Au cours des dernières années on assiste à une explosion du nombre d’incubateurs et d’accélérateurs au Québec.
Ces organismes sont soit paragouvernementaux, des OBNL, associés à des institutions d’enseignements, à des sociétés de capital de risque ou autonomes.
Une majorité de nos startups au Québec passe par ces organismes à un moment où un autre de leur développement.
Les programmes d’incubateurs et d’accélérateurs
L’objectif principal pour la quasi-totalité des incubateurs, est d’aider à créer des entreprises et organisations pérennes.
L’approche utilisée par les incubateurs au Québec se ressemble, même si le contenu offert diffère significativement d’un incubateur à l’autre.
On offre généralement aux startups une version (très) abrégée et intensive des formations traditionnelles qu’on retrouve dans les écoles de gestion. Soit: le plan d’affaires, l’étude de marché, les états financiers, ventes, aspects légaux de l’entreprise, propriété intellectuelle, les RH, etc.
Le hic, c’est qu’une startup n’est pas une entreprise, ni même une mini-version de celle-ci.
C’est une entité complètement différente qui demande une approche de gestion et de planification adaptée à sa réalité.
La formation tourne autour du démarrage mais ne l’adresse pas directement.
Les accélérateurs ont par contre des approches plus diversifiées. Ils sont souvent spécialisés dans des secteurs en particulier.
Plusieurs n’offrent que du coaching et de l’introduction à des clients et/ou investisseurs potentiels. Dans ce dernier cas, nombreux accélérateurs sont la propriété de fonds de capitaux de risque. L’accélérateur devient alors ni plus ni moins qu’une pépinière des projets dans lesquels investir et un moyen de garder un œil sur leur investissement.
Les projets qui se présentent aux accélérateurs ont souvent des modèles d’affaires déficients. La clientèle est peu ou mal ciblée, les besoins des clients inconnus ou mal compris, la connaissance de l’écosystème déficiente ou carrément absente.
Cette réalité fait en sorte que les accélérateurs ont beaucoup de mal à accélérer de tels projets et qu’ils doivent souvent retourner leurs clients à leurs devoirs ou les incuber avant d’entreprendre la phase d’accélération.
L’approche Lean Startup
Le Lean Startup est une approche de gestion entrepreneuriale conçue spécifiquement pour la phase de démarrage.
On la décrit souvent comme l’approche scientifique appliquée à la startup.
Tout comme dans la démarche scientifique on ne prend pas pour acquis que nos hypothèses de départ (dans notre modèle d’affaires) sont exactes. On les teste, par le biais d’expériences, pour les valider et si on se trompe on s’ajuste et on recommence avec d’autres hypothèses et ce jusqu’à ce qu’on trouve la formule pour accomplir notre mission.
On fait ces expériences à répétition sur toutes les hypothèses les plus risquées jusqu’à ce qu’on en arrive avec un modèle d’affaires où l’entrepreneur (ou ses investisseurs) est à l’aise avec le niveau de risque restant.
Tout comme dans l’approche scientifique les expériences doivent se faire de façon rigoureuse. On collecte de la donnée et on apprend de cette information.
Les bénéfices d’utiliser l’approche Lean Startup
Bénéfices pour les entrepreneurs
L’approche sert, entre autre, à réduire les risques inhérents aux startups. Principalement ceux associés à la commercialisation.
Elle sert également à identifier rapidement les idées d’affaires qui ne fonctionneront pas. Ce qui évite de gaspiller temps, argent et autres ressources sur un projet voué à l’échec.
L’approche Lean Startup est d’abord et avant tout pratique. Elle force l’entrepreneur à observer, écouter, échanger et comprendre les acteurs de son écosystème d’affaires afin de répondre à leurs besoins.
Exigeante, l’approche Lean Startup force l’entrepreneur à garder un bon rythme dans le développement de son projet ce qui réduit le risque de perte de momentum et d’abandon.
Elle permet à l’entrepreneur d’apprendre à utiliser des outils de gestion et de planification performants qui contribueront à rendre son entreprise/organisation agile.
Elle permet d’implanter graduellement un système d’informations provenant de l’écosystème d’affaires et d’apprendre à interpréter et utiliser ces données dans les décisions de gestion au quotidien. Cela assure que l’entreprise reste pertinente et réagisse rapidement aux changements dans son environnement.
