And the car turned red – An innovation story at Nissan

Every year, Nissan Europe runs a competition called the Chairman’s Innovation Awards. It is open to all employees who want to propose new ideas for Nissan. A few years back, John Ferguson, a British technical architect, proposed a technology that allows customers to change the colour of their car whenever they want. John won the Chairman Innovation Award. John’s idea was incubated in Nissan Innovation Lab where the Innovation Coach guided John to explore his idea using the Lean Startup approach.

Lean Startup sees an idea as a stack of hypotheses hiding the risks behind the project. The approach requires identifying those hypotheses and confronting them with reality to see if the idea can stand. In John’s project, the two initial biggest risks were posed by the technical feasibility and the customer’s desirability for such a feature. Was there a market for his idea?

With no previous experience of innovation projects, the Lean Startup approach gave John a structured methodology to guide him forward. And it was a huge help he says: “I very quickly saw the benefit of Lean Startup. The coaches explained how this was going to work and gave me deadlines, things to deliver, which I really needed. It would have been quite difficult without it.”

On the technical side 

For technical feasibility, John found a company developing an e-ink technology. “I went out to different companies, made contact with them. We settled on one company to provide a prototype.”

On the market side, there were 3 big business risks:

  1. we didn’t really know who the customers are
  2. we didn’t know if they really have a strong need
  3. we didn’t know what the customer would commit to

John had to figure out who was interested in his new feature. Who wants to change the color of their car with a simple mobile app? And more importantly, who will pay for it and how much? John drafted about 10 canvases with possible customer profiles and the pain point that this technology can address. After a quick prioritization exercise, it was time to get out of the building and confront his understanding with the reality. He went down the street to meet car buyers: “The hardest part of the whole activity was when I ended up in the street and talked to people. That will live with me for a long time. I still have nightmares of standing on the street corner of London, trying to stop people to see if they want to buy. But it was the true gold.”

He asked about the challenges of buying a car, trying to grasp the influence the colour has when buying a car. It was not about asking leading questions but rather about giving the person a chance to open up and explain what they found frustrating when buying a car.

One of the biggest learnings the coach gave me was: you don’t go up to a customer and say “Would you buy this?” because the customer will say “yes” because he wants to please you. So, what you get is a kind of positive distortion of the truth. If you then say to them: “Ok then, give me the money now.”, they would say “Oh no!”.

People were talking to John and saying things like: “I spend 2 hours a day inside my car, I don’t care how it looks like outside”, or: “I just want a black car because I don’t want to have to wash it.”

Those interviews brought new perspectives and a refined understanding of the customer’s needs. John decided to focus on one specific customer segment: the fashionista who would like the color of their car to match their style of the day.

To probe that segment, John got a video produced to show the product in action: a TV advert based on the idea that the customer was able to accessorise the car to their outfit. The actress in the advert is wearing a red dress. She walks outside; her car is blue. She pulls out her cell phone, opens up an app and chooses the colour red. And the car turned to red.

The video was broadcasted on the Nissan Facebook page. John analysed the results: ”There wasn’t any kind of strong indicators that people were clambering for this. The idea itself just wasn’t as strong as we thought it was.”

It requires a lot of courage to be able to say: “Well I had this idea, but in light of certain facts, it’s not a good idea to go for.” There is never any certainty with a new product.

John reflected on his experience: “I found an appreciation for failure, positive failure. I didn’t want to have to spend millions to realise that this thing wasn’t going to sell. You do feel disappointed, but at the same time, it’s a learning experience. There have been times in the last year where I’ve reflected on it and wondered: what if we had tried with a different persona in the video rather than focus on fashionista? Would we had gotten a different answer? And you can play this game forever. There was enough evidence to suggest that there wasn’t a business case. One of the things the coaches told me is: “Even if it fails, you’ve succeeded because what you’ve done was proving (in this case disproving) an assumption. You’ve avoided the company wasting a great deal of money, time and effort.” Which is exactly what Lean Startup is all about.

So, a positive failure. Was the coaching helpful? John told the coaches: “The danger is when the consultant wants to please you because he knows you’re paying him. But you weren’t afraid to say to me: “No John. What are you going to deliver this week? What are your assumptions?” You were really pushing me out of my comfort zone because I did not come from a business background. And I appreciated that. It really helped me. You took me through processing, and I think you judged me right, pretty early on, you knew how far you can push me and when to step back. And I think it worked very well. It was a really positive experience.”

