Tag Archives: lean

NPDProcessLeanStartupScrum

Discovering Lean Startup was inspiring for me: I felt I had found an approach that could complement Scrum nicely. Since then I have been combining the two approaches in my own new product development work as well as helping my clients to do so. This post shares my experiences and insights. It maps out a high-level process for creating new products within existing businesses focussing on product management practices and tools.

From Vision to Launch

Lean Startup encourages us to first investigate if there is a need worthwhile serving before we worry about the details of the new product. The former is called “Problem Validation”, the latter “Solution Validation”. While traditional approaches also suggest carrying out market research and analysis before we engage in product planning and definition, lean approaches increase the speed at which we operate. This allows us to fail and learn faster, to adapt our product strategy and tactics quickly, and to hopefully launch the right product with the right features sooner.

The following diagram illustrates the process I apply to create new products:

Problem Validation

The new product development process depicted above starts with a vision. It then uses a series of cycles or iterations to transform the vision into a product ready for launch. The focus of the early iterations is to understand what problem the product solves, who the customers and users are, and how the product benefits the company creating it.

I find it important that the product owner leads this effort and carries out the necessary work together with a cross-functional team. While the team composition depends on the product, having a marketer, sales representative, service representative, a UX designer, and a developer on board is usually helpful. Product owner and team capture their assumptions about the market by using a tool like the Vision Board, Business Model Canvas, or Lean Canvas.

Employing techniques such as direct observation, problem interviews, and competitor analysis helps them validate their assumptions and update the board or canvas, as the following pictures illustrates:

Additionally, the developers may create spikes (throwaway prototypes) to explore the feasibility of the product. Target users and customers participate in the process, for instance, by acting as interview partners.

Solution Validation

Once product owner and team have shown that there is a problem that’s worthwhile addressing, the focus changes to validating the solution and developing the actual product: The team needs to learn what the desired user experience is, what functionality the product should provide, and how it should be built.

The new focus requires adapting the team composition: The product owner, the UX designer and the developer stay, but the marketer, sales and service representatives leave the team. They continue to participate in the development effort as stakeholders. New developers, testers, and other roles required to create a great product join the team.

Product owner and team capture their assumptions about the product including the user interaction, the user interface design, the functionality, and the nonfunctional aspects using a tool like the Product Canvas and techniques such as scenarios, user stories, and design sketches. The assumptions are tested by collecting and analysing feedback on prototypes, mock-ups, and product increments/MVPs. Useful techniques to gather the feedback include product demos, users tests, and releases (to selected users).

As you may have noticed, the picture above suggests that “Stakeholders incl. users” participate in the process, and provide feedback or data on work results. While using target users and customers to validate ideas is generally helpful, it is not always appropriate. Imagine addressing a key technical risk in your first solution validation iteration: It probably makes little sense to invite users to the review meeting to understand if the approach chosen is viable. Similarly, if a disruptive product is developed it can be hard to find target users that are not too attached to their current solution.

Scaling and Launch Preparation

Once the Product Canvas and the architecture have started to stabilise, you can start adding more people to the project. I find it useful to break-up the original team so that at least one or two members are part of each new team, as this helps the new members get up to speed. I also suggest you grow your new product development project in a step-wise fashion: Scale from one to two teams, then from two to four, and so forth. This allows you to understand the impact on the people and the process including product ownership .

Be aware of the danger of premature scaling: Adding too quickly too many people. This tends to lead to a bloated, over-engineered product in my experience, and it prevents you form being able to experiment effectively. Therefore delay scaling until you have resolved the main risks – until you can focus on completing features and adding new ones.

Finally, as you make progress with your solution validation work, don’t forget to prepare the product launch. Having a marketer present at the sprint review meetings should help, but you may find that a dedicated marketing may be required to prepare and execute the launch well.

Summary

The following table summarises my recommendations for transforming an idea into a shippable product:

The process described in this post is based on work by Steve Blank, Ash Maurya, Eric Ries, and Ken Schwaber. The eagle-eyed process historians amongst you may have noticed that the idea of progressive scaling has its roots in the (Rational) Unified Process. Experimental, iterative product development has been around for quite some time of course, I believe at least since the late 19th century when Thomas Edison established the Menlo Park laboratory.

You can learn more about combining lean and agile techniques to create new products by attending my Agile Product Management training course. Please contact me for onsite workshops.

If you have any feedback, comments, or questions, then I’d love to hear from you!

I find the Lean Startup concept of a minimal viable product (MVP) rather exciting: It entails creating a first product version to test our ideas as quickly and cheaply as possible. This could be a throwaway prototype such as a mock-up or a product increment, working software that is tested and documented. The MVP works together with a build-measure-learn cycle: developing software, gathering customer feedback, and learning from it.

Build, Measure, Learn

With roots in the Scrum tradition, this sounds rather familiar to me: Validating assumptions by gathering customer feedback using product increments is called empirical management or inspect-and-adapt in Scrum.

But Scrum advocates the use of a product backlog containing the outstanding work necessary to create a successful product. How does the backlog fit into the picture? And can the product backlog be helpful to create a minimal viable product?

