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www.rallydev.com @zachnies! ©2013!
Innovation in an
Agile Portfolio
Enterprise Lean Startup!
Zach Nies – Chief Technologist!
www.rallydev.com @zachnies! ©2013!
Zach Nies
@zachnies
Zach Nies, Chief Technologist
Rally Software
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
Font Sampler!
http://en.wikipedia.org/wiki/File:Caslon-schriftmusterblatt.jpeghttp://media.kelbymediagroup.com/layersmagazine/images/columns/artoftype/may06/glyph-set.jpg
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
I love to change
industries !
www.rallydev.com @zachnies! ©2013!
Apply new

disciplines!
www.rallydev.com @zachnies! ©2013!
Become
disciplined
explorers…!
www.rallydev.com @zachnies! ©2013!
who know how to
balance
exploration

and execution!
www.rallydev.com @zachnies! ©2013!
Build what

people want!
www.rallydev.com @zachnies! ©2013!
Take advantage
of market
opportunities!
www.rallydev.com @zachnies! ©2013!
What happened to
this company?!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
1 2 5
iPhone Released1
iPhone App SDK Released2
Android w/ Nav Released5
Major Recession3
3
iPhone App Released4
4
www.rallydev.com @zachnies! ©2013!
A lot can !
happen in

1.5 years.!
www.rallydev.com @zachnies! ©2013!
Is your business
Agile enough?!
www.rallydev.com @zachnies! ©2013!
Turn these
disruptions into
opportunities!
www.rallydev.com @zachnies! ©2013!
What’s changing?!
www.rallydev.com @zachnies! ©2013!
Time to excellence!
www.rallydev.com @zachnies! ©2013!
http://en.wikipedia.org/wiki/File:Disruptivetechnology.gif
www.rallydev.com @zachnies! ©2013!
http://en.wikipedia.org/wiki/File:Disruptivetechnology.gif
Excellence!
www.rallydev.com @zachnies! ©2013!
Some examples…!
www.rallydev.com @zachnies! ©2013!
1984!
www.rallydev.com @zachnies! ©2013!
2006!
www.rallydev.com @zachnies! ©2013!
About 20 years!
www.rallydev.com @zachnies! ©2013!
2001!
www.rallydev.com @zachnies! ©2013!
2006!
www.rallydev.com @zachnies! ©2013!
5 years!
www.rallydev.com @zachnies! ©2013!
2007!
www.rallydev.com @zachnies! ©2013!
2010!
www.rallydev.com @zachnies! ©2013!
3 years!
www.rallydev.com @zachnies! ©2013!
2010!
www.rallydev.com @zachnies! ©2013!
2012!
www.rallydev.com @zachnies! ©2013!
2 years!
www.rallydev.com @zachnies! ©2013!
2008!
www.rallydev.com @zachnies! ©2013!
2012!
www.rallydev.com @zachnies! ©2013!
4 years!
www.rallydev.com @zachnies! ©2013!
“The Tesla Model S outscores every other car

in our test Ratings.” – Consumer Reports!
www.rallydev.com @zachnies! ©2013!
1979!
www.rallydev.com @zachnies! ©2013!
1989!
www.rallydev.com @zachnies! ©2013!
10 years!
www.rallydev.com @zachnies! ©2013!
5 years!
www.rallydev.com @zachnies! ©2013!
2.5 years!
www.rallydev.com @zachnies! ©2013!
1.5 years!
www.rallydev.com @zachnies! ©2013!
http://hbr.org/2013/03/big-bang-disruption/
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
Disruption can
sneak up on you!
www.rallydev.com @zachnies! ©2013!
Impact on
companies!
www.rallydev.com @zachnies! ©2013!
500
www.rallydev.com @zachnies! ©2013!
Question:!
!
How long does the average company
on this list survive?!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
1958: !
Average lifespan was 61 years!
!
2012: !
Average lifespan was 18 years!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
8 years!
www.rallydev.com @zachnies! ©2013!
Incumbent
advantage

