Lean Startup Tools for Scrum Product Owners

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AT4 Concurrent�Session�11/14/2013�10:15�AM�

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"Lean Startup Tools for Scrum Product Owners"

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Presented by:

Arlen Bankston LitheSpeed, LLC

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Arlen Bankston

LitheSpeed

Arlen Bankston is an established leader in the application and evolution of process management methodologies such as Lean, Six Sigma and BPM, as well as Agile software development processes such as Extreme Programming (XP) and Scrum. He

is a Lean Six Sigma Master Black Belt and Certified ScrumMaster Trainer. He also has twelve years of experience in product design, leveraging principles of information architecture, interaction design and usability to develop innovative products that meet customers' expressed and unspoken needs. Arlen has led Agile and Lean deployment and managed process improvement projects at clients such as Capital One, T. Rowe Price, Freddie Mac, and the Armed Forces Benefits Association. Arlen's recent work has centered on combining Lean Six Sigma process improvement methods with Agile execution to dramatically improve both the speed and quality of business results. He has also led the integration of interaction design and usability practices into Agile methodologies, presenting and training frequently at both industry conferences and to Fortune 100 clients.!

Lean Startup Tools for Agile Product Teams Agile Development Practices East, Nov. 14, 2013!

Meet the Presenter

Arlen Bankston •  Co-Founder of LitheSpeed, LLC •  User experience & product

development background •  14 years of Agile experience •  Lean Six Sigma Master Black Belt •  Lately 40% training, 20% each of

coaching, product development & management

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Agenda

•  Agile & The Lean Startup Movement •  Validating your Business Case

•  Getting Out of the Building •  Business Model Planning

•  Tuning your Solution

•  Landing & Launching •  Prototyping

•  Building Based on Data

•  Analytics & Testing •  Customer Service

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Agile & The Lean Startup

Movement

Risks of Agile

1.  Backlog items are not always validated against true end-user needs

2.  Critical reliance on a fallible Product Owner

3.  Lack of clear advice on how and when to “pivot”

4.  IT bias… fall back on what we know: build, build, build

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“Lean” Means Just Enough

Manage risk by doing just enough to learn, as a product progresses: •  How to build the right thing •  How to target the right people •  How technically viable your idea is •  What it’s worth •  How to grow it

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Lean Startup Movement – A Brief History

•  Steve Blank coined “customer discovery” in the book “Four Steps to the Epiphany”

•  Steve funded Eric Ries’s startup company IMVU in 2004

•  In 2010, Alex Osterwalder wrote “Business Model Generation”

•  In 2011, Eric wrote “The Lean Startup”

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Lean Startup in a Nutshell

1.  Describe your business case as !a set of assumptions

2.  Talk to early adopters and show!them prototypes to test assumptions

3.  “Pivot” releases based on both qualitative & quantitative feedback

4.  Deliver often & with high quality using agile methods

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Ideas! Product!

Data!

Build!

Measure!Learn!

Lean%Startup%at!Capital!One!Bank!

1.  Hire only the best digital talent and then massively empower them

2.  Designed new workplace environments to spark innovation

3.  Retooled consumer insights generation

4.  Don’t create business cases first – Build and test prototypes to create the business case

5.  Build concierge-based solutions before we build the technology

6.  Measure success as customer engagement rather than unit production

Thanks to Gagan Kanjlia, Senior Vice President, Capital One Bank

Validating your Business Case Matching customers, problems & markets

Most Initial Business Models are Wrong

•  PDA encryption software led to…!!!

•  The Game NeverEnding (a web-based MMORPG) led to…

Lean + Agile Innovation Process

Customer%Discovery%

Customer%Valida7on%

Find the right product market fit…

Then execute and iterate on it incrementally.

Pivot

LEAN FEATURE

VALIDATION AND

ELABORATION

AGILE FEATURE DELIVERY

AND RELEASE

Product Backlog

Discovering Customer Needs

[In]validate your assumptions by:

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•  Interviewing users •  Observing users in their native

environments •  Manually simulating your

system (“concierge”) •  Rapid usability testing •  Tracking behavior of customer

cohorts (related groups)

Problem Interview

Talk with early adopters to learn whether they share your perception of the problem. This is a sample interview script to validate & rank problems with users.

14!Thanks to Ash Maurya, author of Running Lean for this format:

http://www.runningleanhq.com/

What do we do with unused food in our

pantry? Felt that new dieters were the audience. •  We split into three teams

•  We went to Macy’s Cellar looking for people in the cooking section

•  We went to Whole Foods

•  We grabbed people off the street in Times Square

Results?

•  We learned: Young singles and families were most interested, and more for variety than diet or budget.

•  88% of the people we spoke to gave us their email addresses (35 emails)

MacGyver’s Kitchen

Invalid Customer 20% 7/34

Wrong customer, budget & waste not important.

Don’t know what to do with food in pantry

To validate: 60%

Valid 80% 35/44

Concerned with time, variety, serving size

To validate: 60%

Don’t know what to do with food in pantry

Javelin%Board%for!MacGyver’s!Kitchen!

Validation Board for Experimentation

17 hBps://www.leanstartupmachine.com/validaHonboard/!

Plan and track experiments to test your assumptions about customers, problems & solutions. Pivot based upon the results that you see.

The Pivot

Based on what you learn, you might: •  Stick to the plan •  Target another customer group •  Target a different need •  Expand or contract feature focus •  Change platforms or architecture •  Change channels •  Kill the idea entirely

Persevere, pivot or punt.

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Lean!Canvas%to!draJ!your!Business!Model!

