Applying Lean Startup Principles to Agile Projects Mike

Applying Lean Startup Principles to Agile Projects Mike Hall Three Beacons mike@threebeacons. com 214. 783. 3936 www. synerzip. com Webinar Series 2015 0

Lean Startup www. synerzip. com Webinar Series 2015 1

Applicability It’s for everyone: startups, new product development, new features, etc. www. synerzip. com Webinar Series 2015 2

Mantra “What if we found ourselves building something that nobody wanted? In that case, what did it matter if we did it on time and on budget? ” The goal of any project is to figure out the right thing to build. www. synerzip. com Webinar Series 2015 3

Thinking Question at the start of a typical project: • Can we build a solution for that problem? Lean Startup questions at the start: • Do consumers recognize they have a problem? • If there was a solution, would they buy it? • Would they buy it from us? • Can we build a solution for that problem? • Can we build a sustainable business around this product/service? Ask “Should it be built? ” instead of “Can it be built? ” www. synerzip. com Webinar Series 2015 4

Framework • Adaptable framework • Based on scientific methods • A journey of “discovery” - Subject the vision to constant hypothesis testing - React to customer feedback - Bypass work that does not lead to learning - Adapt to what the data is telling you “Successful entrepreneurs had the foresight, ability, and tools to discover which part of their plans were working brilliantly and which were misguided, and adapt their strategies accordingly. www. synerzip. com Webinar Series 2015 5

Lean Startup - Principles www. synerzip. com Webinar Series 2015 6

Assumptions as Hypotheses • Identify your project/feature assumptions (continuously) • Reword them as hypotheses “The XYZ change will prove that customers want to. . . ” (value) “The ABC feature will increase new customers by at least 15%. ” (growth) Avoid: • • • Acting as if assumptions are true and proceeding anyway! – Leaps of Faith Taking statements for granted Reports from anyone other than the customer www. synerzip. com Webinar Series 2015 7

A Tale of Two Teams • What to build? • Clear baseline metric • Passionate debates • Hypothesis on how to improve metric • Suits decide • Experiments to test hypothesis • Implement several features at a time • Empirical data from customer usage • Celebrates any positive perception • Celebrates learning www. synerzip. com Webinar Series 2015 8

Experiments • Think of your project as a set of small experiments • Break business plan down to its component parts – and test them • Define experiments to test each hypothesis • Results of the experiments guide decisions about product direction Case Study: Zappos Experiments allow us to transition from guesses to knowledge. www. synerzip. com Webinar Series 2015 9

Validated Learning • The result of the experiments • Can be positive or negative changes • Empirical data from the customer • “Learn lessons early” rather than “build features and fix bugs” • Faster and more accurate than market forecasting and classical business planning The measure of an effective team is how much validated learning did we achieve (as opposed to how much did we build). www. synerzip. com Webinar Series 2015 10

Small Batch Size • Allows us to identify quality problems sooner • Pull – each step pulls the parts needed from the previous step, Toyota JIT production • As soon as we formulate a hypothesis, run the experiment as quickly as possible using the smallest batch size to get the job done! “Large batch sizes can create a death spiral of re-doing work. ” www. synerzip. com Webinar Series 2015 11

Build – Measure - Learn Decision! from the data Minimize time through loop the smallest batch possible qualitative and quantitative www. synerzip. com Webinar Series 2015 12

Minimum Viable Product www. synerzip. com Webinar Series 2015 13

Minimum Viable Product • The resultant output of successive Build – Measure – Learn loops • Remove/Avoid any effort that does not lead to learning • Goal of MVP – test your hypotheses, achieve validated learning • Decision after learning: pivot/persevere/quit • Iterate toward launchable product “The only way to win is to learn faster than anyone else. ” www. synerzip. com Webinar Series 2015 14

Case Study: Dropbox • Very popular web-based file-sharing service • Initial MVP: a You. Tube video • Targeted to early adopters • Beta waiting list went from 5, 000 to 75, 000 overnight • Company now worth over $1 B www. synerzip. com Webinar Series 2015 15

