Author Archives: Jennifer Maerz

Speaker Spotlight: Using Data to Build a Better Business Faster

Big data is changing the way everything from government organizations to international record labels operate. We can access sophisticated analytics about our businesses from our laptops, making it easier to understand our customers at a granular level — in theory, that is. But for startup and enterprise companies alike, discerning the exact metrics to evaluate, and knowing when it’s time to talk to users face-to-face, can be confusing. That’s where our good friend Alistair Croll comes in.

The Lean Analytics author and Solve for Interesting founder is one of our featured speakers at this month’s Lean Startup Conference Nov. 16-19 in San Francisco (and hey, if you haven’t registered to attend yet, grab a ticket while we still have spots left). Alistair will be leading a session on using data to build better businesses faster.

To offer a taste of Alistair’s expertise, we offer an edited interview with this esteemed entrepreneur and author — who knows many important things about web performance, analytics, cloud computing, and business strategy — around best practices for using big data.

Alistair ran Year One Labs using a tailored methodology that put customer discovery first.

“We ran Year One Labs as an incubator more than an accelerator. We chose startups through hackathons that showed they could build new things, rather than for a specific idea. We knew we needed a methodology that would force them to do a lot of customer discovery — in fact, we didn’t let them code for the first few weeks! We recognized that at the start of a startup’s life, it doesn’t know what problem it’s trying to solve, much less how to solve it. Lean Startup fit the bill perfectly.”

Data collection should be built into startups’ DNA.

“Analytics need to be in the entire lifecycle of a product. You have to build data collection into the product roadmap; measure it in real time and in the aggregate; and learn by following up on the data to better understand your market. We often say that in a Lean Startup you aren’t building a product — you’re building a product to figure out what product to build.

So here are three examples from Alistair of companies that successfully used Lean Startup and Lean Analytics methods to determine the best metrics for their operations.

“Localmind, a Year One Labs company later acquired by AirBnB, had a business around asking questions about a place. One of their big assumptions was that strangers would answer questions. Because we wouldn’t let them code, and because this was a big, risky assumption, they decided to go on Twitter and geofence all tweets coming from Times Square and ask those people questions.

“They figured if you can get an answer from New York, you can get one from anywhere. And it turned out their assumption was valid — over 95% of people would respond to a question like ‘Is there WiFi?’ or ‘Where’s good coffee?’ That was enough to move ahead, in a day, without coding. It’s a great example of minimal data.

“We’ve seen big companies do this too. One global maker of paper products (that I can’t name) noticed a discrepancy between what men and women were searching for on their site, and used this to introduce an entirely new class of personal hygiene product that’s worth millions today. It turns out that unfulfilled searches on a website are an excellent open survey of what customers want you to sell them, but you don’t currently offer.

“Finally, consider David Boyle, who was then the head of analytics at EMI. The label wouldn’t let him see the huge hoard of transactions they had on record, so he decided to grab data himself instead, and ran over a million surveys worldwide about how people consume music. When he brought that data back to the company and its artists, it went well. Here’s a talk of David explaining how the BBC uses analytics today.

“He recently told me that when he showed [EMI artist] Snoop Lion that he had a burgeoning audience of ‘gadgeteers,’ or tech-friendly listeners, Snoop changed his entire attitude to the online world and social media. With these changes underway, David finally got access to the hoard of transactions, letting him to even better analysis.”

The data your organization generates could be its biggest asset.

“Computers today can surface unexpected correlations that marketers can then test for causality. The entire field of growth hacking is really about finding a thing you can change today which causes a change in some desirable metric down the road — and then optimizing that metric.

“But it’s getting even smarter. There are a number of systems that can outperform data scientists on the ‘intuition’ part of analyzing data, deciding what metrics matter automatically. That’s transformative. You only need to look at Tesla’s self-driving cars to see what happens when you can push machine learning and data into a hardware product to see how different the world will be.

“Data is also changing regulations and governance. Essentially, it’s squeezing arbitrage out of industries, because everyone has the same information at the same time. To combat this, many online services are guarding their data jealously, or erecting garden walls around their users, making it harder for upstarts to break in. But that also means that if you can create a valuable data set, your best asset may be the data you generate.

“Consider Shazam, which can tell you what track is playing in seconds on a mobile device. Their service is free — but their data can predict what song will be the next big hit, and that’s invaluable for the music industry, which is where they make their money.”