When John was in the Nissan Innovation Lab, he was coached by the TangoStart.com team: Iain Wallace and Franck Debane

The right path to take – advice from Steve Jobs

In May 1997, Apple held its Worldwide Developers Conference (WWDC) in San Jose, California. At that time, Steve Jobs was not CEO of the company. He was speaking as an advisor to the company. In this extract, Steve Jobs answers an challenging and rather agressive question from one the participant. His response elevate the debate and until today remain one of the best advice that businesses could take on product development.

One of the things I’ve always found is that you’ve got to start with the customer experience and work backwards to the technology.

You can’t start with the technology and try to figure out where you’re going to try to sell it.

I’ve made this mistake probably more than anybody else in this room, and I’ve got the scar tissue to prove it. And I know that it’s the case.

As we have tried to come up with a strategy and a vision for Apple, it started with ”What incredible benefits can we give to the customer? Where can we take the customer?” not starting with, “Let’s sit down with the engineers and figure out what awesome technology we have and then how are we going to market that.”.

And I think that’s the right path to take.

A few months later, when Steve Jobs became new CEO, Apple was on the the verge of bankruptcy. Under his leadership, Steve Job reinvented the company to become one the most successful company in the world.

Innovation grow business.

When doing business, you decide what are the fundamental directions you want to take. Remember to answers this question first: What incredible benefits can we give to the customer?

How to build your Value Proposition

Getting the value proposition right is one of the most ambiguous task entrepreneurs face in the early definition of their idea. It a convergence point where your team and your customer meet. Not easy to pinpoint.

So here are some elements to consider to help you build this value proposition. To simplify, the value proposition is the promise you make to your customers.

When prompted with your value proposition, your target customers should be able to:

  1. understand what you are proposing them
  2. decide if this is something they want or not (yes I’m interested, or no, this is not for me)

To be able to craft a decent value proposition you need to understand and align on:

The main problem you are solving for your customers

The problem you are solving should resonate with your target customer. If your target customer recognizes the problem, they will be interested in hearing about the solution you have to offer. That simple as that.

Examples:

  • Vivino — picking bad wines
  • MAYU — drinking bad water

Solution

Explain now how you are going to solve the customer problem? At this stage, if the customer agrees with the problem, then he wants to know what the proposed solution is. You don’t need to go into details here, but you want to see if modalities of your solutions are acceptable to the customer. Your solution could be an app. A personalized service. A device.

Examples

  • Vivino — A mobile application
  • MAYU — A jug of water with a rotating stone

Benefits

As a result of accepting your offer, what could happen to the customer? What can he expect to have or achieve that could not have before?

Example:

  • Vivino: feel great about their choice of wine, the confidence that the bottle they will share is a good one
  • MAYU: drink purified water, and live healthier

Customer Quote

Thinking from the customer perspective is always useful. Think of what a happy customer would say after using your solution? This makes your value proposition very tangible for you and for the target customer that will see it.

Customer Commitment

To see if your value proposition is one that is compelling to your target customer, you simply present it to them and hope for a firm agreement. More than a yes, an engagement from that customer, joined with some commitment from them. Otherwise, don’t really if they’re just being polite are really interested. Think of what could be a good commitment you could ask your customers, should they be interested in your proposition. It could be pre-paying for the solution, registering for your service, sending you further data.

Ready to build your value proposition now?

Here is a template to help you out.

Your value proposition is ready?

Find out how you can test your value proposition!

What MVP should I build

You know as an entrepreneur that before building your idea you should build an MVP first, the famous Minimum Viable Product.

So what is this MVP?

This MVP is an experiment to see how customers would react if your idea existed. You will actually build many MVPs and each MVP will help you understand if parts of your idea will work or not, by measuring real customer behaviors.

So what should your MVP look like?

You can test different parts of your idea (price, marketing channels, features, value proposition, user interface, etc…). What you need to test really depends on the advancement stage of your project.

To navigate all the possible experiments you can do, we built a map of the different MVPs, split by advancement stages.

  • Problem Validation: making sure you are addressing an important problem for your customers,
  • Value Proposition Phase: testing the benefits you want to bring to your customers, is this converting into real value?
  • Solution Validation: transforming this value into a tangible product/service, testing its different potential forms.
  • Product Market/Fit: testing how large is your market and if you can meet the need.
From problem validation to market fit

Here is the detail of each experiment.

PROBLEM VALIDATION TESTS

Problem Interview: Explore your customers’ actual problems, needs and the jobs they really want to be done with qualitative interviews where you do not pitch any solution.

