Dos and Don’ts of Lean Startup- Top Takeaways from The Lean Startup Conference 2014

Lean Startup Conference 2014

Lean Startup Conference 2014

Main Takeaway- Continuous Experimentation Well Beyond The Startup Stage

Contrary to the generally held belief that lean startup principles advice experiments in early stages of a startup; many speakers at the conference showed how they are experimenting continuously at all stages of their ventures.

Eric Ries in said that “Product market fit and experimentation is not a one time activity. It’s a continuous flow of activities. There are no discrete big jumps! Think of these steps in continuous flow that lend themselves to go back if an experiment fails”

Hiten Shah of Kissmetrics reiterated that a meaningful metric leads to a hypothesis and then to an experiment to validate it. Startups should always be A/B testing. Empirically 1 out of 5 tests succeed. Strive to win 1.67 out of 5.

A/B testing can help not only at different stages of a startup; but also for various activities including website traffic, app installs, welcome emails, Web/Mobile onboarding, E-mail digests, Triggered notifications, dormant/churned users.

Des Traynor also said that having continuous feedback is more valuable than one time event driven feedback.

Experiments helped even established brands like Rally, Google and Vox Media to validate hypotheses at later stages of their product lifecycle

  • Rally launched a dummy brand waffle.io targeted towards developers to protect the parent brand from the impressions created by the experiments. Finally Rally decided to have both brands.
  • Google Adsenses team validated Partner Problems using Lean Startup Principles. Blair Beverly said that they faced problem with new projects scaling too early and failing as they lacked historical data to go by. He got coworkers at Google ad senses team to use the Lean Startup. They scheduled office time to read the book, being helpful and not pushy. They also gave them a reading guide with questions. In the end they identified three hypotheses; put together templates like the partner problem hypothesis. People felt good about invalidating their own hypotheses as it saved them work that would’ve been wasted.
  •  Vox Media launched Vox.com in 9 weeks using analytics to guide customer validation. Melissa Bell got her co founders and others from Vox media in the same room to get everyone on the same page about her vision. Many editorial staff came from Washington Post whereas Vox was an agile technology company. They used card stacks for flexibility. They had problems with the way editors used card stacks, as it was difficult to navigate-hence they analytics were used to solve the problem. Now Vox.com has 22m users. Delivering content to users where they are-on social channels such as Facebook or YouTube instead of own URL.

Lean Startup- Dos & Don’ts

Max Ventilla

  • Pivoting statistics- 80% of failures didn’t pivot, 65% of successes Pivoted but 85% of Huge Successes (>$1B exit) didn’t pivot. Those didn’t pivot felt that evolution is safer than betting on intelligent design.
  • You need to eat your own dog food. Use your product to solve your own problems. If not you are at an enormous disadvantage.
  • Invert the org chart :customers & customer facing team should be on top. They should be heard and not told what to do.
  • Force yourself to pretend at the earliest possible moment what you want to be- to learn whether its worth being what you want to be. Landing pages, Concierge or Wizard of Oz are ways to pretend.
  • Don’t speed up for the sake of it. For startups not going fast enough is not the main risk. False summit is the reality. Journey of a startup is slow like that of a mountaineer. A new goal appears once you have reached what seemed like the ultimate goal.

Grace Ng

  • According to Grace Ng success criterion for any experiment is the weakest outcome that will give you enough confidence to move forward.
  • Testing the riskiest assumption on buy side in a two-sided market place could be deceptive in a sellers’ market. Sellers may not automatically follow even if you find many buyers.
  • Validated hypothesis doesn’t necessarily lead to a viable business. Grace Ng tested a hypothesis whether birdwatchers will post photos to ask questions. The Hypothesis was valid but the problem turned out to be too small – not a big pain-point.
  • Don’t validate the solution before validating the problem. As in the case above; the problem was not big enough though the solution was right.

Eric Ries

  • When it takes too long to learn as end results take time, use proxy metric like number of likes or start a cohort.
  • Don’t depend on one experiment to determine the product market fit. Keep testing and validating along the way as you grow. Growing too fast by taking product-market fit for granted is dangerous.
  • Don’t get misled by corporate America’s habit to underinvest or overinvest. “All Hands On Deck” sounds great but surely is a sign of overenthusiasm.
  • Avoid handing off innovation between silos. Handoffs kill innovation. What is learnt in one silo can’t be handed off to another silo.
  • Don’t add features for the sake of it. Its better to err on the side of being too minimal to get early feedback and learning. Its easy to add a missing feature later.
  • Pay more attention to paid users’ feedback than free users’ feedback. Free users ask for more; paid users ask for better.
  • Don’t use vanity metrics- Eric’s law: At any time no matter how badly you are doing there is at least one Google analytic graph that’s up into the right

Joanne Molesky

  • As you go through build-measure-learn cycles for product the same way you should be going thru build-measure-learn cycles for process compliance.
  • Beware of developers’ tendency to focus on how to do things than on outcomes. Developers tend to ignore security as they are dazzled by technology, so they focus on doing things faster-not safer. Security testing, threat model and risk metrics should be included right from the beginning and not at the end.

