Why Lean Startup Practices Work and How to Scale Them
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Silicon Flatirons is pleased to host Rally Software Chief Technology Officer, Zach Nies, for a Crash Course about some of the surprising science behind building successful startups. Even though building a startup is hard work with high failure risk, entrepreneurs Steve Blank and Eric Ries have popularized practices that can increase the odds of success. Following the Customer Development or Lean Startup practices will show you what to do. This talk will give you an understanding of why these techniques work, which will allow you to better apply them to your startup or scale them into your enterprise. The event will focus on high growth business based on the deep experience of a CTO from one of the Front Range's leading companies. Entrepreneurs are by nature execution-oriented and you will walk away from the talk with concrete, actionable ideas that will help you make better decisions tomorrow. The subject matter should be relevant to both entrepreneurs creating new companies and entrepreneurs reinventing existing enterprises.
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Why Lean Startup Practices Work and How to Scale Them
- 1. Why Lean Startup Practices Work & How to Scale Them
- 2. Zach Nies
- 3. @zachnies
- 5. First, something to think about
- 8. Entrepreneurs have a chance to create the world they want
- 9. There is proven science that can improve your odds of success
- 10. What world do you want to create?
- 11. What does that feel like?
- 12. Success allows you to create the world you want and live your dreams
- 13. Why am I here tonight?
- 15. Success, but they weren’t living any dream
- 16. Discover & promote the tools that enable success while living the dream
- 17. How I got here
- 19. Font Sampler http://media.kelbymediagroup.com/layersmagazine/images/columns/artoftype/may06/glyph-set.jpg http://en.wikipedia.org/wiki/File:Caslon-schriftmusterblatt.jpeg
- 22. Vision: Civil rights and equality for all
- 27. Amazing team, exactly the culture I dreamed of creating
- 28. Great product
- 30. Why am I doing this?
- 31. Live inside the Internet
- 33. Vision: Solve the world’s hardest problems as citizen engineers
- 34. 14 minutes in pairs, 7 minutes interviews of each person:
- 35. You have created a computer game of entrepreneurship. You believe you can combine this game with some educational material and profiles of successful entrepreneurs to make an excellent teaching tool for entrepreneurship. Your inspiration for the product came from several reports in the newspapers and magazines about increasing demand for entrepreneurship education.
- 36. What information would you seek about potential customers and competitors? List questions you would want answered. How will you find out this information - what kind of market research would you do?
- 38. Who would first do market research to determine how to position the product, calculate addressable market size, and expected financial returns?
- 39. Who is focused on identifying possible competitors?
- 40. Who would first figure out your passion for the idea, what you know about the market, and who you know? Then talk to a few people to see if you can sell a prototype?
- 41. Who is focused on identifying possible partners?
- 42. Remember your answers, we will come back to this later.
- 43. Books that informed this talk
- 44. People who informed this talk David Max Cynthia Kent Snowden Boisot Kurtz Beck Frank H. Mark Eric Knight Newman Ries Steve Blank
- 45. Why care about the underling principles? Aren’t there proven practices?
- 52. Following Being the a Recipe Chef VS
- 53. We have recipes
- 56. For complex problems, the recipes won’t always work
- 58. What’s unique about hard problems? h"p://www.flickr.com/photos/horiavarlan/4298997922/
- 59. What you don’t know is unknown
- 60. What you predict, doesn’t come true
- 61. What worked yesterday, doesn’t seem to be working today
- 62. How do we make sense of environments like this?
- 64. Some background (and a little math)
- 66. Ratio of smallest to largest values?
- 67. 4.8
- 68. Power laws and Pareto distributions h"p://arxiv.org/abs/cond-‐mat/0412004
- 69. Ratio of smallest to largest values?
- 70. 150,000
- 72. High impact, low probability events
- 73. An example
- 76. Business involves many Pareto distributions
- 77. But wait, there’s more…
- 78. 4 Dots
- 79. 6 Connections
- 80. 64 Patterns
- 81. 10 Dots
- 82. 45 Connections
- 83. ? Patterns
- 85. In business a few patterns are more valuable than all the rest
- 86. but which ones?
- 89. How do we make sense of this?
- 90. Plausible Probable Unordered Ordered
- 91. Plausible Probable Unordered Ordered
- 92. Plausible Probable Chaotic Complex Complicated Simple Unordered Ordered
- 93. An example Plausible Probable Chaotic Complex Complicated Simple Unordered h"p://www.flickr.com/photos/ksionic/383240468 Ordered
- 94. Plausible Probable Complex Complicated Chaotic Simple Unordered Ordered
- 95. Plausible Probable Complex Complicated Chaotic Simple Unordered Ordered
- 96. Plausible Probable Complex Complicated Chaotic Simple Unordered Ordered
- 97. Plausible Probable Complex Complicated Cause & Effect is obvious to all and is repeatable Chaotic Simple Unordered Ordered
- 98. Plausible Probable Complex Complicated Cause & Effect is not obvious and requires analysis or expertise Chaotic Simple Unordered Ordered
- 99. Plausible Probable Complex Complicated Cause & Effect is only coherent in retrospect, and not repeatable Chaotic Simple Unordered Ordered
- 100. Plausible Probable Complex Complicated Cause & Effect not perceivable Chaotic Simple Unordered Ordered
- 101. The Cynefin Framework Complex Complicated Cause & Effect is only Cause & Effect is not coherent in obvious and requires retrospect, and not analysis or expertise repeatable Disorder Cause & Effect is Cause & Effect not obvious to all and is perceivable repeatable Chaotic Simple Unordered Ordered
- 102. How about an example?
