Scrum Gathering 2012 Shanghai_创业创新分会场：揭秘lean startup – 产品负责人应该知道什么(Julien Mazloum)

Demystifying the Lean startup

For product owners and entrepreneurs

Julien Mazloum（祝亮）
Scrum Gathering Shanghai – June 2012

Copyright © 2012 OutSofting. All Rights Reserved.

Who am I?

 Julien Mazloum 祝亮
• Canadian (Quebec) working in Beijing. 来自加拿大魁北克，目前
在北京工作
• Consulting Director at OutSofting China. OutSofting中国区高级
咨询师
• Agile training, coaching and consulting. 敏捷培训，指导，咨询
• Specialties: 特长
– Agile PO coaching. 敏捷PO指导
– Agile transformation coaching. 敏捷转型指导
• Agile Evangelist : Committed to expand Agile in China. 敏捷传教
士：致力于在中国推广敏捷


Purpose 目标

 Demystify the basics of the Lean Startup.


Warmup!


Video introduction about Product Ownership
关于产品负责人责任的介绍视频
Steve Blank on Product Management:
http://www.youtube.com/watch?v=8Xa_IAp75ig from (00:57 to 2:57)


Findings 视频中的发现

 Product management has always been an issue,
especially for innovative products:
 产品管理一直是个问题，尤其是创新产品
• More than 90% failure because not the right product was
developed (no market for it).
• Less than 10% failure because the product was not well
developed.
 What Agile Development did 敏捷开发做了什么
• Dramatic improvements in delivery 急剧改进交付
– Clear improvement on the 10%.
• Allowed responding to change 允许相应变化
– Limited improvement to the 90%.


Agile right now 现在的敏捷

Why do this product?
为什么做这个产品？
What does this product do?
这个产品做什么？

How to develop this product?
如何开发这个产品？

Who?谁？

Who takes care of the
Why and What in Scrum?
谁负责Scrum中的“为什么”和“
做什么”？


Expectations on Product Owners
对PO的期望


Let’s start!
现在开始！


Case #0
The problem AND the solution are well known.
问题和解决方案都已知

Requirements

Analysis
Problem: known

Design
Solution: known

Coding

Waterfall! Testing
Product
Deployment

瀑布！


Case #0

Known problem and known solutions do not really
exist in software development.
在软件开发中基本不存在问题和解决方案都已知的情况。


Case #1

Product Owner knows (most of) the WHY and WHAT of
the Product (simple and established products)
产品负责人知道大部分产品“为什么”和“做什么”
（简单产品和已有产品）

Problem: quite known

Solution: unknown

Agile development!


About case #1

 This is in fact … quite rare. 事实上这种情况也很少。
 Only true for products for which we already have an
existing business model (we know how to make
money with it) such as:
• have only too similar alternatives 相似的解决方案
– Example: are quite commoditized.
• do not really have other alternatives 没有其他选择
– Example: Cancer or AIDS drugs.
• stable utility software 稳定的实用软件
– Treated as a liability and not an asset.
– Example: redoing an internal Information System.


Case #2

Welcome to the real word!
欢迎来到现实世界！


Case #2

Problem: unknown
?
Solution: unknown

?

Case #2

Product Owner is
not sure his vision corresponds to a real market need.
PO不确定他的愿景和真实市场需求一致

WHY is NOT certain, 不确定为什么
WHAT neither. 也不确定做什么
=> They need to be discovered. 他们需要被慢慢发现

 Most potential value 最潜在的价值
 Most uncertainty 最不确定的


What is a startup?

A startup is a human institution designed
to create a new product or service under
conditions of high uncertainty.


Startup
The goal of the startup is to find a business model that
would allow it to grow into a self-sustainable business.

The failure of a startup is…. to stay a startup!

Therefore a startup is NOT a micro-company!

Startups are ALL about dealing with uncertainties!

Managing a startup (entrepreneurship) is about
surviving all uncertainties to find a good business
model and build the business on it.


Much more than deciding what product to do!


Evolution 革命

FROM 从

TO 到


Key questions

 How can we know if our product idea can lead to a
successful business?
 How can get the fast feedback we need to build the
right product?
 How can we make sure the right product still
supports the right business model?


Case #2:

Customer development!

Customer Customer Customer Company
Discovery Validation Creation Building

Problem: unknown

Solution: unknown

Agile development!


What is Lean startup

The application of Lean thinking to the entrepreneurial
process.

Lean startup =
Customer Development + Agile development.


What is Lean Thinking?

 Focus on value creation from customer perspective.
• Waste elimination in the process.
 Respect for people.
 Relentless improvement.


Lean in the Lean startup

Lean thinking principle How the principle is How the principle is
expressed in Agile expressed in the Lean
development startup

Focus on value creation Working on small valuable The biggest waste is
(removing waste in the batches of work with high building a product that
process) quality (no hand-offs, no nobody wants. The Lean
rework, no task switching). startup engages very early
with the users to eliminate
this waste

Respect for people (the Self-organized team who Not waisting people’s time
people who do the work decide how to do the work developing something
decide how to do it) nobody will use.
Users are at the center of
the process

Relentless Agile methods such as The business model is
improvemeembedds nt Scrum continuous constantly refined and
improvement improved.


Customer development, the bigger picture!
客户开发，更大的视野！

Customer Customer Company
Customer
Discovery Validation Building
Creation

pivot
We can have customers
This product addresses a real need.
and make a business
There are customers for this.
out of this idea.
There is VALUE in this idea。
GROWTH and PROFITS
are possible!

From the book : “The four steps to the epiphany”.


Customer development, the bigger picture!
客户开发，更大的视野！

Customer Customer Company
Customer
Discovery Validation Building
Creation

pivot

Validating the vision

Validating the strategy

Validating the product


The key of customer discovery and validation.

