong.  As Amir explained, the second flow had steps that engaged the user and drove better retention and usability. This exercise showed that people should be shown the value of the app as part of the initial conversation. Any requests for information should be part of an organic conversation or exchange, so users understand what they’re getting.

It also functioned as a lesson on why it’s so important to measure customer feedback not based on what they say, but rather based on what they do within the product.

Amir gave another example of this from his own experience as an entrepreneur, when he was building an app to help people meditate. He found that although people were eager to try meditation, there was a significant amount of drop off after they began actually using the app. Asking users for feedback wasn’t providing clear answers, but observing them in conversation with the app gave better clues.

He ultimately observed that the session time was too long to keep users engaged. In an experiment to dramatically shorten the duration of meditation, he got the response he’d hoped for: more engaged users.

Amir noted that one important part of running experiments is actually not telling the user it’s happening. This reinforces that the in-app conversation is the ultimate source of truth. Telling the user that you’re going to run an experiment and then, for example, sending them a survey to ask if they liked it, is not as effective because it’s too far removed from their natural usage.

Observing the quality of conversation between app and user is what Amir calls “rapid validation.” Hearing from customers, getting feedback, iterating and failing fast when necessary are all key principles of Lean Startup.

Focusing on empathy and conversation is a way to accelerate that process, and get to product/market fit even more efficiently. There will always be products that don’t work out and companies that don’t succeed, but using rapid validation, you save yourself from mistakes that are easily avoidable.


Enjoying these stories? Never miss out on real-time updates and learn about the hot topics in our community. Connect with us on Twitter: @leanstartup

Developing Your Vision with Lean Startup

23107569251_af0cc8e553_k
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

As an early engineer at the well-known financial management tool, Mint.com, Poornima Vijayashanker learned about building products and starting companies the hard way: by doing it herself.

She’d always been a fan of the Lean Startup methodology, but she found that the more she worked, the more practical, how-to information she craved. She documented what she was learning as she went along on her blog and education platform, Femgineer. She also shared her methodology at the Lean Startup Conference 2015.

In her workshop, Poornima addressed the two of the most important issues that people tend to face when they’re starting companies: 1) Developing ideas, and 2) Recruiting technical talent. Although they may seem like very different phases of the process, they are inextricably linked. Before you can recruit the right people, you need a clearly validated and expressed idea. That helps you shape the vision you’ll pitch to technical talent when the time comes.

1) Talking about and testing your idea

Although developing the idea might seem like the easy part, there’s a lot more work involved than just a quick stroke of genius. In fact, founders often have an idea about a product they want to build but they haven’t correctly identified the problem they think they have. Even when pitching to friends and family, these four questions will be critical in clarifying the essence of your product:

  • Who is it for?
  • What is the problem?
  • What is the solution?
  • What is the benefit of the solution?

If you can answer these questions, you’ll not only have an easier time explaining your project to friends and loved ones, but you’ll have a clear path forward to validating your idea to customers. And if you can’t, you probably need to rethink the product you’re building. These questions are not only important when it comes to developing product features, but also for determining if you have the right product in the first place.

Poornima talked about one client who decided that she wanted to make software that would help doctors with patient retention. This woman noticed that many doctors had patients who visited once, but didn’t come back for recurring appointments. But following the Lean Startup methodology, when she went to validate her product with actual doctors, she discovered she wasn’t solving the problem they found most pressing.

Doctors turned out to be much more concerned with the logistics of getting paid by the patients who had visited them (whether one time, or many.) In short: Billing. The founder revised her plan based on meeting the actual needs of her potential customer base.

With this renewed focus, she could revise her answers to those important four questions, and also start building on a compelling vision.

2) Recruiting Technical Talent

That clearly defined vision is actually more critical than most founders think when it comes to recruiting technical talent. Many founders imagine that the first thing they need to do is get a technical co-founder. In reality, there’s a right time to recruit, and it’s later than most people think; initial customer validation is key when it comes to finding the right people to bring your idea to life.