Customer Reviews: Study people comment on competitors’ products. Identify the main pain points they have with these products

VALUE PROPOSITION TESTS

Solution Interview: Pitch your value proposition to customers and if it is something they want, collect some proof of commitment. Something that has cost to your customer: a letter of intent, an engaging meeting, sharing some personal data. Explore what they are willing to give in return for your value proposition.

Pre-Sales: Test your potential customers’ willingness to pay for your solution in advance. A good way to test price sensitivity.

Paper Wireframe: Test the usability of your product with a paper prototype of the designs containing some functional elements. It allows you to understand how people interact with it so you can identify potential problems and unnecessary complexity.

Flyer in a Catalog: Advertise your product with your phone number on the flyer and distribute it into an existing catalog. Measure the number of calls you get.

Supermarket Shelf: To see if your customers will actually buy your product, take a sample packaging of your product to an established supermarket and put it on the shelf. Observe customers interacting with your product. Measure the number of sales you would have accomplished. Stop the customer before they actually buy it, otherwise, they might be disappointed!

5 Seconds Test — Does your target customer understand your offer? Show your value proposition briefly (5 seconds) to your customers and ask them what they understood. You will be surprised how different it can be from what you wanted to convey.

Trackable Link: Place a unique trackable hyperlink in an email and measure whether customers click on it or not. This can give you an indication of the interest in your offer.

Landing Page: A digital standalone webpage created to capture potential customers’ information through a specific call to action. You can contact these customers to ask them what they expect or later when your service is ready.

Explainer Video: Create the impression that your product is already in function and show how it works (as if it was functioning) on a video. Put it on your landing page, post it in the forums or send it by email and see if customers engage with your proposition.

SOLUTION VALIDATION TESTS

Concierge Service: Solve the customer problem, manually, as a service. The customers know that a human is performing the service. For instance, if you want to build a matchmaking app, start by putting people in touch manually. Use the learnings to start automating the process. You will understand how helpful your service is to customers.

Wizard of Oz: Similar to the concierge service, but the customer does not know that a human is providing the service. Use technology to deliver the service manually but make the customer believe the infrastructure is already functioning. That’s how many chatbots started. With minimal development, you are testing if you can solve the customer problem and if the customer is happy with your solution.

Mockup: Built upon the wireframe, a mockup is a draft of your final product that people can interact with. Testing visual elements or specific features help finalize the look and the feel of the product/service.

Physical Prototype: Build a simple physical prototype to test the engagement of your customers. You can build products with very simple materials or using a 3D printer very quickly or a digital prototype.

Newsletter/Blog: Test that you can provide value to your customers by pushing relevant content to their problem. This can be done with a newsletter or blog or a social media platform. This allows you to build your network of early adopters.

Fake Door: On an existing digital product, show to the user an option that doesn’t actually exist yet. When the user clicks, the system lets the user know that the feature is not yet available. Measure how many users are clicking on the feature to decide if it’s worth building.

Online Ads: Target a specific customer segment and test your value proposition. Measure the number of views and the reaction to the call to action.

PRODUCT/MARKET FIT TESTS

Price Testing: Test different prices according to the number of features, your customer target, your positioning, marketing channels. You want to know which price corresponds to your image and which price will prevent your target customers from buying your product.

A/B Testing: A or B? Design an experiment to test both with the same sample of users then use the winning version. Test pricing schemes, the impact of different messages, most relevant channels. Be careful, you need a great volume of testers to validate your assumptions.

Crowdfunding: Validate an idea through crowdfunding platforms. You will be able to generate cash and gauge interest to build your product/service.

If you want to go further, I recommend those articles:

And to learn how to think and move like a startup, contact me on Tango.

Can Big Corporations innovate better than Startups?

Increasingly, Startups are disrupting established companies that are wealthy with resources and most importantly with customers. On February 2019, two founders of modern entrepreneurship — Steve Blank, creator of the Lean Startup movement and Alex Osterwalder, inventor of the Business Model Canvas and co-founder of Strategyzer — discussed what it takes for big corporations to innovate better than Startups.

The insightful hour of conversation is available on the Strategyzer youtube channel.

Here is the transcript of some extract of the interview.

Today startups are pure competitors

Alex Osterwalder: What makes startups more inclined to innovation and to disrupt industries?

Steve Blank: It is worth visualizing startups, companies and government agencies and the percentage of these organizations focused on innovation: 100% for startups, between 0 and 10% focused on innovation for companies and the rest on execution and that’s normal because they already found the product/market fit, close to 0% for government agencies.

