Lean Enterprise’s Business Model

Lean Enterprise’s Business Model

 

You may have already heard about Lean Enterprise but, because it is a relatively new concept, you most likely haven’t yet.

What is Lean Enterprise?

Lean Enterprise Business Model - Baker MarketingIn short, Lean Enterprise is the Lean Startup approach adapted to large organisations. It has already been adopted by many large organisations such as GE, Toyota, the White House (about 4 years ago), NPOs  and many startups that became large such as Zappos.

 

How can Lean Enterprise be used?

Lean Enterprise can be used as the guide to an entirely new innovation program. However, since most large organisation already have an innovation program, Lean Enterprise can simply build on the existing program, improve it, make it more efficient and, over time, permeate the entire organisation with a culture of innovation.

Explaining Lean Enterprise

Explaining Lean Enterprise could be a very long process given that it touches all aspects of business and will take a very distinct flavor in each or the organisation that adopts it.

When entrepreneurs or intrapreneurs (folks responsible to make innovation happen in large organisations) want to explain their projects to me, I usually ask them to describe their business model.

Hence, I’m thinking that describing Lean Enterprise’s business model is will be a good way to explain this approach to manage innovation in large organisations succinctly.

Understanding Lean Startup first

Lean Startup approach - Baker MarketingIf you are unfamiliar with the Lean Startup approach then I suggest you brush up on it. Lean Enterprise requires a very good understanding of the underlying principles as well as the capability to run Lean Startup-type experiences.  There is an abundance of Lean Startup documentation online including the many Lean Startup related posts on this blog. Here is a sample of them that you can check out as a primer.

The Lean Enterprise Business Model

The image below (click to make it larger) is Baker Marketing’s version of what Lean Enterprise’s business model would look like. This version would not make for a good investors’ pitch but it’s also not its purpose.  Hopefully, this business model canvas will help you to understand, at a glance, what Lean Enterprise is all about.

The Lean Enterprise Business Model Canvas

Lean Enterprise's Business Model - Baker Marketing

Click for full view

Although this canvas is pretty straight forward, I will detail the Customer Segments and Value Proposition sections of the Lean Enterprise business model for better comprehension.

 Targeted Customer Segments

Lean Enterprise's Business Model - Baker MarketingThe Lean Enterprise innovation approach can be used is just about any large organisation that needs to innovate. The more disruptive the innovations it produces, the more gains it will get from the Lean Enterprise approach.

 

 

For profit organisations

This segment has the most straight forward application of Lean Enterprise for innovation purposes.

There are already dozens of large organisations incorporating Lean Enterprise in their existing innovation programs to make them more efficient. It is the case of such companies as Google, GE, Intuit, Toyota, Adobe, etc.

 

Non profit organisations

NPOs around the world all have a common pain; they are struggling to get enough resources to achieve their goals.

In many cases they are also faced with the task to innovate in order to keep being relevant to both their users and benefactors. Lean Enterprise helps them by ensuring that all the resources they do have are used as efficiently as possible when they innovate.

Lean Enterprise also helps large NPOs develop a more innovation-friendly culture.

 

Public and para-public organisations

Given that efficient use of resources is a basic principle in the application of Lean Enterprise, most public organisations could benefit from its implementation greatly. Government institutions are also in dire need of catching up to economies changing at the fastest pace ever in history.

The White House initiated the Healthcare.gov portal re-design in 2011 with a Lean Startup (not yet known as Lean Enterprise) team. The embryonic project was then taken over by CGI. When CGI was unable to deliver on time and on budget, the project was reverted to the Lean Startup team. The results they achieved were so spectacular that the White House eventually adopted Lean Enterprise for all of their innovative projects.  The approach also spread to other American government agencies and departments.

Aneesh Chopra, who was appointed CTO of the United States by Obama in 2009 (until 2012) was one of the catalysts in propagating the Lean Enterprise approach through the US government. [1]

 

 

Value Proposition

Lean Enterprise's Business Model - Baker MarketingThis is, in part, what a large organisation can expect to obtain with the implementation of a Lean Enterprise approach to innovation that their current program may not be bringing them.

 

Help innovate more efficiently

The efficiency is obtained in large part with the fact that an innovation project that is completed, within a Lean Enterprise-based innovation program, will necessarily answer the needs of its target customers/users. Hence a product/market fit or a service/user fit will be achieved every time.

Efficient use of resources (especially human) being an underlying principle of Lean Enterprise, it is therefore a constant preoccupation of the project participants.

 

Use existing resources more intensively

If you work in a large organisation, I am certain you are aware of either unused resources or resources not fully used that can be put to contribution in innovation projects. If not, I suggest you ask and snoop around. You will find some in no time. The infusion of entrepreneurial attitude, brought by Lean Enterprise, makes using these resources second nature.