- 103. Music Industry in 2000 - Napster Complex Complicated Independent Managing a large tour musicians self publishing online Disorder Managing a NIN tour Major label online distribution CD distribution Chaotic Simple Unordered Ordered
- 104. What does this imply about taking action?
- 105. Probe, Sense, Respond Sense, Analyze, Respond Complex Complicated Disorder Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
- 106. Probe, Sense, Respond Sense, Analyze, Respond Complex Complicated Disorder Standard procedures Process re-engineering Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
- 107. Probe, Sense, Respond Sense, Analyze, Respond Complex Complicated Analysis Planning Many expert opinions Disorder Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
- 108. Probe, Sense, Respond Sense, Analyze, Respond Complex Complicated Frequent experiments Pattern matching Exploring hunches Disorder Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
- 109. Probe, Sense, Respond Sense, Analyze, Respond Complex Complicated Disorder Crisis management Innovation management Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
- 110. Probe, Sense, Respond Sense, Analyze, Respond Complex Complicated 15 - 30 < 150 Disorder 5 > 150 Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
- 111. An example
- 113. Entrepreneurship Complex Complicated Disorder Chaotic Simple
- 114. Complex Domain Probe, Sense, Respond Cause & Effect is only Frequent experiments apparent in Pattern matching retrospect, and not Exploring hunches repeatable 15 – 30 people
- 116. Vision & Empathy
- 118. The journey starts with vision and empathy
- 119. “He knows the ‘why’ for his existence, will be able to bear almost any ‘how.’ Viktor Frankl
- 120. In pairs for 2 minutes: Think about the world you want to create. Describe it. Also, what does it feel like?
- 121. Manage the emergence of beneficial coherence
- 122. Coevolution
- 123. Probe, Sense, Respond
- 124. Probe, Sense, Respond A $40 example
- 127. Successful MBA Serial Students Entrepreneurs
- 128. You have created a computer game of entrepreneurship. You believe you can combine this game with some educational material and profiles of successful entrepreneurs to make an excellent teaching tool for entrepreneurship. Your inspiration for the product came from several reports in the newspapers and magazines about increasing demand for entrepreneurship education.
- 129. 1. Who could be your potential customers for this product? 2. Who could be your potential competitors for this product? 3. What information would you seek about potential customers and competitors - list questions you would want answered. 4. How will you find out this information - what kind of market research would you do? 5. What do you think are the growth possibilities for this company?
- 132. Probe, Sense, Respond
- 134. Design Thinking
- 136. How do you manage complex systems?
- 137. “The only valid model of a complex system is the system itself. Murray Gell-Mann
- 138. Finely Grained Objects
- 139. Small teams 5 - 30
- 140. Small experiments
- 143. Meaning emerges through interaction
- 144. Get out of the building!
- 145. Learn through experiments that are safe to run
- 146. Hard for startups
- 147. Hard for companies
- 148. How do you make $600 Million in 2010?
- 149. Hundreds of A/B experiments at all times
- 150. Maximize learning – Don Reinertsen http://jchyip.blogspot.com/2010/05/lean-software-and-systems-conference.html
- 151. How small should experiments be?
- 152. Chip flip game
- 153. The power of small batches
- 154. The power of Agile
- 155. Waterfall “Managing the Development of Large Software Systems” Dr. Winston W. Royce – 1970
- 156. Waterfall All Features in Release “Managing the Development of Large Software Systems”
- 157. Waterfall All Features in Release “Managing the Development of Large Software Systems”
- 158. Waterfall All Features in Release “Managing the Development of Large Software Systems”
- 159. Iterative Feedback
- 160. Scrum Framework Backlog Standup Grooming Iteration Demo / Review Planning & Retrospective Iteration Product Iteration Product Backlog Backlog Increment
- 161. Focus on Stories Stor y Stor y Stor y 1 2 3 All Stories in Iteration All Stories in Iteration All Stories in Iteration
- 162. Flow of value Vision Design In Done Deployed What was Development learned?
- 165. Wise Crowd
- 168. An experiment Count the passes the white team makes
- 170. An experiment How many passes?
- 171. An experiment What else did you notice?
- 174. Change Blindness
- 176. Disintermediation
- 177. Help everyone detect weak signals
- 178. Share raw data from experiments with everyone
- 181. A case study
- 182. Jerome Breche, CEO
- 183. Scaling these concepts
- 184. What is Lean?
- 186. Lean is … Organizational Learning System Operating People System System Frode L. Odegard, Lean SoTware InsVtute
- 187. Making sense at scale
- 188. At a startup Complex Complicated Disorder Chaotic Simple Idea/Market Fit – Code Base – People/Org
- 189. New product inside big company Complex Complicated Disorder Chaotic Simple Idea/Market Fit – Code Base – People/Org
- 190. Applying this with your team
- 191. Does everyone know why? h"p://www.flickr.com/photos/lejoe/2800660239
- 192. No death marches h"p://www.flickr.com/photos/west_point/5566824566 h"p://www.flickr.com/photos/elcapitan/2387917709
- 193. Cut debt days h"p://www.flickr.com/photos/consumerist/4406234952
- 194. Learn from setbacks h"p://www.flickr.com/photos/cakesquared/3819067260
- 197. Retrospectives What S What has What HYPOTHESE HELPED HIND has could we ERED us?! us?! draw about how we move forward?!
- 198. Publicize what you learn h"p://www.flickr.com/photos/lorenkerns/4114441322
- 199. Every situation isn’t the same
- 201. Entrepreneurs have a chance to create the world they want
- 202. There is proven science that can improve your odds of success
- 203. Pick 2 concepts from tonight
- 204. Take them back to your team
- 205. Create the world you want