The whole idea of Lean Startup started when we realized that startups are not smaller versions of big companies. Vice versa, a large company is not a larger version of a startup because it’s bound by different constraints than early-stage ventures.

In the 20th century, startups were bound by capital, they had a couple of million dollars, today startups have more capital in large rounds than corporations have for their entire yearly budget.

Startups were seen as incubators for large corporations and today they are pure competitors.

What big corporations can do to respond to startups

Alex Osterwalder: A lot of things are working against large corporations. Startups are focused on creating a new growth engine and often it is disrupting the established players and they are extremely well funded now so they go faster.

Is there anything that large corporations can do? or is it like a life cycle? Is the fall inevitable?

Steve Blank: You’ve implied there is a natural life cycle to a company. In the 20th century, Deloitte and McKinsey have looked at this and said the average life cycle is about 50 years. Nowadays it’s closer to 15 for a public company. This means something is happening to them, not that CEOs have gone stupider, it’s just that the environment has changed. Yet companies don’t have the tools, methodologies and skill sets to respond. However, there is a cookbook :

  1. Companies can actually figure out how to incentivize external resources to focus on disruption. For example, Apple on the app store or the Nasa gave money to Space X.
  2. They can acquire external innovators. For example, Google buying Android. Beware of the risk of mismatched cultures, processes, and incentives. Companies almost always strangle the newly acquired innovation culture unless they are really careful at how they manage disruptive acquisition.
  3. The third way is to rapidly copy your innovators but use your business model to dominate. For example, Microsoft copied Netscape web browsers, Google didn’t come up with pay-per-click, it copied Overture’s to sell ads. The risk for large companies is that if you copy without understanding deeply the customer problem, you could end up with solutions that miss the point and might be a failure.
  4. The fourth way: innovate better than existing disruptors. It is extremely difficult for companies because it’s more about a culture process problem than a tech problem. Startups are born betting it all but large companies are executing and protecting legacies.

Disrupters with off the shelf components!

Alex Osterwalder: Big corporations say they can collaborate with startups. Can something come out of that? What are the guidelines to make something work?

Steve Blank: It goes back to culture and leadership in large corporations. I remind people that large companies have handbooks of processes, financial metrics, culture, all built in and focused on execution. They recognized that the bills are being paid by people who are just turning the crank.

But companies need to become ambidextrous: chew gum and walk at the same time! They need to be able to execute and have an innovation culture in parallel. In the 20th century, it was a “nice to have”, in the 21st century it is a requirement. However, the problems still remain.

Companies are almost always run by horizon 1 executors. CEOs who are great at playing golf, understanding sales, numbers, managing process and all. The innovation stuff they know the words but never came up with that culture.

Now they are dealing with disruptors who in the old days would have required years to come up with some tech disruption. Now disruptors can get off the shelf components and commodity components and come up with the disruption of business models, that’s what’s scary.

Get disruption out of execution organizations

Alex Osterwalder: In terms of metrics, ambidextrous organizations, cultural space, innovation, what can large organizations learn from startups that they don’t have today?

Steve Blank: If you wanna do something disruptive, it cannot sit inside an operating division of a functional organization. It is important to distinguish between incremental innovation and adjacent innovation (level 2).

If you truly want the disruptive stuff, it cannot start inside. Why? Because we’ve seen this all the time: no budget, not possible to hire the best assets, resource allocation doesn’t allow it. If you’re not committed, don’t do this.

If we just put these people in an internal incubator or accelerator, we’re also going to fail. We have created an innovation theatre and not an innovation pipeline (an end to end process). That is the ambidextrous part.

What’s the equivalent to a process driven, stage gate driven engineering process that takes a year to get a product out versus a fast track operated speed emergency and deliver MVPs that are just good enough process that actually gets things out of the door?

Right now we seem to confuse innovation with what needs a demo, like a startup but forget we need to connect it to delivery. How does this get to a customer? Typically innovation teams don’t want to have those political battles on day one. However, if you’re not having those conversations about what an end-to-end pipeline looks like for innovation delivery then welcome to t-shirts and cool coffee cups but you’re ain’t going to deliver anything.

Failure in large corporations is not the same thing as in startups

Alex Osterwalder: Organisations often copy the part of startups that is the least impactful. How to copy the attitude to failure embraced by the startup world?