L’approche Lean Startup intègre le développement de la clientèle et la vente très rapidement (vs l’approche traditionnelle) dans le processus de démarrage. Les ventes se concluent avant même que le produit soit terminé. Ce qui à son tour:
Accroît la crédibilité du projet entrepreneurial
Contribue au financement du démarrage
Finalement, la mise en application de l’approche Lean Startup, dès le début du processus de démarrage, contribue fortement à créer une culture d’innovation dans l’entreprise. Une culture où il est non seulement permis de se tromper mais une où des processus sont mis en place pour capter le savoir qui émane des erreurs.
Une culture où la compréhension des besoins des clients, de même que ceux des autres acteurs de l’écosystème de l’entreprise, est le focus.
Bénéfices du Lean Startup pour les incubateurs et accélérateurs
L’utilisation de l’approche Lean Startup par l’incubateur/accélérateur avec ses clients apporte de nombreux avantages qui non seulement contribuent à mieux atteindre sa mission mais aussi d’être plus rentable.
L’utilisation de l’approche Lean Startup avec ses clients permet à l’incubateur/accélérateur:
D’offrir un cadre structurel permettant à l’entrepreneur de maintenir son momentum
D’inculquer le réflexe à l’entrepreneur d’aller voir ses clients potentiels dès le tout début de son processus de démarrage et par la suite.
D’aider l’entrepreneur à non seulement bien écouter ses clients potentiels mais aussi d’interpréter les données recueillis par ce dernier lors de ses échanges avec les acteurs de l’écosystème de son entreprise.
D’identifier rapidement les entrepreneurs qui n’ont pas la discipline/motivation nécessaire pour démarrer une entreprise.
De mesurer empiriquement (en $) la croissance de la valeur des startups dans leur giron.
De mesurer un coefficient de risque associé à chaque startup à un moment donné.
D’identifier rapidement toute dissension majeure dans l’équipe entrepreneuriale. Cela en raison de rencontres avec des clients potentiels et de la cadence imposée afin de trouver le bon modèle d’affaires.
D’apporter une contribution réelle pour aider leurs clients à s’insérer dans l’écosystème d’affaires local
D’accroître significativement leur taux de création d’entreprises pérennes.
L’implantation de l’approche Lean Startup dans l’accélérateur physique ADI
Examinons maintenant un cas pratique d’implantation de l’approche Lean Startup dans un accélérateur québécois.
ADI est un accélérateur physique de la région de Montréal. En 2016 ses co-fondateurs, Christian Beaubien et Stéphane Rousseau, ont décidé d’implanter l’approche Lean Startup et de l’utiliser auprès de leurs clients.
ADI a décidé d’utiliser l’approche Lean Startup après avoir observé qu’une majorité de leurs clients arrivaient avec des produits bien définis au niveau technique mais dont la valeur ajoutée (pour les clients) était basée uniquement sur les présomptions des entrepreneurs. Très peu d’entre eux avaient pris la peine d’observer ou discuter avec leurs clients potentiels avant la phase du design du produit. Certains ne savaient pas non plus qui seraient leurs clients au juste ou quel était leur modèle d’affaires.
Lorsque les prototypes étaient complétés les entrepreneurs ne trouvaient, plus souvent qu’autrement, pas de preneurs pour leur création. Ils abandonnaient alors leur projet ou reprenaient le processus à zéro, retournaient chercher du feedback de leur marché, ajustaient ou recommençaient totalement le design de leur produit.
Cette approche traditionnelle générait un énorme gaspillage de ressources.
Cette constatation a mené Christian et Stéphane, qui possédaient déjà de bonnes bases avec l’approche de production lean, à se former d’avantage sur l’approche Lean Startup en lisant sur le sujet et en assistant régulièrement aux ateliers du Cercle Lean Startup de Montréal.
Ils ont ainsi développé leur propre version de l’approche qu’ils nomment Design for Feedback.
Cette approche, qu’ils continuent de perfectionner, a donné un nouvel envol à ADI et d’excellents résultats pour leurs clients.
Si vous êtes entrepreneur, je vous invite donc à trouver les incubateurs qui utilisent l’approche Lean Startup dans votre région. Il faudra quelques efforts pour les trouver puisqu’il n’y en a encore que très peu au Québec.