Dan Milstein

  • Don’t take idle pleasantries as positive feedback. People tend to be polite and cordial even though they are least interested.
  • Don’t choose to see what fits in a narrative that sounds good and makes you look awesome. That is self-deception. Realize that a startup is a series of unpleasant encounters with reality.
  • Don’t own a plan. Own questions. Plans will change.

Hiten Shah

  • Test small changes- Google sign on and changes to verbiage improved acquisition by 314% for KissMetrics.

Brant Cooper

  • Don’t as two questions that kill breakthrough innovation – what is the roi? When do we get it? In order to answer these questions we have to look at existing markets which kills innovation -innovator’s dilemma. We need to build cultures or safety net for innovators.

Conclusion

Most of the takeaways and dos and don’ts are common sense for any practicing entrepreneur. According to Eric Ries The Lean Startup process is more widely practiced than talked about. Most entrepreneurs are agents of long term change. They don’t think The Lean Startup is a big deal. As with most profound thoughts- it seems obvious after its well thought through, well organized and well presented.

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If Its Painful Do It More Often!

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“Do more painful things more often!” – In the Agile 2013 conference keynote at Nashville Gene Kim quoted Adrian Cockroft (Architect at Netflix) which got me thinking how we see it being applied not only in software development and delivery but also in diverse fields like inventory management and personal fitness. Here are some examples.

Continuous Integration: Development teams would independently build software components which were integrated in the end to work together.  Integration used to be a painful process given mismatch of assumptions, versions and expectations. Now we have CI tools like Jenkins, Bamboo and Cruise Control which execute automated steps that integrate at short intervals of a few minutes – this flags out the mismatches listed above early. This reduces the surprises and pain faced at the end of the iteration.

Continuous Delivery: Releasing a software product in the production environment is a nightmare for development and operations teams often requiring all team members to stay available over weekends to take care of any last minute snafus. Managers tend to delay release dates to the last acceptable date . Continuous delivery preceded by continuous deployment is done by running automation scripts  to deploy and test the application in development and test environments. This is done several times before final deployment in production. This re-use increases the confidence level in these scripts are run to deploy in production.

The Lean Startup Way: Launching a business venture is not easy to say the least. Entrepreneurs tend to spend time perfecting their dream before taking it to the market. Eric Ries acknowledges that business models are likely to fail. He advices businesses to go to market at shorter intervals – thus allowing them to learn from their early failures than getting cornered in a situation where there is no time left to fail and learn. This model places high value on learning from early failure and frequent build-measure-learn cycles.

Chirunning : This technique applies principles of Tai Chi to running. Formalized in a book by Danny Dreyer – one lesson of this technique advices runners to take shorter steps more frequently to reduce the pain and injuries caused by over pronating – or taking long strides.

Cycle Counting: Counting items in inventory at the end of the financial year used to be a painful exercise riddled with inaccuracies that could not be traced back to errors accumulated over the year. Most warehouse management software provide a solution by putting cycle counting in place. Warehouse managers don’t wait for the year end ; but cordon off areas of the ware house every week to physically count all items in that area and reconcile differences with book inventory. This flags out errors early – closer to their occurrence  – thus improving traceability.

There must be many more examples where an arduous , painful and inefficient task which often got postponed because of its nature is  now being completed more efficiently and with less pain as its being done more frequently.

Here are some candidate tasks; which we should consider doing more frequently.

1)   Employee Appraisals: Usually an annual exercise – dreaded by appraisers and employees. Would quarterly frequency reduce the pain?

2)   Elections: It’s the most painful part of democracy. Can we make elected representatives more accountable by having them go back to their electorates more frequently?

3)   Census: So much data is collected that it becomes irrelevant by the time its processed . Can we have an ongoing survey to account for births, deaths , relocations and other events that impact demographics?

4)   Tax returns: Year-end is busy time for accountants. They stay late to file returns as the last date approaches. Often accountants are required to request date extensions to complete their work. Can we have a financial period shorter than one year to make our lives easier?

Waning importance of resumes over social media postings in the hiring process?

With increasing use of social media like linked-in and facebook in the hiring process; resumes are likely to lose their prominence; hence candidates who are active in social media would enjoy better visibility and improve their chances of selection. This blog examines this development to offer some guidance to candidates.

Here are some reasons why prospective employers would value postings in social media over the resume- Continue Reading

7 Unique Ways India Conditions the Minds of its Entrepreneurs to Excel

New Age Start-ups – Advantage India!

Like every November Indian Startups will flock at Bangalore this year for the Nasscom Product Conclave . Many well-educated and experienced entrepreneurs will showcase their new age products. Its time we looked at the unique way India conditions the minds of its entrepreneurs to excel.

Unique Way 1:

Indian entrepreneurs are good at making creative improvisations in the face of resource crunch.

Successful startups owe their success to their ability to be creative and economical at the same time. India is an economy of shortages. People often think a lot before spending on things as trivial as a phone call. “Missed calls” are extensively used to communicate without spending anything. Guards or drivers report on duty by giving a “missed call” to their superiors. TV viewers can vote in a competition by giving missed calls to the chosen competitors. Rag-pickers recycle almost everything from pet bottles to plastic bags. Arvind Gupta makes innovative scientific toys from trash. Almost quarter million office workers in Mumbai have hot meals from home delivered to them for a quarter per day and has near zero error rate- thanks to the low cost transportation system developed by the community of Dabbawallas.

Unique Way 2 >>