Lean Startup for Project Managers

Lean Startup For Project Managers Project Managers Meetup Dec 2012

By Caroline Gordon @carolineggordon

carolineggordon.com

Thursday, 7 March 13

http://carolineggordon.com

http://carolineggordon.com

Me

Engineer -> Manager

Project Manager / Development Manager 15+ yrs

Product Companies


Some of the different stuff I helped create



Lean Startup

On the surface

A risk management technique

Context:Very high uncertainty



Lean Startup

In its essence

A totally new way to manage, track, and deliver

A Mindshift...


Inputs

“Traditional Project Management” PMBOK - The Project Management Institute (PMI) Project Management Body of Knowledge. A flexible guide to managing projects. Basis of PMP Certification.

Lean Startup - Book by Eric Reis, subject of many blogs, workshops (Lean Startup Machine), conferences

Me


What is a startup?A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty


What is a project?A project is a temporary endeavor undertaken to create a unique product, service, or result.

What is a startup?A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty



Staffing level for a lean startup


Traditional ProjectProduct Manager - “I want this”

Development Team - Build It (straight to step 4)

Lean Startup4 questions:1.Do customers have the problem?2.If there was a solution would they buy it?3.Would they buy it from us?4.Can we build a solution for that problem?


Traditional ProjectProduct Manager - “I want this”

Development Team - Build It (straight to step 4)

Lean Startup4 questions:1.Do customers have the problem?2.If there was a solution would they buy it?3.Would they buy it from us?4.Can we build a solution for that problem?


Traditional Project ManagementTraditional Project Management

Product Manager Project Team

Study the problem and conceive the solution Working on other projectsBuild business model

Working on other projects

Write Marketing Requirements Document

Build an estimate- incl analyse build risks and add

activitiesGet project Approved - customer problem, high level solution

and business model do not change after hereGet project Approved - customer problem, high level solution

and business model do not change after hereEngage with the team to refine

functionality Iteratively build the solution

Deliver the product -cycle time - months, yearsDeliver the product -cycle time - months, years


Lean StartupLean Startup

Product Manager Project Team

Study the problem and conceive the solution Test the assumptions in the

model with customersBuild business model

Test the assumptions in the model with customers

Build - measure - learncycle time - hours, days, weeks

Build - measure - learncycle time - hours, days, weeks


Vision: Overarching goalStrategy: Business model, customer propositionProduct: Solution to customer problem


Projects - this part is fixed after planning and initiation

phases

Vision: Overarching goalStrategy: Business model, customer propositionProduct: Solution to customer problem


Build-Measure-Learn Loop


Startup:Series of experiments looking for

invalidation of assumptions.Invalidation - > Pivot

Change business model, customer proposition

Project:Success is defined by how close you

meet project objectives.

If any invalidation comes to light:cancel the project


Risk Based Project Management:✓risk analysis of building the product✓add activities to reduce risk ✓sequence activities according to level of risk, focus on biggest risks early✓reduce risk early

Lean Startup✓risk analysis expands to the business model and customer✓add activities to scientifically prove your assumptions (remove the risks)✓start with the biggest risk - will be around the business model / customer✓reduce risk early


Risk Based Project Management:✓risk analysis of building the product✓add activities to reduce risk ✓sequence activities according to level of risk, focus on biggest risks early✓reduce risk early

Lean Startup✓risk analysis expands to the business model and customer✓add activities to scientifically prove your assumptions (remove the risks)✓start with the biggest risk - will be around the business model / customer✓reduce risk early


Initial Activities to reduce risk:Project Management

✓build a prototype ✓engage stakeholders✓understand requirements

Lean Startup✓validate your assumptions that the problem exists✓validate your assumption that your solution will solve the problem✓look for better solutions


Initial Activities to reduce risk:Project Management

✓build a prototype ✓engage stakeholders✓understand requirements

Lean Startup✓validate your assumptions that the problem exists✓validate your assumption that your solution will solve the problem✓look for better solutions


Intuit

Example - Intuit. 20 year old company around 2002, it’s new products had a poor success record.

