The Entrepreneurial Enterprise

Guest post by Lisa Regan, writer for The Lean Startup Conference.

How can established companies benefit from implementing Lean Startup? To answer that question, we hosted a webcast conversation earlier this week with Eric Ries, Brant Cooper, and Patrick Vlaskovits. We’d like to share a few highlights and invite you to join the ongoing conversation by posing questions for Eric, Patrick, and Brant in the comments to this post. They’ll jump in to answer in the coming days. (Of course, you can also continue the conversation by attending The Lean Startup Conference. Our latest batch of discounted tickets is about to sell out, so register today.)

A lot of people think the “startup” part of “Lean Startup” means the ideas apply only in young companies. But, in fact, they can be crucial in large, established companies that need to find growth in new products and new markets. As Eric puts it in the webcast, “I’ve met now the CEOs of some of the biggest companies in the world, and I still spend time with the CEOs of high-growth Silicon Valley companies from the garage on up, and what all those people have in common is that they are seeking out sources of sustainable growth…. What we care about in the innovation community is growth that is driven by customers and creating value for them. And we just so happen to think that the best way to create sustainable growth in our highly disruptive world is through continuous innovation…. And that challenge I have seen to be identical no matter the size of the company.”

Patrick and Brant understand these problems intimately. They are the co-authors of The Lean Entrepreneur, and the co-founders of the Moves the Needle Group, which advises the innovation practices of Fortune 100 companies. Their webcast conversation with Eric began with a discussion of the ways that large companies come around to realizing they need to implement Lean Startup. Among other themes they covered: the conditions under which established companies implement Lean Startup; the hindrances and incentives they face; what individual employees can do to implement the methodology; and how to protect a company’s core business from the potential impact of experimentation. Though we’re posting a few highlights below, we encourage you to watch the video in its entirety, as Eric, Patrick and Brant dig into technical details and case studies that will be helpful for people engaged with this topic.

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The webcast conversation examined corporate versus startup structure, and the limitations on innovation that corporations create for themselves. Problems arise when companies isolate areas of the business in what Eric refers to as “functional silos”—independently operating teams (design, engineering, marketing, legal, etc.) that discretely address specific areas of the production chain. Each silo may be innovative in itself, but at some point it considers its work complete and hands off to the next silo, with which it has had little to no collaboration and for whose tradeoffs it has not accounted. What can Lean Startup do about this?

Eric:  I’ve now worked with a number of companies where once they adopt Lean Startup, it gives them a common vocabulary for all the different teams to use the same vocabulary, the same business-oriented, results set of concepts to wrap all these techniques in…. We knock the silos down and get everybody on a single, cross-functional team to say to everybody, look, you are a startup, you are not a set of different functions, so you, team…go experiment and learn how to make this happen. When teams are organized that way they’re so much more productive, so much more energized, the creativity you unlock is incredible.

Brant:  We’re still taught in MBA school is these silos, right? And if people can just imagine, if the way we motivate people, the way we do performance reviews, and incentivize people within silos—those measures cannot be drawn in a direct line to corporate objectives. You cannot draw a direct line to reducing waste or improving revenues or cutting costs…whereas the cross-functional teams, you can tie it to a performance metric that has a direct result in the corporate objectives.

Patrick, with a bit of highly practical advice: One of the things Brant and I counsel large organizations, particularly ones that have already embraced Agile, is to extend the Agile metaphor into the funnel, for example, and show the benefit of Lean Startup for the sales and marketing teams, and then show the benefits of Lean Startup to the HR folks…. With sales and marketing experiments, often you pick low-hanging fruit in the millions of dollars very, very quickly. We’ve seen this time and time and time again, and that’s how you get other parts of the organization and other functional roles excited about starting LS methods.

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A variety of audience questions came in effectively asking how an established company, with an existing product, customer, and brand image, can make use of a minimum viable product (MVP) for experimentation purposes without damaging the larger company’s standing.

Brant: The core business has to be protected from the startup. We separate out these startups. They need to exist in a different place for the time being, so that the startup is protected from the questions around return on investment, and the core business is protected from the startup…. So you’re not launching a minimum viable product to all of your core business customers--that’s a no-no. You have to keep these separate. And then the Lean Startup acts like a new startup. You have to go find your own customers to experiment with, you have your own brand, so you have to think like a Lean Startup.  You’ve got your validated learning with the customer development you’ve been doing with your own market segment. But you’re not going to your core business.

Patrick: The startup “can’t run to the core business and have all its problems solved for it. Because then you get something like the children of helicopter parents, that can’t fend for themselves. And ultimately if it’s a real innovation, that has real value and creates real value for customers, it has to fend for itself. It has to be a stand-alone business case that makes sense.

Eric, on making lemonade out of an MVP lemon: 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.

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So how do you start a Lean Startup practice where you actually work? Patrick, Eric, and Brant all talked, in response to audience questions, about the importance of individual actors within corporations deciding to, as Patrick put it, “be subversive.”

Brant: Changing the culture is what’s needed and it’s hard and it takes time. And so I think if you’re a person inside of an organization that is ready for this type of stuff, the first thing you should do is go find like-minded people, and that’s actually how you start the process…. I’m not saying go do something that’s going to get you in trouble, but you can’t wait for some magic to happen, for some external force that says ok, now this company is prepared for Lean Startup culture. You actually have to go and make the change yourself.

Patrick:  Actually, let me go as far as to say you should go get in trouble, you should actually be subversive. I’m half-joking here, but I think we’ve all seen this, that where Lean Startup has managed to take root and flower is where initially you had some aggressive early-adopters act a little subversively. If you have a mortgage and a family, I’m not telling you to risk your career on adopting Lean Startup, but if you’re passionate about making change, you can’t wait for permission to do this stuff, you’ve got to start doing it and you’ve got to start doing it intelligently, and part of that is hacking the actual internal political system. That’s very difficult, obviously, but it’s part of that journey.

Eric:  Think of all the managers who worked at Kodak, or Nokia, or Blackberry--pick your favorite company that has had a total collapse in living memory. And say, “How would it feel to be the manager who was there, who saw the disruption coming and did nothing about it?” First of all, is that actually a good path to having a longterm career? If you have to feed a family and make your mortgage, and your company collapses while you’re there, is that really going to help you? I feel like it’s almost irresponsible to put your head down and say, “Whatever, I work for a great institution, and I’m going to let it crumble under my stewardship….” The future leaders of companies I think are going to be the people who today started learning with these techniques, because what we’re talking about here is nothing less than a full-scale paradigm change in the management culture and management philosophy of modern companies. So would you rather be an early adopter of that, or have someone else take that lead?

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Interested in more in-depth discussion of Lean Startup in the enterprise? We invite you to check out the entire video, including a fascinating conversation about why revenue is not a good growth metric. For even more insight, register today to join us at The Lean Startup Conference in December. If you bring eight or more of your employee, we’ll give you a substantial break on the price. For more info on the benefits of team registration, see our post on fostering innovation in established companies. For pricing details just email our executive producer Melissa Tinitigan and use the subject header “group discount.”

Key Questions for Bringing Lean Startup to Established Companies

Guest post by Lisa Regan, writer for The Lean Startup Conference.

Our next webcast tackles a particularly challenging topic. On October 8 at 10a PT, we’ll be talking about bringing Lean Startup methods to established companies, precisely the kinds of businesses that are most resistant to experimentation, even as they desperately need it. Eric Ries will be joined by Patrick Vlaskovits and Brant Cooper, co-authors of the NYT-bestselling book “The Lean Entrepreneur” and frequent advisers to Fortune 100 companies like Hewlett-Packard, Qualcomm and Pitney Bowes. The webcast is free with advance registration and — the best part — features a live audience Q&A where you can submit your own questions for Brant, Patrick and Eric.

To set up the themes of the webcast, we asked both Brant and Patrick a few questions about their experience with enterprise companies. They didn’t pull any punches in telling us how difficult — and yet important — it can be to get leadership on board.

LSC:  What do you see as the most common reasons that large companies give for why they don't apply Lean Startup?

Brant:  In my experience, the conversations don’t ever go that way. Large companies don’t have to, and in fact don’t, justify choosing not to shift to a different methodology. In fact, most of our work is inbound, meaning that companies come to us already seeking to do Lean Startup; they’re already on board. I’m not currently in the business of – nor sure I ever want to be in the business of – convincing organizations to do Lean Startup. That's hard. That’s Eric Ries’s job.

