Lean provides a platform to build a sustainable business based on implementing user generated ideas towards solving an identifiable  problem. Exploration is the process of identifying a gap in the market, a viable need for the solution that you intend to develop. The next step towards successful sustainability is the product pitch.

I have mentioned in my previous posts on LSM, the process of exploration. This stage of product development is designed to validate that the consumer is willing to pay. In our case, we had 46 users hand us money in the street for a product that didn’t exist, but they bought into the idea, which was, technically, their idea. This validated the hypothesis that early adopters, power users, were willing to pay for our application.

In a corporate space, we already know that our customers are willing to pay, because they already do. How can we use lean, to develop future products through our existing platforms? The pitch is an interesting element of lean, in relation to big business. The existing consumer base is intrinsically linked to contextual big data, which is valuable. This allows us to aggregate and analyze our user’s behavior on our web, mobile and tablet assets. We know exactly what our customers are doing, and when and how they are doing it. The pitch is in the products that we already serve, allowing us to tailor our next product to the habits of our existing users, increasing lifetime value for current and potential customers, and eliminating the features that render a sub optimal experience.

With Google recently releasing a mobile analytics platform, a high level of data analysis is accessible to the startup, whatever platform they develop on, albeit without access to the raw data, and this is free. In corporate, with big data tables consisting of up to 600 million rows, we need a more accurate digital representation of user behavior, to personalize our products, and we pay for it. Software solutions, like Omniture, help us to do this on a very granular level. It’s this data that I believe we can use to determine the viability of our pitch. As a startup would test an MVP on new customers, let us also experiment on our existing ones. We already know what makes them happy. We can use the data we have in order to accurately gauge the added or declined value a new version, feature, update will have, through a minimum viable iteration. This will give us an idea on what to implement in version 1 ++, in turn allowing us to measure the correlation between new customer acquisitions, and existing user conversion rates the new iteration of a product provides.

This almost creates a product development network effect. A product becomes more valuable to all users, each time a new user joins. With social integration being an integral part any application, and a viral business model trending tech startups, corporates have needed to adapt to a social change. Each new acquisition will not only generate revenue, but also provide valuable data on how our products work. More users equal increased revenue streams, equal an increased knowledge base on customer requirements, adding value to our products, making users more willing to share them, and new users more willing to pay for them.

Lean is the process of maximizing the probability that a product/service has a demand, that what is being built is the right thing to build. For example, card counting is a technique that increases the probability of accurately predicting the chances of a high or low card being dealt in a given hand. In the same respect, lean minimises the risk of failure by pivoting with the least amount of effort lost.

We zoomed-in, pivoted, and one small element of our previous solution became the focus of our next, which was time, and reiterated over the build, measure and learn cycle. We now needed to test our new hypothesis, would people engage in more frequent new experiences if they could pay for someone to organize them? Our research was conducted in the same way as described in the previous post, the result again invalidated. We pivoted four times.

In terms of corporate product development, this is an easier strategy to adopt with new products and services, but the incorporation into existing projects is difficult, budget has been spent, whether the product is wanted or not, and time has been put into delivering it. The traditional product development approach puts up barriers towards using lean methodology, lean does not focus on the solution, the product features, designs or functionality, which can be a hard habit to break. Lean focuses on the problem, the early adopting consumers lay the features out in front of you, after good customer development research and a valid assumption. With agile being implemented across more and more technology departments, lean is an easier shift, we build our digital assets in an agile environment, why do we not design them in this way? plan them this way, and release them as a minimum viable product, having consumed minimal resources. Then we will only build the actual product if we have substantial buy in from stakeholders outside the business, supported through the user base acquired having previously smoke-tested our MVP, then iterate.

The ‘hang with a local’, startup, recently liquidated, was a result of this agility. To have invested nothing but short periods of time towards validated learning we now had a better perception of what the market sector was in need of. Whilst the experiments we ran were limited due to time constraints over the few days we had, and competition projected us, or me, into an emotional, desperate to win wreck, our passion was in the process and not the product. Entitlement and sentimentality are out of place in this environment as even though we loved our bucket list, done-to-death vision, pivoting to our consumer projected results allowed us to personalize our service to those that needed it.

We built a landing page using unbounce, and went out and sold our non-existent product on the streets, whilst we had some successful conversions, it wasn’t enough, but it proved that the practice worked.

I recently attended an agile/scrum training course through News Int. with a number of other tech employees from various companies, out of which we were the only one that currently implemented agile into our software development life cycle. Every other employee claimed, “It sounds great, but however will we implement this across our current teams ?”, and I thought everyone used agile. It is a big transition and so is a lean approach to product development, looking upon tech departments as small startups in the wider business, but the flexibility and the capability to adapt in a rapidly changing environment suggest these approaches are becoming a necessity, rather than a choice.

We are lucky, at News International, in relation to this, our technology leadership team prioritize driving innovation individually, as highly as they do collectively. Cloud platforms are at our core, and in my opinion, a media and publishing company, with a research and development department, is innovation in itself. With this entrepreneurial drive being cascaded  from the top ranks of the department, lean and agile make perfect sense.