De plus, lorsque vous en trouverez un assurez-vous que les coachs Lean Startup, œuvrant dans l’incubateur ou l’accélérateur, ont une expérience pratique avec l’approche.
À Montréal, autre qu’ADI, les universités McGill (programme Lean Launch Pad) et Concordia (District 3) ainsi que les Founder’s Institute utilisent l’approche Lean Startup dans leur incubateur.
À Sherbrooke, le programme d’incubation de Pro Gestion Estrie utilise également l’approche Lean Startup.
Si vous êtes un incubateur ou accélérateur et désirez former votre équipe sur l’utilisation de l’approche Lean Startup, contactez Baker Marketing. Il nous fera plaisir de vous présenter notre programme de formation pour les incubateurs/accélérateur ou d’en créer un spécialement pour vous.
 Un bon coach Lean Startup aura nécessairement de l’expérience pratique avec l’approche. Lire le livre et visionner quelques vidéos ne font pas d’un individu un coach Lean Startup pas plus que seule une formation théorique ferait d’un individu un coach sportif.
In our last post we looked at various management approaches to reduce risks. One of them pertained to business experiments. In this post, we’ll dig a bit deeper to better understand this approach.
You have most likely heard of business experiments. The Harvard Business Review, as well as many other business management publications, published multiple articles on the topic in the last few years. They were mostly in the context of innovation.
What is a business experiment?
If you have not, a business experiment is simply testing a concept (idea, program, process, design, product, strategy, etc.) with stakeholders (customers, suppliers, distributors, employees, etc.). The experiment’s goal is to provide pertinent data to assist with decision making (usually with go/no go decisions or sometimes fine-tuning).
So yes, you do know what a business experiment is. It’s been around for, well, pretty much ever. Now you’re asking yourself; Why this article is drawing my attention to it?
The reason is that business experiments are no longer used as an occasional management tool, they are transforming into the way businesses are managed.
Why are companies experimenting at an increasing rate?
As we mentioned, business experiments are used to collect data that assists management with decision-making.
Decision-making in the business world is becoming a more demanding task (to say the least).
Companies are significantly leaner (i.e. less resources and more work for everyone, including managers).
The amount of information available, from secondary sources, is enough to make any manager’s head spin.
There is a higher supply than demand for managers hence making bad decisions is a riskier proposition for your longevity in a given company than ever.
In many sectors, markets are moving at a faster pace than ever before with competitors coming in from everywhere and customers’ choices exploding.
Hence managers are turning to ways to reduce the time and the risk involved to make the best possible decisions.
Running a business experiment to gather pertinent and timely data quickly answers the needs of over-burdened managers to reduce the risks of the decisions they make.
This explains, in part, why organisations are experimenting. What explains the increasing rate at which they are doing it, and transforming it into a management approach, has more to do with the following reasons:
It’s cheaper and faster than ever to run business experiments (many can be done in minutes with free tools)
An increasing number of employees or outside consultants have the skills to run experiments, analyse and interpret the collected data
The costs to store, process and communicate the data/result are very low (compared to a decade ago) and falling constantly.
Business experiments and the Lean Startup framework
So how does an organisation go about implementing business experiments as a managerial approach? There is no one way to do so. There are however experimentation frameworks out there that can structure your approach.
One of these is the Lean Startup framework.
The base of Lean Startup is the experiment. The Lean Startup experiment is based on the scientific experiment model. It follows a build, measure, learn process.
Build (designing your experiment)
Building your experiment is a 3 step process
1. Identify the critical assumption associated with the concept to be tested
When you stop to think about it, there are thousands of assumptions we could test to assist with decision making when managing a business. If we tested all of our assumptions there would be no time or other resources left to run the business. Hence, you only want to test the critical assumptions. The ones that, if not validated, pose a business risk that you (or your organisation) are not willing to take.
2. Transform your critical assumption into a hypothesis statement
Your critical assumption was a thought you put into words. Your hypothesis statement is one sentence that can be validated (or invalidated).
3. Design the experiment that will validate (or invalidate) your hypothesis
Designing your experiment is only limited by your (and/or your team’s) imagination. The way you choose to render the concept of your hypothesis (how you present it or illustrate it) is called your Minimum Viable Product (MVP).
An important part of the MVP is the minimum part of it. In the design of your experiment, you will be aiming at spending the least amount of resources in order to obtain the maximum amount of learnings from your experiment.
