Lean Startup Principles in any Organization | UXNZ2017

Using Lean Startup Principles
Outside of a Startup
@MandaLaceyS | #UXNZ 2017
@MandaLaceyS | #UXNZ2017

What is The Lean Startup,
again?

Lean Startup
A method to develop new businesses
and products that addresses
uncertainty and risk
through cycles of rapid
experimentation.

Art by Allie Brosh @MandaLaceyS | #UXNZ2017

Lean Startup Concepts
Entrepreneurship is everywhere.
Entrepreneurship is management.
Innovation Accounting.
Validated Learning.
Build. Measure. Learn.

Entrepreneurship is
everywhere

“a start-up is a human
institution designed to
create something new,
under conditions of
extreme uncertainty”

Scenario 1
How much would you pay to play?

Scenario 1
$5,000

Calculated Risk

Scenario 2
How much would you pay to play?
?
??
?
?
?
?
?
?
?
?
?
?
?
??
?
?
?
??
?
?
?
?
?

Scenario 2
A lot less than
$5,000

This is what we mean by startup.
You can’t even calculate the risk.
?
??
?
?
?
?
?
?
?
?
?
?
?
??
?
?
?
??
?
?
?
?
?

Basically, you’re in a
startup any time you
don’t really know the
problems or the
solutions.

Entrepreneurship is
management

“The definition of insanity is
doing the
same thing over and over
and expecting different results.”

Aiming for
innovation doesn’t
mean you shouldn’t
have rules or
processes.

Innovation
Accounting

Boring stuff is
helpful.

Establish a baseline so you can
measure success.

Validated Learning

Your goal is to build
a viable business.

That means you build
stuff people will actually
use.

And will either make or
save you money.

Measure your
progress only by
how much you’ve
learned about
being viable.

answer
Actionable MetricsVanity Metrics*
Anything that looks good
but doesn’t help you
make a decision
Examples:
• Facebook likes
• Pageviews
• Event attendees
Metrics that help you
decide whether you’re
succeeding or not
Examples:
• Revenue per customer
• Retention rate
• Customer source

*Metric Caveat

Validated Learning

Build.
Measure.
Learn.

Image from http://theleanstartup.com/principles @MandaLaceyS | #UXNZ2017

Build - MVP
Measure - Meaningful data
Learn - To pivot or persevere

Build

Minimum
Viable
Product (required to learn)

DA REAL
MVP
Enough to learn from
NOT half baked
NOT a bad experience
NOT necessarily
working software

GOOD MVP

GOOD ITERATION

NOT MINIMUM @MandaLaceyS | #UXNZ2017

NOT HALF-Baked
NOT VIABLE @MandaLaceyS | #UXNZ2017

NOT VIABLE

Not cool.

Measure

answer
Actionable MetricsVanity Metrics*
Anything that looks good
but doesn’t help you
make a decision
Examples:
• Facebook likes
• Pageviews
• Event attendees
Tied to specific,
repeatable tasks and
help you decide whether
you’re succeeding or not
Examples:
• Revenue per customer
• Retention rate
• Customer source

Learn

Pivot! Pivot! PIVOT! @MandaLaceyS | #UXNZ2017

1. Add frosting
2. Change to vanilla frosting
3. Add sprinkles
4. Change to vanilla cake
5. Improve the recipe.
These are all pivots:

More on pivots later

TLDR;
Lean startup is a
an approach
meant to help you
not build stupid
stuff. @MandaLaceyS | #UXNZ2017

@MandaLaceyS | #UXNZ2017@MandaLaceyS | #UXNZ2017

Running Lean
Experiments

61

62

Start here!!

1.
Start with observations
[GOOB]

What problems could you solve?

Observe

Diary
Study
or
Experience
Sampling

Interview

Context of use
Patterns of interaction
Interruptions
Workarounds
Moments of frustration and delight
Transitions
Pay attention to:

The cat needs a place to sleep.

NOT: We should build a cat bed.

NOT: The cat is too big for the box.