This blog posts answers this question and investigates how Lean Startup and Scrum concepts can be combined successfully.

The Product Vision

“If I had asked people what they wanted, they would have said faster horses,” said Henry Ford famously. A vision, an idea of the future product, is the start of any successful innovation. Without a vision, we lack a shared goal, a common direction.

To reach our goal, we have to decide on an approach or strategy. This includes making assumptions about the target group, the needs the product should address, the key product features, and the value it should create for the organisation developing. I use my Vision Board to capture and visualise the product strategy.

The strategy’s assumptions must be validated. A great way to do this is to create the minimal viable product and to release it to the target customers and users.

The Product Backlog

Unfortunately, the product strategy is often too coarse-grained and partial to be used as a direct input for writing software. It can therefore be helpful to take an intermediate step, and to identify the work that is required to validate the strategy.

The corresponding items are placed in a sketchy, lightweight product backlog. To put it differently, the backlog is derived from the product strategy; it makes the strategy implementable.

Vision, Product Strategy, Product Backlog

From Backlog to Minimal Viable Product

Once we have a strategy and initial product backlog available, we create the minimum amount of functionality necessary to test our assumptions. This may take a day or two, or one or more sprints with a preference for the shorter timescales. Our goal is to find out quickly if the product generates a positive response amongst the target users and customers, and if the target group members use the product in the intended way. Once we’ve created the MVP, we release it and gather the relevant data.

Strategy, Backlog, and MVP

Note that releasing the MVP can be limited to a small group of users if the respondents are representative for the target group. Google, for instance, released early versions of its Chrome browser internally and asked its employees to test the software and to provide feedback before a first public beta was released in October 2008. A counter example is Google Buzz: The software was apparently loved by Google engineers, but unfortunately not by the rest of the world.

Pivot or Persevere?

Once we’ve gathered and evaluated the feedback, we need to decide if and how to act upon it. If the feedback invalidates any assumptions in the product strategy – which is likely to be the case when a new product is developed – we should adjust it together with the product backlog. Making changes to the strategy is also called pivot.

We may decide to change the target group or the needs selected, for instance; maybe the features or the look and feel envisioned is not right; or the business model does not work as expected, for instance, users never click on the ads displayed. Changing the product strategy can require restocking the backlog. With the backlog updated, we continue with the next cycle, develop a new MVP, and gather new feedback.

Pivot

If the data confirms our strategy, we preserve and adapt the product backlog by incorporating the insights gained. Depending on the quality of the MVP, we may have to throw away any mock-ups and prototypes created so far, and start afresh developing tested and documented software using agile development practices. If the MVP is a product increment, we can progressively transform it into a shippable product using a series of sprints.

Persevere

Summary

Using a minimal viable product is a powerful concept to validate the product backlog that be used in harmony with Scrum’s approach of creating working software, exposing it to customers and users, investigating their feedback, and making the necessary adaptations. Many thanks to @stefanroock for feedback on the first MVP of this post.

If you’ve found this blog post interesting, you are likely to benefit from my Agile Product Management training. The course teaches a combination of Lean Startup, Scrum, Kanban, and Design Thinking techniques. Check it out!

To create a new product, we have to peek into the future and anticipate what the product will roughly look like and do. For anyone not blessed with perfect foresight, predicting the future correctly is notoriously difficult. After all, the only thing certain about the future is that it is uncertain! Investing in a new product hence always involves risk. We may have targeted the wrong market segment, envisioned the wrong product or the wrong features, or the market may have changed by the time the product is launched.

Envisioning a Lean, Minimal Product

A great strategy to minimise the investment risk is to envision a lean, minimal product with the smallest possible feature set. I refer to such a product as the minimal marketable product. It contains just enough functionality to be viable – to launch, market and sell the product successfully. Developing a minimal product is quicker and cheaper than a more ambitious, feature-rich one. If the product bombs less time and money is lost. If it is a success, the product starts earning money sooner. Additionally, a minimal product allows us to receive feedback earlier so we adapt the product quicker to the market response. Rather than trying to create the perfect product, we follow the motto “get it out, then get it right.” Note that the product’s quality must be right from the start. Otherwise it will be difficult to adapt the product; bugs may hinder its adoption, or even damage the brand.

The iPhone

An example of a minimal marketable product is the original iPhone, which launched in 2007. One of the secrets behind its success is the narrow set of customer needs Apple selected. The company avoided the trap of trying to please too many people at once, of trying to copy all the features competitors offered. Instead, Apple took a fresh look at what smartphones should look like and do, and deliberately left out some functionality. The original iPhone shipped without many features standard on existing phones: copy and paste, the ability to send text messages to multiple recipients, and a software development kit, for instance. These limitations, though, did not hinder its success. Paring down the functionality allowed Apple to develop and ship the product within a competitive timeframe and gave the company a significant lead over its competitors. Building on the success of the first iPhone version, Apple started to extend the capabilities of the phone both in terms of hardware and software with the launch of the 3G model in 2008. This version also allowed the company to enter a new market segment by targeting business users.