You can hear more from Alistair about using data to build a better business faster at The Lean Startup Conference Nov. 16-19 in San Francisco. Grab a ticket while they’re still available here.

Speaker Spotlight: How Lean Startup Helped Serve Communities in Kenya

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Here’s the thing about The Lean Startup methodology. It isn’t just for use by one industry, or one staff size, or even in any one country. Our customer-first, rapid trials-rapid discovery ethos is adaptable to all varieties of mission driven, enterprise, and startup companies around the world.

At The Lean Startup Conference on Nov. 16-19 in San Francisco–just two weeks away–innovative thought leaders from around the globe will offer examples of the remarkable changes they’re making across industries using our simple methodology. And yes, we’re very excited for you to meet them all.

We have the full lineup and schedule for the conference here and you can register to attend here. But as we lead up to the big day, we’re spotlighting speakers who’ll be involved in our Master Classes, hands-on workshops, lightning talks, keynotes, interactive breakout sessions, Office Hours, Startup Tours, industry dinners, and other learning and networking events.

First up in our speaker spotlight series is an edited transcript of our Q&A with Rocio Perez-Ochoa, co-founder of Bidhaa Sasa, a non-profit working to distribute beneficial goods to rural communities in Kenya. She will be offering her startup story in an afternoon breakout session on Tuesday, Nov. 17. The Lean Startup method helped Rocio and her co-founder get their idea off the ground, and to continue to grow this important business. She revealed the key things she’s learned in the evolution of her organization.

The inspiration for Bidhaa Sasa? Fix the distribution bottleneck in rural Kenya.

“My business partner and I [previously] worked in East Africa with companies that provide energy solutions to people living without electricity. In some countries, like Kenya, the vast majority are not connected to the grid because there is no grid. This is especially true in rural areas. There are a few technology companies developing small, mostly solar-powered solutions to help people [get] electricity in their homes.

“We felt very frustrated because we could see how households were still living in poor conditions despite companies working to developing technology solutions for them. “There are many gadgets out there that could help ordinary rural families improve their lives — goods like solar equipment for lighting and electricity, water filters to drink clean water with, and stoves for healthier cooking do exist.

“Most companies were focused on the tech and very few even admitted there was a distribution bottleneck. So we decided to set up Bidhaa Sasa to try to understand why these goods don’t reach the ones who most need them.”

They aimed to understand the user before worrying about the technology

“Many of the tech businesses we met in East Africa were ‘back to front’: the technology seemed to be at the centre, not the user. Businesses were focusing on inventing new products and tech almost for the sake of it. Managers did not seem to really understand the users’ pains and the way they currently go about solving their problems.

“In mid-2014, I re-read The Lean Startup and suddenly things started to make sense. I could see why so many tech businesses I was very familiar with were going nowhere and why they were making similar mistakes.

“The customer development theory was an eye opener and gave us the final push to launch this venture. It makes so much sense to design a business around the customer instead of the product.”

Don’t get into a “startup mindset.” Instead, get into your customers’ mindset.

“Sometimes it was difficult to abstract the core ideas from [The Lean Startup] theory, to remove the Silicon Valley/high-tech component in most of the examples in book, and to apply these ideas to our very particular context. But we did not waste any time worrying about the practical things of starting a new company (and in Kenya, everything is harder than in your average developed country). We went straight into customer discovery. We spent around six months running surveys and meeting prospective clients. We first ran a problem discovery exercise and then a solution presentation one.

“Our MVP is a service MVP. We offer a small range of technology goods (a solar lamp, a solar system, a cook-stove, a radio, and a mobile phone) on credit. We deliver the goods to clients’ doorsteps no matter how remote they think they are. We also educate the users on how to best use the goods, we install the solar systems in people’s houses, and we manage the product warranties.

“We want to be known as a client-centric company that responds quickly to our clients’ needs and aspirations. One pending feature is adding a TV to our range, since that’s the top aspiration for most of our clients.”

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Bidhaa Sasa moves at the pace of its client’s needs, not some board member’s desires.

“There is always a temptation to move faster because, oh yes, we are selling. Our clients are honoring their debt and are quite technology savvy. This is not a surprise to us because we are selling to early-evangelists, who by definition are early adopters.

“It is sometimes difficult to slow down things and focus on learning rather than on P&L and operational issues. We could streamline operations with fancy equipment, like tablets instead of pen and paper, but that would not speed up our learning.