This doesn’t necessarily mean bootstrapping your experiment. It simply means that you will make sure that whatever learnings you need to get from your experiment, you get by using the least amount of resources possible.
This can mean it will cost you nothing but a few minutes of the time of one person or tens of thousands of dollars, if that’s the only way to go about getting the information you need. Of course, the cost of your experiment must be proportionate to the financial risk associated with it.
The reason you are making the experiment is to get data that will help you with your decision making. Hence, you want that data to be reliable.
This is where you need a bit of knowledge about primary data gathering. You need to make sure the data you collect is not biased. You won’t be looking to get statistical quality data. That would take too long, cost too much and be an over kill for your purpose.
You’ll simply need the clear direction that your data in headed for.
In business experimentation instead of gathering a lot of data once, you gather a small amount of data repetitively. Although not as precise as statistical data it does provide you with a sufficient amount of information to de-risk, to a great extent, your decision. It is also a more suited approach to an environment that changes rapidly.
When deciding on the data you will be capturing in your experiment, remember these three important rules.
Your data should be:
If it doesn’t go in the direction you thought it would then you can change something in your business strategy or product or program that will make the data go in the direction you want.
You need to be able to re-produce the exact same experiment, in similar conditions and get similar results. For example, if you are testing the design of a snow shovel and are doing it during the storm of the century, the data you collect won’t be accountable.
The more people who interpret the data you collect, the deeper and richer your learnings will be. So make sure that the data captured during your business experiments is shared throughout your organisation. Ensure that everyone knows they are welcome to share their interpretations on the data. Making your experiments, the data collected and the results accessible throughout your organisation will also accelerate business experiments process as some parts/resources of one experiment can be used for others.
The more experience one has at conducting experiments, the faster and more accurately they are done.
This part of business experiments, although it may seem like the easiest, is the hardest. Learning means you are either
absorbing completely new information (rarely the case) or
you are changing in some way (sometimes drastically) already stored information in your brain
The second type of learning is the hardest. The more contradictory the data you have is to the one you previously had, the more difficult it is to learn from it.
This stored information in your brain will create a filter that will impact how you interpret new data.
Also, the more resources that has already been invested in a project, the more difficult it is to pivot on a previous course of action.
The benefits of using business experiments to manage
The main benefit, as mentioned previously, is to reduce the risk of your business decisions. This in turn will minimise your losses on various projects.
Another benefit, that is not obvious, is the improvement in work relationships. This happens for multiple reasons.
First, employees get a sense of empowerment. If they submit ideas to upper management with supporting empirical data, they know their idea will be considered.
Also, managers don’t need to spend as much time justifying their decisions. They let the data speak for itself. They do however need to include questioning the quality of the data into their process.
Finally, as mentioned, organisations that use business experiments on a daily basis to manage usually encourage employees to share the results of their experiments. This not only improves internal communication and efficiency it also creates an environment where mistakes, that bring new learnings, are valued.
This type of environment is essential to not only foster innovation but pro-activity.
Getting started with business experiments
If you think that using business experiments may be a profitable management approach for your business, start with one project (which will be a meta experiment) during which all higher risk decisions will be taken with supporting data. The project you select should be one that has high inherent risk within it (like launching a product in a new and different market). It should also be a type of project that is somewhat recurrent in your organisation. This will help you have a baseline scenario in order to compare the results of the meta experiment. Make sure to identify the metrics you’ll be evaluating before starting your meta experiment.
Some metrics (there are many others) you may want to look at would be:
How long the project took from start to finish
What % of the initial planed output was achieved
Variables pertaining to team cohesion
Variables pertaining to employee (the ones who worked on the project directly and indirectly) satisfaction
ROI projected vs achieved on a timeline (3, 6, 12, 24 months)
Implementing any new management approach takes a while. There is no one-size-fits-all recipe. You need to…yes you got it…experiment and find the approach best suited for your organisation.
If you need coaching or help getting started with your first experiment Baker Marketing can definitely help.
 Although MVP most often refers to a prototype of a product, it also means the representation of your hypothesis you will present to participants of your experience.
On Lean Startup, Business Experimentation and Data Driven Organisations
Entrepreneurs know that managing a business today isn’t anything like it was 10 years ago.
Business risks are still there but managing them got a lot harder.