 

Build on existing innovation programs/practices

Lean Enterprise is based on principles, tools and techniques borrowed from many existing and proven management theories such as:

  • Lean production
  • Customer development
  • Agile development
  • Design Thinking

Most innovation programs already make use of the principles, tools or techniques of some of these theories. Lean Startup implementation can ‘’surf’’ on these existing programs in an organisation and add to them.  This greatly flattens the learning curve and is more easily adopted.

Implementing a Lean Enterprise approach to innovation is like any other change management program. It must be done incrementally, ensuring all are onboard.

 

Increase speed to market of innovations

Lean Enterprise is based on rapid iteration testing of the various parts of a business model until you reach a product/market fit or service/user fit[2].

The approach has a built-in control mechanism to ensure innovation teams don’t go astray, lose focus or momentum.

 

Pivot quickly on ideas with no positive ROI

All of the products or services that get to market with a Lean Enterprise approach are successful. This, however, doesn’t mean that these successful products or services look anything like what was imagined initially.

Lean Enterprise does not prevent or fix product or service ideas that would flop in the market.  It does however quickly show which ideas need to be discarded thus avoiding the waste of resources to bringing them to market.  Luckily, most ideas simply need a few pivots (okay many pivots) to achieve success with their markets.

 

Better manage innovation financing risks

The use of innovation accounting in Lean Enterprise innovation programs allows for incremental financing with a known risk coefficient of each of the projects increments.

It bridges the gap between corporate innovators and financial managers.

You can read more about innovation accounting in these previous posts.

 

Creates innovation culture in the long run

The real prize, at the end of the journey of implementing Lean Enterprise, is the creation of a true culture of innovation.

Some of the most important barriers today in achieving a true organisation-wide culture of innovation are the following:

  • Mistakes are neither welcome nor tolerated
  • Resources (human, financial, physical, etc.) are kept in silos
  • Decision making power is diluted (with a heavy weight at the top of the pyramid)
  • Over-abundant and rigid processes that result in slow reactions to market changes

The Lean Enterprise approach to innovation, intrinsically, removes those barriers.

As any other change management program, Lean Enterprise takes time, effort and commitment. Commitment from the innovation project champions but also from top management. Although still in its infancy, the Lean Enterprise approach shows promise of integrating innovation into large organisation’s main stream of business instead of treating it like a special cousin, as it is now.

If you want to learn more about Lean Enterprise and its application, you can pre-order Eric Ries’ new book due out in the fall, called TheStartup Way.

If you have a Lean Startup Circle community in your area, you can contact the organisers to locate experienced coaches or attend their meetups and see how entrepreneurs and intrapreneurs can help each other innovate more efficiently.

[1] This hour-long talk with Aneesh Chopra explains how Lean Enterprise came to be in the US governement

[2] Characterised by a sharp increase in the sales or adoption growth for a sustained period.

Mentors Montréal – Le mentorat d’entrepreneurs en devenir

Mentors Montréal – Le mentorat d’entrepreneurs en devenir

 

Ce billet s’adresse principalement aux mentors d’affaires qui s’intéressent au mentorat de pré-démarrage et de démarrage ainsi qu’aux organismes qui desservent ces entrepreneurs en devenir. Il a pour objectif de partager l’expérience de la première année d’opération de la communauté Mentors Montréal créée spécifiquement pour desservir ces clientèles encore mal desservies dans la région de Montréal.

Mentorat d'affaires - Baker MarketingQu’est-ce que le mentorat d’entrepreneurs en devenir?

La définition pure du mentorat  implique une relation de soutien, d’aide, d’échange et d’apprentissage entre un mentor (préférablement bénévole) et un mentoré, dans le but de développer le mentoré.

La version plus puriste du mentorat d’affaires repose principalement sur la transmission du savoir-être entrepreneurial. La transmission de savoir-faire étant plutôt associée au coaching.

Il est important ici de ne pas confondre mentorat d’affaires et mentorat professionnel. Ce dernier a pour objectif le développement de compétences et/ou de faciliter l’ascension des échelons professionnels (à l’intérieur d’une même entreprise ou non).

Dans la culture populaire nord-américaine le mentorat d’affaires est axé sur la santé financière et la pérennité de l’entreprise plus que sur le savoir-être entrepreneurial.

Ce type de mentorat, qu’on qualifie parfois de mentorat à l’américaine, implique que le mentor peut agir également à titre de coach ou même de conseiller afin de prendre le chemin qu’il ou elle juge le plus court vers la santé financière de l’entreprise. Ce type de mentor partagera son réseau d’affaires, référera des clients et ira même jusqu’à investir financièrement dans l’entreprise de son mentoré.