“The most important challenge for us is understanding our customers. One can imagine the gulf between us, the founders, typically middle-class first-world producers, and our clients, who are subsistence farmers. We are not even Kenyan, and know nothing about farming.

“Test-selling to early-evangelists is helping, but we are barely scratching the surface of how life in villages is organized. What is the decision process inside a family? What level of risk are these low-income families able to take? Why do they even buy from us?”

They want to understand the role of community in a person’s purchasing power, which is crucial to their business model.  

“One of our key problem hypotheses is the lack of credit available to an average rural family. They don’t have stable incomes, they don’t have bank accounts, and they are barely consumers. If one does not make these technology goods affordable, very few will ever buy them.

“So we decided to offer payment plans. But will clients pay on time given their low-income status?

“Our bet is that life in a village depends heavily on others and that the social network is intrinsic to it. We also believe that any head of family, no matter how poor they are, will always try to find ways to improve the lives of their dear ones.

“To test these hypotheses we created a way to sell on credit to a group of people rather than to individuals. The members can help each other if someone has problems with the repayments.

“This experiment is crucial for us and we hope that we will learn from our initial groups how influence works in practice in villages, [as well as] who are the leaders and the followers. And to what extent is social cohesion really responsible for our current zero default rate — or is it pure luck?”

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Next steps for Bidhaa Sasa: depth of customer knowledge over geographic expansion

“For now we don’t have any plans for expansion. I am much more inclined to go for depth rather than spread. There are literally hundreds of thousands of potential family clients in our region in Western Kenya.

“We don’t look at expansion for the sake of it because of what we have seen many times in this part of the world: companies with new products or services have a tendency to spread themselves very thin. I think [that’s] because they are chasing the early adopters from one region to the next, even across countries.

“That is all good if you have the resources, but I don’t think you can have a long lasting business if only early adopters ever buy your product or service. All you are doing is postponing the tough problem of crossing the famous chasm.”


Written by Jennifer Maerz, Contributing Editor of Lean Startup Co., with Kirsten Cluthe as Contributor.

Like what you read? You can hear more of Rocio’s story, learn more about Bidhaa Sasa, and hear from others like her who run organizations around the world at The Lean Startup Conference Nov. 16-19 in San Francisco.

The 6 Big Reasons You Should Really Be at The Lean Startup Conference

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

We’re all excited to hear the latest from our buddy Eric Ries, especially since he has not one, but two new books coming out soon — The Leader’s Guide and The Startup Way. But The Lean Startup Conference isn’t just a place for Eric to hear himself talk. It’s a one-of-a-kind conference and community of 2,000 thought leaders who meet annually in San Francisco to discuss the ways everyone from big government agencies, multinational conglomerates, scrappy startups, religious organizations, and mission-driven initiatives puts continuous innovation into practice, empowering employees and fostering radical success along the way. It’s a big deal that only gets bigger with every year.

We aren’t gathering together to simply talk at you, either. That would be so boring. Our interactive, multidisciplinary conference will spark new ideas, help you face your workplace challenges from fresh perspectives, and connect you with other entrepreneurs and intrapreneurs, regardless of whether you’re new on the payroll or have been running things for years. Really, there’s no better way to recharge and return to work inspired than spending a few days with Lean Startup’s global network.

Join us Nov. 16-19 at Fort Mason, where we’ll exchange stories of radical thinking from leading edge and enterprise companies alike with lightning talks, hands-on workshops, Office Hours, interactive breakout sessions, meetups, Master Classes, Startup Tours, industry dinners, and of course the big keynotes. Yes, we’re going to keep you busy — and make sure you get your bang for the buck. This is an investment in your professional development, after all. We’re not just another networking event.

Check the full schedule here — and keep these six big incentives to join us in mind:

New Speakers for 2015

Half of this year’s 100+ speakers and mentors are new to our conference. We’re talking about people who’ve led groundbreaking initiatives at influential organizations:Kickstarter’s Yancey Strickler, HotelTonight’s Amanda Richardson, Harvard Business Review’s Eric Hellwig, Strategyzer’s Alexander Osterwalder, Product Hunt’s Ryan Hoover, Adobe’s Tom Nguyen, altMBA’s Winnie J. Kao, and a triple bill from GE: culture leader Janice Semper, GM & CTO of Hybrid Fuel Cells Johanna Wellington, and Mark Little of GE Global Research.