is going away !
www.rallydev.com @zachnies! ©2013!
How does this
impact Product
Development?!
www.rallydev.com @zachnies! ©2013!
Role of uncertainty!
www.rallydev.com @zachnies! ©2013!
Chaotic! Simple!Complicated!Complex!
Uncertainty!
High! Low!
www.rallydev.com @zachnies! ©2013!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
www.rallydev.com @zachnies! ©2013!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
www.rallydev.com @zachnies! ©2013!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
www.rallydev.com @zachnies! ©2013!
Chaotic! Simple!Complicated!Complex!
Disruption!
Product lifecycle!
www.rallydev.com @zachnies! ©2013!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
Disruption!
www.rallydev.com @zachnies! ©2013!
Take
Action!
Follow
Rules!
Analyze!
Guess &
Learn!
Chaotic! Simple!Complex! Complicated!
Uncertainty!
www.rallydev.com @zachnies! ©2013!
Take
Action!
Follow
Rules!
Analyze!
Guess &
Learn!
Chaotic! Simple!Complex! Complicated!
Bureaucrat!Engineer!Firefighter! Entrepreneur!
Uncertainty!
www.rallydev.com @zachnies! ©2013!
S
e
n
s
e
A
n
a
l
y
z
e
Uncertainty!
www.rallydev.com @zachnies! ©2013!
E
x
p
l
o
r
e
O
p
e
r
a
t
e
Uncertainty!
www.rallydev.com @zachnies! ©2013!
Aligning action

with uncertainty!
www.rallydev.com @zachnies! ©2013!
http://www.flickr.com/photos/isaacmao/380257543
Create a plan to
predict the future!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
HOW MANY
GUESSES?!
www.rallydev.com @zachnies! ©2013!
FIRST CONTACT
WITH POTENTIAL
CUSTOMERS!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
http://www.flickr.com/photos/oregondot/4132135156
www.rallydev.com @zachnies! ©2013!
Obscure

the uncertainty

with details!
www.rallydev.com @zachnies! ©2013!
Embrace and
reveal

the uncertainty!
www.rallydev.com @zachnies! ©2013!
Sounds like

a startup!
www.rallydev.com @zachnies! ©2013!
How does

Eric Ries define

a Lean Startup?!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
Where does
uncertainty live?!
www.rallydev.com @zachnies! ©2013!
Brown, Tim (2009-09-16). Change by Design (Kindle Location 1984). Harper Collins, Inc.. Kindle Edition.
www.rallydev.com @zachnies! ©2013!
Brown, Tim (2009-09-16). Change by Design (Kindle Location 1984). Harper Collins, Inc.. Kindle Edition.
Level of uncertainty!
www.rallydev.com @zachnies! ©2013!
What to do!
Brown, Tim (2009-09-16). Change by Design (Kindle Location 1984). Harper Collins, Inc.. Kindle Edition.
Operate!
www.rallydev.com @zachnies! ©2013!
What to do!
Brown, Tim (2009-09-16). Change by Design (Kindle Location 1984). Harper Collins, Inc.. Kindle Edition.
www.rallydev.com @zachnies! ©2013!
What to do!
Big

Companies!
Brown, Tim (2009-09-16). Change by Design (Kindle Location 1984). Harper Collins, Inc.. Kindle Edition.
www.rallydev.com @zachnies! ©2013!
Big
Companies!
http://www.flickr.com/photos/ironnickel/6076087519
www.rallydev.com @zachnies! ©2013!
Startups!
http://www.flickr.com/photos/elcapitan/2387917709
www.rallydev.com @zachnies! ©2013!
What we need