Steve Blank: Another reason why you want to pull innovation groups out of execution groups is that in a large corporation, we have job specifications and descriptions. Title on a business line, detailed job specs. In a large corporation, it comes from HR. This job has been done before, we know what the requirements are, what you need to do day-to-day and we know how to measure you. Failure in a large corporation for the execution part is a real failure.

In a startup, there is no job specification. On day one, we’re just guessing, that’s why failure is not a failure in a startup. Failure is actually learning and discovery, we’re doing hypothesis testing. We’re taking every part of the business model canvas that we built and say let’s run experiments here and we’re gonna get data, derive some insights and invalidate our hypothesis based on the data.

It is not the same mindset compared to execution.

You need a different set of measurement tools and a different culture. One group is doing execution of the business model and the other one is searching for a business model.

The incubator is part of the innovation pipeline but if you don’t have the connecting tissues from sourcing innovation to delivering the product, you haven’t build anything productive.

Don’t confuse motion with action. The goal is not for you to demo cool stuff. A chunk of big corporations are having fun incorporating what they think is innovation. The actual goal is to deliver on time stuff with speed emergency that people need.

Entrepreneurship is a calling

Alex Osterwalder: Many of the entrepreneurs who succeed don’t succeed on the first time. They understand the innovation pipeline because they’ve done it from end to end several times. Can entrepreneurship be learned? Is it a profession that can be learned over time?

Steve Blank: I was a practitioner and now I’m an educator. For founders, entrepreneurship and startups are a calling, not a job. If you’re not called, you shouldn’t be anywhere near a startup. Entrepreneurship is a miserable job. It’s much like being an artist. Most of the time, it’s not fun, you’re doing it because this a calling, passion, you’re driven to do this. We’re having fun because we are engaged with our passion, not by a job specification.

We should separate the early stage team from the later stage team. Almost every successful startup has at least two people, that’s the entrepreneur paired with the innovator. It’s very rarely embodied in a single person. The innovator might be the Steve Wozniak who came up with the Apple 2 but there would not have an Apple without the entrepreneur who is Steve Job who could create a reality distortion field and remove money from people’s wallet before he had anything and convince investors he was going to change the world.

Or Bill Gates versus Paul Allen. Paul Allen innovated and Bill Gates was the business strategist, he built the distribution channel and was the one to turn Microsoft into the company it became. Elon Musk doesn’t build rockets engines or cars, it’s JB Straubel who you never hear about who came up with the entire battery architecture used in Tesla cars. For every startup, you see that pairing almost from the beginning.

Why an Innovation pipeline?

Steve Blank: In a large corporation, the entrepreneur is someone who knows how to push products unto the finish line. But in the past, we kept telling these stories of heroic innovation without realizing that maybe we should build a repeatable process internal to companies rather than making those stories a one-off. That’s why we came up with an innovation pipeline which says let’s start with sourcing and get a whole lot of internal and external ideas into the company and then let’s do problem curation (figuring out the solution sourced match any problem that potential customers might have), then let’s prioritize the things we have in our pipeline either by product line or by horizon 1, 2 and 3 and then let’s do hypotheses testing and solution interviews. Finally, some of it might actually require integration.

The last part about pipeline which most people ignore (and that’s why the stuff die) is how we integrate this into our existing channels or engineering organizations or functional units to get it out of the door or if it’s unique enough we get internal funding to stand it up as unique division or sales channel. That’s a good internal process.

The Innovator versus the Entrepreneur

Steve Blank: You must be passionately committed to get stuff out of the building and see your idea turn into something used by thousands of people, then you are at the right place.

I’ve seen people get confused because entrepreneurship is trendy and is the thing to do.

To me, an innovator is someone who has an insight about creating something that never existed before or making something that exists much better. In Silicon Valley, we tend to think of technology innovation but it could be an innovation about a channel opportunity or pricing or something that is unique. Most innovators are not the same people who would go out and raise a million dollar for that idea or even, within a company, figure out how to convince your sales channel to do something different or convince your CEO or your board to invest in a new factory. It takes a different character. Those are entrepreneurs, people who know how to make something happen against all odds. It’s not the same as an innovator. The combination is very rare.

Using internal resources to pivot to an adjacent market

Alex Osterwalder: Is it imaginable to have inside companies corporate entrepreneurs on a salary that get the same kind of results that entrepreneurs get? Take action on venture money or on a salary is very different. Can those two exist or can it only happen outside of the corporate world?

Steve Blank: It can happen in large companies but in a different way. Companies are at a huge advantage when they figure out how to embrace innovation in both strategy and tactical operations getting an innovation pipeline.