Patrick:  Last week I had an interesting conversation with the CIO of a major European company operating in a mature, very profitable industry. His team was quite well-versed in Lean Startup, and asked hard and insightful questions. One theme that emerged a few times amongst the comments was essentially, “Yes, we think that Lean Startup could be hugely beneficial, but we’re worried about the changes in culture, organization and process required to pull it off.” Essentially, they have a “the cure might kill the patient” anxiety.

It would be too easy to shrug off their thinking as short-sighted, but I think their concern is valid. At the end of the day, it will be how they view the future of their industry, and their role in it, that will determine whether they see the coming disruption as something they choose to participate in, or remain willfully ignorant of.

LSC: What opportunities do large or established companies typically fail to see or take advantage of when they do attempt Lean Startup methods?

Brant: Companies take on Lean Startup for reasons that are all over the map, and they have experiences with it that cover a similar range. This is mostly because they’re not implementing the methodology in its entirety; rather, they have some concrete set of outcomes in mind. So I’ll see internal development groups trying to apply Lean Startup methods. And, companies that are modifying their design thinking processes are similarly interested. I also see employees attending Lean Startup Machine in essentially ad hoc efforts to try something new. Overall, this is part of a tendency to see Lean Startup as simply an evolution of Agile, and to mistakenly think that it thus “belongs” in Engineering, or that it’s only useful for new product endeavors. That kind of compartmentalization ignores existing products and processes, and encourages people to think that the methodology doesn’t apply to “their stage” of product development. 

In general, I think organizations are prone to seeing Lean Startup as a “tack-on,” a benefit to supplement the usual way of doing things. And while Lean Startup can certainly be useful from that perspective, the real missed opportunity for the company as a whole is in organizational transformation. In other words, why only make changes to a particular product or product line, when you could teach the entire organization, at all levels, to move faster, get closer to customers, and learn to continuously innovate?

Patrick: There is one area of low-hanging fruit that I do see for companies that institute Lean Startup as a “tack-on,” as Brant put it. That’s when the sales and marketing functions adopt Lean Startup for customer acquisition. By executing best practices, they can often realize huge gains in conversion from hitherto invisible opportunities around the funnel and the product.

LSC: Lastly, how can reform-minded individuals or teams address these resistances from within — that is, how can people interested in the methodology get buy-in up the hierarchy?

Brant: In my experience this cannot be only a grass-roots push. Somewhere in the C-Suite, there has to be an executive who has realized that a change in philosophy and in practices must occur if the company is to take “innovation” out of the realm of being just a marketing buzzword. This may be a maverick CEO, or a new CEO brought in for change, or one who simply has had an epiphany and is out looking for a new approach. We’re still in early-adopter territory here.

From that perspective, I’d say that the best path for reform-minded individuals is not to seek buy-in, but rather to attempt to foster an epiphany. That isn’t going to happen, at this stage, by seeking approval from your boss. But hey, we’re approaching the holidays. Buy the CEO or Chief Innovation Officer a copy of Eric’s book. With any luck, he or she will read it.

Patrick: I share Brant’s emphasis on leadership, but I think you gotta try the sandwich approach -- grassroots from the bottom and an aggressive leader from the top. Ideally, this kind of organizational change covers the entire spectrum of the business.

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Our webcast with Brant, Patrick and Eric is October 8 at 10a PT. Register today to join hundreds of people attending, and bring your questions for the live Q&A.

If you’re thinking of bringing Lean Startup to your organization, we encourage you to take advantage of our team discount for The Lean Startup Conference, Dec 9 – 11 in SF: send eight or more of your employees and get a substantial break on the price. For more info on the benefits of team registration, see our post on fostering innovation in established companies. For pricing details just email our executive producer Melissa Tinitigan, and use the subject header “group discount.”

Fostering Innovation in Established Companies

Guest post by Lisa Regan, writer for The Lean Startup Conference.

Does this sound familiar? You want to apply Lean Startup methods at your company, but your boss is used to being the decision-maker and is resistant to the concept of testing ideas. Or, you are the boss, and your team is afraid of or unwilling to try new methods. This kind of gap between leaders and teams is common at all sorts of companies. But it’s particularly prevalent at established companies, where hierarchy tends to inform more of the action.

On October 8 at 10a PT, join us for a webcast, Bringing Lean Startup to Established Companies. Eric will speak with Brant Cooper and Patrick Vlaskovits, both authors and entrepreneurs who have served as advisers to large companies, including many on the Fortune 100. This webcast is free with registration, and Eric, Patrick and Brant will open it up to Q&A with attendees, so come with questions ready. In addition, we’re offering a Lean Startup Conference discount for corporate teams; details below.

We explored Lean Startup in the enterprise through a number of talks at last year’s conference. One of our favorites was a panel led by Intuit co-founder Scott Cook, who spoke about the change in leadership required at his company when he decided to implement Lean Startup methods after meeting Eric in 2009. His challenge was, as he put it, “Converting Intuit to run on Lean Startup principles by converting Intuit to be a network of lean startups.” This transition required changing both how decisions were made in the company and how leaders behaved, moving away from what Scott vividly described as decision-making by “politics, PowerPoint and persuasion,” and “the conventional, the consensus, and the commonplace.”



In this discussion, Scott identified four things leaders have to do in an established company in order to “enable decision-making based on the best ideas that can be validated in the marketplace.” These were: setting the grand challenge; installing the systems and culture that enable people, even junior people, to be able to run fast experiments to achieve that challenge; pulling insights from those experiments, no matter whether they succeeded or failed; and living by the same rules and the same discipline as the rest of the team.

Each of these four elements of what we might term Lean Startup Leadership was addressed by a different Intuit team leader (the video here shows them all). To take just one example: Carol Howe, Intuit’s Senior Product Manager, spoke about the way her team created TurboTax SnapTax. A mobile app that lets people use their phones to prepare and file taxes, SnapTax lets users snap photos of their tax documents. As Carol described, the app was a huge success — but, “this was not where we started nor what we intended to build.” The original plan was for an app to allow photographing tax documents that users would then need to enter into their standard, web-based version of TurboTax. Customers disliked this two-step process in early testing, and so Carol’s team built a version of the app that ran entirely on mobile, and was a one-stop-shop for tax preparation. Even then, they were careful to test the new app in a limited context, launching it first only in California, and only on a limited category of tax filers.

Carol: “We heard from all those other customers — customers in other states, and customers with more complex returns. They complained to us and said that they too wanted to file their return on their phone. And that’s when we knew we were on to something special.” They had used methods characteristic of a Lean Startup to validate customer demand and create a truly innovative product — even though this product would compete with Intuit’s own flagship TurboTax software.

Obviously, any company, whether large or small, wants to create products that consumers nationwide clamor for. But creating and empowering teams to both identify and fill the needs of those customers via a process of rigorous testing and rapid iteration requires buy-in at all levels of the company. Corporate leadership, as well as team leaders, need to be on board. On October 8, Eric, Brant and Patrick will investigate the hurdles large corporations face in implementing Lean Startup and the unique opportunities there are for companies that are willing to do so. Register today to join them.

To help support teams applying Lean Startup methods, we’re offering a discount for any company that wants to send a group to the 2013 Lean Startup Conference. If you send eight or more employees, we’ll give you a substantial break. Simply email our executive producer Melissa Tinitigan for details, and use the subject header “group discount.” Here are few of the benefits to sending a team:

•    Get out of a rut. The Lean Startup Conference provides fresh ideas even for teams that have been working together, or hammering on a single intractable problem, seemingly forever. It’s not just the on-stage presentations that help get your team members thinking — it’s also the networking events and startup site visits that expose you to the sharpest entrepreneurial talent. And, professional development improves staff retention and satisfaction. Your team will come back energized.

•    Save time. Teams thinking about instituting more testing, or exploring the Customer Development model, will get direct information about how to implement these methods. You’ll gain understanding and confidence in the process, thus reducing your fear of making mistakes — a barrier that Scott Cook cites as a major hindrance to embracing Lean Startup, especially at the lower levels of a company.

•    Look into the future. The next best minds in corporate innovation are speaking at the Lean Startup Conference. They’ll give your team a sense of what’s ahead and can help you better perceive where to go next. Site visits to highly successful startups, including those successfully scaling, will provide inspiration and key insights to how those teams approach their work.

•    See results. Have your team present to a larger group — the division or the entire company— about what you learned at the conference. We’re preparing a kit of resources that you can take back to your organization and share ways you can immediately apply Lean methods to ongoing projects.   