Pour de plus amples détails sur l’offre de services de mentorat d’affaires à Montréal je vous invite à lire mon billet intitulé Démystifier le mentorat d’affaires à Montréal.

Le mentorat d’affaires, même dans sa version puriste, implique une portion de coaching (ou de savoir-faire). Généralement, plus l’entrepreneur possède d’expérience entrepreneuriale (dans son secteur d’activités), moins il a besoin de coaching (savoir-faire).

Inversement, puisqu’on ne devient pas entrepreneur automatiquement le jour où on décide de se lancer en affaires, les entrepreneurs en début de parcours ont un plus grand besoin de coaching (savoir-faire).

Corollairement un entrepreneur en début de parcours est aussi généralement moins réceptif à la transmission de savoir-être entrepreneurial puisqu’il n’est pas encore rendu à cette étape de son cheminement.

Mentors Montréal - Baker MarketingMentors Montréal

Il y a près d’un an maintenant, j’ai créé à l’aide de nombreux bénévoles, la communauté de Mentors Montréal.

Mentors Montréal compte plus de 250 participants dont environ le tiers est des femmes. Mentors Montréal regroupe plus de 50 mentors qui ont un minimum de 2 années d’expérience entrepreneuriale ou qui ont œuvré depuis de nombreuses années auprès d’entrepreneurs en devenir.

Principaux objectifs de Mentors Montréal

L’objectif premier de Mentors Montréal est de desservir les besoins en mentorat/coaching d’affaires des individus en pré-démarrage (réflexion) ou au début de leur période de démarrage (idéation et début de l’étape de découverte).

Un second objectif est d’offrir un terrain neutre d’échange, d’observation de la clientèle et d’expérimentation aux différents organismes montréalais dont la mission est (en totalité ou en partie) d’informer, de coacher et/ou de mentorer ces entrepreneurs en devenir.

L’équipe de Mentors Montréal

Présentement, autre que l’auteure de ces ligne, l’équipe de bénévoles qui permet à Mentors Montréal d’exister se compose d’employés d’organismes du milieur. Les organismes représentés sont l’École des entrepreneurs (ancien SAJE en Affaires), Futurpreneur, la Fondation Montréal Inc. et le Réseau M, qui est également un de nos deux commanditaires (l’autre étant Desjardins qui nous offre l’espace pour les rencontres). Les autres bénévoles sont (ou ont été)  des entrepreneurs ou gestionnaires chevronnés impliqués dans la communauté entrepreneuriale montréalaise.

Il est important de noter que ces employés, à une exception, contribuent bénévolement et à titre personnel à l’organisation des rencontres de Mentors Montréal. Il va sans dire qu’il s’agit de gens passionnés d’entrepreneuriat et fortement engagés dans la communauté entrepreneuriale montréalaise.

Les mentors

Le profil des mentors varient grandement. Certains ont plus de 20 ans d’expérience et sont chefs d’entreprises d’envergure internationales. D’autres sont des travailleurs autonomes ou ont démarré leur entreprise il y a à peine quelques années.  Leur âge varie entre 25 et 65 ans avec une majorité entre 40 et 55 ans. Leur secteur d’activité est également très varié avec une légère concentration dans le secteur des TI.

Suite à une vérification de leur parcours professionnel les mentors, qui s’inscrivent à la communauté via la plateforme Meetup, n’ont qu’à se présenter aux rencontres, lorsque disponibles, et aider, du mieux qu’ils ou elles le peuvent les mentorés présents.  Les mentors sont libres de revoir ou non les mentorés à l’extérieur des rencontres.

Mentors Montréal - Baker Marketing

Les rencontres

Les rencontres de Mentors Montréal ont lieues aux 4 à 6 semaines (jusqu’à présent dans le superbe Desjardins lab du Complexe Desjardins) et offre l’accès à une dizaine de mentors ou plus pour des sessions de speed mentoring qui durent de 10 à 15 minutes chacune. Elles sont annoncées deux ou trois semaines à l’avance.

Suite à une brève présentation des mentors, un participant rencontrera jusqu’à 5 ou 6 mentors pendant une soirée lors de séances de speed mentoring. Le format de la soirée est également propice au réseautage et aux échanges entre participants.

 

Mentorat d'affaires - Baker MarketingProfil des participants

La grande majorité des membres de Mentors Montréal sont des entrepreneurs en devenir à l’une des deux étapes suivantes :

Pré-démarrage (15 à 20%)

Ces individus sont à l’étape de la réflexion et n’ont pas encore pris une décision ferme quant à savoir s’ils feront le saut vers l’entrepreneuriat ou non. Ils peuvent ou non avoir une idée de produit ou service à offrir mais n’ont fait aucune démarche pour la développer. Ils ont généralement peu ou pas d’information sur les ressources disponibles aux entrepreneurs.

