Lean Startup for Established Businesses?

The Lean Startup concept - as championed by Eric Ries, Steve Blank, Andrew Chen, and others - is to move incrementally toward a viable business model using a tight feedback loop with potential customers.

Lean Startup is an ongoing sequence of posing hypotheses, testing those hypotheses, and then pivoting (adjusting) your business model based on the test results.

Integral to the Lean Startup concept is Steve Blank's idea of Customer Development (i.e., a hyper-focus on customers and the market at hand).

Lean Startup should not be limited to cagey entrepreneurs and Silicon Valley hipsters. 

Lean Startup could be readily applied to most product development projects that occur in companies of all shapes & sizes.

For software development projects in established companies, Lean Startup would be much like an incrementally improved version of Agile software development.

A significant upgrade to the time-tested Agile approach might be realized simply by having the development team pivot based on a tight customer-testing & analytics loop, rather than reacting to deer-in-the-headlights guesses hastily offered up by bewildered product owners. Engineers at Google have been doing this for years (see the Google News example in my post Launch Early & Learn).

Have the development team pivot each iteration based on a tight customer-testing & analytics loop, rather than the whims of the product owner.

Established companies are afflicted with an overwhelming inertia to make seat-of-the-pants decisions based on whims and half-baked notions. This occurs because employees and contractors are not stakeholders. This also occurs because of dead wood (the lazy & uninspired). To be fair, it’s not their bacon. It's much easier to make decisions based on a whim than it is to design tests, and do the grunt work, that answers essential and existential questions.

One challenge to established businesses is to set up an iterative framework of hypothesize, test, and pivot. Another challenge is to inspire employees to care enough about the product to doggedly pursue customer experience & customer desires through balls-out hypothesis testing and a feedback conduit to customers. 

The flip-side challenge is walking the tight-rope of customer development. That is, walking the fine line between engaging potential customers to help you converge to a business model and repelling potential customers by asking too much of them.

Resources

• Startup Lessons Learned by Eric Ries
• Customer Development Manifesto by Steve Blank
• A Strategy for New Products
• Definable & Measurable Software Value