is a way to

discover the future!
www.rallydev.com @zachnies! ©2013!
Uncertainty!
Knowledge!
Experiments!
www.rallydev.com @zachnies! ©2013!
Discover the future!
Validate!Discover! Transition!
Business Model!
Vision and Empathy!
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
“Get out of the
building!”!
Steve Blank!
www.rallydev.com @zachnies! ©2013!
“Meaning emerges
through
interaction”!
Dave Snowden!
www.rallydev.com @zachnies! ©2013!
Discover the future!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
http://www.flickr.com/photos/b0jangles/7114571717
www.rallydev.com @zachnies! ©2013!
Vision and Empathy!
Discover the future!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
http://www.flickr.com/photos/klearchos/4541072707
Vision!
www.rallydev.com @zachnies! ©2013!
The idea is not
the thing that
matters.!
www.rallydev.com @zachnies! ©2013!
What does
matter?!
!
According to Simon Sinek!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
Why you’re doing
it matters.!
www.rallydev.com @zachnies! ©2013!
http://www.flickr.com/photos/usarmyafrica/4553749920
Empathy!
www.rallydev.com @zachnies! ©2013!
Technology adoption
is a human
phenomenon !
www.rallydev.com @zachnies! ©2013!
Not a technological
phenomenon !
www.rallydev.com @zachnies! ©2013!
An example…!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
Need human
centered approach!
www.rallydev.com @zachnies! ©2013!
Discover the future!
Business Model!
Vision and Empathy!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Business Model!
www.rallydev.com @zachnies! ©2013!
Discover!
Discover!
Business Model!
Vision and Empathy!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Discover!
Problem

Discovery!
We understand the
problem a customer

wants solved!
Discover!
www.rallydev.com @zachnies! ©2013!
http://www.flickr.com/photos/adactio/2535502416
www.rallydev.com @zachnies! ©2013!
Discover!
Solution

Validation!
Our product idea

solves the customer’s

problem!
Discover!
www.rallydev.com @zachnies! ©2013!
Video Demo (Landing Page)!
Concierge!
Wizard of Oz!
Crowd Funding

Single Key Feature!
Types of Minimum Viable Products!
www.rallydev.com @zachnies! ©2013!
Discover!
Business

Validation!
Our business model

can be profitable!
Discover!
www.rallydev.com @zachnies! ©2013!
High level business model!
http://www.forentrepreneurs.com/saas-metrics/
www.rallydev.com @zachnies! ©2013!
Discover the future!
Business Model!
Vision and Empathy!
Pivot

or

Persevere?!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Validate!
Validate!
Business Model!
Vision and Empathy!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Validate!
Prepare to Sell!
The founders can:

Understand the flow of
money and sell the offer!
Validate!
www.rallydev.com @zachnies! ©2013!
You!
?
www.rallydev.com @zachnies! ©2013!
Validate!
Close
Deals!
Our draft sales plan will
close or activate
customers!
Validate!
www.rallydev.com @zachnies! ©2013!
Sales Funnel!
http://www.flickr.com/photos/carlagates247/5524789016
www.rallydev.com @zachnies! ©2013!
Validate!
Package
Offer!
We can package, price,
position and promote

our offer!
Validate!
www.rallydev.com @zachnies! ©2013!
For (target customers)!
Who (have the following problem)!
The (product name) is a (describe the
product or solution) !
That provides (key benefit) !
Unlike (reference competition),!
The product/solution (describe the key
point of competitive differentiation)!
Product Positioning!
www.rallydev.com @zachnies! ©2013!
Discover the future!
Business Model!
Vision and Empathy!
Pivot

or

Persevere?!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Discover the future!
Transition!
Business Model!
Vision and Empathy!
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Transition!
Transition
Team!
We have budget and

assembled a cross-
department transition team!
Transition!
www.rallydev.com @zachnies! ©2013!
Managing a Portfolio 