Thanks!to!Ash!Maurya,!Leanstack.com!19

Draft your business case in a simple, single-page format, and adjust based upon the results of your interviews, prototypes and releases.

Example!Lean!Canvas!for!Sensei!

Sensei!is!an!Agile!retrospec7ve%tool%by!LitheSpeed.!!www.senseitool.com!

Lean!Canvas!as!Dynamic%Dashboard%

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Think!of!your!project!as!a!set!of!small%experiments.%!The!results!of!these!experiments!should!be!simply!stated!and!reviewed!regularly!to!guide%decisions%about!product!direcHon.!

Thanks!to!Ash!Maurya,!author!of!Running!Lean:!hBp://www.runningleanhq.com/!

Tuning Your Solution Quick, cheap ways to validate your approach

The%MVP!

A “Minimum Viable Product” might be: •  Learning: Onsite observation, fake menus, ads •  Pitching: Preorders, comparisons, joint design •  Experiencing: Concierge, prototypes

Early releases focus on quickly & cheaply testing ideas.

Later%releases%focus!on!scaling.

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MVP%

Pivot%Key%Differen7ators%

Flexibility%&%Safety%

Scaling%&%Op7miza7on%

Story!A1!

A2!

A3!

B1!

B2!

C1!C2!

C3!

D1!

D1!

D2!

B3!

Epic!1! Epic!2! Key!AcHvity!

Major!Component!

Plan!Releases!&!Pivots!with!a!Story%Map%

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Concierge!to!Test!without!Coding!

A manual simulation of your product or service.

Balsamiq!Mockups!for!LowWFi!Prototyping!

hBp://balsamiq.com/products/mockups/!

Test layouts and flows without coding or graphic design.

Easel!for!Rapid!Prototyping!Create clickable prototypes to test interaction flows and basic designs.

QualitaHve!Solu7on!Interviews%

28!

Test%your%solu7on%early!via!prototypes,!and!later!working!soJware.!!This%is%a%sample%interview%script%to%qualita4vely%gauge%user%interest%in%a%specific%solu4on.%

Landing & Launching

Unbounce!for!Landing!Pages!You can create dynamic landing pages that help you tune your pitch and garner pre-orders with tools like Unbounce.

Kickstarter!to!Find!a!Market!&!Funding!Crowdfunding sites like Kickstarter can be used to sharpen your message, test a market and fund independent projects.

Wufoo,%Qualaroo%for!Surveys!&!Forms!Rapid form builders can capture customer details or test ideas.

More!informaHon!at!Wufoo.com,!Qualaroo.com!

Building Based on Data Analyzing & evolving your production system

Analyzing & Testing

Customer%Funnels%and!Cohort!Analysis!

Study your users’ behavior as individuals. “Cohorts” are usually groups that arrive at the same time and share the same initial experience. !Popular tools: •  Mixpanel •  KISSMetrics

Tracking%reten4on%of%cohorts%over%4me.%

“Pirate”%Metrics!&!Customer!Funnels!

36!

Acquisi7on%

Ac7va7on%

Reten7on%

Revenue%

Referral%

How many users are interested and find you? Preorders, signups, ad responses How is their experience when they do? Successful runs through key use case Do they stick around for the long run? 30, 60, 90 day retention by cohort Do they pay? Ratio of paying users or ROI Do they tell their friends?

Successful recommendations

Thanks to Dave McClure http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version

Pirate!Metrics!with!Sensei%We!used!acquisiHon,!acHvaHon!and!retenHon!metrics!to!find!out!how%many%people%successfully%completed%retrospec7ves%with!our!tool,!versus!just!kicking!the!Hres.!!!!By!tracking!cohorts,!we!were!also!able!to!see!the!rela7ve%impact%of%new%features!that!we!introduced.!

QuanHtaHve!A/B%&%Mul7variate%Tes7ng%Split (A/B) testing randomly presents users with competing versions of specific application pages and features. •  See what works best by running parallel experiments •  Choose the winning option after appropriate time

Header!

Sign%up%form%

Demo!movie!

Story!

Header!

Sign%up%form%

Demo!movie!

Story!

58%%of!visitors!signed!up!

35%%of!visitors!signed!up!

A% B%

A/B!TesHng!Sensei!with!Op7mizely%We!found!a!60%%increase%in%registra7ons%just!from!adding!the!term!“distributed!teams”!to!our!landing!page.%

Customer Service

Zopim%Live!Chat!!We!envisioned!live!chat!to!be!largely!a!help!tool,!but!it!ended!up!connec7ng%us%with%our%most%passionate%early%adopters.%

Thank You!

Reading%List%–!Lean!&!Agile!InnovaHon!

•  Running Lean – Maurya •  Essential Scrum – Rubin •  The Entrepreneur's Guide to Customer

Development – Vlaskovits •  The Lean Startup – Ries •  Discover to Deliver – Gottesdiener •  The Other Side of Innovation – Govindarajan •  Four Steps to the Ephiphany – Blank •  Business Model Generation – Osterwalder

Contact Us for Further Information

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Arlen Bankston Managing Partner, !LitheSpeed Arlen.Bankston@lithespeed.com

On the Web:

http://www.lithespeed.com

http://www.sanjivaugustine.com

"I only wish I had read this book when I started my career in software product management, or even better yet, when I was given my first project to manage. In addition to providing an excellent handbook for managing with agile software development methodologies, Managing Agile Projects offers a guide to more effective project management in many business settings." John P. Barnes, former Vice President of Product Management at Emergis, Inc.