Don’t forget to register for the October 8 webcast and prepare your questions for the live Q&A. Register separately to attend the conference, and email Melissa for group discount info.

Applying Lean Startup Beyond Silicon Valley

Guest post by Lisa Regan, writer for The Lean Startup Conference. 

Entrepreneurs beyond Silicon Valley, including those working abroad, often have to retool Lean Startup methods to apply them in places with very different business cultures. On September 24 in the U.S. (September 25 in Asia), international Lean Startup experts Kevin Dewalt, Takashi Tsutsumi and Justin Wilcox will meet for a webcast to compare notes and hash out solutions. This event is free, and their conversation will be followed by a live Q&A for webcast attendees; register today to join them.

To introduce you to some themes of this webcast, we spoke to Kevin, Takashi and Justin last week about the biggest challenges they see in implementing Lean Startup methods outside the U.S. Here’s what they had to say.

Kevin Dewalt—a speaker at this year's Lean Startup Conference—is an entrepreneur, investor and adviser who has served as an investor for a strategic U.S. government fund and as Entrepreneur-In-Residence for the National Science Foundation. Two years ago, he moved to Beijing, where he founded Lean Startup Meetup Beijing, as well as his current venture, SoHelpful.me, a platform for leveraging one-to-one relationships to build reputation and word of mouth.

“Two years ago I moved to Beijing, where, as the founder of SoHelpful.me, I take calls from all over the world, talking entrepreneurship and innovation with people in 30-minute intervals. Those conversations can often circle around the difficulties of entrepreneurship outside Silicon Valley. I think one challenge in trying to take Lean Startup ideas outside Silicon Valley, and especially to places that are highly culturally different from the U.S., like Asia, is that the methods most of us are familiar with are actually pretty culturally specific. If you ask people in Asia about Lean Startup methods, they’ll often say, ‘I’m not sure that would work here,’ and in a sense they’re right–many of the familiar methods won’t work if applied unmodified. That’s why I recommend that people focus on ideas rather than tactics. Lean Startup ideas will work even in places as different from Silicon Valley as Asia–the specific tactics will need modifying, though.

“Think, for example, about the way we talk about sales and customer development and the idea of ‘getting out of the building.’ In Silicon Valley, you can go to people and ask them what their problems are, and what solutions they would value, and they’ll be happy to answer you. People in Silicon Valley are accustomed to openly discussing change, and to talking about what’s wrong or needs fixin —it’s culturally accepted there and you get a lot of practice at it. In most of the world, that’s just not the case. If you walk into a manager’s office almost anywhere in Asia and say, ‘I want to talk to you about your problems,’ he’ll tell you that everything’s fine, that he has no problems. He’ll probably suspect that his boss sent you. Right away, by talking in terms of problems and change, you’ve lost that person; they’ll just shut down.

“This is not to say that you can’t get out of the building in Asia, too. But you’ll have to go about it differently. Relationships are very important, and introductions are valued, even expected. You’ll need to do the legwork to get introduced, and to become known to people before you ask them for help or information.

“Another resistance or challenge faced by people starting businesses in Asia comes from within the startup itself, around getting support from co-founders and investors. There’s often a practice in Asia of locking onto the first idea as ‘the idea.’ Impatient investors and team members give little support to a founder trying to do Customer Development to verify or modify that idea. They often look on this as a waste of time. And then, when customers are not buying the product, the blame will tend to focus inward — on the founder for perceived shortcomings in the product, rather than examining the question of whether the product itself is actually solving a problem.

“What can you do in the face of such challenges? As I mentioned above, think ideas. When you find yourself getting overwhelmed with tactics, remember that the big idea of Lean Startup is search – it’s about searching for opportunity. People search differently in different cultures. To find out how they search, you need local advisers, people who understand how to apply Lean Startup methods where you are, and to do customer development in ways that are relevant to that culture.

“The good news is that those people make themselves known. The Lean Startup community is very tight and well-organized. There are Facebook pages, and Meetups, both of which are good filters for smart, passionate people around the globe. (I’ve observed that people don’t organize Lean Startup Meetups unless they’re serious.) Those organizers will in turn value the Silicon Valley perspective that you bring – you just want to make sure you let them know that you’d like them to show you how they do it where you are now.” 

Many of the challenges Kevin describe resonate with Takashi Tsutsumi. Takashi has been a venture capitalist for fourteen years, investing in technology startups both in Japan and in the United States. Enthusiastic about the scientific approach for a startup, he personally translated both The Four Steps to The Epiphany and The Startup Owner's Manual into Japanese. On weekends, he evangelizes Customer Development and runs a Lean LaunchPad class nationwide in Japan. Takashi spoke to us specifically about what it’s like to try to bring Lean Startup methodologies to a business culture as conservative as Japan’s. He described two challenges, and two pieces of good news. [Ed note: Takashi emphasized to us that his ideas here are his own and not affiliated with any companies that he works for or is involved with.]

“Japan is known for its conservatism and the norm of lifetime employment, both of which result in a lack of entrepreneurship. In this environment, I have been practicing and evangelizing Customer Development/Lean Startup for the last seven years (with great help from my teachers Steve Blank and Bob Dorf and my friend Masato Iino), facing challenges and delighted by the unexpected good effects for entrepreneurship. The following are a few examples.

“Challenge #1:  Perfectionism and detail-oriented culture

“Japanese are known for their perfectionism and the Japanese culture is highly detail-oriented. This culture particularly contradicts with minimum viable products. Entrepreneurs worry that they will lose their trust and reputation with customers if their products compromise features, UI/UX, quality, etc. In addition, although entrepreneurs come up with good MVPs, they gradually add more features as customers say that A, B, and Z are missing, resulting in a ‘maximum’ viable product instead. Therefore, one of the keys for success to practicing Lean Startup methodology in Japan is to encourage entrepreneurs to be patient in minimizing their products. I sometimes refer the nice rule of thumb from Eric Ries, ‘Take what you think is right now and cut it in half and do that two more times and ship it back.’

“Challenge #2:  Pivot is failure?

“Pivoting is a key Lean Startup concept, but in Japan, pivot mostly means failure. The Japanese perfectionism affects this thinking in that people consider it right to complete a plan once it’s developed. First, this is true for entrepreneurs. They stick to the initial idea (i.e., the hypothesis) even if facts tell them it’s wrong. They just hate to admit being wrong, or they believe themselves too much to change their mind. Second, and more important, stakeholders, such as investors and management, think this, too. Even when entrepreneurs get used to the principle of Lean Startup, in which a pivot is not necessarily a failure but is progress, their stakeholders don’t share the sensibility. Investors and management use an original (therefore unproven) plan as a yardstick, so I often hear funny conversations that effectively go like this:

VP Sales: I talked to many customers to see whether they have the problem we hypothesized and whether our solution properly fixed their problem—but none of them said yes. We should pivot.

CEO: I know, but we can’t pivot as I got approval from the board by committing to our business plan. We have to stick to our original plan untapped and carry on, even if we know we are wrong.

“I see this as the largest challenge for Lean Startup practitioners, especially in Japan. Therefore, ‘Step Zero of the Four Steps,’ or buy-in, is more important in Japan than in the Valley.

“Good news #1: Perfectionism and detail-oriented culture

“Perfectionism and detail orientation inhibit adapting Lean Startup methodology in Japan, but they turn out to be strengths once people buy in. Once they buy in, entrepreneurs in Japan follow and execute Lean Startup exhaustively.

“I see exhaustive execution of Lean Startup methodology often in the mobile/internet space. One good example is Cookpad, Japan’s top recipe site. Cookpad develops new services and features on a strict Lean Startup method. They test selling an MVP first to their colleagues, and they have to pivot if their colleagues do not pay for it. In fact, Eric Ries’s Lean Startup is mandatory reading for new hires prior to their first day. Cookpad also has their homegrown tools for hypothesis building and cohort analysis for effective execution of Lean Startup methodology. Yes, as Lean Manufacturing was the heart of 20th century Japanese manufacturing, Lean Startup’s process-oriented quality nicely fits the Japanese mind. I hope more startups and corporations in Japan execute the Lean Startup methodology in the Japanese ‘relentless’ manner.