Insights from 1 round of research do not a
sustainable business build.
Now you have a list of much better
informed assumptions.
Keep in mind.

2. List and prioritize assumptions

Assumptions come in three flavors
is this thing viable?
is this thing feasible?
is this thing desirable?

Desirability
assumption
prompts (Design)
Who is your target audience?
_________________________
_________________________
What problem are they trying to
solve? ____________________
__________________________
How do they solve that now?
_________________________
_________________________
What are the obstacles to solving
that problem with current solution?
___________________________
___________________________
What outcome are they looking
for? ______________________
__________________________
What will make users switch from
their current solution?
__________________________
__________________________
Viability
assumption
prompts (Product)
How will you generate revenue?
___________________________
___________________________
Who are your primary
competitors? ________________
___________________________
What advantages would we have
to any competitors?
__________________________
How will you acquire new
customers? ________________
___________________________
How often will they come back?
__________________________
___________________________
Why will users come back?
___________________________
___________________________
Why will users refer us to others?
____________________________
____________________________
How does this solution support
company vision?_____________
____________________________
Feasibility
assumption
prompts
(Engineering)
What are the biggest engineering
or tech challenges?
_____________________________
_ __________________________
What are the legal or regulatory
risks? ______________________
___________________________
What are the internal governance
or policy hurdles?
___________________________
___________________________
Why will leadership teams
support this? ________________
___________________________
Where does your funding come
from? _____________________
___________________________
Adapted from David Bland, Precoil

Image from David Bland, Precoil
Successful
businesses are
here.

Everyone’s
favorite!

Scenario
*You’re trying to create a new application to help
busy parents plan meals and you’ve just interviewed
a dozen parents who were out grocery shopping
with their kids. .

Desirability
assumption
prompts (Design)
Who is your target audience?
_________________________
_________________________
What problem are they trying to
solve? ____________________
__________________________
How do they solve that now?
_________________________
_________________________
What are the obstacles to solving
that problem with current solution?
___________________________
___________________________
What outcome are they looking
for? ______________________
__________________________
What will make users switch from
their current solution?
__________________________
__________________________
Viability
assumption
prompts (Product)
How will you generate revenue?
___________________________
___________________________
Who are your primary
competitors? ________________
___________________________
What advantages would we have
to any competitors?
__________________________
How will you acquire new
customers? ________________
___________________________
How often will they come back?
__________________________
___________________________
Why will users come back?
___________________________
___________________________
Why will users refer us to others?
____________________________
____________________________
How does this solution support
company vision?_____________
____________________________
Feasibility
assumption
prompts
(Engineering)
What are the biggest engineering
or tech challenges?
_____________________________
_ __________________________
What are the legal or regulatory
risks? ______________________
___________________________
What are the internal governance
or policy hurdles?
___________________________
___________________________
Why will leadership teams
support this? ________________
___________________________
Where does your funding come
from? _____________________
___________________________
Be as specific and
precise as possible.

unknownknown
important
unimportant

important
unimportant
Evaluate
unknownknown
Generate ideasDelusions of progress
Just do it

important
unimportant
Evaluate
unknownknown
Release planning

important
unimportant
Run experiments
unknownknown
Generate ideasIgnore here
Just do it

important
unimportant
Evaluate
unknownknown
Generative research
and ideationDelusions of progress
Just do it

important
unimportant
Focus
experiments
unknownknown
Just do it

Everyone’s
second favorite!

1. Assumptions about users and their problems/
needs are riskier than assumptions about
solutions.
2. It doesn’t really matter where things land. The
general quadrant is good enough.
3. The conversation is the most important piece.
PROTIPS

Stretch break

3. Make a clear hypothesis

Hypothesis
“ a supposition or proposed
explanation made on the basis of
limited evidence as a starting point for
further investigation.”
-The Interwebs

If we [do, build, provide x thing],
then [these people]
will [some desirable outcome].
We’ll know when [actionable metrics].

[do, build, provide x thing]
is your proposed solution.

[these people]
are your target
personas.