Sessions with the Lean Startup alums you know and love

We’ll have unique insights from Lean Startup favorites Solve for Interesting’s Alistair Croll, Hunch Analytics’ Aneesh Chopra, Microsoft’s Cindy Alvarez, Dinadesa’s David Binetti, 18F’s Hillary Hartley, Pivotal Lab’s Janice Fraser, Users Know’s Laura Klein, and Techstars’ Zach Nies.

But wait — there’s more. We’ll also be hearing about leading Lean Startup strategies from folks at Google, Dropbox, Wells Fargo, American Express, and the Internal Revenue Service, among others.

Get smart, fast

Our Ignite talks are back! Leaders who’ve instigated radical changes in their fields and their organizations offer five-minute bursts of inspiration from the trenches of tech, labor organizing, sustainable agriculture, and education.

Choose your own track adventure

With nine different options during the afternoon breakout sessions (we know, we’re turbo-charging this thing with ideas), you can narrow down the selections by focusing on the tracks most useful to you and the methods by which you learn best. Are you more of a roundtable discussion kind of gal? A Lean Startup training kinda guy? Other options for cramming your brain with new ideas, depending on your price point for badge level, include motivational presentations and case studies, interviews with corporate innovators, interactive workshops, and Q&As with Eric.

Personalized training and feedback

From our Coaches Corner to one-on-one speed mentoring, we’ll equip Platinum and Gold badge holders with specific tactics for your workplace. Bring your toughest problems, and we’ll work on solutions with you. Get personal advice from the likes ofIntuit’s Eileen Fagan, Kiva’s Akash Trivedi, Twilio’s Arthur Johnson, Google’s Tanya Koshy and Jawbone’s Lou Moore.

Back by popular demand: the return of networking dinners

Because our community loves chewing on food and ideas at the same time, we’re organizing group dinners for the third year in a row. On Nov. 17 & 18, choose your socializing track based on your interests, and for $55 a pop you can continue the conversations provoked in our daytime sessions over dinner with your peers in your industry.

And hey, because we’d love to have you join us, we’re happy to help nudge your manager into sending you to the conference. Here’s three very good reasons why your boss should send you to the Lean Startup Conference.

Ok, ready to join us? This is where you can register before we sell out.

In order to be inclusive to all you innovators out there, we’re offering three different price points, from the scrappy to the down-for-everything.

  • Platinum Pass: 4 days, includes Opening Night Reception as well as all keynotes, Ignite talks, breakouts, and first dibs on purchasing dinner tickets — plus workshops, Office Hours, Live Q&A with Eric, Master Classes, Coaches Corner (sign-up required), new Startup Tours, a VIP Happy Hour, video bundle of all keynote and breakout talks, priority seating, and dedicated VIP concierge treatment. Sale price: $3,465 before 10/31, $3,850 after. Save $385 now.
  • Gold Pass: 3 days, includes Opening Night Reception as well as all keynotes, Ignite talks, breakouts, and option to purchase dinner tickets — plus workshops, Office Hours, Live Q&A with Eric, and Master Classes. Sale price: $2,295 before 10/31, $2,550 after. Save $255 now.
  • Silver Pass: 2 days, includes Opening Night Reception as well as all keynotes, Ignite talks, breakouts, and option to purchase dinner tickets. Sale price: $765 before 10/31, $850 after. Save $85 now.

The Lean Startup Conference. Nov. 16-19, 2015 in San Francisco, CA. Time is running out. Register here today. 

How One Multinational Conglomerate Radically Changed Its Company Culture and Saved Millions*

*Or, hey, if GE can dramatically shake up its internal processes, your behemoth corporate workplace can too

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

GE employs people in 175 countries across a half dozen industries and in more time zones than we can keep track of. So you might think modifying the culture at a company this vast from a this-is-how-we’ve-always-done-it methodology to one that rewards risk taking would take a lifetime.

But it’s taken Janice Semper, who works in GE’s HR department, less than 18 months to significantly modernize the company’s processes. And now she’s evangelizing the radical shifts her innovation team has been able to implement at GE.

Her team’s revamped methodology, which GE coined FastWorks, proves that a customer-first ethos can drastically slash the bottom line and increase the competitive edge for the Fortune 500s out there. Moving to FastWorks helped GE get one product to the market two years ahead of the competition. It’s also reduced development costs in one division by 60% while cutting the cost of earning customer validation by 80%. Not bad, right?