The product began with the initial concept of building a bucket list app, this was intended to drive new experiences, by allowing users to record their bucket list, big ideas, visually monitoring their progress, sharing, ranking and budgeting in order to motivate and inspire, out of the ordinary experiences. Given the traditional product development model, and our experience with it, rather than focusing on a problem: the user doesn’t have a service that makes it easy to organize  big new experiences (there are apps out there). We focus on the solution, the product, the features, design and functionality, of a product that we do not know if anyone really wants yet (they don’t). Lean looks at the minimum viable product, generating the greatest amount of progress, with the least amount of effort, and measures progress by lessons learnt.

NI technology have always driven innovation, the first to put up the pay wall, for example. We open source code to public repos, through Research and Development we prototype new products, and dog food beta product releases internally before public launch. In this respect our prototypes are our minimum viable products, we learn, from the products that get built, by those that built them, dog fooding and collecting feedback on what works, and what requires improvement. Lean says we are biased, of course we are, we built them. LSM have pushed us to begin MVP consumer testing, (not to be confused with the model, view, presenter design pattern),  to actively validate our business case from feedback by the customers that will pay for it. Now the word lean is circulating around R & D, daily.

So, first we needed to validate a business case for the requirement. It is worth noting, that for the learning purposes of the exercise, cost, competition and market saturation were not factored in to our experiments, and due to the time scale, only a single hypothesis was tested at any one time, and only once. In a real environment this would be different, but the lean process framework would remain the same. The first stage was customer exploration.

The Lean Startup Machine uses a tool, a validation canvas,  a visual representation of the lean product development process. As I mentioned briefly in the previous post, this forces focus on a specific set of requirements, identifying a problem for just one person. The theory prompts you to conduct a startup as an experiment. Define a target group, a sub set of customers to test your hypothesis, their problem, and a possible solution. In the ‘Hang with a Local’ example, our first assumed problem was that ‘People feel guilty about not accomplishing new experiences.’, the solution: a bucket list application. To test this, we defined a set of core assumptions, that if false, would completely invalidate our business model. Then we ran an experiment to test the riskiest of these. Our assumptions included, ‘People actually want to experience new things.’, a pretty safe  majority assumption, the riskiest of our core being, that people actually felt real guilt about the number of new experiences they  had achieved to date. We were trying to monetize an emotive and sentimental response, over lack of life experience, by providing a means to gain more.

We asked a series of indirect questions to our potential customers, designed to validate or invalidate our problem hypothesis in as fast a time as possible. A minimum success criteria was defined, we wanted 5/14 people to give us a definite indication that this was the case. This was exploration. This didn’t happen, we found that actually, people either made their own means of recording the things they wanted to do in life, pins in map, blogs, diaries etc, or didn’t feel guilty at all, but merely looked upon the obvious excuses, career and finances, as a justification to why they didn’t per sue new experiences.

So we had to pivot, but what we learnt, was that those that did chase new experiences, didn’t want to do it alone, and found it difficult to find the time to research, plan and organize, the new things that they wanted to do. Regardless of the accessibility and  resources of the internet, with this being, to them, too broad a platform. The customer hypothesis remained the same, the solution, became a personal event organiser, someone that makes it happen for you.

Through our product development team at News International I was lucky enough to participate in a training workshop with the Lean Startup Machine. These guys teach lean methodology to entrepreneurs, corporates in around 15 cities, if I remember correctly. The concept has been developed from the Toyota Production System and lean manufacturing model, the Lean Startup Machine was built upon a book by Eric Ries, who created the lean methodology and shaped the movement into what it is today.

We spent 3 days conducting customer development research, relentlessly trying to invalidate our riskiest assumptions based on a problem hypothesis that was a result of our initial vision, iterating over the solution and using the build – measure – learn cycle to validate a business model that displayed an actual need for our new product vision. We would measure success as lessons learnt, and, as frequently happened, pivot when a business case could not be validated in respect to our solution hypothesis against a minimum success criteria, and the iterations began.

We focused on trying to solve a problem for just one customer to begin with, rather than go for unattainable mass market accreditation (which can be a credit to the failure of some tech startups). What we were really looking for, was to identify a problem that made consumers “foam at the mouth”, at the hope of a solution. We were looking for early adopters, who would, through a little research, give us all of the ideas and features that we would need to implement in order to build them the perfect product that they were willing to pay for, and they did. A number of consumers would pay for the product, without the product even existing, and they would tell me how nice I was when I gave them thier money back, and directed them to our sign up page.

In this case we came up with a service, that would connect tourists, to local residents of the places they visit and hang out with them for a while. @localhanging.

We managed to generate over 1000 hits to a non-existent site, get 46 paying customers give us money on the streets, (which we returned), and have 59 users click to pay £5 on our landing page. Whilst this is a relatively small number of engagement, and the big numbers a merely vanity metrics, not actually indicating any substantial drive for our product. We were not a “draw something” success driving 5 million downloads in a week, or in fact generating any profit at all. However, what we learnt was priceless: we are now looking to implement the lean framework across the product teams within our company, through this blog I will share what we learnt and how, how we incorporate the process across News International and how successful, or invalid it becomes.