Any product vision relies on assumptions.
任何产品的远景依赖于假设

The key is to validate these assumptions as quickly
as possible (based on facts).
关键是依据事实尽快确认假设是否合理

Customer Customer
Pivot or persevere. Discovery Validation
调整或坚持
pivot
Speed of the pivot is key!


Example
3D Avatar plugin that can work on any IM 7 years.
Many Venture Capitalists and strategists said it is
absolutely great idea.

Hidden assumptions （假设）:
- Users do not want to use a new IM.
- Users would invite their existing IM contacts.
- Adults would be interested to try it.
- Users agree to install the plugin to their existing IM.


Let’s use science!

Experimenting to learn on our assumptions is the key.


Learning

 Learning is the essential unit of progress for a
startup.
 Validated learning is backed by empirical data
collected from real customers.
 Value hypothesis: Tests whether a product or
service really delivers value to customers once they
are using it.
 Growth hypothesis: Tests how new customers will
discover a product or service.


Minimum Viable Product (MVP)

Minimum Viable Product (MVP) is the smallest possible
product to test your assumptions.

Early adopters are the customers who feel the
strongest need for the product.


MVP versus perfection

We do not know what quality is if we do not know who
the customer is.


Innovation accounting

 Traditional accounting versus innovation
accounting.
 Innovation accounting is about providing evidence
that a sustainable business can be built arounf its
products and services:
• Establish the baseline
• Tuning the engine
• Pivot or persevere
 Split tests
 Good metrics (Actionable, Accessible, Auditable).
 Beware of vanity metrics!


Pivots

 Why pivoting is heard
 Different pivots.
• Zoom-in pivot
• Zoom-out pivot
• Customer segment pivot
• Customer need pivot
• Platform pivot
• Business architecture pivot
• Vaue capture pivot
• Engine of growth pivot
• Channel pivot
• Technology pivot


Pivot or persevere


Customer Creation (or ``acceleration``)

 We make sure we can grow our customer
Customer
base Creation
 We need to validate our business model
and continue to validate
• the assumptions for growth.
• The business model sustainability.
 3 engines of growth:
• Sticky
• Viral
• Paid.
 We lay the foundations for an adaptable
and learning organizations (technical
excellence, 5 whys, quality focus…).


The importance of product-market fit

 What management is about:
Market -> Product -> Process -> Structure.

20th century focussed on ->
21st century shall focus on ->


Example: The killer game


Case #2: LEAN STARTUP

Customer development!

Customer Customer Customer Company
Discovery Validation Creation Building

Problem: unknown

Solution: unknown

Agile development!


Conclusions:

 Lean startup is about managing innovation and its
uncertainties.
 Startups can happen in large companies.
 Validated learning is the key measure of progress.
 We know our initial business plan is wrong so
identify the main assumptions and iterate to learn on
them.
 The tools (MVP, split-tests, business model canvas)
might evolve in the future.
 The spirit will redefine management in the 21st
century.


My contact info

 My email: julien.mazloum@outsofting.com
 My Skype ID: jmazloum
 My Twitter ID: @jmazloum
 My LinkedIN profile:
cn.linkedin.com/in/julienmazloum
 The Slides:
www.outsofting.com/Demystifying_Lean_startup_Shangh
ai_2012.pdf


An explicit framework and quantitative tool to
guide product learning 指导产品学习一个明确的
框架和定量工具
 The Scrum + Opportunity Engineering framework provides a
strong proof of business viability:
 Scrum＋机遇工程框架提供了商业可行性的有利证明
• Make the financial model across the chain of consumption and state
the assumptions (business factors)
• 让经济模型跨越消费和假设的链接（商业因子）
• Prioritize business factors 对商业因子排序
• Commit to the most important business factors 致力于最重要的商业
因子
• Reduce their uncertainty by testing them in real life 通过真实的测试
来减少不确定性
– Use Agile to implement the features that allow to implement successfully these
business factors
• Refine and iterate 优化并迭代


Summary! 总结 Customer Customer
Discovery Validation
 We use
• Agile delivery to understand the customer needs
• 敏捷交付来理解客户需求
• the early adopters for feedback
• 先行者获得反馈
to learn on the RIGHT product to DO. 学习构造正确的产品。

 Think about the MVP (Minimum Viable Product): 考虑最小可行产
品（MVP）
• The most cost-effective way to test the hypothesis underlying your
product vision.
• Get only the feedback necessary to validate your vision


Lean startup References

 http://steveblank.com/2010/03/04/perfection-by-subtraction-
the-minimum-feature-set/
 http://torgronsund.com/2010/01/12/minimum-viable-product-
revisited-the-mvp-curve/
 http://www.slideshare.net/venturehacks/the-lean-startup-2
 http://www.startuplessonslearned.com/2008/09/lean-
startup.html
 http://andrewchenblog.com/2009/12/07/minimum-desirable-
product/ : MVP, MDP, MFP
 http://www.ashmaurya.com/2009/10/how-i-built-my-
minimum-viable-product/


Other references

 What is customer development?
http://www.startuplessonslearned.com/2008/11/what-
is-customer-development.html

 The book that describes “Opportunity Engineering”.

 The Lean startup book.

 The Scrum + Opportunity Engineering framework:
http://www.outsofting.com/FromDevelopmentAgility
ToBusinessAgility.pdf


Scrum Gathering 2012 Shanghai_创业创新分会场：揭秘lean startup – 产品负责人应该知道什么(Julien Mazloum)

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Scrum Gathering 2012 Shanghai_创业创新分会场：揭秘lean startup – 产品负责人应该知道什么(Julien Mazloum)