So how do GE’s accomplishments affect you, the non-GE worker, sitting here wishing your ultra corporate employer would test some fresh approaches? Or perhaps you, the corporate boss, whose teams are entrenched in the safety of routine?

The thing is, the Lean Startup framework that worked for Janice and GE could also work for your company, so long as you’re aware of the nuances of applying Lean concepts to a mammoth organization.

This is where Janice’s trials and errors with GE are helpful.

In a recent podcast interview with Lean Startup Co., Janice broke down her strategy for infusing GE with a system that empowers employees and puts the customer’s needs first. Of course we recommend listening to the whole thing. Janice has so many wise things to say.

But if you just want the gist, this is how GE changed everything, in a nutshell:

It started with getting the brass on board — all 5,000 of them.

Before FastWorks, GE was steeped in Six Sigma, a rigid set of techniques that the company rolled out in a heavy-handed, bureaucratic way, says Janice.

This time around, she didn’t want to slap Lean Startup teachings in a manual and call it a day. She needed employees to really own FastWorks.

So she hit the road — together with her FastWorks co-founder, GE’s Global Director of Innovation Acceleration Viv Goldstein-Wiltshire, as well as our very own Eric Ries and author David Kidder. Together they visited every GE business and discussed how FastWorks would simplify their processes, help them move faster, and make them more customer-centric.

Then Janice embedded a “community of coaches” within each GE business.

The FastWorks crew trained a community of experts in the tools, principles, and behaviors integral to the program and showed them how to implement them. And they didn’t jam these coaches into random offices, they allowed each GE business to initially decide who the coaches should be, how many coaches they’d need, and if they should be full-time or part-time, with some guidance from Janice and Viv.

Her team aligned every system at GE to work in conjunction with FastWorks.

Training people is great, but it’s also like—hey, you can teach people to speak French, but if they only have conversations in English, this stuff is never going to sink in. FastWorks needed to be part of every conversation people were having at GE.

Janice says she learned early on that GE’s leadership was struggling to put FastWorks into practice because the methodology worked against some of their other practices.

To fix this glitch, she thought more holistically about integration. Her team reconstructed the expectations for employees and leadership and retooled the performance management systems to support FastWorks.

About that performance management system … it couldn’t remain this rigid thing.

Historically GE measured its employees’ work on a rigid, goal-oriented system. This formula was out of sync with a new ethos that championed experimenting and pivoting.

So the FastWorks crew revamped the thing.

Now GE has an ongoing review process that focuses on “asking the right questions throughout the year” instead of annually feeding employees abstract benchmarks to hit.

They also stopped rewarding people for being “right.”

Working in Six Sigma for so many years created an environment where employees were terrified of being wrong, says Janice, which led to a cultural fear of failure.

So Janice’s team trashed the old perfection-focused ethos and instituted a new, five point plan in its place, which her team unveiled in discussions with GE’s business leaders:

“Our five belief statements are: customers determine our success, stay lean to go fast, learn and adapt to win, empower and inspire each other, and deliver results in an uncertain world,” says Janice.

They wanted the top brass to really understand that failures are part of the iteration process.

They created Growth Boards to quickly assess which projects should continue … and which ones get the axe.

Too many companies manufacture DOA products because, well, they’ve already invested too much time and money into them to stop. GE is halting that lifeless inertia with its Growth Boards.

These groups are similar to VC boards, where teams pitch new products, earn their seed funding, and get more funding only when they’re able to validate their assumptions. Otherwise it’s back to the drawing board.

“Stopping work, stopping anything at GE, was countercultural,” says Janice, “but this gave [employees] the forum to be able to say we actually should not pursue this because our customer has told us it will not create value for them.”

And then they can focus more resources on the stuff that does work.

So why should your team consider a similarly Lean approach? Because you want your company to stick around, right?

It’s hard to think of an industry that isn’t experiencing some form of unprecedented disruption right now. Small, agile companies are popping up to compete with legacy businesses all over the world.

Janice says this status quo shift creates a compelling urgency for corporations to immediately consider modernizing their methodology.

“If we don’t change, we run the risk of becoming an organization that is obsolete,” she says. “And we’re not talking in 100 years, we’re talking in less than a decade.”

Janice Semper will be speaking more about GE and FastWorks at The Lean Startup Conference, November 16-19 in San Francisco. More info on the conference and all our speakers here. Grab your ticket by Oct 31st to take advantage of our Fall pricing.


 

Jennifer Maerz is a Contributing Editor for Lean Startup Co.