[some desirable
outcome] is what you
want people to do.

[actionable
metrics] are
measurements
that tell you if
the investment is
worth it.

Calculating actionable metrics
Perceived Cost Perceived Value

So let’s say…
You sell clothing online and want to propose a
feature that suggests matching accessories in the cart.

So let’s say…
Estimated Cost
5 weeks
$25,000
($5,000/week)

So let’s say…
1000 orders/week
$20/order
($20,000 sales/week)
Current Trends

So let’s say…
$5,000 extra per week to
cover $25k in 5 weeks
(which is Extra $5/sale)
Necessary added value

If we [suggest matching accessories in the cart],
then [Fashion-challenged Amandas]
will [purchase more accessories].
We’ll know when [we earn $5,000 over the course
of a week].

If we [suggest matching accessories in the cart],
then [Fashion-challenged Amandas]
will [purchase more accessories].
We’ll know when [average order value goes up
$5].
OR

Sometimes it’s
easier to
frame as
failure
condition.
“If we don’t make
at least x% more
on each order,
we won’t
implement.”

Sometimes
you don’t
have existing
numbers, so
you use what
you have.
“We’ll move
forward with
option a if they
pick it 25% more
often than
anything of the
other options.”

And
sometimes
you just
have to
guess

Your Turn!
*You’re trying to create a new application to help
busy parents plan meals and you’ve just interviewed
a dozen parents who were out grocery shopping
with their kids.

If we [do, build, provide x thing],
then [these people]
will [some desirable outcome].
We’ll know when [actionable metrics].
Your Turn

If we build an app that automatically generates 5
recipe ideas per week,
Then busy parents,
Will be interested in downloading this application.
We’ll know this is true when we present them
with a variety of food-related apps and they choose the
recipe generation app at least 15 percentage points
more often than any other choice.

4. Design your MVP.

REMEMBER
An MVP is just
what you build
to answer the
question in your
experiment.

Fakin’ it.

Wizard of Oz

Concierge

Piecemeal

Sellin’ it.

Explainer video

Fundraising

Landing Page test

Fake door test

Ad Tests

Honestly,
there is no
right answer
to picking
your MVP.

Aim for delicious.
Not ambitious.

Don’t be a jerk.

Exercise
How would you test the hypothesis you just created?
What might you need to build?
How might you make that even more minimal?
How might you make that even more lovable?

If we build an app that automatically generates 5
recipe ideas per week,
Then busy parents,
Will be interested in downloading this application.
We’ll know this is true when we present them
with a variety of food-related apps and they choose the
recipe generation app at least 15 percentage points
more often than any other choice.
How would you test this hypothesis?

Create fundraisers for 3 theoretical apps and
see what gets most funding.
Maybe…

Create a landing page that presents 3
different app options and see which is
clicked most.
OR

Create ads for 3 different app ideas and see
what gets the most click-throughs.
OR

Describe 3 different options and utilize click
testing to see what gets chosen most often.
Maybe…

5. THEN run your test

You’ve done
most of the
hard stuff
already.

6. Analyze data

The clearer your hypothesis,
the easier it is to analyze.

1) Stay the
course, move
on to next risk.

2) PIVOT!
PIVOT! PIVOT!

Sometimes the
next path is really
clear.

Actionable MetricsPivots aren’t
You might need to change:
Feature focus
Overall market
Specific customer segment
Platform
Channel
Technology
Engine of growth
etc.
etc.
etc.
magic.

Go back to
qualitative,
generative
work.

3) Go again.

7. Incorporate iterative cycles

You’re not done.

important
unimportant
WHAT’S NEXT?
unknownknown

Reduce cycle time.
Not build time.

But. Don’t lose sight of the big picture.

Experimentation supports vision.
Adapted from Mark Shahid | @plastic_fuzz
Generative longitudinal research
Short periods of investigation

Build stuff people want
and will create value.

Thank you!
@MandaLaceyS
amanda.stockwell@gmail.com

Lean Startup Principles in any Organization | UXNZ2017

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