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METHODOLOGIES FOR CREATING WORTHWHILE INFORMATION
SYSTEMS
Confidential © 2014 FrostHub, Inc. All Rights Reserved.
Doug [email protected]
VALUEVISION
STARTUPCULTURESTRATEGY
CO-DESIGNENTREPRENEURSHIP
ALL STARTUP IDEAS ARE STUPID
FROSTHUBOrganizational Design, Product Strategy and Software Design Consultancy
Bootstrapped Startup - Operations Management Software
Founded in 2010
Team of 5+ - Average 15 years of experience in software industry
Partnerships
LEAN STARTUP AND AGILE METHODS
How to create an information system that provides value to your customers?
History
Lean Principles developed by Toyota
Learning and Continuous Improvement
Extreme programming by IBM
Customer Development methodology - Steve Blank
INSIGHTS
“True startup productivity is not just making more stuff, but systematically figuring out the right things to build” - Eric Ries
WHAT IS A STARTUP?
A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
Treat your information systems project as a startup - be entrepreneurial
LEAN STARTUP PRINCIPLES
1. Entrepreneurs are everywhere
2. Entrepreneurship is management
3. Validated Learning
4. Build - Measure - Learn
5. Innovation Accounting
WHAT IS LEAN STARTUP?
• It asks people to start measuring their productivity differently.
• Startups often accidentally build something nobody wants, it doesn’t mater much if they do it on time and on budget.
• Goal of a startup
• Figure out the right thing to build - customers want and pay for - as quickly as possible.
ENTREPRENEURSHIP IS MANAGEMENT
• Our goal is to create an institution, not just a product
• Traditional management practices fail
• Need practices and principles geared to the startup context of extreme uncertainty
VALIDATE LEARNINGProcess of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects.
Real customers
Empirical data - source of knowledge is acquired by means of observation and experimentation
Get out of the office
EXAMPLES
• Will people listen to music privately in public setting?
• Will people pay for music online?
• Will people share their personal moments in a public portal?
• Will people share their dating interests publicly?
Validate hypothesis about customer behavior
THINK BIG, START SMALL
Zappos
• Is there sufficient demand for and superior online shopping experience for shoes?
• Built a product (smoke and mirrors) - tested it - learned
VALUE VS. WASTE
• Which of our efforts are value-creating and which are wasteful?
• Lean thinking - defines value as providing benefit to the customers; anything else is waste.
• Wrong Assumptions - go down a wasteful path without validation
HYPOTHESIS TESTS
• Value Hypothesis - tests whether a product or service really delivers value to customers once they are using it.
• Growth Hypothesis - test how new customers will discover a product or service
DO THIS OVER AND OVER AGAIN
PITFALLS• You test the wrong thing
• You do this when you misunderstand the real problem
• Your MVP is bloated
• Don’t build a thing in the beginning
• You don’t define any success metrics
• take any positive signals as validation
• You are asking the wrong questions
• You didn’t pivot properly
AGILE PRODUCT DEVELOPMENT - SCRUM
TEAM STRUCTURE
• Product Owner
• Scrum Master
• Front-end Developer
• Back-end Programmer
• Software Architect
• Quality Assurance Engineer
• User Interface Designer
MINIMUM VIABLE PRODUCT
• THE “MVP”
The smallest amount of work you can do to validate your assumptions.
• Not always a product
• Not what you are going to sell with minimal features
DON’T BUILD THIS
CAR DESIGNED BY "AN AVERAGE SCHMO."
EARLY MVP
ANOTHER MVP
SKETCHING
BUILD
CONCEPT REV. 1
CONCEPT REV. 2
DETAILED DESIGN REV. 4
BUILD
WE LEARNED
• Some MVPs were bloated
• We didn’t do enough exploration or concierge experiments
• We have built too much functionality that is not valuable to the users
• Needed to shorten our build-measure-learn cycles
CUSTOMER TESTING
• Test with people you didn’t know before
• Users will always think they need something more
• Finding early adopters
• Continuing the conversations and co-design
PIVOT
Change directions - but stay grounded in what you have learned
PIVOTS• Twitter - Odeo, podcasts
• Groupon - The Point, online fundraising
• Starbucks - espresso makers
• Flickr - Game Neverending, game
• Instagram - Brbn, check in app
• Suzuki - weaving looms
• Wrigley - soap
http://www.businessmodelgeneration.com/canvas/bmc
INVESTMENT READINESS
source: http://steveblank.com/category/customer-development-manifesto/
RESOURCES• Startup resources
www.leanlaunchlab.com
www.leanstartupmachine.com
www.startuplessonslearned.com
www.theleanstartup.com
www.quickmvp.com
www.javelin.com/experiment-board.html
• Prototyping tools
www.axure.com
http://balsamiq.com
• Tools
Google Apps
Amazon Web Services
Evernote
Jira and HipChat - Atlassian
Pivotal Tracker
Watch Silicon Valley on HBO