The Apple Newton

Developing a minimal marketable product may sound like a no-brainer. But my experience suggests that many start-ups and established companies alike find it hard to restrict the features of a new product. It’s often too tempting to opt for a big-bang release trying to satisfy as many users and customers at once in order to maximise revenue. Contrast the iPhone with another Apple product: the Apple Newton, first launched in 1993 after five long years of development. Remember those Apple ads that promised a PDA that could do all sorts of wonderful things, including recognising your handwriting? When it was finally shipped, the Newton proved to be too bulky and heavy. Worse, its most important feature, the handwriting recognition, did not work properly. The product underperformed and was finally withdrawn from the market in 1998. In hindsight, Apple was overly ambitious with its Newton plans. The company launched a product that tried to do too much at once, and failed.

The Steps towards a Minimal Marketable Product

To create a lean, minimal product, limit the target group and “build a product for the few, not the many,” as Steve Blank recommends in his book The Four Steps to the Epiphany. For instance, if you use personas to describe members of your target group, consider the impact of removing a persona. Would the product still sell? If yes, reduce the target group by dropping the persona. Once you have done a great job for your early customers, you’re in a position to build on the initial success with a new, incremental release that attracts new customers.

Second, understand your product’s value proposition and only select the features that are essential to address the needs of the target group. Have the courage and discipline to discard all others for now. Selecting the minimal set of features does not mean creating a bland, boring or simplistic product. It means focusing on those properties that are essential for the product success. If you work with user stories, for instance, review each story or epic, and ask yourself if the product can be shipped with out it. If yes, exclude the story. As the French writer and poet Antoine de Saint-Exupery put it:

“Perfection is achieved, not when there is nothing more to add,
but when there is nothing left to take away.”

You can learn more about minimal marketable products by attending my Agile Product Planning training course. You can also find a more detailed discussion of the concept in my book “Agile Product Management with Scrum“.

Many product backlogs are too long, detailed and complex. This is in stark contrast to what the product backlog should be: a simple artefact listing the outstanding work to bring the product to life. It’s time to put any over-weight product backlog on a diet making it lean and concise. This blog posts continues the discussion of making a lean product backlog by limiting unnecessary variation and preventing overburden.

Limit Unnecessary Variation

Variation, also called unevenness, prevents a smooth flow of work. While not all variation in the product backlog is bad — the size of its items should vary depending on their priority to minimise waste, for instance — reducing unnecessary variation helps create a lean backlog and a lean workflow:

Standardise the techniques for describing product backlog items. Choose user stories to capture functional requirements and operational qualities such as performance and robustness requirements, for instance. Agree on a common way to describe usability requirements such as sketches, wire-frames or mock-ups.

Use a sprint goal. The sprint goal summarizes the desired outcome of the sprint, and moves the Scrum team a step closer toward the release of the product. A shared sprint goal ensures that everyone is working toward a common goal. It minimises variation by limiting the type of requirements worked on in a given sprint, for instance, by choosing items from the same theme. This facilitates close teamwork and can increase velocity.

Ensure that the high-priority items have roughly the same size and favour small items – items that can be transformed into a part of the product increment within a few days. This reduces variation, improves the progress tracking within the sprint, and prevents defects by allowing the product owner to provide just-in-time feedback on the work results. Note that this approach works best when the team uses agile development practices including story-driven development.

Create a steady cadence by using fixed-length releases. Timebox your projects: Identify the window of opportunity based on the product vision and the product backlog, and freeze the release date. Take Salesfore.com, a leading provider of on-demand customer relationship management services. The company releases a product update every four months. As a consequence, Salesforce.com experienced an amazing increase in the number of features delivered while drastically reducing its lead-time for new functionality. Note that a fast, steady cadence supports other measures including minimising the inventory in the product backlog.

Prevent Overburden

As long as people work crazy hours, and as long as projects and teams are overwhelmed by the amount of work, the removal of waste and variation is ineffective. Waste and variation are likely to creep back in unless we limit the amount of work to the capacity and capabilities of the organization. Let’s assume we try to eliminate defects but the project still suffers from overburden. Chances are that quality problems reappear since the project members still feel pressured and are overworked. In fact, overburden is a major source of waste including work-in-progress, waiting and delays, task-switching, and defects.

To eliminate overburden, let the product backlog evolve based on customer and user feedback. View changing requirements as a competitive advantage and leverage the feedback together with the project progress to decide which functionality is implemented. Encourage the team to pull only as many items into the sprint as they can transform into a product increment in a sustainable way. Ensure that the high-priority items are ready: They should be clear, testable and feasible. This avoids that the team overlooks tasks and pulls too much work into the sprint. And last but not least, make high-priority items small. This allows the team to optimise its work utilisation. It also avoids the danger of missing tasks – which is a common issue with large stories.

Find out more

Find out more about working with the product backlog effectively in my book Agile Product Management with Scrum. Attend my lean training course to fully understand how product owners can benefit from applying lean techniques.