Thursday, April 9, 2015

Excerpt from the Introduction to The Leader's Guide

This is the first of several early excerpts I'll be sharing from The Leader's Guide, a 4-color, 250-page, hardcover and digital book which will be offered exclusively through Kickstarter--according to my agreement with my publisher, Crown, the book can never be sold in stores. As usual, I'm leaving out important details like company names in order to respect their privacy while the book is still in early draft form. 

The campaign ends on Wednesday, April 15--learn more about it here.

MVP's help you discover "what really matters"

The technology research and development team of REDACTED faced a challenge that will be familiar to anyone whose products are subject to rigorous reliability and safety testing.

They were charged with discovering and developing state-of-the-art technology for their REDACTED line--and yet, during the research process, the team has historically had no contact with the customer whatsoever. 

Instead, they would rely on focus groups and market research before handing off their findings to a separate design team. As a result, the team would not get feedback on their new technology until their REDACTED hit the market--a full three years after their work began.

“This is a big concern for us,” said REDACTED. They suspected that if they could do customer development throughout the development process, they could come up with a much better product. “This is what led us initially to the Lean Startup,” he added.

“We were like, ‘Yes, this is awesome,” said another team member. “We should do Lean Startup and it will solve all our problems.”

Of course, as they soon discovered, it was a little more complicated that that.


What became clear was that if they wanted to create better technological solutions, they would need to provide a real service to customers by reaching out to customers with a MVP.

The idea, at first, seemed crazy. The team’s role, after all, was research and development. They had backgrounds in REDACTED. They weren’t salespeople. They didn’t even talk to customers.

But creating technology in a vacuum and waiting three or four years was not a sustainable strategy, so we put our heads together to figure out an MVP that would allow them to understand how customers interacted with their technology. 

Rather than spend years building a new product line that included the new technology they crafted a de-featured version using a tablet computer that could be rigged up to a preexisting product for testing purposes.

Once they had built the prototype, they needed customers to test out the MVP. Because they were an R&D group, they had no experience with this kind of engagement. And so, when they ran a Craigslist ad to invite people to come in and complain about their current driving experience, they didn’t expect many people would respond.

Within an hour, 300 people signed up. 

They brought 30 people in for interviews--an exciting experience that dispelled many misconceptions about “what truly mattered.”

The learning didn’t stop there. Because they couldn’t sell directly to customers they said to five of the 30 participants: Take the prototype, and at the end of a month we’ll give you a choice. If you like using it, you can keep it. If not, we’ll give you $100 dollars. 

Fast-forward a month: 60% of those who tried it wanted to keep it; 40% of those people said they’d refer it to someone else. 

The team felt good about the results and were hoping that their metrics would convince upper management to apply Lean Startup principles throughout the organization. Instead, they realized their journey was just beginning.

The top managers all wanted to know: “Why does this matter for us?” They didn’t yet understand how these learnings could be applied to the mainstream product development process. 

They could see the potential, however. They were impressed with the way the R&D team had improved user experience when it came to individual features, and so they charged the team with figuring out how to connect the learnings and the process to the mainstream product group.

After they began running experiments came the hardest part of their journey thus far: staying focused. They’d frequently fall into the old innovator’s habit: building whatever felt good without testing our their ideas. Documenting their experiments was boring, but it kept them focused and on track.

They also kept in touch with other members of the Lean Startup community, finding that other entrepreneurs were eager to share cheaper ways to learn and test. Thanks to that guidance, their team began mapping out different kinds of low-cost experiments and customer interviews. They came up with a wide variety of tests based on the following criteria:

“What was the maximum amount of learning we could get in the shortest amount of time?"

Running the Lean Startup at their large organization has not been easy. But by testing new technology long before the entire new product is build, they’ve been able to increase their certainty that they’re building something customers will want and use, and they’ve demonstrated to senior management that there are ways to test out new ideas long before millions of dollars have been invested on research and development.

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