MVP Patterns • Concierge MVP – personalized service as a learning activity • Wizard of Oz MVP – behind the scenes humans doing the work • Case Study: Aardvark • Low-quality MVP • Case Study: Craigslist • Case Study: IMVU avatar teleportation • Smoke test - marketing materials • UI mockups • Etc. www. synerzip. com Webinar Series 2015 16

Pivot, Persevere, or Quit • Based on the validated learnings of an MVP, decide! • Pivot – structured course correction designed to test new hypotheses • Persevere – continue on with next set of hypotheses • Quit – cancel the project and move on to the next one “There is no bigger destroyer of creative potential than the misguided decision to persevere. ” www. synerzip. com Webinar Series 2015 17

Case Study: Potbelly Sandwiches • Started out as an antique store • Began selling sandwiches to drive traffic to the stores in the hopes of selling more antiques • Lines formed out the door • Pivoted to a sandwich store • Today over 280 sandwich stores nationwide www. synerzip. com Webinar Series 2015 18

Pivot Types • Zoom-in pivot – refocus product on what was previously considered one feature • Zoom-out pivot – single feature is inadequate, so add features • Customer segment pivot • Customer need pivot (Potbelly) • Platform pivot • Business architecture pivot • Value capture pivot • Engine of growth pivot • Channel pivot • Technology pivot Pivots take courage! www. synerzip. com Webinar Series 2015 19

Others • Innovation Accounting • Engine of Growth • Adaptive Organization www. synerzip. com Webinar Series 2015 20

Application to Agile Projects www. synerzip. com Webinar Series 2015 21

Case Study: NAV-API • Navigation platform supports 3 rd-party apps integration • Goal is to accurately measure usage analytics • Measurement messages are - Start/Stop driving - Route to destination - Travel guide viewing, etc. • Approach 1: downloadable SDK integrated into apps - Caches measurements, sends every 5 minutes to server - Re-issue app when SDK changes, re-certify - SDK execution can crash 3 rd-party app • New product: web service to receive measurement messages - Defined RESTful API called NAV-API www. synerzip. com Webinar Series 2015 22

Get Started: Hypotheses-Driven Vision • Develop a classic vision board • List assumptions • Continue to identify assumptions as you go • Translate implicit assumptions into explicit testable hypotheses • List hypotheses www. synerzip. com Webinar Series 2015 23

NAV-API Vision Board Vision Statement For clients who have a need for capturing usage analytics on their connected applications, Navigation API (NAV-API) is a cloud-based service that provides a simple easy-to-understand way of reporting measurements. Unlike classic embedded SDK approaches, the NAV-API will provide a direct reporting experience based on web service calls. Target Group 3 rd-party app customers • Yelp • Trip Advisor • Trip. It • Travefy • AAA • Tripomatic • Hertz • Avis • Tourist. Eye • Trip. Case • World. Mate Needs • Ease of measurement reporting • One solution for all digital • Increase revenues • Use of familiar programmatic • Cloud-based • Satisfy pent-up demand • Transparent evolution • Increase digital approach • Less software development • No need to download/integrate SDK • Linear scaling as demand footprint • 1 -stop-shop grows • Fault tolerant Assumptions • Customers will prefer NAV-API over the embedded SDK • NAV-API will make it easier to certify apps • NAV-API can handle large amount of users www. synerzip. com Value Product Hypotheses • > 80% of all customers will prefer NAV-API • NAV-API can be self-certified by customers • NAV-API can handle 50 K simultaneous sessions • NAV-API will need a super-fast DB • Redis is the best DB for NAV-API • An early release to friendly customers will • An initial release can be built with limited (but provide good feedback Webinar Series 2015 24 valuable) functionality for early adopters

Get Empathetic: Knowledge Broker Personas • A special form of persona • But emphasizes the knowledge sharing that each can bring • Customer Archetype – humanizes the proposed target user Knowledge Sharing • Can explain why certain features are more important • Can describe his previous SUVs and what he liked/disliked • Will give an opinion on our new Sync+ system • We can determine how likely he will upgrade to a full-size SUV in the future www. synerzip. com Webinar Series 2015 25