Début du stade de démarrage (65-80%)

Ces individus ont décidé de poursuivre leur idée entrepreneuriale. Une majorité ne le fait pas encore à temps plein. Ils sont généralement au stade d’idéation ou, dans une moindre proportion, au début du stade de découverte. Ils n’ont souvent pas encore une modèle d’affaires précis en tête. Ils ont généralement une bonne idée des ressources disponibles aux entrepreneurs bien qu’ils en aient encore à découvrir.

Dans ces deux catégories ont retrouve une majorité qui appartient à un des trois profils suivants:

  1.  Étudiant universitaire ayant terminé ses études. Il a parfois une courte expérience en grande entreprise ou institution. Plus souvent, il ne trouve pas un travail (rémunéré) dans son domaine et se tourne vers l’entrepreneuriat pour acquérir de l’expérience.
  2.  Professionnel immigrant, souvent hautement qualifié, ayant de la difficulté à s’intégrer dans le marché du travail.
  3. Professionnel d’expérience, ayant œuvré ou œuvrant dans la grande entreprise. Il, ou moins fréquemment, elle a perdu son emploi, l’a quitté volontairement ou songe à le faire.

Mentors Montréal - Baker MarketingBesoins des entrepreneurs en devenir en matière de mentorat/coaching

Les besoins varient significativement selon le stade où se situe l’individu.

 

Pré-démarrage

Les besoins de ces individus, parfois entrepreneur en devenir parfois non, se situent principalement à un de ces trois niveaux.

  1. Accompagnement dans leur décision de se tourner vers l’entrepreneuriat ou non
  2. Comprendre ce qu’est l’entrepreneuriat; le quotidien et les implications pratiques (incorporation ou non, comment obtenir un no. de TPS/TVQ, location d’espace de travail, site web, assurances, gestion du temps, etc.)
  3.  Connaître les ressources disponibles aux entrepreneurs (informations, formations, financement, etc.)

Début de démarrage

Les besoins de ces entrepreneurs en devenir sont un peu plus variés. En majeure partie, ils se retrouvent à un des niveaux suivants.

  1. Comment vendre
  2. Clarification du modèle d’affaires ou de certaines de ses composantes
  3. Bâtir son réseau d’affaires
  4. Financement et partenariat

Dans le cas des immigrants récents on peut ajouter à cette liste le besoin de comprendre la culture d’affaires locale.

Dans la seconde et dernière partie de ce billet je traiterai des leçons apprises sur le mentorat pour entrepreneurs en devenir et de certains des impacts observés sur les membres de la communauté de Mentors Montréal depuis la dernière année.  Finalement, quelques pistes, qui permettraient d’améliorer les services de mentorat d’affaires pour les entrepreneurs montréalais en devenir, seront suggérées.

Lean Startup Tools – The Concierge Phase

Lean Startup Tools – The Concierge Phase

 

This is the last of an 8-post series on applying Lean Startup in the various phases of a start-up. In this post we’ll take a look at the tools that will accompany you in your efforts to maintain a lean startup practice in your company during the concierge phase.

Lean Startup Principles and fundamental tools

The tools suggested in this post are but the tip of the iceberg of the tools that exist to help you adhere to the principles of Lean Startup. They will vary according to the specifics of your business model.  A great place to find apps to help you with your productivity is the Slack apps directory. Using thes tools doesn’t mean you are following a Lean Startup approach. You can only do this by putting into practice, on a daily basis, the various principles that underly Lean Startup.

Top Lean Startup Principles:
(Click on the theory to see an example of a book on the topic)

Theory Principles
Lean Production Customer focus; Efficient use of resources; Just in time; small batches;
Customer Development Understand your customers’ needs then develop your product/service; Use continuous feedback from your markets to make decisions (feedback loop)
Design Thinking Have a 360 view of needs, problems, issues; Empathize with your customers before you start designing your product; test multiple prototypes before going to market; transparency of information and process
Agile development Develop in iteration; test your developments with users  before going to the next step; use agile planning tools

 

There are also fundamental tools that come with the Lean Startup approach. These tools are:

  • Management tools:
    • Business model canvas or the Lean Canvas for planning.
    •  Experiment board to guide you with your first experiments.
    • Kanban boards to ensure you are not creating bottlenecks in your production
  • Metrics: Use data to make decisions whenever possible.
  • Innovation accounting:
    • Keeping a log of your experiments
    • Innovation options to calculate the maximum value of your start-up and the associated level of risk.

Here are ideas of tools or types of tools to look for when applying the Lean Startup approach in the concierge phase (last phase) of your start-up.