“Good news #2: Customer Discovery nurtures entrepreneurship

“Customer Discovery is never easy in Japan. Ordinary people do not talk to strangers, knowing they hate unsolicited inquiry. However, the more customers an entrepreneur talks to, the more they learn. What surprises me, however, is that talking to customers also turns non-entrepreneurs to entrepreneurs because they feel a sense of fun and confidence in their idea. As many of you saw in our final presentation for the 2020 Olympic game city, Japanese inherently love ‘O-MO-TE-NA-SHI,’ meaning total empathy. Here’s an instance. A group of graduate students at Tokyo Institute of Technology whose goal was to be researchers, found that prospects loved their product during a Lean Launchpad class. They decided to pursue their startup idea. Three out of seven teams in this Lean Launchpad class in Osaka decided to found a company to pursue the business idea they had tested by talking to a bunch of customers. This may be an effect from the perfectionism in Japan, in that that they execute exhaustively once they believe and feel confident after Customer Discovery. I find this phenomenon an unexpected effect of Lean Startup methodology, but very interesting, particularly given that Japan must increase entrepreneurship and new startups for the revitalization of its economy.”

Finally, we talked to Justin Wilcox, another Lean Startup Conference speaker this year. Justin has started several companies that have not succeeded. This process has led him to investigate the science of entrepreneurship, a topic he spoke about at last year’s Lean Startup Conference in a talk on crowdfunding MVPs. He leads Lean Startup workshops around the world, recently spending a lot of time in Singapore and Puerto Rico. He is a mentor for both Founder’s Institute and Startup Weekend and he blogs about Lean Startup matters at CustomerDevLabs.com. He spoke about a carrot-and-stick approach to encouraging Lean Startup methods in areas where they may run up against entrenched practices.

“My experience outside the mainland U.S. has largely been in Puerto Rico and Singapore, where I've noticed some real differences from Silicon Valley—some that are challenges, some advantageous. One major challenge in smaller countries is that an acute sense of market size has a negative influence on people's sense of how to talk to customers. Founders in these smaller countries sometimes think of their home country as their market, when their opportunity could be much larger. And so when we tell people that they have to get out of the building and interview X number of people in a large market (U.S., Europe, etc.), it’s naturally daunting. It’s uncomfortable enough interviewing customers—complicate that with different accents, time zones and cultural references and ‘getting out of the building’ gets harder.

“Market size plays into a broader under-confidence outside the U.S.—or perhaps it’s actually an over-confidence inside the U.S. In Singapore, for example, the first question I'm often asked is, ‘So what do you think of Singapore?’ And of course I say that it's great, it's extraordinary — because it is. But I notice that in the U.S we don't ask foreigners what they think of our country because there's a basic assumption that the U.S. is amazing. Puerto Rico and Singapore were both colonized, and I sense their histories of ceding power to some force outside and greater than themselves (foreign governments, large corporations, etc.) is reflected in their entrepreneurial culture. In that context, several Lean Startup leaders in these communities have to empower founders to take risks and embrace failure in front of friends and family—harrowing work at best, inconceivable at worst.

“My approach to confronting these issues outside Silicon Valley —really, outside the U.S.—is similar to the way I teach Lean Startup in general, which is to accept that everything about the methodology is hard, because people have to be willing and able to overcome their own basic psychological defenses. I try to encourage people to think about what they want out of life, and the ways this set of practices can help them get there, instead of only focusing on the barriers. If I can connect with an entrepreneur about what they want to accomplish, and what they are passionate about, I have an easier time persuading them to get outside themselves and beyond their usual limits and defenses.

“Of course this is difficult abroad—it is anywhere. And in my experience, people in Silicon Valley don't have it figured out any better than people elsewhere. This gets to the advantage that people outside the U.S. can have in implementing Lean Startup. I've been struck by instances where I've been to other countries and spoken with people who really get Lean Startup, and who are shocked that all people in the Valley aren't already doing these things. In fact, the culture of Silicon Valley, flush with success, can create its own kind of complacency, as though simply being in the right place at the right time will be enough. People working in environments that are not flooded with success will use anything they can find that will step up their game. So while the broader culture may resist entrepreneurship, individual entrepreneurs abroad can be open to trying anything, because they have to be. For instance—I would put more money on JFDI in Singapore, based on the way I see them pushing themselves, than almost any incubator in the U.S.”

Join Kevin, Takashi and Justin on September 24 (September 25 in Asia) for a free webcast to discuss these and many other issues around implementing Lean Startup ideas beyond Silicon Valley. Don’t forget to register to attend, and then prepare your questions for the live Q&A to follow the discussion!

PS. For The Lean Startup Conference, we sell tickets in blocks. When one block sells out, the price goes up. We have just a few tickets left in the current discounted block. Register today for the best prices. 

Introducing New Lean Startup Practitioners

Guest post by Lisa Regan, writer for The Lean Startup Conference.

In building the program for this year’s Lean Startup Conference, we’ve tried to strike a balance. We’ve invited some deservedly well-known experts—people like Steve Blank, Laura Klein, Cindy Alvarez, Brant Cooper, Patrick Vlaskovits, Janice Fraser and Ash Maurya—to share their insights. But we’ve also sought out new voices. Indeed, the majority of our speakers this year are people who, though they’ve been doing compelling Lean Startup work and have great stories to share, are not on the conference circuit.

To give you a sense of these practitioners, we asked some our new speakers to talk about how they use Lean Startup methods. Below are three of their takes on  MVPs. To hear more from them, register for The Lean Startup Conference today. We’ve just  put a new batch of tickets on sale, and when this one sells out, the price goes up, so sign up now.

Steven Hodas will be speaking at the conference about  applying Lean Startup methods within extreme bureaucracy—in his case, the New York City Department of Education. Steven came to the NYCDOE via NASA, where he built the U.S. government’s first public website. After starting two companies of his own, he now heads the NYCDOE’s Markets initiative, which works on fostering smart demand for innovative solutions to the most urgent problems in New York’s public schools. Steven framed the value of MVP in terms of the enormous bureaucratic hurdles he has to cross:

“The NYCDOE is by far the largest school district in the country, with 1,800 schools, 1.1 million kids, and 135,000 employees. Our annual budget is $25 billion. As a life-long edtech entrepreneur I was excited and wary when I was asked to run Innovate NYC Schools, a program within the Office of Innovation that's intended to make the DOE more flexible, responsive, and better able to function. I knew that nearly everything I'd want to do would be anathema to standard operating procedure. After all, that is the point of the work.

For example, the basic notion of an MVP goes against the core tenets (whether spoken or unspoken) of large, bureaucratic organizations. Those tenets are:

1) We don't have customers, we have subjects. (Unspoken)

2) We are the experts in both the problem and the solution. (Spoken, loud and proud)

3) Iteration is a sign of failure, because (2). (Spoken, as if to a child)

4) The way to avoid (3) is to design by committee and then to ignore feedback, because anyway (1).

Still, because my job is to create bridges that don't yet exist between people inside the DOE (see 1-4) and those in the entrepreneur and maker communities, the MVP model provides the best template. In my case, the scarce resources, rather than time and money, are time and political capital. And the urgency stems not from an agile competitor, a first-mover market, or a power-law distribution of reward, but rather from the need to achieve enough velocity to overcome the tremendous gravitational pull of business-as-usual.

Further, my products are actually processes. My deliverable is not software per se (though sometimes there is that too), but alternative models for operating and engaging, a different way for DOE employees to view and go about their own work. An MVP strategy is the only way to generate the early wins that build credibility with both internal and external audiences, thus allowing me the space to learn, improve, deploy again, learn, improve, and so on. Each MVP is like a ratchet tooth or belay anchor that keeps the work from going backward, while enabling me to generate greater momentum for the next, more ambitious reach.”

Khalid Smith, co-founder of LessonCast, will be speaking at the conference about concrete things small startups can do to reach product-market fit with B2C customers. LessonCast builds tools that help teachers, schools, districts and teacher’s colleges improve the way that educators are prepared to teach. Khalid, who has a background in coaching, has talked about the challenge of really confronting your own decisions:

“When I speak at startup competitions, my talk usually starts with ‘I’m not as interested in how much of your business you can build this weekend as I am in seeing you execute the part of your business that creates value. So don’t build your business today. Today, do your business; then building it is just a function of time and money.’ But it’s really hard to take your own advice. This was true of our path to our current concierge model [Ed note: the concierge model is the practice of building a front end or offering a service that appears automated--and then behind the scenes, doing the work by hand]. My wife and co-founder Nicole pioneered the core idea behind LessonCast as she led the turnaround of a middle school struggling to raise its test scores. Using her experiences as a guide, we built a suite of tools that she wished she’d had during those tough two years. We thought we had our MVP and the next step was to scale our solution. But as we tried to sell it—crickets.

