Product Management meets Lean Startup

I’m participating in a panel at a Brainmates’ Product Talk in Sydney on 14 April. The topic is “The Intersection of Lean Start Up and Product Management"

So, I thought I’d post a few thoughts on the subject in advance. I welcome any comments, and feel free to turn up on the evening - watch the Brainmates events page for details.

The two key things that make Product Management in a corporate environment different from Lean Startup practices are:

1. You can’t fail fast (as much). You can’t fail as freely as a startup, because you can’t take undue risks with your existing customers, brand and experience. You probably can't iterate as rapidly as a startup due to many perfectly valid business and technical constraints.

2. You can’t maintain narrow single-minded focus. You’ve already discovered MVP, and need to scale and diversify. You’re dealing with a myriad of candidate features, maybe even a portfolio of related products.

But

Where the two meet perfectly is the strong emphasis on evidence-based decision-making. That’s what the lean validation board is all about. It’s exactly what happens when Product Managers specify features based on a testable hypothesis.

And

There are plenty of hacks that allow Product Managers to test hypotheses that are as risky as those of a startup, as rapidly as those of a startup. For example, not all tests need to be live in market - you can validate using survey data and tools like those provided by Survey Engine or Qualtrics

Also

Having achieved MVP, established a validated business model, having real customers and the data that comes with them, probably having competitors with some feature overlap, a Product Manager in an established businesses has a fertile field from which to generate hypotheses. You can explore up and down the value chain or supply chain for opportunities to disrupt. You can try to predict where 'the puck is going’ in terms of disruption in the broader customer journey (e.g. 65% of my referred traffic comes from Google now, but I think in 2 years it will be voice search, or wearables, or Pinterest). You can mine the behavioural data of your real, active, paying customers. You can even talk to them.

In short, Lean Startup principles don’t apply perfectly and undigested to Product Management in established business, but there are key areas in which these principles (or a close analog) are extremely worthwhile, and some of the constraints can be easily overcome.

HiPPO Grooming

I’ve coined a new phrase which I’m rather chuffed with. It has been submitted it to Urban Dictionary and I’m claiming it here.

HiPPO Grooming is the delicate art of defusing a truly awful concept put forward by someone very senior and very stupid in a brainstorming or 'visioning' session.

The trick is to completely transform the suggestion into something worthwhile (or at least harmless), while at the same time convincing the clueless senior exec that it retains their intent and ownership, and full credit is due to their brilliance.

This is as difficult and dangerous as it sounds.

The HiPPO bit comes from [HiPPO] = Highest Paid Person's Opinion (previously defined on Urban Dictionary, see definition 23 under[hippo]. The saying goes that the HiPPO is the opinion that prevails in a decision making session, even when it’s not the best outcome.

Example

CEO - "Let's make our online registration form just like a video game."

HiPPO Groomer - "Brilliant idea, Sir. We could introduce some elements that provide a playful game-like experience of progress and reward as customers complete the form."

Colleagues (aside) - "dude, that was some nice HiPPO Grooming"

Not the Messiah, just a Very Nifty Toy

banksimple - (not) The Future of Banking (yet)

I wish I had a dollar for every time someone asked me what I think of banksimple.

I’d have about twenty bucks. But I digress. Here’s what I tell them:

I think banksimple solves a bunch of problems that don’t *really* exist. All the features in their demo videos look like nice-to-haves. Extremely nice nice-to-haves I’ll grant you, but nothing that would make me want to jump a fence.

See, at the heart of exemplary product design is a *real* problem solved. Dyson vacuum cleaners, iPods and Polaroid cameras all look slick and sexy. But that’s not all. Dyson got rid of the bag. Edwin Land gave you developed photos of your cherished moments in seconds - where before it would take days (and maybe allowed you to capture ‘cherished moments’ that mightn’t have gone down so well at the local photo stall – nudge, nudge). Steve Jobs made ripping, organising and playing digital music about a million times easier than any solution which existed before the iPod.

My point here is not to disparage banksimple (or ‘Simple’ as they are now simply known, having changed their name late 2011). No, my point is that banking is clearly a ‘target rich environment’ when it comes to problems that need to be solved. You don’t need to talk to customers of any bank for long to realise the wealth of opportunity in the form of real, pressing pain-in-the-neck problems.

It can only be a matter of time before someone solves some of these and seizes The Future of Banking. Will it be Simple, Paypal, Google, a dinosaur bank, a startup in a garage?

By the way, in my own humble opinion the place to start is with small business customers. They probably have the highest, most frequent involvement with their banks, and plenty that keeps them up at night.

The Voice of the Customer in Agile

The ‘Voice of the Customer’ is the weakest link in Agile web development.

New advances – which make Choice Modelling cheap, fast and relevant – solve this problem.

The ‘Voice of the Customer’ is a poorly taught and poorly understood component of Agile methodologies. There is no consensus on the tools that should be used to capture it.

Of the methods that are in use, the most rigorous are complex, costly and time-consuming, and can’t be easily and quickly repeated at each iteration. The less rigorous methods are cheap and quick, but the information they produce is actually worthless (we have proven this, as I demonstrate below).

So, measuring the ‘Voice of the Customer’ in Agile web development is generally done either:

-          not at all; or

-          poorly; or

-          fairly rigorously at the outset, then poorly or not-at-all throughout.

But there are now Choice Modelling methods available that allow us to quickly, cheaply and accurately measure the Voice of the Customer, both initially and throughout development.

Let me illustrate by example.

On a recent web project we simply wanted to know which features our customers wanted most. So we conducted a basic online survey to build a choice model. In order to prove this was a superior approach, we conducted a parallel online survey using the common ‘rating’ approach (where respondents rate each feature on a scale of 1 to 5).

Both approaches involved exactly the same cost (cheap), time (2 days) and sample (40 people). The results are summarised below.

The Rating results weren’t statistically meaningful. The features all scored about the same average, and the highest scoring feature was actually the number 6 ranked feature in the Choice Model. These results were either useless, or - if you ignored statistical significance and took notice of the highest average rating – wrong.  

Because the choice survey was so quick and cheap, we’ll be able to repeat it between each sprint, in order to see if (and how) customers’ preferences change as they became exposed to more fully developed iterations of some of the features.

Having seen the benefits of this approach, I think you’d have rocks in your head to use anything else.  The adoption of these new Choice Modelling tools can only be a Good Thing for product innovation online.

I am happy to point anyone who wants to know more in the right direction.