Poornima explained that technical folks really want to see what they built exist in the world. If you haven’t validated your idea, initial concepts, and maybe even a prototype, they’re likely to spend a lot of time working on features that will never see the light of day. Her big message was:

Don’t recruit early. First, figure out if you’re committed.

This doesn’t mean that engineers need to be told how to build your product. But they do need an idea of where they’re going, in order to develop an intuition around the products they are building.

Your job as founder is to convey your vision. The important distinction Poornima made is that you don’t want to sell them on your product. You want them to buy into the experience, and how your product/company will make an impact in the real world.

Using Lean Startup to Build Your Vision

Ongoing customer validation is the best way to ensure that your vision is one that continues to inspire employees, customers, and advocates alike. Poornima said she still spends hours a day, even as CEO of the education platform Femgineer, listening to what her customers have to say.  She continues to make discoveries about the needs of her audience, and is able to use that feedback to iterate her offering and grow her audience.


At Lean Startup Co., we’re continuously learning about our customers’ needs and challenges too. What are you looking to learn in 2016? How can we support you? We’re brewing up some exciting new programs this year, but we need your help with validating our ideas. Can we take a half hour of your time for some feedback on future ideas? Sign-up for a friendly customer development call with us here.

Revolutionizing Publishing with Lean Startup

Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

 

For 94 years, the Harvard Business Review (HBR) has stayed true to its mission to bring the best ideas in leadership and management to their audience of successful business people. That mission is still at the core of what they do, but as the publishing industry has shifted in the wake of the digital revolution, HBR has faced the same choice as many other notable publications: Evolve or Die.

Eric Hellweg, managing director of product management and strategy for HBR, came on board with the goal to help drive that evolution by expanding HBR’s product into one that meets the needs of modern audiences. Following the methodology of some of Lean Startup’s intellectual forebears, he and others at HBR began the process of shifting the mindset at an established, century-old organization.

He spoke about this experience – and the team’s ultimate success – at The Lean Startup Conference 2015. Implementing some of the concepts of Lean methodology at a well-established company is quite different than doing it at a new startup, but it is equally integral to product and brand development.

There are advantages to starting with the foundation of a successful company, such as a loyal audience, willingness to pay for products and thus the opportunity to test new ones. However, there are some setbacks that you certainly wouldn’t find at a startup. For example, Eric shared an anecdote from early on in his time at HBR, when a colleague rather emphatically said, “We will be blogged about, but we will never blog.” He also noted that it’s harder to sell people on the idea of “failing fast” when there’s an established reputation to uphold. Perhaps most interestingly, employees at HBR had very little experience talking to users and implementing feedback.

That said, he found that Lean Startup and other related frameworks are a strong foundation for developing a product-focused discipline within HBR. At The Lean Startup Conference, he shared a framework that proved invaluable to the team in building a successful digital business inside an established organization.

1. Be something

In order to be something, you need to evaluate the current organization to determine what you’ll forget, what you’ll borrow and what you’ll learn. You’ll need to forget legacy approaches that aren’t adaptable. In HBR’s case, they need to “forget” the print editorial process and adapt one that was more suitable for the digital platform. At the same time, you also want to borrow elements of the core company that can give you an advantage, i.e. a strong user base. Along the way, you learn what’s appropriate as you grow your innovation and identity within the larger company.

2. Be patient

Eric noted that at the outset (and even along the way), transformation can seem daunting. Especially if you’re used to the way things work in the startup world, you may have to temper your expectations when working inside established organizations. HBR started its digital transformation eight years ago, which is a testament to how much can be accomplished with measured, consistent work.

3. Be obsessed with the user

User feedback is a key pillar of Lean Startup, but for HBR, that required a shift in how they thought about their audience. Previously, they had subscribers: people who made a purchase at the beginning of the year and consumed the content determined by editorial. As they made the move to digital, they had to think of their audience as members of a community, which was centered online, nurtured with content and measured in continuous engagement both online and off.

