PMI - BOOK REVIEW
by Gregor Nicolas
Who is the author?
Eric Ries is born on September 22, 1978.
Eric Ries is an entrepreneur and author of the New York Times bestseller. While at Yale, he co-founded Catalyst Recruiting, an online forum for university students to network with potential employers. He took a leave of absence to pursue Catalyst Recruiting, but the company dissolved quickly.
After graduating, he moved to Silicon Valley with There, Inc as a software engineer. He launched its web-based 3D Virtual World product. This company also dissolved.
In 2004, Ries left to join one of the founders of There.com, Will Harvey in co-founding IMVU Inc. The company was sometimes called the Instant Messaging Virtual Universe. Eric Ries described the accidental process by which the company acquired its meaningless name, and stated "It's not an acronym; it doesn't stand for anything", though he did note the name was originally used because the IM aspect invoked instant messaging, something the company wanted to be associated with. The company was a modern Crypto game token distributor.
It was a social network. IMVU investor Steve Blank insisted that IMVU executives audit Blank's class on entrepreneurship at UC Berkeley. There Ries picked up Blank's method of fast customer feedback, which Blank called "customer development", and applied it at IMVU in combination with lean software development, testing alternate versions of the product and measuring download rates. IMVU deployed code to production nearly 50 times a day, an unusually rapid development cycle. Ries also copyedited an early version of Blank's book on customer development, The Four Steps to the Epiphany.
IMVU aimed to integrate instant messaging with the high revenue per customer of traditional video games. Ries and Harvey did not seek a large amount of initial funding and released a minimum viable product within six months.
He serves on the advisory board of a number of technology startups, and has consulted to new and established companies as well as venture capital firms. In 2010, he was named entrepreneur-in-residence at Harvard Business School and is currently an IDEO Fellow.
In 2009, he was honoured with a Tech Fellow award in the category of Engineering Leadership. The Lean Startup methodology has been written about in The New York Times, The Wall Street Journal, Harvard Business Review,Inc. (where he appeared on the cover), Wired, Fast Company, and countless blogs. He lives in San Francisco.
The book presents Eric Ries describing his proposed lean startup strategy for startup companies or organizations looking to move quickly through the growth or idea generation process. It is about quantity to improve on learning. It feels like a gamification of the Minimum Viable Product delivery.
It is hard to see quality coming right out of the process with a team of amateurs. It is more likely a bootcamp training to get a team to find the best way to improve by experimentation. Sound like Scrum in testing phases. Similar to a set of sprints for business idea realization linked to strategic impact. It also links to measuring what matters when the revenue stream is kept high on the review charts.
Ries developed the idea for the lean startup from his experiences as a startup advisor, employee, and founder. He learned from failures and found that that it is better to know if you are about to fail as fast as possible. Sounds like a Silicon’s valley tech motto during the growth era.
There is also a focused component of costumer centricity into the model. Getting feedback from the user or customer the sooner is a crucial point of attention of the Lean Start Up. Ries attributes the failure of his first startup, Catalyst Recruiting, to not understanding the target customers, their wants, and focusing too much on perfection. Meeting all expected to the T is a waste of time.
Keeping the end in mind is crucial. Therefrom you make incremental progress. The idea combines this process of building with a purpose. This links well with the breakdown structure exercise. Ries does not forget that every step is an experiment and takes it as is. It is important during the Lean Start Up to close the experiments as soon as possible. Building an MVP (Minimum viable product) and then testing and iterating quickly results in less waste and develop a better product market fit. This sounds like DMAIC (Define, Measure, Analyse, Improve, Control) from Lean.
He also meets Lean methods by tackling the Five Whys, a technique designed to reach the core of an issue. This is also a method to cut waste to the core as soon as possible.
Many companies have used the methods. I think it is prudent to implement the mentality the attitude and adapt the methods to fit the business model of the company utilizing it. There needs to be a transparency and clarity in communicating the purpose, strategy, and vision.
The main question is what is the methodology about
The lean startup methodology is used to develop products and businesses in a short period of time, which allows the creator of the product or business to quickly determine if their business model is a viable one. This usually takes 5 days from beginning to end.
When implementing the lean startup methodology, the business that uses this methodology will focus on developing a product while also gaining customer feedback, which usually involves releasing a minimum viable product to the market or a small subset of your customers.
