1. Joe KinsellaMBA Guest Lecture, UMass BostonOctober 13, 2011Blog: HighTechInTheHub.com LinkedIn: linkedin.com/joekinsella Twitter: @joekinsella

2. My Background Success Stories Process for Iterating Case Study Parting Thoughts Q&A 3. 20+years in high tech software startups inthe Boston area with engineering focus Currently VP of engineering forSonian, cloud startup Formerly VP of engineering atSilverBack, acquired by Dell in 2007 Technology enthusiast & startup junkie Responsible for delivery of 18 softwareproducts 4. Howard Shultz joined Seattle coffee retailerStarbucks in 1982 On visit to Italy he becomes enamored withsocial culture in the espresso bars Tests concept at Starbucks, leaves to start hisown coffee shop, later acquires Starbucks First stores launched outside Seattle in1987, grows to 165 by 1992 IPO 2010: 17,000+ locations, 55 countries, $9.7Brevenue 5. Startedwith hypothesis: Italian coffee culturecould be transplanted to the U.S. Pursued vision despite rejection Iterated concept from 1983 to 1987 Visited over 500 espresso bars in Italy Piloted concept with small 300 square footcoffee bar in a retail store Leveraged knowledge of industry experts Iteratedseating, music, service, roasts, uniforms, andmenu in response to customer feedback 6. Michael Dell, a freshman at UT, identifiesmarket opportunity to sell computersdirectly to businesses Starts selling computers from dorm room Quits school to build computer business Grows company and goes public in 1987 Rapid revenue growth: $159M 1988, $2B1993, $32B 2000 7. Started with hypothesis: could make moneyand pursue hobby upgrading PCs Pursued vision despite resistance fromparents Iterated concept over 1983-1986 Sold expansion kits via small ads in papers Adjusted business and products based oncustomer feedback When asked by customer if he could buildcomputers, decides to make prototype Tests selling computers at PC show On success, changes business focus 8. The idea is often the easiest step The idea is often wrong Must focus on identifying customer value Must talk to and respond to customers Break through happens when you start smalland incrementally adjust Hard work and willingness to take risks willnot make up for real customer valueNeed process to iteratively change features/ functions in response to customer needs 9. Introducedby Colonel JohnObserveBoyd in 1990s Concept: opponent who canmove through cycle quicklycan gain advantage (get ActOrientinside decision cycle) First used in military circles,but broadly applied today Decide 10. Winningis about agility Requires iteratively adjusting tocircumstances on the ground Cannot be achieved from behind a desk Can disrupt competitors by getting insidetheir decision cycle Winners move faster than their competitors 11. Continuous customer Ideasinteraction Continuously test and Learn Buildadjust hypothesis Deliver value incrementally Data Code Grow based onprovensuccess Measure 12. Earlyforms used as early as the 1970s Scrum early methodology in mid-1990s First Scrum team came out of Boston area(Easel Corporation, 1994) * Methods owe allegiance to manufacturingmethodologies (e.g. Lean, Kanban) Movement driven as reaction toheavyweight methods of past (e.g.waterfall) * Easel was my first software job after college 13. Observe 14. Great products and services result fromepiphanies, e.g. Strategy what if I sold computers instead of upgrades? Delivery what if I added seating to my caf? Product what if I provided software to allow MSPs toconnect to their customers without a VPN? Epiphanies come from Understanding customers and market Iterating & experimenting Continuous focus on customer value It takes numerous epiphanies, often acquired overyears engaged with customers, to achieve success 15. 1. Has a Problem +2. Is Aware of Having a Problem +3. Has Been Actively LookingFor a Solution +4. Has Put Together aSolution out of Piece Parts + 5. Has or Can Acquirea BudgetFrom The Four Steps to the Epiphany by Steven Gary Blank 16. Orient & Decide 17. Storyis one or more sentences that capture what a customer wants to achieve E.g. User should be able to have comfortable and social environment for drinking coffee Shouldbe sufficiently granular to beactionable in short period of time Stories should be recorded: e.g. 3x5cards, agile board Stories should receive weighting (storypoints) based on effort to execute 18. Prioritizestories in order based onpotential business impact Derive major themes (epics) from storiesto review with customers Bring customers through prioritizationexercise to ensure ranking correct Maintain backlog of unfinished stories 19. Act 20. Sprint is unit of development that deliversone or more stories to market Typical lengths for software is from 1-4weeks Starts with planning and ends with deliveryof new version of product or service tocustomer Sprints can be applied to all businesses &product 21. Eachsprint starts with prioritization ofbacklog Development is timeboxed Sprint results in usable deliverable Larger changes decomposed intoincremental deliverables Stories that do not get completed in sprintmove back to back log (train leavingstation) 22. Once new features launched, essential toreturn back to Observe of OODA Follow up with customers to gatherfeedback on new services/features Write new stories for backlog based onfeedback Prioritize new and existing stories in nextsprint Rinse & repeat 23. 1. Not talking to enough customers2. Not talking to the right customers3. Being overly vested in idea4. Premature scaling5. Not developing incrementally6. Unrealistic expectations7. Not differentiating customer must haves vs. nice to haves8. Lack of meaningful milestones to judge progress9. Not knowing when to give up on a direction 24. Author: Eric Ries, Silicon Valleyentrepreneur Coined term Lean startup in2008 Sample company usingmethodology: Dropbox Use agile software methods Drive maniacally customer-centric process 25. Author:Stephen Blank Step by step process forbringing successful products tomarket Drives key lean startupsconcepts, including minimumviable feature set Introduced earlyvangelist 26. Author: Clayton Christensen Shows companies exist in valuenetworks, interdependent social andbusiness resources within a market These value networks Support driving sustaining changes in a productor service Can disincentivize companies in responding todisruptive changes E.g. disk drives, digitalphotography, mobile telephony, InternetProtocol, outpatient clinics, ultrasound