The Three Horizons Model!
Horizon 1
0 to 12 months
Horizon 2
12 to 36 months
Horizon 3
36 to 72 months
Current
Businesses
Generate
today’s cash
flow
High Growth
Businesses
Today’s
revenue
growth +
tomorrow’s
cash flow
Growth
Options
Options on
future
high-growth
businesses
Expected Window of Returns
AccumulatedTotalReturns
Figure 2.4
www.rallydev.com @zachnies! ©2013!
Transition!
Integrate
into Depts!
Transition!
Departments can take on
our new offer!
www.rallydev.com @zachnies! ©2013!
Inventors
Inventor to department transition
www.rallydev.com @zachnies! ©2013!
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
www.rallydev.com @zachnies! ©2013!
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
www.rallydev.com @zachnies! ©2013!
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
www.rallydev.com @zachnies! ©2013!
Validate!
Roll off
Inventors!
We no longer need our
inventors on the team!
Transition!
www.rallydev.com @zachnies! ©2013!
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
www.rallydev.com @zachnies! ©2013!
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
www.rallydev.com @zachnies! ©2013!
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
www.rallydev.com @zachnies! ©2013!
Discover the future!
Validate!Discover! Transition!
Frame
Measure
Build
Learn
Business Model!
Vision and Empathy!
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Innovation Sandbox!
www.rallydev.com @zachnies! ©2013!
Discover the future!
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
www.rallydev.com @zachnies! ©2013!
Guesses!
Knowledge!
Experiments!
www.rallydev.com @zachnies! ©2013!
Empathize & Frame!
Test & Measure!
Build&Ship!
Learn&Share!
Experiments!
www.rallydev.com @zachnies! ©2013!
TAKE EACH MAJOR
GUESS!
www.rallydev.com @zachnies! ©2013!
RUN AN EXPERIMENT!
www.rallydev.com @zachnies! ©2013!
http://www.youtube.com/watch?v=Iyjs3zeoSrM
www.rallydev.com @zachnies! ©2013!
http://www.richard-feynman.net/gallery.htm
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
Disciplined
exploration!
www.rallydev.com @zachnies! ©2013!
Your turn!
www.rallydev.com @zachnies! ©2013!
Background: What do you want to learn and why?
Frame the Experiment: What is your Problem Statement?
Write the Problem Statement from the Define worksheet here. What pain or problem is being experienced?
[Customer Segment] needs a way to [describe job to be done], (because|but|surprisingly) [describe insight].
Hypothesis to Test
[Specific repeatable action] will create [expected result].
Is this hypothesis falsifiable?
Experiment Details
Describe the experiment you plan to run and how you are going to attempt to falsify your hypothesis.
Safety: How is the experiment safe to run and how will you recover?
Describe how the experiment is safe to run.
Describe how you will recover from running the experiment upon completion or if you discover it isn’t safe to run.
Measures
What will you measure to invalidate your hypothesis?
What will you measure to indicate the experiment is safe to run?
What will you measure to indicate you should amplify the experiment?
Measures can be Qualitative and Quantitative.
Experiment Backlog
Stack ranked list of actions needed to run the experiment.
Next Steps: Given what you learned, what’s next?
Experiment Results and Learnings
Describe what you learned from the experiment? Did you invalidate your hypothesis or does it live on?
Experiment Name:
Owner:
Mentor: Date:
I-2
www.rallydev.com @zachnies! ©2013!
Guess:

Removing our cubicle
walls will increase

the value we ship

to our customers!
www.rallydev.com @zachnies! ©2013!
The impact of
innovation is
changing!
www.rallydev.com @zachnies! ©2013!
Extend Agility into
your business!
www.rallydev.com @zachnies! ©2013!
Take advantage of
market
opportunities!
www.rallydev.com @zachnies! ©2013!
What happened to
this company?!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
www.rallydev.com @zachnies! ©2013!
1
Began Using Lean Startup1
2
$50M in New Product Revenue2
3
1800 Concurrent Experiments3
www.rallydev.com @zachnies! ©2013!
Books that informed this talk!
www.rallydev.com @zachnies! ©2013!
Geoffrey

Moore!
David Snowden!
Ash

Maurya!
Tim

Brown!
Clayton

Christensen!
Steve

Blank!
Eric

Ries!
People who informed this talk!
Brant Cooper
Patrick
Vlaskovits!
www.rallydev.com @zachnies! ©2013!
Go Agile. Go Rally.!

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