The goal of using this methodology is to get rid of wasteful practices during the initial stages of a company, which provides the company with a higher possibility of long-term success. By using the lean startup, you aim success without much funding, detailed business plans, or perfect product. The focus is as much feedback on the initial deliveries for quick implementation of iterations. This requires an efficient use of resources, time, and money. There is a focus on purpose and the development of a lean scope.
Build, Measure, Learn
It is a quick delivery of the Minimum Viable Product (MVP) or service and evaluating its success in the market amongst the targeted customers.
During the phases, the major focus is Focus. Focus on the purpose. Focus on the data that matters right there, right now. Focus on what satisfies the customer’s needs, wants, or objectives.
The Learning is about learning what to keep doing and what to stop doing.
As project managers, we are on this constant need to keep motivation and focus on the purpose of the project.
Like the lean start up, these days the user’s feedback is a must. There is a stakeholder analysis and we gather important information on who will be crucial to the success of the project when completed.
Constant satisfaction surveys are sent out or ran through formal and informal channels.
The idea of the Lean Start Up can be compared to the Sprint runs of the Agile method Scrum. However, the Lean Start Up shows a deep involvement of the Scrum Master and the level of self-sufficiency of the team based on their professionalism or amateurism.
Project management has a quality aspect to it which is not always avoidable. The PM has to deliver work packages to avoid keeping a backlog of work in progress (WIP). This is in line with the Lean Start-Up. On the other side a project wants to achieve a certain level of quality that is not always possible if no dedicated team is involved.
During a project, these deliverables are interconnected and the quality of one will impact the others and the entire project. However, to meet the book’s method, feedback is sought to iterate and improve. We will consider this the building of MVP to a quality expectation that is acceptable and agreed upon for the success of the project.
PMs are running mini startups to be handed over to the operations and perfection is not always top priority. The results and the fast integration are looked at the most. Efficient and effective handover are targeted. Feedback for top satisfaction of the project result recipients is the priority. Therefore, a great sponsor and a conscious customer representative are needed for the project.
I do see the use of Lean Start up for many projects or project phases. However, I will argue that the environment where the project is being develop has to move as quick as needed for the team working on the project to receive the feedback needed for a successful outcome.
Few lessons from the book:
1. Test Frequently and Learn Quickly - MVP approach
2. Observe and Measure Real Customer Behaviour - Get MVP into the hands of real customers early
3. Focus Exclusively on Capturing Actionable Metrics - Avoid vanity metrics
4. Be Comfortable Pivoting based on Key Learnings - Pivot or stop if the initial plan is not working
5. Embrace New Accounting Methods - Ries argues that Lean Startups need to embrace ‘innovation accounting’. With this method he suggests that progress is best tracked by observing things like user activity, engagement, retention and virality. In other words, if user numbers are increasing, and they are being retained such that Lifetime Value (LTV) is growing significantly, this is a better indicator of ‘progress’ than traditional accounting methods.
6. Stay Lean - The word ‘lean’ refers to speed and agility and not ‘cost savings’
1. The main characteristics of a lean startup include:
- Allows you to develop a product based on the desires of the market
- Uses validated learning to determine customer interest
- Focuses on metrics like product popularity and lifetime customer value
▪ What matters for advancement
- Starts out with a minimum viable product to assess the reaction that customers have to the product
- Experimentation is favoured as opposed to sticking to a strict plan
2. The main characteristics of a traditional startup include:
- Begins with the creation of an extensive business plan that's used as a rigid structure for the next few years
- Includes financial projections
- Involves creating products in secret where only employees and investors have any idea about the product
- Business plan is used to obtaining funding from angel investors or VC firms
The Lean Start Up sound a lot like the Agile Manifesto tackling certain slow processed of the more traditional predictive project management methods.
Even though we have evolved, it does not mean that we have ignored the necessity of the predictive in certain cases. Certain companies still need and require a process before delivering the final product, to a certain extent. An airplane company cannot start flying their MVP without meeting certain requirements. Not everyone can be an astronaut.
However, we have lived a recent change when results and feedback are needed as quick as possible. The traditional vaccine creation has been reviewed and made lean with Covid. This is also a result of experiences, research, and years of trials in the domain.
Therefore, I would suggest that Lean Start Up is better used by a team of experienced, focused, and challenging individuals looking to get results as quick as possible and improve on feedback without the impediments of the bureaucracy of their environments.