I remember the first time I heard about Lean Startup. I was an analyst for Forrester research on a panel at the Agile conference in Orlando. A member of the audience asked, “What do you think about Lean Startup?”. Honestly, I had not heard of Lean Startup. After the conference, I bought Eric Ries’s book – Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. The concepts it presented blew my mind. The idea is that Agile could be combined with an approach to effectively, incrementally validate and deliver a terrific business. At that point, I had not spent time in a startup and had always delivered software products for large enterprises that already had established businesses. I was very new to the idea of building a business from the ground up. But the ideas resonated with me.
Over time I realized that the work of Eric Reis was based on the graduate program of Steven Blank. His book The Four Steps to the Epiphany: Successful Strategies for Startups That Win and the later book The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company became foundational reading during my time at Tasktop as the Chief Product Officer.
In a nutshell, the three books point to the need to learn about your customer and business incrementally through frequent experimentation and learning. Eric Reis encouraged the reader to use an agile approach to execution, framing the nature of each Sprint in terms of the business’s need to learn. The three phases are
Problem / Solution Fit – This is also known as Customer Discovery. To quote Brant Cooper, author of The Lean Entrepreneur, puts it simply: Customer Discovery “is all about questioning your core business assumptions.” Performed correctly, Customer Discovery is a customer-centric, scientific process that puts evidence behind an assumed product-market fit.
Product / Market Fit – This is also known as Customer Validation. Customer discovery is problem-focused, customer discovery is solution focused. This phase of Lean Startup is about customers using a product and providing feedback on its use. It is focused on iterating the value proposition, feature set, and UX in response to the customer. Delivering minimal viable products (MVP) at this stage is crucial.
Scale– Also known as Customer Creation and Building. The final stage of the lifecycle is focused on scale where channels, marketing, and more traditional approaches to building a business come into play.
At the heart of each phase is validated learning, also known as build, measure, learn. This is frequent delivery in pursuit of learning. The questions change during the lifecycle, but this fundamental idea shapes everything. Operationally, anything that slows down this learning loop or adds complexity is avoided.
Lean Startup and Scrum
Reis and Blank talk about using these ideas to build and scale a business, but the ideas hold true at the product or even feature level. For a product, earlier Sprints will focus on validating the business assumptions associated with the product. Later, Sprints will create an MVP to validate the features and capabilities. The MVP will evolve into a working product. And for most products, the scale stage lasts for a long time, with new features being added to extend sales channels or add different user types. The ideas of Lean Startup also make sense for feature development. Earlier Sprints validate the ultimate assumptions of the feature around value, usage, and risk. Later, Sprints add usability and capability as more people use the feature.
In 2016, Gartner created a diagram that showed how Design Thinking, Lean Startup, and Scrum combined. At first viewing, it describes a world of these three disciplines interlinked, a view that I share. But the diagram implies a flow that is both dangerous and misleading. This potential danger was described by Marty De Jong in his article as “With this first impression, I missed the underlying danger this diagram can provide when executed by inexperienced executors or could even be used (un)intentionally to make a charade of the organizational transition it is supposed to support and become a waterfall in disguise”. The idea that Scrum is meant to be purely used at the end to build something is misleading. Ultimately, Scrum can be the overall execution engine driving toward a goal. Scrum is a tool for delivering incremental learning against a goal that both Design Thinking and Lean Startup require.
OK, that was interesting – so what?
Most people using Scrum are not building the next business or a new product; they are working within large organizations to deliver incremental product improvements. Drawing the connection between the ideas of Lean Startup and their use of Scrum is challenging. But there is value in the ideas of the Lean Startup community, and they include:
It is all about Value – Over the last five years, we have seen Scrum being positioned less about delivering stuff and more about delivering value. Value ultimately has a customer and an investor. Value works in an environment with constraints such as laws, access, and context. Lean Startup provides a set of ideas that help provide more context to the features and capabilities we are delivering. It also encourages tools like Lean Canvases that help Scrum Teams make that context transparent.
Measurement is critical – With the introduction of Evidence-Based Management and Lean UX, we add ideas and practices to Scrum that provide direction and encourage experimentation. At the heart of any backlog item is the idea that its completion provides a measurable outcome.
Learning is an incremental journey – Steve Blank uses the phrase “get out of the classroom” when talking about his MBA program and how it differs from other programs, and the idea is true for Scrum Teams. Rapid, frequent learning provides evidence that helps plan and drive progress. The Scrum Events are best when they are based on evidence. Lean Startup encourages teams to the learning to cost equation, ensuring that they learn most cost-effectively. For software teams, that might mean not building software!
The ideas of Lean Startup provide an excellent blueprint for how Scrum Teams look at the opportunities they are presented with. They help these teams navigate the messy reality of value, people, and usage. Of course, like everything, they do not solve the problems but help Scrum Teams ask the right questions.