 

Applying Lean Startup - Concierge Phase - Baker MarketingProduct development tools

If your product is an application or software

Continuous deployment (or delivery for certain markets) espouses most of the Lean Startup principles. It requires a slew of tools. Atlassian offers many of them with apps such as Bitbucket, JIRA  and Bamboo.

If you’re creating a physical product

You may want to look at integrating your suppliers into your corporate Slack, if not already done. In order to do so, you should get the secure ($) version of Slack.

You’ll also want to establish processes that will ensure your marketing/product design and production teams communicate regularly in order to ensure market needs and trends are communicated asap throughout your value chain. Common work tools for these teams and spaces (physical or virtual) where they can easily meet on a daily basis should be available.

 

Applying Lean Startup - Concierge Phase - Baker MarketingMarketing tools

You will want to look into integrating as many of your data sources as possible (Analytics, CRM, Ticketing system, social media feeds, and manual data) into a robust business intelligence platform. One of the better and more agile one out there at this time is TableauQlik and Microsoft BI are also good choices. IBM’s SAS and Watson are better, since they integrate AI elements, but highly likely out of your price range.

If you’re running an on-line business then you need to start looking into an agile and powerful real-time analytics solution. Google, aside from its free version, has a module approach that is neat since you can only get the packages you use.  The entire 360 suite of 7 add-ons is very costly. You’ll need to make sure you get an ROI before investing in it. There are other options such as Clicky that also offers real-time analysis. Clicky integrates with Slack.

Whatever BI or analytics platform you get, the most important part is to ensure you have the resources and processes in place to maximise their returns for your company. Hence it must be part of most everyone’s job description to feed the BI databases on a regular, if not daily, basis.  You’ll also need someone to ensure the data in your system is clean and the analyses are correctly interpreted.

Your experiment logs should be scraped for pertinent market information regularly. They should have their own Slack channel (or section in your intranet).

By the end of the concierge stage, you may be cranking out multiple new products in rapid fire in order to get a larger wallet share of existing customers or to satisfy the needs of new segments. Applications such as LaunchLeap that help you get quick feedback from a large number of users will help you accelerate your experiments.

 

Applying Lean Startup - Concierge Phase - Baker MarketingHR tools and guidelines

If you aren’t outsourcing your recruiting and training then you’ll want to look for tools to make these processes more efficient.

Get a screening tool (with broad mesh) up on your website to reduce the time spent looking at non pertinent resumes.  Make sure your corporate values and culture are also reflected on your website and all your social media content.

Use your FB and LinkedIn corporate pages to get referrals for potential top candidates.

Invest in training video s available 24/7. These online videos make the on boarding process more efficient and transparent.

Encourage inter-employee training and coaching.  Having video, sound and recording capabilities on their computers or laptop will enable employees to share their knowledge with their peers either in real-time or asynchronously.

Have as few employee guidelines as possible. When they are absolutely necessary, keep them as broad as possible. Nothing kills creativity and initiative as well as guidelines. Just remember not to substitute good management with guidelines and you should be fine.

 

Applying Lean Startup - Concierge Phase - Baker MarketingFinancial tools

Finance is not my area of expertise so I won’t venture into suggesting accounting apps or platforms. What you will want to look for in your accounting system to support your Lean Startup approach are the following capabilities:

Integrating market information into your sales projections (by segment)

Enabling you to show only the financial data you want to specific categories of employees.

Although you want to remain as transparent as possible with your financial results, your growing staff and eco-system will require you to limit the financial information you share with some of them. If your system doesn’t allow you the flexibility to easily share some of the information with specific employees/partners/suppliers then you may be tempted to only share summarized data on a monthly or quarterly basis.

 

Conclusion

As you have now come to realise throughout this series of posts there is no one way to apply the Lean Startup approach.  There are however wrong ways to go about it. If whatever you are doing goes against or disregards Lean Startup principles, then it’s obviously not Lean Startup. Throwing in buzzwords like MVP and pivots won’t change this.

We also saw a variety of tools used in the practice of Lean Startup. These don’t even represent the tip of the iceberg. They will also become obsolete very soon. Newer and better ones will become available. The important message is to keep looking for tools that will make you more efficient and help you achieve the minimum in MVP.  These tools will also enable you to run experiments in a timeframe that was impossible only a few years ago.

These tools are the reason an iterative, experiment-based approach like Lean Startup is now viable.

Lean Startup is the essence of entrepreneurship. It’s about doing.  It’s about taking only the risks you have to take in order to answer a market need with a product or a service. It’s about having some core competences but mostly about how fast you can learn what is pertinent and apply your learnings. Finally, it’s about discipline, rigor and lots of hard work.

Lean Startup is rarely sexy but then again neither is starting and growing a successful business.

Applying Lean Startup in the concierge phase of your start-up

Applying Lean Startup in the concierge phase of your start-up

This will be the second to last post of a series of how to apply the Lean Startup approach to a new business.

