Five FAQs About Lean Startup

By Eric Ries. A version of this post ran originally on LinkedIn. At The Lean Startup Conference, December 9-11 in San Francisco, a unique roster of speakers and mentors will offer deep insights into advanced entrepreneurship techniques. Because the Lean Startup is a particular methodology and not just a catch phrase, I’d like to answer […]

By Eric Ries. A version of this post ran originally on LinkedIn.

Photo by Dean Myers

At The Lean Startup Conference, December 9-11 in San Francisco, a unique roster of speakers and mentors will offer deep insights into advanced entrepreneurship techniques. Because the Lean Startup is a particular methodology and not just a catch phrase, I’d like to answer some frequently asked questions about the method—and also make sure you know that our final blocks of discounted conference tickets are available now, so this is the best time to register.

Lean Startup is a set of principles I devised for managing the conditions of extreme uncertainty faced by early-stage products—which might exist in a young company or in a very established enterprise. This is the phase when you don’t know if your product has any value; whether or how much your customer is willing to pay for it; or whether you can create a delivery mechanism that will function effectively. Lean Startup reduces that uncertainty through a process of experimentation. You create hypotheses about your product and its relationship to your customer, you create experiments to test those hypotheses as quickly and inexpensively as possible, and you iterate based on what you learn—only to form a new hypothesis, test, and iterate again.

Photo by Betsy Weber

In the lead-up to The Lean Startup Conference, we held a series of webcast conversations for our speakers, introducing some of Lean Startup’s major themes. As the folks in these sessions have repeatedly pointed out, what’s true of a startup is also true of a growing company, a publicly traded company, a non-profit, an educational endeavor—pretty much any place with products or services and constituents. From our sessions, here are some of the answers to five of the most frequently asked questions about Lean Startup:

1. “How do I create a culture of experimentation?”

In our recent webcast, “Lean Startup at Growing Companies,”a conversation with Ari Gesher of Palantir and Wyatt Jenkins of Shutterstock, here’s what I had to say in response to this question: “If you just say, ‘I’ve learned that we should have a culture of experimentation,’ and you put up posters in your office saying, ‘Ok, everybody, starting today we’re going to have a culture of experimentation!’ you’ll have absolutely no impact whatsoever. One of the things I really believe in is something called the Startup Way, which is just a diagram that helps me remember how to invest in change from the bottom up, rather than mandating it from the top down. And it goes like this: Accountability; Process; Culture; People – in that order. It’s the foundation of how we hold people accountable; determines what kind of experiments we can and can’t use, what kind of process and infrastructure we will or won’t invest in…. If you don’t make those process investments, if you don’t have a system for testing hypotheses, you’re never going to get a culture of experimentation and hypothesis-driven development. And if you have an old, Dilbert-styled culture, you’re never really going to be able to retain the best people for the long term.”

2. “How, in a hierarchical corporate structure, can I get senior managers bought in?”

One great example of this at a big company came from Ben Yoskovitz, co-author of the book Lean Analytics, in our webcast, “Lean Analytics for Non-tech Companies”: “The example I think about is when I was speaking with someone at Comcast and I was asking how they got Lean into the company and the answer to that was: ‘We just started.’ So people would come to us with a project—and it goes nicely with [an earlier] question about service providers. You know, if you’re a service provider and somebody comes to you with a project, you have to do the project, and you have to budget the project. But step one, instead of saying: ‘Well let’s plan this whole thing out and build the whole thing before we realize if anyone wants it or not,’ instead, step one is: let’s go talk to customers. And it wasn’t making a big deal out of it, it wasn’t saying, ‘We need to change everything in our company!’ It wasn’t looking at what these cool startups are doing, so we’re going to go apply that into our business. It wasn’t anything along those lines, it was just… saying, ‘Oh we can’t fail if we just talk to customers. Let’s just see what happens.’ And then everyone just said: ‘I guess this is the process we’re applying to this project,’ and they were set to go. I think you can sneak in Lean Startup or Lean Analytics or a combination of both by just starting as simply as possible.”

3. “How do I keep up team morale when experiments invalidate ideas, meaning that people have to ‘throw away’ their work?”

This is a major issue for engineers, who may have to toss aside some beautiful code. For the engineer’s perspective, we turn to Hut 8 Labs founder Dan Milstein from our webcast, “Getting Engineers into the Lean Startup Cycle”. Here’s Dan: “Part of what’s useful is to understand engineers are profoundly driven by wanting to solve meaningful problems. And they may have forgotten that if they’re working at an organization that doesn’t let them do it. But if the leadership of the organization can share the fundamental question of whether the business is going to work as a problem to be solved – ‘Let’s all go solve that together’ – engineers can get really excited about solving that problem, and then they don’t so much mind work getting thrown away.

“Engineers have to get to the point of trusting that the problems they’re being given to solve are meaningful, and leadership has to be able to own the fact that they don’t know what’s going on. As a leader, there’s a temptation to pretend that you know the answers, and as an engineer there’s a temptation to remember your bitter past history and not trust that the problems you’re solving actually matter.”

4. “How do I make sure problems with my MVP won’t hurt my brand?”

MVP stands for “minimum viable product.” A staple of Lean Startup, this is a no-frills product put out to be a starting point for testing with customers, with the intent of learning and then iterating on it. Here’s what I said about MVPs and customers in our “Lean Enterprise: Bringing Lean to Established Companies” webcast: “The great thing about an MVP is that if customers don’t like it, but they care enough to complain, that’s actually great news. Most of the time when you do an MVP, no one even notices. Zero customers show up. You have ‘launch day’ and then nothing happens, because your value proposition is so wrong that no one cares. So that doesn’t harm the brand. If people complain but you kept the scale of the product small—and MVP is about containing the scope of the experimentation so that the cost of failure is low—then you can make it right for those customers that complain. Like, you can send them a hand-engraved letter press apology. Every single one. Personally delivered to their house. By you. If that ever happens.”

5. “How can Lean Startup help non-tech companies?”

As Alistair Croll, co-author of Lean Analytics, pointed out in our Lean Analytics webcast, all companies are tech companies these days:  “I’ll give you two examples, one big and one very small. I have a coffee shop down the street that has tip jars out, and they put out a question, and they look at which one got the most tips…. That’s a survey, right? And then at the other end of the spectrum Walmart has this campaign called Get On the Shelf, where people nominate products and then Walmart has votes and tests them and it is essentially a Kickstarter for shelf space at Walmart. Both of those are forms of experimentation.”

As Akash Trivedi of KivaZip said in our webcast “Lean Impact: Implementing Lean Startup in Mission-driven Organizations,” Lean principles can be a huge help to, for example, socially-driven orgs: “[Not] proving your hypothesis is not a failure. Not getting data is a failure. There have been plenty of examples that I’ve seen where I was really excited about an idea but where the data just proved otherwise. And actually if you put me on the spot, the things I’m most excited about on [Kiva]Zip are the things we decided not to do versus the things that we did do, because to me, when you’re tackling some of these abstract fundamental problems that so many people are depending on, you don’t have the luxury of getting it wrong. You need to come up with the most optimal, relevant solution, and I think the best way to do that is to cut out what doesn’t work.”

These five questions are just a taste of the kind of conversation we’ll be having around entrepreneurship and Lean Startup ideas in San Francisco, December 9-11. Register for the conference today. I look forward to seeing you there.

 


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