IMVU: “But Does It Scale?” from Eric Ries' Startup Lessons Learned Conference, April 23, 2010 in San Francisco. The video presentation is available at http://bit.ly/bBpUcm

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2. Video of this presentation from the
April 23, 2010 Startup Lessons Learned
conference is available at
http://bit.ly/bBpUcm
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3. But Does it Scale?
The Evolution of Lean at IMVU
Brett G. Durrett, James Birchler, Timothy Fitz
IMVU, Inc.
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4. Introduction
• Assumption audience is quite familiar with
Lessons Learned blog
• IMVU sometimes referred to as the
original Lean Startup
• Talking about how we now work and the
learning that lead us here
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5. Quick Background
• Customer Development & Lean principles
lead company to tremendous growth
• Fast development – everybody focused on
getting new things into customers hands
• No “golden gut” - customer metrics beat
grand product vision
• Inspirational environment – everybody
empowered to make product decisions
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6. Success!
IMVU Revenue by Quarter (in millions)
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07
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7. Scaling Our Success
• Product Owners for R&D, productizing,
monetizing and keeping things running
– Smaller, independent versions of company
• Same successful philosophy and practices
– Ship fast (but 2 month cycles feel slow)
– Anybody can make product decisions
– Customer-facing over infrastructure
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8. Not So Much
IMVU Revenue by Quarter (in millions)
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07
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9. Not So Much
• Revenue dropped even though we were
the using exact same philosophy and
practices that delivered success
• Product becoming “bucket of bolts”
– Features abandoned because development
teams disbanded / moved to new projects
• Emphasis on customer-facing changes
leads to increased technical debt 8

10. Scaling This Success: Plan B
• 7 “customer experience” product groups
– acquisition, discovery, connection, etc.
• Persistent feature ownership
• Each group has key business metric
– Conversion, retention, # chats, etc.
– Combined metrics ultimately drive revenue
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11. Again, Not So Much
IMVU Revenue by Quarter (in millions)
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08
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12. Again, Not So Much
• Revenue flat
• Product still a “bucket of bolts”
• Technical debt continues to pile up
– Build infrastructure hindering development
– Can’t iterate on IM client
• Lack of progress leading to morale issues
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13. Key Failures
• Didn’t align everybody for success
– Competing metrics = adversarial owners
– Authority disconnected from responsibility
• 7 product teams = too small to be effective
– No desire to apply limited team to tech debt
• Focus on immediate customer feedback
prevented “big bet” improvements
– Bias favors features over infrastructure 12

14. Scaling This Success: Plan C
• Align organization for success
• Strengthen product ownership
– Support it with effective project management
• Allow “big bets”, not just optimizations
• Don’t lose the things that make us great!
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15. Getting Aligned
• Officers determine business strategy
– Shared (repeatedly) with all employees
• All employees have same incentive plan
– 2009 targets for profitability and revenue
• Authority consistent with responsibility
– Drive accountability
– Required difficult changes to culture
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16. Stronger Product Ownership
• VP Product clear mandate
– Determines long-term product strategy
– Aligns product owners to company strategy
• Three product teams: product,
monetization, keeping things running
• Product Owners determine all product
changes
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17. Project Management
• Needed visibility into:
– Where we spend development resources
– Better ROI assessment when planning (the “I”)
– What others are doing (transparency)
• Resource Allocation
– Product decides % of resources to each area
– Engineering determines actual people
• Variation of scrum, 2-3 week sprints
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18. Scrum at IMVU – How it Works
• Product Owner, QA, Tech Lead pre-plan
• Full team reviews detailed project planning
• 3 engineers agree on task duration
• Template tasks for all projects, esp. “Technical Review
of Code Once Shipped”, which leads to work added to
“Engineering Project Follow-up” lane
• Engineers hand off code to Product Owner/QA with a
feature demonstration
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19. Seeing the Big Picture
• Passion for customer validation great
• Obsession for immediate validation can
distract you
• Easy to lose sight of:
– Product opportunities requiring a big bet
– Increasing technical debt
– Infrastructure needs
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20. Customer vs. Infrastructure
• Customer facing features prioritized over
infrastructure critical to early success
• When it compromises ability to rapidly
iterate a key strength is lost
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21. How Do You Know?
“We are hiring smart people that can’t make
changes to our code”
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22. Payback of Technical Debt
• Dedicated technical investment projects
• Some systems get a technical debt “tax”
applied only when product changes
• Tech Leads can add project requirement
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23. Build Infrastructure Overhead
• Effective development systems require
ongoing investment to scale
– Impacts speed and morale
• IMVU spending 20% of engineering on
maintenance of the tests and process
– Even with premium we find it has high ROI
• Pain follows a square wave pattern as we
scale the organization 22

24. Example: New IM Client
• Not previously possible
– 1-year design and development
– Substantial non-customer-facing infrastructure
• Big win for customers and technical debt
– Solved key issue confusing customers
– Rate of development greatly accelerated
• Iterated with customer validation!
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25. Example: Hack Week
• Originally few requirements
– Anybody can develop anything
– Have to demo it at end of week (live)
• New requirements – anything, but ship it or kill it
– Each person allowed 1 project at a time
– Product adopts it, keep building it or kill it
– Limit customer exposure until adoption
– Engineers need business data to make decisions!
• Results
– Much higher rate of projects getting to customers
– Many engineers choose to work on existing product plan!
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26. Key Cultural Values We Kept
• Customer metrics validate our decisions
• Value everybody’s ability to contribute to
product direction
– Great ideas can come from anywhere
• Culture of accepting failures so long as
you learn (and improve)
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27. But Does it Scale? (Yes)
IMVU Revenue by Quarter (in millions)
$8
$7
$6
$5
$4
$3
$2
$1
$0
Qtr Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09
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28. Oh Yeah…
Interested in getting more experience?
We’re hiring!
http://www.imvu.com/jobs/
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