Until now in this series on applying Lean Startup, we started with an introduction, then looked at the ideation phase, the discovery phase and the pre-sell phase (also known as the Death Valley).

 

Congratulations!

Applying Lean Startup in the concierge phase - Baker Marketing Either because you have made it this far in reading this series or, even more important, you have successfully crossed the Death Valley (pre-sell phase) and came out of it with the holy grail of a product/market fit (when the hockey blade becomes the stick on your revenue chart).

You now find yourself in the concierge phase.

 

What is the concierge phase

The boxes below presents a very high level summary of usual situations your start-up can expect in the concierge phase.

Product

Application

  • Your core features all work pretty well
  • You created your first (official) road map to additional features

Physical product

  • If you are outsourcing, you are either looking at optimizing your suppliers or taking steps to bring production in-house
  • If you are manufacturing in–house, you are looking at getting decent equipment to start producing at a larger scale

Market

  • You are looking at more efficient tools to learn about your customers, markets, and environments
  • You are exploring new customer segments
  • You are aggressively growing your initial markets
  • You are constantly reassessing the total size of your markets
  • If you are an innovator in your market; you are keeping an eye out for the chasm (1)

[1] The saturation of the early adopters market and passage to the early majority  (re. The innovation adoption curve)

 

Processes

  • You are feeling the need to put processes down on paper so your teams has a more homogenous approach
  • You realise you need a lot of processes and procedures but don’t want to bog down your agility

HR

  • You are on boarding team members at a rapid rate
  • Job definitions are getting more specialised
  • Your core team is trying to find a fit with their new, more limited, roles in the company (spoiler alert – some won’t adjust)
  • Your core team feels as though they spend more time coaching new resources than getting work done

 

Finance

  • Money is coming in at a decent rate from sales
  • Labour costs need to be controlled as they are growing faster than your sales at times
  • Extra office space and equipment mean increasing your bank margin or taking out (mostly) short term loans
  • Investors are now calling you and want to hear about your scaling strategy

 

Too busy for Lean Startup

 

Applying Lean Startup in the concierge phase - Baker MarketingYou are now running a small business that is experiencing the fastest growth rate it ever will, short of an acquisition.

It is easy and oh so tempting to abandon the build, measure, learn approach. After all, you know your initial market’s needs very well by now and you are crazy busy fulfilling orders, fixing issues and well, running a company.

It is a trap most entrepreneurs will fall into. Until their growth rate slows down, stalls and starts to plummet. The dirty secret of the concierge phase is that most companies’ revenues during this period don’t look like a straight hockey stick handle. That straight upward slope is just the trend of your revenues. The revenues themselves go up and down regularly. If you want your slope average to be positive and steep, you need to minimise those downs. Most times these down periods will happen for the following reasons:

  • Your customer needs are changing due to a shift in the market (often due to a new competitor)
  • You experience process or production failures
  • Your initial early adopters market is getting saturated and you didn’t react quickly enough to open new markets
  • Your early adopters markets are saturated and you haven’t figured out how to sell to the early majority customers.

Continuing to apply the Lean Startup approach during your concierge phase will ensure that any new features or internal processes will answer the needs of your customers (external and internal). It will also ensure that market changes are captured and acted upon. This does mean that many of your processes must incoporate Lean Startup elements in them. In some cases, it can also mean that the you will need the build, measure and learn processes themselves to be written down and into job descriptions.

Incorporating Lean Startup in your processes is the key to keeping your company innovative and agile as it grows.

Your product, processes, marketing and overall strategy will adapt continuously. When you need to cross the chasm to reach your early adopters, the Lean Startup approach will be your natural bridge to the other side.

In our next and final post of this series, we’ll take a look at the tools that are most useful in the concierge phase.

[1] The saturation of the early adopters market and passage to the early majority  (re. The innovation adoption curve)

My 2016 Best Reads on Marketing, Innovation and Lean Startup

My 2016 Best Reads on Marketing, Innovation and Lean Startup

It’s the end of the year already. It went by incredibly fast. This is the time to look back and identify what needs to be fixed. It’s also the time to be grateful for all that we were able to achieve.

One of the things I am always very grateful for is the knowledge I gain during the year. Important sources for the knowledge I pick up are the books and articles I read.

I have to admit that I didn’t have as much time to read this year as I got involved in many (maybe too many) projects. I did however manage to read some very good books on marketing, innovation and Lean Startup.

As I did last year, I am sharing with you some of the ones I especially liked.

Best Reads on Marketing

I didn’t keep up with all that is new in marketing this year. It’s nearly impossible to do so. I tuned in to a few webinars that helped me focus my readings.