Get Organized: Learning Maps • Create a story map on a wall • But organize and prioritize it by Hypothesis from left to right • Which will deliver the most learning? • Which learnings are most crucial? • Which learnings reduce risk? • Which are most crucial in answering “Are we building the right product? ” • For each hypothesis, name the user stories and/or work items • Prioritize the user stories top to bottom www. synerzip. com Webinar Series 2015 26

NAV-API Learning Map Hypotheses Experiments: Stories, Work Items www. synerzip. com Webinar Series 2015 27

Tee It Up: Experiment Backlogs • Similar to Scrum product backlog • But is learning-based prioritization • List of all experiments 1. . n • Stories, work items, research, etc. • Tagged with Hypothesis name/description www. synerzip. com Webinar Series 2015 28

NAV-API Experiment Backlog www. synerzip. com Webinar Series 2015 29

Get Focused: Minimum Learning Product (MLP) • Similar to MVP, but much smaller • Learning-based, not viable productbased • Smallest chunk of the Learning Map that can be developed to learn something important • Real or mock form • Goal is to get just enough learnings - Then pivot, persevere, or quit • Choosing the MLP replaces classic Scrum sprint planning - Break into tasks if it helps www. synerzip. com Webinar Series 2015 30

NAV-API Minimum Learning Product MLP www. synerzip. com Webinar Series 2015 31

Experiment Test Iteration • Experiment Test Iteration (ETI) • Similar to Scrum sprint but variable time length - Depends on size of experiment - Get through Build/Measure/Learn as quickly as possible! Scrum: fixed iteration length ETI: variable iteration length ETI 1 ETI 2 3 days 5 days www. synerzip. com ETI 3 9 days ETI 4 17 days Webinar Series 2015 ETI 5 6 days ETI 6 7 days 32

Build It: ETI • Build out the MLP • Measure progress based on validated learning • Use modified storyboard showing Validated column Story www. synerzip. com To Do In Work Done Webinar Series 2015 Validated 33

Get More Data: Learning Results Period • Obtaining results from knowledge brokers • Sometimes the validation takes longer than the ETI • Run this in parallel with the next ETI - Defer pivot/persevere/quit decision until this data is in Pivot/Persevere/Quit ETI 3 Learning Results Period ETI 1 ETI 2 3 days 5 days www. synerzip. com ETI 3 9 days ETI 4 17 days Webinar Series 2015 ETI 5 6 days ETI 6 7 days 34

Demo It: ETI Review • Dev team demos their progress • Discuss learnings obtained from the Learning Results Period • Experiment findings are discussed with stakeholders • Decision: pivot, persevere, or quit www. synerzip. com Webinar Series 2015 35

Think About It: ETI Retrospective • Team discusses - What went well, what did not go well - How to get better • A spirit of “continuous improvement” • Plus: - How is the team feeling about the assumptions? - Are there any not identified previously? www. synerzip. com Webinar Series 2015 36

Rinse & Repeat: MLPs • Build series of MLPs to reach final launchable product • Use innovation accounting to “tune the growth engine” • Be courageous in pivot/persevere/quit decisions www. synerzip. com Webinar Series 2015 37

Team Dynamics • Scrum team becomes a small “innovation factory” - Responsible for code and/or artifacts that prove/disprove a hypothesis - Continuous innovation • Practicing the art of “genchi genbutsu” - “Go and see” - The only way to truly understand the requirements is to get out of the office and spend time with the customer - Gemba – the real place - Don’t rely on information from other sources www. synerzip. com Webinar Series 2015 38

Gemba Walk • Gemba Walk - Go see the actual process Purposeful attempt to learn what is really going on Direct customer interaction Ask questions Show respect Learn www. synerzip. com Webinar Series 2015 39

Team Dynamics (cont) • Scrum. Master becomes “shusa” • Chief engineer responsible for guiding the product to success • Guides team on experiments and MLPs to product www. synerzip. com Webinar Series 2015 40