New market realities and business risks
Today’s new market realities such as:
Break-neck speed technological progress (specially IP related)
Lowering of barriers to entry in most sectors
Exponential amount of available data
Plummeting costs of storing/processing/crunching data
Omnipresence of social media
Impact every aspect of running a business.
Burying your head in the sand and ignoring these new realities prevents you from hedging the serious business risks they represent.
Risks such as:
Inability to see new competitors coming fast enough to adjust
Having higher input/production costs than your competitors
Fast changing customer needs/habits/preferences
Developing and marketing unwanted/non optimal products or services
Sinking money into ineffective sales and marketing
Inadequate/useless employee training
Recruiting employees with the wrong skill set
Any of these situations, if not managed for long periods, can put you out of business.
Combinations of these risks managed badly, even for a short time, can have the same effect.
New management approaches to better manage risks
Old management approaches developed over 30 years ago are no longer suited to manage business risks effectively in current market conditions.
New management approaches, techniques and tools, developed specifically to deal with current market realities are much better suited to manage today’s business risks.
Lean Startup, business experimentation and management based on data (resulting in data driven organisations) are such management approaches.
In a nutshell, here are what they are about and how they can help you manage your business risks.
Overall management approach, based on the scientific method, best suited for projects (including starting a new business) that involve market uncertainties or volatility.
It uses fast iterative business experimentation to gather data in order to prove hypotheses and lucrative market existence before launching a full product/service. It uses concepts from other management theories such at lean production, customer management, design thinking and agile development.
It also applies innovation accounting to reduce the financial risk associated with high risk projects.
Risk management aspect
It will help your organisation avoid or manage the following risks
Inability to see new competitors coming fast enough to adjust
Fast changing customer needs/habits/preferences
Developing and marketing unwanted/non optimal products or services
Sinking money into ineffective sales and marketing
Starting a company/organisation that isn’t viable in the market
Business experimentation is simply doing small scale versions or parts of a project by testing it out first. You then gather data to support your original plan before going forward with your project.
The subjects taking part in these experiments can be any stakeholder in an organisation such as suppliers, employees, customers, etc.
It is often used to convince the purse holders in an organisation to invest in a project or idea.
Whenever possible, it is done with a scientific approach gathering solid data.
Risk management aspect
When done correctly, business experimentation can help to reduce, but not eliminate, almost all types of business risks.
Management with data (for data driven organisations)
Management with data consists of making all decisions, whenever possible, with data. This data can be of secondary (existing data) or primary sources (comes from analytics, accounting, connected objects or experiments). The data is both external and internal to an organisation.
Risk management aspect
Just like experimentation, which is a necessary aspect of a data driven organisation, management based on data can help alleviate all types of business risks.
Many organisations, especially larger ones, have been using data for management purposes for decades now. This approach is now accessible to small organisations thanks to significantly lower costs of gathering, storing and treating data so it can be useful for decision-making. It does however require a skill set that is not yet prevalent in the workforce.
As you can see these approaches are not distinct from one another. Data driven organisations that fully apply management with data need to be experiment based to gather primary data. Experiment based organisation that apply the approach to new product/service or existing ones, that they wish to keep pertinent in the market, will need a Lean Startup approach.
Lean Startup, business experimentation and management with data are, by far, the most prevalent new management approaches helpful to reduce business risks in current market environments. They are not the only ones. Although many business schools teach (sometimes badly) some or all of these new approaches, many still don’t. Hence you’re mostly on your own to research and learn about them.
Transforming your business to use these management approaches is a long term project. In many cases, it requires a shift in the corporate culture. Hence, you should start now.
If you are just starting your business, start it on the right foot by using a management approach that will enable you to properly manage the risks of doing business in today’s fast-paced environments.
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?
In 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
If 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 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
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
The 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. 
This 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:
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.
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.
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.
This is the last of an 8-post series on applying Lean Startup in the various phases of a start-up. The previous post examined the concierge phase. In this onet 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)
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
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:
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.
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.
Product 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.
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 Tableau. Qlik 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.
HR 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.
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.
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.
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.
Your core features all work pretty well
You created your first (official) road map to additional features
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
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)
 The saturation of the early adopters market and passage to the early majority (re. The innovation adoption curve)
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
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
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
You 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.
 The saturation of the early adopters market and passage to the early majority (re. The innovation adoption curve)