TurboTax had one major release per year.


IntuitFast forward to lean startup they had over 500 changes in 2.5 month tax season, each one built, deployed, tested and learning gathered in 1 week - 70 tests per week.

Key metrics for the enterprise - number of customers using products that didn’t exist 3 years ago and


Intuit

Last 5 years average annual revenue increase of 10%


Mind ShiftsWhen you have only 1 test - the ‘project’ you have to sell all through the project - you are always ‘selling’ the idea

Out of 100 good ideas you’ve got to sell your idea (the project). So you build up an organisation of politicians and sales people

When you have 500 tests you are running, then everybody’s ideas can run and then you create entrepreneurs who can learn and adapt instead of politicians


Mind Shifts...

Leaders and middle managers (project managers!) think that they are analysts and their job is to do great analysis and create the right plan

The leaders (project manager’s) job now is to get their idea in the hands of customers as soon as possible and let them vote on what works

Intuit - Cook


“It’s moving leaders from playing Caesar with their thumbs up or down on every idea to - instead putting in the culture and systems so that teams can move and innovate at the speed of the experimentation system”

Intuit Founder - Scott Cook


More mind shifts!Innovation is a bottom up decentralised and unpredictable thing but that doesn’t mean it can’t be managed - it can but it requires a whole new discipline

Established companies have less time than ever to dominate with a successful product - they have to create Innovation Factories following Lean Startup principles to create disruptive innovations continuously -

The challenge - do it on an Enterprise Scale with managers schooled in traditional management


How to validate quickly - example - Lean Startup Machine Weekend

1 weekend to validate a business idea:✓customer hypothesis - who are they?✓problem hypothesis - what is their problem?✓assumptions - what am I assuming?✓riskiest assumption - testHow to test: “get out of the building”✓Customer interviews✓Online surveys✓Online sign up page✓Decide your target metric before you start -> 8/10 people must agree that..✓Not selling ... seeking to understandValidated or not (metric based) -> pivot or persevere ✓Next riskiest assumption...test


Compared toTraditional project approach:

market research, customer interviews, develop customer proposition

business model

hand to development team

iterate solution -> NOT iterating business model or customer value proposition


Innovation Accounting - a new management paradigm

3 steps: 1.Baseline: Use MVP (minimum viable product) to establish real data on where you are now2.Tuning the engine: changes that must improve basic metric (eg sign up rate)3.Learn: Pivot or persevere



Customer

Problem


Customer

Problem

AssumptionAssumptionAssumption

Assumption

AssumptionAssumption

RiskiestAssumption


Customer

Problem


Assumption


RiskiestAssumption


Customer

Problem


Assumption


RiskiestAssumption

Method


Customer

Problem


Assumption


RiskiestAssumption

MinimumSuccess

Method


Customer

Problem


Assumption


RiskiestAssumption

MinimumSuccess

Method


Customer

Problem

RiskiestAssumption


Customer

Problem

RiskiestAssumption

DifferentCustomer

SameProblem


Validation boards

Lean Startup Machine – invite only for online, but you can download a nice version and use it locally. Follows the Lean Startup Machine model of assumption vaildation.

Lean Canvas - follows lean startup principles, supports multiple boards for each segment of your idea and click through for experiments and results – very nice

Lean Launch Lab – includes some nice features like recording customer interviews


http://leanstartupmachine.com/

http://leanstartupmachine.com/

http://leancanvas.com/

http://leancanvas.com/

http://carolineggordon.com/blog/2012/12/08/3-validation-boards/://www.leanlaunchlab.com

http://carolineggordon.com/blog/2012/12/08/3-validation-boards/://www.leanlaunchlab.com

More books - Escape Velocity - Geoffrey Moore,

Inspired - Marty Cagan


Tomorrow at work:

- Question the assumptions!- Manage all the risks

- Look deeper...


@carolineggordon

carolineggordon.com

[email protected]

Tell me how you went...


mailto:[email protected]

mailto:[email protected]

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