I read mostly on mobile marketing (various aspects), influencer as well as community marketing. Community marketing is a strategy that isn’t as easy to implement as one might think. Here is a post I wrote on how to find a profitable community marketing partner.

HubSpot - Best reads 2016 -Baker MarketingAgain this year, I found that my most interesting marketing reads came from blog posts on mainly two sites; eMarketer and HubSpot

 

Growth Engines - Best reads 2016 -Baker MarketingSpeaking of HubSpot it is one of the case study in Sean Ellis’s book; Growth Engines: Case Studies of How today’s Most Successful Startups Unlock Extraordinary Growth.

Through ten case studies, including Yelp, Uber, LinkedIn and HubSpot, Ellis explains the different types of growth engines and the contexts in which they worked best for those companies.

Although I read Growth Engines to better understand a concept that is integral to Lean Startup, this book offers some very valuable marketing lessons. It also touches on growth hacking, a term coined by Ellis. It inspired me to write a post on what growth hacking is and isn’t.

UX Strategy - Best reads 2016 - Baker MarketingAnother book that I thoroughly enjoyed was UX Strategy by Jamie Levy. Having been a Product Manager at a time where UX was but one part of the job description, it was great to delve into the depths of UX strategy.

Whether you are starting a new venture to create the killer app, or trying to innovate in an existing small, medium or large business, this book is a must read before you start. It can help you define a winning value proposition. It also guides yourr competitive analysis and helps you see which features you need to focus on.

The book is an easy read and doesn’t require any prior knowledge on UX design or app development.

Best Reads on Innovation

I was invited to a university workshop on blockchain earlier this year. Given I knew nothing on the topic I figured that it would be a great opportunity to learn. Montreal, where Baker Marketing is located, is a hotbed for blockchain research and development. The workshop did teach me the basics of blockchain but left me wanting to know more (a lot more, this is exciting stuff and definitely a game changer) about how this new technology could be used.

Blockchain Revolution - Best reads 2016 - Baker MarketingOne of the researcher at the workshop suggested Blockchain Revolution: How the Technology behind Bitcoin is Changing Money, Business and the World, by Don and Alex Tapscott. It was exactly what this non scientific reader needed. The Tapscotts explain the concept in very simple terms. They also explore a large number of applications for blockchain. They clearly show how significant a game changer this technology could be.

 

In Spring I also contributed to the organisation of the Montreal edition of the Intrapreneurship Conference.
During the conference one of the keynote speakers was Guillaume Hervé. Hervé is a veteran practitioner of intrapreneurship. He contributed to several corporate spinoffs in the aeronautics and health sectors. In case you are not familiar with the term, intrapreneurship is entrepreneurship adapted to large enterprise.

Winning at Intrapreneurship - Best reads 2016 - Baker MarketingIntrapreneurship is however not the same as entrepreneurship. These differences are the focus of Hervé’s book Winning at Intrapreneurship: 12 Labors to Overcome Corporate Culture and Achieve Startup Success.

Based on the 12 labors of Hercules, Winning at Intrapreneurship looks at the traps, pitfalls and myths of innovating in large businesses. Hervé saw them all in his career as an intrapreneur. He shares with us some tricks of the trade on how to avoid and debunk them. You can read more on this topic on the post I wrote titled Entrepreneurs as Corporate Innovators.

Best reads on Lean Startup

Leader's Guide - Best reads 2016 - Baker MarketingContinuing on the innovation in large business topic, Eric Ries published a second book this year. It’s titled the Leader’s Guide to Adopting Lean Startup at Scale.

First, Eric innovated in the way he published the book. He financed the book with a Kickstarter campaign. The backers were invited to join the Leader’s Guide community (managed by Mightybell). He used the community to test hypotheses about the content and cover of his book. Yep, he did it the Lean Startup way.

Unfortunately however, Eric only printed as many books as there were backers who pledged the sufficient amount. It isn’t available anywhere for purchase now that the Kickstarter campaign is over. You can however get a free digital copy if you know someone who invested in the campaign.

The Leader’s Guide is based on Eric’s experience (as well as that of some backers) on implementing Lean Startup in large corporations, like GE, and government organisations (like the White House).

I especially like the format of the book. Symbols are used in the margins throughout the chapters in order to quickly understand what the text pertains to. The coach’s Guide sections, for example, are about tips and subtleties in implementing the concepts.

It’s truly a guide that you will go to when implementing a Lean Startup approach to a large organisation.

Eric also announced that he will be publishing a third book next year. It’s tentative title is The Startup Way.

Scaling Lean - 2016 Best Reads - Baker MarketingWe were lucky to have another great Lean Startup practitioner write his second book this year.  Ash Maurya penned Scaling Lean: Mastering the Key Metrics for Startup Growth.

As a follow up to his first book, Running Lean, Ash is now looking at how to use metrics to scale your business once you have found the elusive product/market fit.