Conclusion www. synerzip. com Webinar Series 2015 41

Conclusion • Lean Startup principles can and should be used in Agile projects - To help insure we build the right thing • Approximately 10 techniques presented, but there are probably even more • This could be the next major evolution of Agile! “If we stopped wasting people’s time, what would they do with it? We have no real concept of what is possible. ” www. synerzip. com Webinar Series 2015 42

Introducing: Gemba • Gemba: a validated learning Agile method Gemba Scrum www. synerzip. com Lean Startup Webinar Series 2015 Lean 43

Gemba Manifesto We value • Validated learning over reasonable assumptions • Data-driven decisions over plausible-sounding arguments • Building minimum learning products over additional features • The courage to build the right thing over something that might work www. synerzip. com Webinar Series 2015 44

Three Beacons Agile Training Scrum team training Lean Startup training Intro to Agile User Stories Extreme Programming Agile Consulting Onsite Skype-based © Three Beacons LLC, 2015 www. synerzip. com Webinar Series 2015 45

THE END Mike Hall Three Beacons mike@threebeacons. com 214. 783. 3936 www. synerzip. com Webinar Series 2015 46

Backups www. synerzip. com Webinar Series 2015 47

Innovation Accounting • Measure the progress of innovation towards validated learning – instead of burn rate or $ • Three steps • • • Use MVP to establish real data Tune the engine from baseline towards ideal Pivot, persevere, or quit • Use actionable metrics – clear cause&effect • • • Split-test of a feature caused 20% increase in sales Per-customer metrics Cohort metrics – groups of customers • Avoid vanity metrics • • Number of hits to a website Action to take is not obvious www. synerzip. com “If you are building the wrong thing, optimizing the product or its marketing will not yield significant results. ” Webinar Series 2015 48

Engine of Growth • Use a small set of actionable metrics • • • Customer acquisition cost Activations Retention Revenue Referrals • Consider viral coefficient • How many friends will each customer bring? • Case Study: Hotmail • “Tune” the engine every time learning occurs www. synerzip. com Webinar Series 2015 49

Adaptive Organization • Auto-adjust process and performance based on current learnings • Andon cord – anyone can stop the production line! • Slow down – invest in preventing issues • Ask “Why? ” 5 times to get to root cause Avoid • Handoffs and approvals • Making decisions on plausible-sounding arguments • Low quality products • Defects www. synerzip. com Webinar Series 2015 50

www. synerzip. com Hemant Elhence hemant@synerzip. com 469. 374. 0500 www. synerzip. com Webinar Series 2015 51 84 51 •

Synerzip in a Nutshell § Software product development partner for small/mid-sized technology companies • • • § Dedicated team of high caliber software professionals for each client • • • § Seamlessly extends client’s local team offering full transparency Stable teams with very low turn-over NOT just “staff augmentation, but provide full management support Actually reduces risk of development/delivery • • § § Exclusive focus on small/mid-sized technology companies, typically venturebacked companies in growth phase By definition, all Synerzip work is the IP of its respective clients Deep experience in full SDLC – design, dev, QA/testing, deployment Experienced team – uses appropriate level of engineering discipline Practices Agile development – responsive yet disciplined Reduces cost – dual-site team, 50% cost advantage Offers long-term flexibility – allows (facilitates) taking offshore team captive – aka “BOT” option www. synerzip. com Webinar Series 2015 52

Synerzip Clients www. synerzip. com Webinar Series 2015 53

Join Us In Person Agile Texas 2015 Tour Presented by Hemant Elhence & Vinayak Joglekar www. synerzip. com Webinar Series 2015 54

Next Webinar Technical Topic: From Hadoop to Spark Complimentary Webinar: Wednesday, August 19, 2015 @ Noon CST Presented by: Mark Kerzner Co-Founder, Elephant Scale www. synerzip. com Webinar Series 2015 55

Connect with Synerzip @Synerzip_Agile linkedin. com/company/synerzip facebook. com/Synerzip Hemant Elhence hemant@synerzip. com 469. 374. 0500 www. synerzip. com Webinar Series 2015 56