It took us a while to realize we’d committed the cardinal sin of using our own opinions and experiences in place of customer validation. I heard the words as I said them to teams in competitions: ‘You are not the customer!’ ‘What experiment did you run to invalidate your hypothesis?’ ‘How do you know what features are must-haves and should be part of your MVP?’ I realized we didn’t have answers to these questions ourselves. All we knew for certain was that the process a school leader would follow, and the software a school leader would use because he or she built it himself or herself, were both different from what other school leaders would actually pay for.   

What we had was an embarrassingly difficult-to-use, first-generation version of our software for school leaders, plus an accompanying process that had worked in an exceptionally skilled and passionate user, Nicole. Nowhere in there was anything that qualified as an MVP. So we sold our software the only way we knew how—by not telling the clients about it. We call our technique the concierge-coaching model. This is a hybrid model where we worked with clients as consultants, but gradually asked the clients to perform more and more tasks themselves using our software. Their ability to complete the ‘assignments,’ with us there or on their own, told us what new features we needed to develop, pinpointed where we needed to improve the user experience, and helped us develop better tutorials.

We focused on three customers: one K-12 school, one teacher’s college and one online course. It was slow and tedious, but the discipline of using the concierge model is paying off. We are on generation 3.0 of our minimum viable product. We are beginning to show the innovation economics of a healthy business and, for now, we can look ourselves in the mirror after a coaching session and be confident that we’re taking our own good advice.” 

Valerie Gofman will be speaking at the conference about how her company, Sharethrough, has scaled Lean Startup methods as it’s grown—a considerable challenge for any maturing organization. Valerie is a product manager, and she works with the business and development teams to guide strategy, testing and communication for both internal- and external-facing products. Her experience of Lean Startup methods has been shaped by the environment in which she works—as she says, “In the native advertising industry, which relies heavily on platforms that are mobile and provide scale, it is paramount that we are able to provide new product features quickly and efficiently.”

Here’s Valerie on how MVPs are woven into Sharethrough’s work:

“The nascent digital native advertising space, which Sharethrough created nearly two years ago, is rapidly evolving. In brief, native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed. From the beginning, our product teams have been focused on iterating and learning as quickly as possible, with MVPs in common use.

MVP is a frequently-used acronym on the product and engineering teams and pervasive around Sharethrough as a whole. From early-stage efforts on new products to iterating on existing features, thinking in terms of the MVP allows us to focus on shipping-to-learn rather than shipping-to-ship. For example, with Vine's seemingly overnight success, brands began requesting it as a means to engage with their audiences. By limiting scope to a base set of functionality that we needed to get in front of those customers, we were able to turn around an MVP within two weeks.

Our MVPs commonly involve Wizard-of-Oz-style manual workarounds [Ed: this is akin to the concierge model Khalid mentioned] that provide efficiency and rapid learning for product and engineering teams and help us demonstrate early success with customers. For example, when thinking about bridging two applications that would eventually converge, rather than initially going through the multiple iterations necessary to  deliver a full-fledged integration, we shipped the most critical (and risky) components first, allowing us to have real users on the system give us a green light. Then, after some not-so-mild course correction, we were able to proceed with certainty.”

Steven, Khalid and Valerie will each focus on important Lean Startup lessons in their conference talks, and they are just three of dozens of new speakers this year. Sign up today for the conference to hear from them all.

Highlights from Our Webcast on Lean Startup for Engineers

Guest post by Lisa Regan, writer for The Lean Startup Conference.

Last week, Eric sat down with developer Dan Milstein--one of the most popular speakers from the 2012 Lean Startup Conference--for a webcast conversation on getting engineers into the Lean Startup cycle. If you missed it, go ahead and watch it here. And if you have questions, post them in the comments here; Eric and Dan will be jumping in to answer.

There were some great take-aways from this conversation, not just for engineers, but for anyone trying to rethink how a startup approaches its defining problem—uncertainty. As Eric put it in the webcast, “A startup is a human institution designed to do something new, under conditions of extreme uncertainty. We don’t really know what’s going to work in advance.” The question then becomes: What can engineers, and everyone else at a startup, do to reduce that uncertainty? As Eric and Dan talked this through, they focused on three areas: first principles, organizational shifts, and methods.

First Principles

Eric began by offering a basic principle for engineers interested in exploring Lean Startup ideas: Start with yourself. “Whatever work you’re in the middle of doing right now, ask how you could treat that as an experiment. Have an explicit hypothesis. What is what you’re building supposed to be doing *specifically*? Then define how that will manifest in real life. Then think of how to test and measure – just for yourself – that effect. Do that and you will automatically graduate to a higher level.” What’s at that higher level? Changes beyond yourself, to the organization more broadly. But, as Eric repeated, that has to begin with the individual: “If you yourself are not able to apply scientific thinking in small ways, you’re going to fail at your vaunted organizational change.”

Organizational change
Once you’ve agreed to change yourself, and to start testing and experimenting, you really need the organization to change as well. Engineers can only do so much on their own. Here’s Eric: “If you’re trying to do engineering under conditions of extreme uncertainty in order to succeed in delighting customers and having an impact on the world, you need to build cross-functional collaboration into the process from the beginning, and to see marketing and engineering really integrated into a unit that’s operating together to try to retire some of those risks early on.”

But this is where things can get tricky. Eric: “Organizational change requires the explicit buy-in of senior management. How do we convince senior management that their pet projects, their beautiful babies, are not as beautiful as they think they are?” By asking them to test those projects. Indeed he has a test for determining whether leaders are visionaries: “So many entrepreneurs cloak themselves in the myth of the visionary precisely to avoid having to confront these kinds of questions. The easiest way to tell the difference between a visionary and a charlatan is to ask them to put their ideas to the test. The visionary who actually believes they’re right will agree to test their ideas 10 times out of 10…. My experience is that the ratio of charlatans to visionaries in our world is 10 to 1 or 100 to 1.” 

Here’s a specific example of organizational impediments that Eric and Dan hashed out. The fact that engineers hate to throw away their work — and everyone else is afraid to ask them to. The solution has two points, which Eric laid out: “First is to realize that if we don’t build something people want, the work will be thrown away *anyway*. All this testing and experimentation is a path toward _preventing_ work from being thrown away.” If the product doesn’t get users, it won’t reveal its flaws – but when the company fails it will still be thrown out. As Dan pointed out, “A product outage is a good sign because it means that people care. You have a great stable system when no one’s using it.”

(There’s another, surprising reason Eric says engineers shouldn’t fear throwing work away, but we’ll leave it to you to watch the webcast for that!)

Dan also spoke about engineers’ investment in the business’ overall success as the key element in persuading them to let their work go: “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 that. 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.”
 

Real-world Applications
In the last segment of their conversation, Eric shared two examples of organizations that have integrated experimenting and testing as their defining methods, not just in terms of engineering, but across the business. The first of these is an anonymous mobile app whose team does a new build every week, loads it on their phones on Friday, tests it all weekend, and on Monday meets to decide what’s working. Often, they wind up throwing out the last week’s work. Eric: “With mobile apps, especially, the products you love the most are the simplest. They on the surface have very few features and all the complexity is hidden behind a really gentle user experience. Those products can only be produced by teams that are willing to throw code away. If you’re afraid to delete you can only add complexity. Simplification is the removal of complexity.”

For one final example, Eric mentioned last year’s Lean Startup Conference talk by Diane Tavenner of Summit Charter Schools. Her weekly rounds of experimentation and metric-gathering led to the conclusion that, when it comes to teaching kids math, lecture doesn’t work. Eric: “You think it’s hard for an engineer to let code go? You’re a professional educator and you’re going to let lecturing go? That’s hard. And it was only through this rhythm of regular experimentation that they were able to let that go.”

Here’s Diane’s video if you missed it – it’s really worth watching if you’re considering the role engineering can play within an entire organizational shift toward testing and experimentation:

Check out the webcast and then post your questions in the comments here. 

Lean Startup Implementation Lessons

Guest post by Lisa Regan, writer for The Lean Startup Conference.

The Lean Startup Conference was founded four years ago to bring together real entrepreneurs who have applied Lean Startup techniques and have useful advice to share with each other. Last year’s conference was no exception: speakers talked about their direct experience with practices you may need help implementing—things like metrics, feedback, and experimentation. This year’s conference will go deeper on advanced entrepreneurship topics, and we wanted to get you up to speed on some of the key ideas from 2012.

