Guest lecture by Joe Kinsella to UMass Boston MBA class on developing products and services.

1. Joe Kinsella
MBA Guest Lecture, UMass Boston
October 13, 2011
Blog: HighTechInTheHub.com
LinkedIn: linkedin.com/joekinsella
Twitter: @joekinsella

2.  My Background
 Success Stories
 Process for Iterating
 Case Study
 Parting Thoughts
 Q&A

3.  20+ years in high tech software startups in
the Boston area with engineering focus
 Currently VP of engineering for
Sonian, cloud startup
 Formerly VP of engineering at
SilverBack, acquired by Dell in 2007
 Technology enthusiast & startup junkie
 Responsible for delivery of 18 software
products

5.  Howard Shultz joined Seattle coffee retailer
Starbucks in 1982
 On visit to Italy he becomes enamored with
social culture in the espresso bars
 Tests concept at Starbucks, leaves to start his
own coffee shop, later acquires Starbucks
 First stores launched outside Seattle in
1987, grows to 165 by 1992 IPO
 2010: 17,000+ locations, 55 countries, $9.7B
revenue

6.  Started with hypothesis: Italian coffee culture
could be transplanted to the U.S.
 Pursued vision despite rejection
 Iterated concept from 1983 to 1987
 Visited over 500 espresso bars in Italy
 Piloted concept with small 300 square foot
coffee bar in a retail store
 Leveraged knowledge of industry experts
 Iterated
seating, music, service, roasts, uniforms, and
menu in response to customer feedback

7.  Michael Dell, a freshman at UT, identifies
market opportunity to sell computers
directly to businesses
 Starts selling computers from dorm room
 Quits school to build computer business
 Grows company and goes public in 1987
 Rapid revenue growth: $159M 1988, $2B
1993, $32B 2000

8.  Started with hypothesis: could make money
and pursue hobby upgrading PCs
 Pursued vision despite resistance from
parents
 Iterated concept over 1983-1986
 Sold expansion kits via small ads in papers
 Adjusted business and products based on
customer feedback
 When asked by customer if he could build
computers, decides to make prototype
 Tests selling computers at PC show
 On success, changes business focus

9.  The idea is often the easiest step
 The idea is often wrong
 Must focus on identifying customer value
 Must talk to and respond to customers
 Break through happens when you start small
and incrementally adjust
 Hard work and willingness to take risks will
not make up for real customer value
Need process to iteratively change features/
functions in response to customer needs

11.  Introduced by Colonel John
Observe
Boyd in 1990s
 Concept: opponent who can
move through cycle quickly
can gain advantage (get Act Orient
“inside decision cycle”)
 First used in military circles,
but broadly applied today Decide

12.  Winning is about agility
 Requires iteratively adjusting to
circumstances “on the ground”
 Cannot be achieved from behind a desk
 Can disrupt competitors by getting “inside
their decision cycle”
 Winners move faster than their competitors

13.  Continuous customer Ideas
interaction
 Continuously test and Learn Build
adjust hypothesis
 Deliver value incrementally
Data Code
 Grow based onproven
success Measure

14.  Early forms used as early as the 1970s
 Scrum early methodology in mid-1990s
 First Scrum team came out of Boston area
(Easel Corporation, 1994) *
 Methods owe allegiance to manufacturing
methodologies (e.g. Lean, Kanban)
 Movement driven as reaction to
heavyweight methods of past (e.g.
waterfall)
* Easel was my first software job after college

15. Observe

16.  Great products and services result from
epiphanies, e.g.
• Strategy – what if I sold computers instead of upgrades?
• Delivery – what if I added seating to my café?
• Product – what if I provided software to allow MSPs to
connect to their customers without a VPN?
 Epiphanies come from
• Understanding customers and market
• Iterating & experimenting
• Continuous focus on customer value
 It takes numerous epiphanies, often acquired over
years engaged with customers, to achieve success

17. 1. Has a Problem
+
2. Is Aware of Having a Problem
+
3. Has Been Actively Looking
For a Solution
+
4. Has Put Together a
Solution out of Piece Parts
+
5. Has or Can Acquire
a Budget
From The Four Steps to the Epiphany by Steven Gary Blank

18. Orient & Decide

19.  Story
is one or more sentences that
capture what a customer wants to achieve
• E.g. User should be able to have comfortable and
social environment for drinking coffee
 Should be sufficiently granular to be
actionable in short period of time
 Stories should be recorded: e.g. 3x5
cards, agile board
 Stories should receive weighting (story
points) based on effort to execute

20.  Prioritizestories in order based on
potential business impact
 Derive major themes (“epics”) from stories
to review with customers
 Bring customers through prioritization
exercise to ensure ranking correct
 Maintain “backlog” of unfinished stories

21. Act

22.  Sprint is unit of development that delivers
one or more stories to market
 Typical lengths for software is from 1-4
weeks
 Starts with planning and ends with delivery
of new version of product or service to
customer
 Sprints can be applied to all businesses &
product

23.  Each sprint starts with prioritization of
backlog
 Development is timeboxed
 Sprint results in usable deliverable
 Larger changes decomposed into
incremental deliverables
 Stories that do not get completed in sprint
move back to back log (“train leaving
station”)

24.  Once new features launched, essential to
return back to Observe of OODA
 Follow up with customers to gather
feedback on new services/features
 Write new stories for backlog based on
feedback
 Prioritize new and existing stories in next
sprint
 Rinse & repeat

26. 1. Not talking to enough customers
2. Not talking to the right customers
3. Being overly vested in idea
4. Premature scaling
5. Not developing incrementally
6. Unrealistic expectations
7. Not differentiating customer must haves vs.
nice to haves
8. Lack of meaningful milestones to judge
progress
9. Not knowing when to give up on a direction

28.  Author: Eric Ries, Silicon Valley
entrepreneur
 Coined term “Lean startup” in
2008
 Sample company using
methodology: Dropbox
 Use agile software methods
 Drive maniacally customer-
centric process

29.  Author: Stephen Blank
 Step by step process for
bringing successful products to
market
 Drives key lean startups
concepts, including minimum
viable feature set
 Introduced earlyvangelist

30.  Author: Clayton Christensen
 Shows companies exist in value
networks, interdependent social and
business resources within a market
 These value networks
• Support driving sustaining changes in a product
or service
• Can disincentivize companies in responding to
disruptive changes
 E.g. disk drives, digital
photography, mobile telephony, Internet
Protocol, outpatient clinics, ultrasound