His rigorous approach to using key metrics to track your progress and focus your efforts has shown great results in many successful startups.

Grasshopper Herder - 2016 Best Reads - Baker MarketingFinally, I want to mention a website whose author consistently publishes great Lean Startup material. Tristan Kromer’s Grasshopper Herder is chalk full of Lean Startup ideas, tools and resources. Tristan was until recently one of the organisers of the San Francisco Lean Startup Circle.

If you are starting a new project and interested in putting Lean Startup into practice take a look at the series of posts on implementing Lean Startup. It is meant to guide you along your journey when you first start your project.

This concludes this year’s crop of my best reads on marketing, innovation and Lean Startup. Maybe some of them will become your favorites.

Thank you for taking the time to read Techno Marketing this year. I hope you take some time off during the holidays to rest and replenish, as we will.

Baker Marketing offers you its best wishes for the holidays. May 2017 be filled with health, serenity and lots of successful projects.
Happy Holidays from Baker Marketing

What the 2016 Presidential Election Can Teach us About Understanding Customer Needs

What the 2016 Presidential Election Can Teach us About Understanding Customer Needs

Would you have taken a bet that offered you 10 to 1 odds that anyone but Donald Trump would be elected President back in July 2016?  I’m guessing you would have.  I know I would have and probably bet a bundle. After all, it was obvious that most Americans thought Trump’s views were too extreme. The British parliament even debated on banning Trump from the UK.  Well we’d both be poorer now and scratching our heads as how this outcome came to be.

This scenario is similar to one where an entrepreneur believes that everyone will want to buy the product he/she is making. After all, the product solves an obvious and important problem that so many people have. You wouldn’t think twice about buying it, so why would anyone else.

Let’s see the factors that can lead us to be so bad at predicting our customers needs.

There are realities you don’t even know exist

Customer needs - Baker MarkeitngExperience, environment and nature,  are  responsible for shaping beliefs and thought processes.  They differ from one person to the next.

Although nature (human biology) may be similar from one person to the next, environments are not. This is harder to remember given most people we exchange with on a daily basis share similar environments to ours. Experience,  which is the sum of all the various situations we were in and how we reacted to them since birth, differs even more greatly from one person to the next.

Although we all know that others don’t think like we do or have the same reality, we sometimes forget to what extent they differ from ours.

This explains why designing an experiment, that captures other people’s realities, is so difficult. It also explains why it is so difficult to interpret other people’s answers accurately. The less we know about our respondents’ experiences and current reality, the more difficult it is to interpret their answers. Hence, we will tend to fill in the blanks with elements of our own reality. This will give us a distorted view.

The lesson learned here is:

  • try to understand your respondent’s environment as much as you can before asking them questions

It will ensure you ask the right questions with words that will mean the same to them as they mean to you. It will also enable you to interpret their answers correctly.

Things change, sometimes overnight

Customer needs - Baker MarkeitngUnforeseen events happen and change realities and the choice set we have. In the political sphere this could mean email scandals. In the product world it could mean new regulations, new competitors or technologies that pop up overnight.

These new realities can sometime remove existing problems. They can also give potential customers more choices as how to solve their problems. Finally, they can leave them so uncertain about their choices, that they will need a lot more time and energy to evaluate their options. This situation is well captured in the innovation adoption curve.

The lessons learned here are

  • You need to act fast on survey results as environments can change quickly
  • When the respondents’ choice sets are in flux, you may have some of them who can’t or won’t make choices

We are willing to put up with a lot to stay true to our identity

Customer needs - Baker MarkeitngCertain behaviours we have take root in our own self image. When US voters identify themselves as Republicans or Democrats they don’t only refer to how they cast their ballot. They often refer to a part of their sets of beliefs. However strongly they feel against a representative of the party, they won’t vote against their identity. They’ll just find a way to rationalise their decision. This is part of the concept of cognitive dissonance.

Some consumers may see the value proposition you offer them clearly but won’t purchase your product.  Because part of their identity ties in to doing the work the way they always have done it.

The lesson learned here is:

  • You may need more time and effort to convince your customers to adopt your product/service when it affects their identity

Why do polls/surveys get it wrong?

Customer needs - Baker MarkeitngWe won’t reveal (to strangers) actions, beliefs or views that we think will affect their image of us negatively. This is cognitive dissonance at work.

This is why it is so important to test your market on their actions rather than on what they say. Especially when you don’t know how important cognitive dissonance is for a particular choice.

The lesson learned here is:

  • Cognitive dissonance will skew your survey results significantly

Here is one last lesson to keep in mind. However wrong you may have been at predicting an outcome there is always something you can learn from the thought process that led you there. You can learn from it and improve your future predictions.