Metrics play a big role in any conversation around implementation. But which numbers matter, and which are vanity metrics--numbers that make you feel good, but don’t actually tell you how you’re doing? At last year’s conference, Red Room CEO and co-founder Ivory Madison pointed out that vanity metrics are among those numbers most commonly cited in investor decks: page views, new members, unique visitors, conversions and, vainest of them all, Twitter followers. None of these, she says, provides information about how well your company is delivering on your business model, nor about the true lifecycle of a customer. Instead, Ivory says, track metrics that capture revenue, observe the behavior of real, individual customers, and demonstrate cause and effect, or how you can replicate a result. These show success at your core business. For the details, here’s Ivory:

Running Lean author Ash Maurya seconded Ivory’s advice. He counsels tracking only five kinds of behaviors: Acquisition (how do users find you?), Activation (do they have a great first experience?), Retention (do they return?), Revenue (how do you make money?), and Referral (do users tell others?). He also advised making it your goal to move just one of these measures at a time, and described his own effort to improve activation with an experiment that yielded unexpected results at pretty much every turn. Check out his talk for the specifics of how Ash tests a metric:

On the subject of experimentation, few have learned more than Matt Brezina, whose company Sincerely launched nine products in its first year to form a group of apps that are the world’s largest gifting network. Matt has deep experience in mobile development and nailed down ten steps to rapid app development, noting that mobile is an environment not obviously compatible with Lean Startup techniques. His talk covered building a minimum viable product (in his case, an app that let people send their kids a photo of Santa) to test basic processes like billing and delivery, reasons for testing in Canada rather than the US (really!), and buying cheap users—plus it encompassed team structure and time management. The talk is detailed and specific—a must-see for anyone in app development:

For one last example of experimentation, we point you toward a short, inspiring talk from Alejandro Velez and Nikhil Arora of Back to the Roots. These two Berkeley grads heard from one of their professors that it was possible to grow mushrooms in coffee grounds. Based on that thin evidence, they became full-time urban mushroom farmers. But what got them into retailers like Bed Bath & Beyond was a series of experiments they ran at farmer’s markets, where they used a timer to test whether they could get more engagement from customers if, in addition to fresh mushrooms, they also offered mushroom growing kits. Results: “For the first time, we were having kids and families engage with us,” Alejandro said, “and they would be with us for minutes.” The kits enormously increased engagement—but it’s important that this product change did not actually alter their mission. Here’s Nikhil: “Our vision has remained the same since day one: making food personal again. But that test…actually shifted our vision from growing fresh product, fresh mushrooms, to educational products that can inspire people to grow their own food."

Alejandro and Nikhil were listening to their customers, a theme Lean Startup constantly returns to. Last year we heard a variety of strategies for getting customer feedback, beginning with Tendai Charasika of Greater Louisville, Inc. offering ten ways founders can get out of their offices. His tips include some crucial reminders (i.e., don’t just ask your mom for her opinion) to some things you may never have considered, like moving your offices to where your clients are, rather than to where the other startups are.

We also had one very specific tip from Adam Goldstein of travel site Hipmunk: install live chat on your site. Live chat gets real-time feedback and accurate information about where customers are getting hung up. “People don’t email to say that something is tricky to use,” Adam pointed out.

At this year’s conference, we’re bringing in speakers who are ready to describe the exact methods they use to implement Lean Startup methods, what numbers they look at, how they pivot from them, how they test their product, and how they find out what their customers want. In upcoming posts we’ll fill in the details about our breakout sessions where you can directly ask successful entrepreneurs, “So how do I do this?” We sell tickets in blocks—when one block sells out, the price goes up. Our current block of tickets is nearly sold out, so register today.

Five Questions for Lean Content Creator Stephanie Hay

Guest post by Lisa Regan, writer for The Lean Startup Conference, who has created content for a number of startups.

In our ongoing exploration of how people actually implement Lean Startup methods in their workplaces, we’re asking practitioners to share their techniques. We’re starting here with a conversation about content with Stephanie Hay, the leading voice behind Lean Content, which she describes as “finding the ‘right’ words to acquire customers before building products.” Her advice is the kind of nuts-and-bolts information you’ll find at this year’s Lean Startup Conference, which will feature in-depth sessions on the how-tos of Lean Startup—including a session lead by Steph.

Steph has incredible energy, as you’ll see in this video of her 2012 Lean Startup Conference lightning talk, where she discussed testing language that “helps people find you, understand you, and choose you.” When not at CrossFit, Steph tests content at Work Design Magazine, which she co-launched in 2010. She has also mentored at 500 Startups, co-organized the DC Lean Startup Circle, and co-founded FastCustomer. We asked her five questions about how, exactly, clear content gets created. Among her answers is a simple test for assessing whether your company has a content problem.

1. How do you iterate on the content side without confusing customers, or seeming as if you lack focus, commitment or are just plain flaky?

Steph: Segmentation and timing. Work Design Magazine has 5,000 email subscribers who comprise a variety of audience types within the commercial architecture and design industry. So we segmented the list by audience type, and secondarily decided which ideas we were going to circulate when and to whom.

For example, we decided to test whether a print edition was feasible. The assumption was that architects and designers would pay a premium for a beautiful, high-quality journal full of the most popular content from the previous quarter, complete with tons of high-resolution images. A secondary assumption was that furniture manufacturers would want to advertise in that journal.

We segmented the audience between likely readers and likely advertisers. We created eight different versions of "sell" content—describing different value propositions of why they'd want to subscribe to receive it (or advertise in it), what they'd pay, and when they had to decide (a deadline).

We then sent it to targeted groups of about ten users each, followed up with them personally two and four weeks later, and stuck to the deadline as our drop-dead date for learning.

Within a month, we learned that both audiences were lukewarm on the product. So, essentially we saved time and energy associated with the massive overhead of printing a publication—not to mention the risk of keeping it going—and punted on it for now. 

The next month, we tested the ideas of events taking the same approach—and it turns out, this was a big revenue source. Readers pay to get tickets for high-quality, in-person content (panel discussions) in cities around the country, and manufacturers and other vendors pay to be associated with that content.

That's the iteration part. If we just sent all our ideas to everyone, whenever we had that idea, it wouldn't leave room for iteration. It would be a blanket approach and, ultimately as you suggested, dilute the messaging and demonstrate a lack of focus.

I think the hardest part for any startup is to rein in the desire to "throw shit against the wall and see what sticks" versus being more strategic in their focus and truly iterating. A content-first approach is a lower-cost, lower-risk way of achieving the same.


2. How does lean content integrate into the rest of the lean product development cycle?

Steph: For me, it leads. If you create a Google doc that describes a small chunk of an interaction—the language you'd use to "sell" an upgrade from a premium model, for example—and you circulate that to some power users, what do they say? Do they ask questions? Do they want to sign up?

Same thing with the email; if you send an email "selling" an idea, and you see the open rates are super low, that means people aren't interested in what you have to say (or at least, your subject line isn't compelling).

I try to make the content focused on what I can learn from it. Normally, that means including two possible conversions: (1) "learn more" and (2) "get on an email list." If people go straight to (2), that's a great sign.

If they open it but don't click, that's a sign your content isn't hitting.

If they click through more often on "learn more," I direct them to a page with more "sell" content. And that page of course includes a conversion to "get on the email list." If the user lands here but doesn't convert by signing up, I expect the content isn't compelling enough. The sell isn't there.

I iterate on the email content and page content over a course of time, maybe one to two months, usually based on the number of people in my test group and/or uniques on a landing page.

You can learn a lot before even sketching wireframes, and you should, because the layout doesn't matter if the "sell" doesn't hit.

Content needs to "sell." The words need to resonate. Once you nail those, it gives the team wind in its sails to keep moving forward.

Plus, UX designers and developers love it when they already have the "right" content done. It makes their jobs easier to not have to think about what to say—so ultimately they can run faster, and what they create is then more effective right out of the gate.

3. What do you need to know before you create content that is able to be found, understood, and helps you get chosen? How do you go about collecting and analyzing this data?

Steph: I do a ton of research in the Google Keyword tool. Seeing monthly search numbers for organic searches is revealing of the kind of language people use—and the kind of possibilities (numbers-wise) for specific markets.