Of course, one of the biggest changes came from realizing that HBR was no longer just an editorial publication, but a company with a real product that was independent from editorial. The UX and editorial are equally important elements, but they don’t need to be run by the same people. To that, taking the leap towards innovation and establishing the product function with HBR has enabled writers and editors to focus on what they do best. The ability to think of these disciplines as independent ultimately supports the growth and overall excellence of the brand.

Continue learning with Lean Startup Co. in 2016. We have a new series called Lean Startup Labs, in addition to our flagship Lean Startup Conference in the Fall.

Written by Rachel Balik, contributor for Lean Startup Co.

Saving Storytelling with Lean Startup

22705183038_a9abd104b2_k
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

Long before we had apps, metrics, user experience or testing tools, storytellers would travel from village to village, perfecting their craft by observing how live audiences responded to their stories.

That’s why Prerna Gupta, founder of the storytelling app, Hooked, says that in some ways, the idea of using data to tell stories isn’t actually that revolutionary. But it is highly valuable, to authors, publishers and studios alike, if you look at some the evidence from the past few years.

In her presentation at the Lean Startup Conference 2015, Prerna gave the example of The Martian, one of this past summer’s highest grossing blockbusters. The Martian started as a blog, then became a book and was eventually made into a movie. Its success was no accident, but rather, it was the result of ongoing market validation and customer feedback. Essentially, the blog (and each blog post) was the MVP, and by building out his “product” based on input from his audience, author Andy Weir was able to launch something the market loved.

Prerna, a writer herself, recognized that this kind of customer validation could be applied to storytelling, which is how she got the idea to build her app, Hooked. She realized that by bringing the idea of scientific experimentation to storytelling, she could improve the experience for both the author and the reader.

When she and her team were building out the product initially, they used data to determine the best UX for the app. Noticing that there was significant drop off around 35% of the way through a session, they set about innovating the format. Adding images or changing fonts didn’t seem to make a difference. What they landed on was an app that tells stories via text messages. To continue reading, the user has to click “next.”

Completion rates went dramatically up. They had discovered a way to reformat fiction to suit reduced attention spans of the modern reader. Hooked put out a call for stories to MFA programs, offering to pay for creative writing.  With UX now in place, they used data again, this time to evaluate the quality of the stories.

Prerna shared one example in which a story they thought would do well was failing to engage users. She reread the beginning, realized it had some confusing elements, and edited it. As she hoped, the story began performing significantly better.  Essentially, what Hooked is doing is giving authors the ability to create “lean fiction.” Not only does this format help authors refine their craft and their storytelling abilities, it also ensures that users consume the product, even ones that aren’t likely to sit down and read a hundred – or even a dozen – pages.

Prerna herself is a huge believer both in the power of fiction and the power of the Lean Startup methodology. She says that following a data-driven and customer-driven approach to product management was one of things that helped her to gain traction for Hooked in Silicon Valley, where fiction is not exactly the flavor-du-jour. Being able to prove the concept, take things one step at time, and consistently back up assumptions with metrics was critical.

By merging the creative and technical, Prerna has been able to create an app that serves both creators and consumers, without compromising on the core values of storytelling. Hooked stories have characters, plots and complex ideas: everything that makes fiction so valuable to read. But it does it in a way that truly takes into account the experience of the user, rather than an unfounded whim of the author or a publishing house.


Continue learning with Lean Startup Co. in 2016. We have a new series of smaller, subject-specific Lean Startup Labs, starting with an enterprise summit in February in New York City, in addition to our flagship Lean Startup Conference in the Fall in San Francisco.

Written by Rachel Balik, contributor for Lean Startup Co.

How to Intentionally Design a Lean Startup Culture

Editor’s Note: It’s two weeks after our annual Lean Startup Conference, and we’ll be digging deeper into some of our favorite talks. For a full re-cap, check out our Lean Startup Conference 2015 playlist. The first set of videos is up, and in true Lean Startup fashion, we’ll be uploading them in small batches as they are edited. We hope you enjoy the videos! – Melissa Moore


22500854264_aecc6e7b21_k
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

Long before everyone was taking selfies, people strove to have a “Kodak moment,” a perfect experience captured on film. But today, Kodak has lost its aspirational glow and became a warning tale of what happens when an industry leader fails to innovate.

