The lean startup methodology, and its Minimal Viable Products strategy have grown hugely popular, but what are the challenges of applying lean startup and how can it be applied when working with external companies?
Lean startup is a product design and realization methodology formulated by Eric Ries. The approach borrows from production practices, such as lean manufacturing and kanban, which focus on execution and adaption as strategies to achieve innovation (a more throughout review of lean startup can be found here.) Although the name includes the word ‘startup,’ the concepts can be applied to companies of any size—from a one-person startup to big, multi-national companies.
Inspired by both the scientific method and business optimization practices, the lean startup builds on three fundamental concepts:
The benefit of lean startup is that it offers a methodology for companies to drive sustainable innovation beyond a “throw it against the wall and see if it sticks” approach.
When discussing lean startup with colleagues and clients, however, they often ask if it means that innovation and design is limited to a data-driven, scientific-like process. While gathering user and market data helps steer the innovation process, it is clear these processes do not stand on their own. Without intuition, skillful design, and the right interpretations, you won’t get far.
Despite the apparent benefits of the lean startup methodology, its widespread application remains challenging. In addition to my daily discussions with clients and colleagues, I've been applying principles from lean startup on a number of projects. Based on my experience, I’ve identified at least three major challenges:
The first challenge concerns changing work practices and ways of thinking. While lean startup doesn’t necessarily mean giving up control, it offers new (and better) tools for staying in control. Changing the way of thinking within a company is not easy and requires a large investment of time. Often making a significant change requires employee backgrounds and skillsets that may be different than what are currently in your company. Those of us that have been working with Agile methodologies for the past decade knows that changing the cultural fabric of a company is a long, and often difficult, process. Thus, the first challenge is a cultural challenge.
A strategy for overcoming this cultural hurdle is to isolate the iterative design process to a smaller group of people within your company. This group should be empowered to take decisions and move forward in shaping the product, and gaining the needed experience.
Change the process
Lean startup also presumes a strongly integrated research, design, and development process. This is contrary to how many companies are structured. It also raises the question of how a company that relies on external consultants or offshore workers can effectively implement lean startup approaches. When the design and development of a project no longer happens in isolated phases, how can it be outsourced in an efficient way?
Furthermore, how can the learning from these activities be brought back into the larger organization?
This second challenge is a process challenge, requiring people with different skills to work in teams rather than departments. The challenge of outsourcing may be addressed by relying on external resources that not only deliver fixed deliverables, but also work together with the sourcing company to form a coherent team. This approach allows expertise be shared, increasing learning while accelerating the product development cycle. It is key to work with partners that understand iterative design and are ready to work within your team. This will help bridge the gap from traditional product design methodologies to methods based on rapid iterations and user feedback.
Planning and logistics
To measure, you need users. It may seem obvious but, in the end, you need to plan for it, and that may be harder than you think. Following approaches such as Design Thinking and Contextual Design involves users in all phases of product development, from participatory design to user testing. Design approaches are often focused on qualitative aspects, however, leaving quantitative research to the business people. The quantitative measurements of user behavior can reveal important aspects of your product, including its value, which can be hard to test using qualitative techniques.
One of the core principles of lean startup is to test often. The best way to know if you've improved your product is to run a comparative test where you test two different versions of your product on a group of users, and see which product performs best. To do so, you need the two versions to test as well as systems to capture user data and manage logistics. Even if you decide just to test an old version of your product against a new version, you still need to invest more time in the development to support parallel testing (also called A/B testing or split testing). This may not be an issue for bigger corporations with existing products and a user base. For a small startup, on the other hand, this can be a significant challenge. In the end, building a testable product has an impact on time to market. I refer to the third challenge as a challenge of resources and logistics.
The road ahead
Applying iterative design, and lean startup in particular, is fast becoming a mainstream design and innovation strategy. Despite these challenges, there is no doubt that lean startup—with its short development cycles along with measurements and improvements based on learning—is a fresh and much welcomed way to look at product design.
Tue Andersen is a senior software architect at frog's Milan studio.