For example, for Work Design Magazine, do people search for "work design" or "workplace design" or "workspace design" or "designing for work" or … you get it. I put all of the terms into the Google Keyword to better understand the lexicon of my target market, which of course I can then work into H1s, title tags, and even subject lines or blog-post headlines. This is all catered toward trying to speak the user's language.

Using the "top content" tab in Google Analytics helps me understand what qualified visitors are looking for. When they come to the site, let's say through organic optimization, do they stay and read more articles? I'm focused on the ones who do. They see something intriguing. So I want to write more of the kind of content people are finding and staying to read.

Getting them to "choose" requires the kind of strategic, iterative approach to learning what content "sells" as described in the first two answers.

4. You've spoken about the fact that people on the inside of a product fail to explain it clearly to others. Why do you think clarity is so difficult and how can people start to recognize that they're being unclear?

Steph: Clarity is difficult because we know how it's built (or what we want to build), and we have motives for how we want things to go (really well, blowup style).

So naturally, we say too much that the prospective customer doesn't care about, or we don't say enough of the "right" words that they need to hear to arrive at the "aha" moment.

But this is where the notion of "lean content" comes into play. Before you have a product, it's possible to find the language that "sells" the product. It's the minimum amount that needs to be said in order for a person to say, "Holy shit, why didn't I think of that?" or "How do I pay for this?" or "Where do I sign up?"

Those are a-ha moments. They're ready to buy.

Responses like "Interesting, good for you," or "Cool, email me more information" or "I'll get back to you" are lukewarm, non-committal responses. There's no urgency, specificity, or indication of action. They indicate you either haven't sold the real value or you're selling to the wrong person.

It's a challenge to hear these not as compliments (and false optimism that there's a business behind what you're saying) but instead as signals that you're not communicating value obviously with the "right" prospective customer.

But with awareness and discipline, you'll only arrive at the real language (and buyer) faster.
It means humbling yourself to really hear what people are telling you, politely, rather than hiding behind the lukewarm.

5. What tests can people run right now to decide if they have a content problem?

Steph: One lightweight test is to print out the content you've got on your website, probably your homepage and sign-up page. Then call your mom or friend and try to have a conversation—a natural conversation—using your own content. See how that works.

If you find that the conversation is one-sided, or that the person you're talking to can't understand what you're promising/asking/selling, then you have a content problem.

The mistake startups make is thinking they need a copywriter who can "polish" their words. Great content effectively sells; the only way to write effective content that helps build businesses is to tie content to conversions. Most startups don't get this. They think it's the layout of the page or the function of the product. Of course, these are important, but they assume someone understands your words enough to sign up in the first place.

Have any startups failed because they've had too many people scrambling to sign up?
So as another test, go out on the street and find anyone willing to listen. The person doesn't have to be your target audience -- you're just trying to test if you can be understood when selling your own product.

If you tell people what you do in 10 seconds and ask them, "Would you need something like that," and the person says, "I'm not sure I understand," then you have a content problem.

If the person says, "I don't need it," then you *might* have a content problem (of pitching the real value), but at least the person understands what you're selling.

If the person says, "Tell me more," then you *might* have a content problem of pitching the real value quickly enough, but at least you're heading in the right direction.

If the person says, "OMG I NEED THAT," you're winning. Stick with that.

Then the job shifts to discover only what you need to say to keep the conversation going and to direct it to a conversion that grows a business. Inherent to this is then also to begin discovering who the market is that understands the conversation and converts quickly and at the highest value. This naturally refines the messaging over time.

(Notice that both of these tests require no code. Just conversations with friends and strangers. Imagine if everyone started here and decided which businesses to build based on their ability to explain them in the first place.)

Learn more from Steph and other practitioners at this year's Lean Startup Conference. We sell conference tickets in batches; when one batch sells out, the price goes up. We've got a new batch on sale today, so register now for the best price.

Getting Engineers into the Lean Startup Cycle

Guest post by Lisa Regan

On August 20, Eric will sit down with developer and Hut8Labs co-founder Dan Milstein for a webcast you can join to discuss “Getting Engineers Into the Lean Startup Cycle.” This conversation will be a great opportunity for engineers and engineering managers to learn more about implementing Lean Startup ideas. It’s also for founders who want to think about how engineering and the rest of the business team can realign around a shared set of goals. This webcast is the first of a series held by The Lean Startup Conference and will take place on August 20th at 10am PST/1pm EST; it’s free—you just need to register in advance.

The conversation will be free-ranging, and it will include live Q&A with attendees, so we don’t know exactly what will happen. But there are a few themes Dan and plan to hash out. Dan comes to this conversation as an engineer, product developer, and startup veteran with a career-long interest in how people interact with the complex systems they themselves build. He investigates the peculiar conditions present in a startup, where, by definition, everyone, including the engineers, is operating in extreme uncertainty. He is interested in asking, given that environment: How can the team measure progress? How can engineers establish benchmarks or make predictions? Should they even try? How do you move the business in the right direction—and how do you find out what that direction might be? All of which amounts to: How do you reduce that inherent uncertainty? Dan and Eric will also talk about how engineers can contribute to containing uncertainty—including in the way they interact with leadership.

These issues don’t lend to easy answers. Indeed, at a startup, the entire business is one big question: “Can we offer a product that fills the customers’ needs such that they’re willing to pay for it?” As Dan described in an interview last year, many businesses inadvertently turn away from this question by splitting the teams for product, marketing, and engineering apart from each other, with each pursuing a tailored set of questions. But this often allows everyone to run from the problems of risk and failure. Instead, Dan says, all of the teams, as well as leadership, need to collectively accept that “in conditions of extreme uncertainty, you’re going to get things really badly wrong,” so it’s important to learn to “focus on the risks rather than pretend they aren’t there.” To do this, you’ll need to overcome basic psychological and structural barriers—ones that Dan and Eric will discuss—and rethink the way engineers and leadership communicate.

For a specific example of how Dan’s been thinking about those barriers in his own work, check out his presentation from the 2012 Lean Startup Conference, in which he broke down the way he runs a Five Whys post-mortem following a product or process failure. As Dan described in his talk, post-mortems are hindered by our human sense of guilt, shame, and blame. Because, he notes, even as we are asking, “Why?”, we are also putting a focus on, “accusing, identifying villains, punishing. And this is going at it all wrong.” We’ll let Dan talk directly about his experiences, but among his solutions is changing the question itself. For example, instead of using a Five Whys to find out, “Whose fault is this?” or even “What was the root cause?”, use it to ask yourself, “What were the multiple contingencies that led to this problem, and which of them can we efficiently address right now?”

How can engineers and leadership (and product and sales) realign around the right questions? What human limitations and structural hindrances will they need to overcome to do so? And, how will they achieve this? On August 20, join Dan and to discuss these issues. Register today.

Lean Startup Beyond the Tech Sector

Guest post by Lisa Regan and conference co-host Sarah Milstein.

The Lean Startup methodology has its roots in the tech sector, where companies need to iterate quickly in order to survive. But the methods have expanded into nearly every industry we can name. In fact, at last year’s Lean Startup conference we had speakers from a number other sectors, including government, transportation, education and public health. They demonstrated the ways that testing and measuring could help many industries build truly useful, successful products and services. At this year’s conference—for which a new batch of discounted tickets has just gone on sale—the conversation continues with additional industries and a deeper focus on exactly how Lean Startup works in other sectors. For those of you who couldn’t attend last year, we wanted to point out a few talks from 2012 that we’ll be building on this December.

Could anything be less like a startup than the federal government? Todd Park, the nation’s Chief Technology Officer, cheerfully admitted as much when he spoke at Lean Startup last year. But, as he also said, “Projects within [government] often are.” Park helps the federal government in “harnessing the power of Lean Startup mojo to better serve the American people.” He described a dizzying array of initiatives in a range of fields—health, energy, education, public safety, finance and non-profits. Here's just one example. The FDA hosts Innovation Pathway 2.0, a program offering streamlined processes for evaluating and approving potentially revolutionary medical solutions. Companies that create devices can see these rapidly pressure-tested, cutting the length of clinical trials and shortening products' time to market (as well as cutting failing ideas faster). Specific challenges help fuel this effort, for instance a call to address end-stage renal disease that put an artificial kidney into testing. Park’s mission: help slow-moving government learn to more quickly pivot toward what works.