Kodak went from a being an industry leader to declaring bankruptcy in 2012. One might consider their downfall an inevitable sign of the times. But according to Alex Osterwalder, author and founder at Strategyzer.com, big companies can avoid their “Kodak moment” if they’re ready, willing and most importantly – able – to go from being a company that maintains the status quo to one that enables innovation.

The key to making that leap is a fundamental shift in organization culture, Alex explained in his talk at The Lean Startup Conference 2015. Kodak had an R&D program just like most big companies, but it wasn’t enough to keep them relevant when faced with competition from smaller, more nimble technology companies. That’s because their innovation was only on the periphery. In order to stay relevant, a Lean Startup culture needs to be built and integrated into the whole company.

Big companies focus on improving, executing and forecasting. Innovative companies focus on inventing, searching and experimenting. This is for good reason; big companies often have business plans they need to present to stakeholders or board members. For them, failure is not an option. That’s why Alex advocates for putting certain people in charge of innovation, and others in charge of execution.

Just like when basketball star Michael Jordan had a harder time transitioning to baseball, the people who are in charge of keeping the company moving forward on an even keel might not be the same people who will excel at innovation. Innovation can’t happen on command, it can only happen when it’s nurtured and supported in the context of the right business culture.

That culture of innovation also has to be supported by the people who are tasked with execution. Alex spoke about a tendency to see innovators as “pirates.” Not only does this make it harder for innovators to get their ideas into play, it also de-incentivizes the role of innovator at a big company. In fact, at most big companies, there’s not a lot of prestige for innovators; in some situations, it’s even “career suicide,” says Alex. If you’re relegated to a small team or a labs division, you’re not working on things that are mission-critical to the organization.

Ironically, as we can see from examples of companies like Kodak or Nokia, innovation is indeed mission-critical, and must be treated as such. This may require a shift in organizational culture. In his talk, Alex provided a simple, but critical overview for how companies can approach and execute this shift, and begin consciously designing a Lean Startup Culture.

1) Map it out. In phase one, the whole team should begin to think about which elements of their process and operations support an innovative culture, and which ones don’t. Label them as either “enablers” or “blockers.”

2) Gather your team. Once the team has started to think about enablers and blockers, the whole group should gather to map out and discuss the as-is culture. Aim for ultimate transparency and realism so everyone shares the same concept of the current business culture.

3) Design a workshop. Once the team has agreed on enablers and blockers and mapped out the current culture, it’s time for a workshop (at least half a day long) where a plan is put in place to shift the culture from what it is to what the team wants it to be.

Not everyone will go through all three phases right away. In fact, it might be helpful for teams to identify just one blocker and start to chip away at the problem. If you truly want to design an intentional culture, though, you have to go all the way. In some respects, the process may seem simple, but it’s essential for helping teams to see the big picture.

So often, people try to make culture changes at the tactical level (new HR software, a ping pong table, happy hours after work.) However, if those tactical changes don’t ladder up to a higher goal, the culture of the business will never change.

It’s important to make the distinction that culture is not about being friendly with coworkers or having fun after work. It’s about getting people engaged in the actual work they are doing. Alex notes that on average, seven out of 10 employees are disengaged, which is not only bad for employees but truly limits a company’s potential for success. Culture needs to be “explicit,” and start with day-to-day management and operations.

As Alex says, “the ping pong table is not going to cut it.”


Written by Rachel Balik, contributor for Lean Startup Co.

Continue learning with Lean Startup Co. in 2016. We have a new series of smaller, subject-specific Lean Startup Labs, starting with an enterprise summit in February in New York City, in addition to our flagship Lean Startup Conference in the Fall in San Francisco.