Of course, MVPs and prototyping, which Park mentioned in that last example, can be key Lean Startup tools, and last year we heard from two speakers who used it to find success in areas far from tech. Danny Kim of Lit Motors invented an appealing little vehicle that has, as he says, “the romance and efficiency of a motorcycle with the safety and efficiency of a car.” It essentially cuts the car in half, leaving just the part the driver sits in (plus a really cool set of wheels). The idea is for something sustainable and affordable—“the same thing the Model-T did,” as he puts it. Jumping into mass production of something as complex as an automobile is incredibly difficult, so he started by testing out a showroom before he built the cars. When he found that nearly 16% of people who walked into this simulated showroom were ready to put down money on the spot, he had demonstrated enough marketability to start hand-building the vehicles for individual sale. He sold out of machines before even getting Series A funding.

You can MVP just about anything, as we learned from Jocelyn Wyatt of IDEO.org. She is working toward affordable waste removal in Kumasi, Ghana, a city of 2.5 million where 72% of people do not have in-home toilets. Wyatt’s organization iterated through a series of MVPs to find a toilet that functioned like a camping unit – durable, and requiring no sewage system — but that people would be willing to use. And once IDEO had the units, they also prototyped a system of service operators to empty them. They even prototyped and tested a brand name and logo that reflected not what they thought the locals would want, but what Ghanaians actually chose (see the video for the surprising differences). The result: IDEO is scaling from 150 toilets to 10,000 over two years.

Last example—education, where Lean Startup methods give “testing” a whole new meaning. As Diane Tavenner at Summit Public Schools, a group of charter schools in the Bay Area, told us last year, “The typical public school is the opposite of lean or startup—it’s guaranteed customers and guaranteed revenue, even when you’re losing your customers.” But by testing the school’s methods, rather than just the students, she is changing that, starting with a math curriculum with one major principle: self-design. Her team created a math guide with a range of materials—online courses and assignments, playlists of materials, games, in-person lectures—and invited students to learn at their own pace. Students determine what they’re ready to be tested on, and when. The teachers and administrators collect data and meet to discuss it daily, and they respond in weekly cycles, testing different solutions to see what works. They’re aiming at 100% graduation rates for their students from 4-year colleges; as it is, 100% of their students already become eligible for college, against a California average of 24%. To find out about how Summit’s “tutoring bar” replaced lectures, check out her 2012 talk:

Some of last year’s speakers will be returning to The Lean Startup Conference this December with more nuanced insights to share. We’re also bringing in additional speakers from these sectors and from sectors new to the conference, including US healthcare, bioscience, traditional automobile manufacturing (where lean principles got their start) and more. If there’s a particular industry you want to see included, let us know in the comments. Meantime, as you may recall, we sell discounted conference tickets in batches; when one batch sells out, the price goes up. We’ve just opened up a new batch today, and we look forward to seeing you in December.

Announcing the 2013 Lean Startup Conference

We’re excited to announce the 2013 Lean Startup Conference, December 9 - 11 in San Francisco. As the Lean Startup movement grows and matures, the conference does, too, this year expanding and changing in a number of ways—based almost entirely on things that our attendees have asked for.

We’ll talk in a minute about some of the new features of the conference, but first, let’s look at the conference themes. This year, in addition to featuring the types of talks you’ve found useful in the past—founder stories, MVP case studies, pivot discussions—we’re also layering in new topics that you’ve told us you’re grappling with, including:

• Emerging strategies that maturing companies have tested to keep innovation at the core of their businesses
• Unexpected challenges faced by entrepreneurs implementing Lean Startup practices around the world; and
• The particular opportunities for Lean Impact among non-profit and mission-driven organizations

In order to offer a deeper dive on the topics most useful to you, we’ve added a day to the conference. So this year, on both December 9 and 10, we’ll have a mix of keynotes and breakouts with targeted how-to talks. Breakouts are new for The Lean Startup Conference, representing one of the strongest pieces of feedback we’ve gotten: you want sessions that provide more in-depth advice about strategies, tactics and tools you can apply the day you get home from the conference. On December 11, an optional extra day for attendees, we’ll also offer half-day workshops on select topics and site visits to startups around San Francisco. Last year, that extra day of the conference included some of the elements you liked most. On December 12 and 13, we’re partnering again with Lean Startup Machine for two additional (and intense) days of applied learning.

One of the other things we’ve heard loud and clear is that you want more ways to meet other attendees at the conference. This year, we’ll not only provide a useful app to help with just that problem, but we’re also baking into the program interesting networking and mentoring sessions. We’ll have more detail on those events later this summer, but do know that we’re putting considerable effort into shaping that aspect of the conference.

Somehow, we’re more than halfway through this post, and we haven’t yet mentioned our incredible speakers. Again, taking a cue from your feedback, we’ve sought out super-useful stories from people you don’t already know from the Lean Startup speaking circuit (like Netia McCray, Valerie Gofman and Ari Gesher, to name just a few), and their talks form the core of the program. We’re also bringing back a few of our most popular speakers from last year (Stephanie Hay, Diane Tavenner and more), asking them to shed new light on the epiphanies they shared in 2012. And, of course, we’re sprinkling in the best Lean Startup experts—the people who deliver fresh, relevant advice every time out (Kent Beck, Alistair Croll, Laura Klein, we could go on here). Here’s the coolest thing: our site today lists just about a third of the speakers and mentors we’re bringing to you this year—so it’s starting off great, and it’s going to get better.

One other piece of feedback you gave us: last year's venue was too crowded. We've upgraded to a large theater, the Nob Hill Masonic Center, and the neighboring Fairmont Hotel, which will give us a lot more elbow room. Should be more like flying first-class, less like coach.

What does a ticket include? The General Admission Pass includes the two-day conference (December 9 - 10), and access to events those days for connecting with other attendees. The Gold Pass gets you those things, plus a third day of hands-on workshops and startup site visits around San Francisco (December 11). The VIP Pass includes all of that, plus Lean Startup Machine (December 12 - 13), reserved seating at the main conference, first dibs on limited seating lunches and other goodies. In addition, we’ve set aside a number of deeply discounted, no-frills scholarship passes for people who couldn’t otherwise afford to attend: students, bootstrappers and very early stage startups. If that's you, apply here.

Tickets are on sale now, and we sell them in batches: when one batch sells out, the price goes up. So the best deals are available today. Register now.

How to Get Free Speaker Training with Kathy Sierra

This post was written by Sarah Milstein, co-host of The Lean Startup Conference.

We are downright thrilled to announce that Kathy Sierra, one of our all-time favorite speakers and teachers, has offered to provide free training for Lean Startup Conference speakers. If you've never spoken at a conference before, or it you've done it and found you weren't quite the MLK you had imagined, this is a terrific opportunity to build your skills. Company leaders: if you have no budget for speaker training, but you've got employees with amazing expertise and limited presentation chops, please encourage them to apply.

As more companies in more sectors use Lean Startup techniques around the world, there are a burgeoning number of useful lessons out there--but fewer chances we'll know about them. So we're actively seeking stories we don't know to share with our community, and we're interested in people who are not already on the speaking circuit. (In this post, we do a deep dive on our audience, the kinds of talks they find useful, and past talks that people loved. Hint: our best talks give advice; if you have some, consider applying.)

Because we're looking for fresh speakers, and because we want to make sure all of our speakers are great communicators, we know we'll have to provide some speaker training. I've taught classes on speaking, and I had been planning to do it. But when Kathy saw that we were offering training, she volunteered enthusiastically, sending an outline for how she'd teach a distributed group, covering both stage fright and presentation skills. Why have the local tennis pro do the coaching when Serena Williams wants to jump in? 

If you're not familiar with Kathy's talks, take a look. You may also know of her through the Head First book series, which has a winning pedagogical approach based on brain science that Kathy and her partner Bert Bates researched extensively. In other words, Kathy's got game as a speaker and as a teacher, and her methods are rooted in a deep understanding of how people work. Of note: Kathy wants to do this training on a volunteer basis, because it will be rewarding for her--which tells you something about the kind of teacher she is.

In order to give more people a chance to apply as speakers, we've extended the deadline by a week. It was originally this Thurs, May 9. It is now Thurs, May 16. If you're thinking of applying, do take the time to read our post about what we look for in talks, and do follow all of the instructions on our very short application form. And again, if you work with somebody who has useful advice to share and might do it eloquently with a little support, please pass along this post.

Finally, note that we aim to run a merit-based speaker-selection process. In our experience, that means we wind up with a higher percentage of speakers who are women and people of color than your average entrepreneurship conference. So if you're in a group that's typically under-represented on stage, do know that we've had success in the past bringing in a range of great speakers--and we intend to build on what's worked.