For example, Spotify decided that they’ve been looking at the world incorrectly, they shouldn’t just aggregate music, their additional business model should be monetizing podcasts. Both of them are audio and nowadays people listen to music as much as they do podcasts on their mobile devices. It’s just bits. Except that one doesn’t have a gatekeeper (like the music industry). Spotify said why don’t we try to become the dominant player in monetizing podcasts and use the same tools and technology to do that. That’s an amazing example of a company using its internal resources to pivot to an adjacent market and say “we already own 10 of millions of users who are paying us for music, why don’t we just get them over to podcasts”. Just like Apple turned to phones from computers. It was a major pivot for a company but they used what they had: massive brand loyalty, manufacturing resources, supply chain resources.

I see a lot of large companies having a lot of resources but they need to take advantage of these resources. This goes back to leadership. If leadership is just interested in fending off investors, spending money buying their shares back, they don’t give enough time to pivoting.”

An innovator, an entrepreneur, a delivering process?

Alex Osterwalder: How realistic is it to create the role of the entrepreneur inside of a large company to boost innovation culture?

Steve Blank: The difference between giving labels and creating teams. Almost every great product or service begins with this question: Step 1, is there an innovator? Step 2, is there an entrepreneur paired with this innovator who wants to take that idea and expose it to the world? Step 3, is there a process built end to end that helps this team deliver that product or service?

What we need to do first is to develop this process and have a pipeline. If you don’t agree with what the process is, starting with job titles and specifications seems backward. You just want the most passionate people into this.

Companies whose culture is already innovative

Alex Osterwalder: Do you think that the large companies, historic companies of the past never really laid down this process to be adaptable?

Some of the most innovative companies are still being led by their founders: SpaceX, Apple when Jobs was alive, Netflix, Tesla, Amazon.

You must build innovation in your culture and then the process flows down. Life cycles in most industries are compressing.

Large corporations have natural corporate innovators. Do they know where they are?

Alex Osterwalder: What I observe is that it’s not a people problem. Do you think that companies have to work more on their talent recruitment?

Steve Blank: There are more innovators and entrepreneurs in large companies than in the startup world, They just made different career choices but they are there. What they lack is a process that allows them to innovate and execute at the same time. Companies beat out of these people the experimentation and risk-taking mindset.

Where do these creative people go inside your company to pull this off? What’s their goal for delivering stuff and how is it resourced? If you can’t find a space for them in your company, you are going to have a bunch of frustrated people in your company who might leave or might not be contributing up to their potential.

For innovations to emerge

Alex Osterwalder: So it leads us back to these ambidextrous organization. We need to create this physical space, mental space, and incentive program so that entrepreneurs can emerge.

That’s when the horizon model can arise. How does this horizon model H1, H2, H3 from McKinsey apply? Can you elaborate on that because it is very much related to this topic of disruption?

Steve Blank: There are still disruptive ideas which require years to build. A lot of physics and construction experts say it is going to take a couple of years. A lot of things require time but the key idea is that startups and you have realized you could build disruptive ideas with existing components of just reconfiguring the business model. Uber did not require a ton of new technology. They realized they had internet, drivers, here you have a new business model. Airbnb certainly did not require a new set of inventions. They needed software to manage their service but it was a business model innovation. Those type of H3 innovations looked like minimum viable products to large companies, they start the business without all the features… but it’s very disruptive. Or the scooters out there are now billion dollars market cap opportunities. Good enough and disruptive is very different from “I’ve got a 100 000 customers I can’t ship this thing, it didn’t pass the QA and the policy meeting and the strategy committee”. Meanwhile, other people are throwing stuff out and refactoring it and working on their product/market fit in the field. It makes companies incredibly nervous.

The problem is the people who are implementing those disruptive strategies building disruption out of H1 existing tools are not the incumbent, they’re the attackers. They have nothing to lose, no legacy to support, no infrastructure to support and no customers and brand to worry about.

The minute where you hear your legal team who says “you can’t do that” you realize you don’t have the fast track innovation pipeline where the focus is speed, emergency, and product delivery.

From business model writing class to experiential class

Alex Osterwalder: What are the most important things we need to teach entrepreneurs or corporate entrepreneurs?

Steve Blank: The capstone class in big universities often was “how to write a business model with a 5-year forecast” but we know that no business model survives first contact with customers. That’s not how the world worked. Of course, you need an operating plan. There is no way that sitting in your office you could pre-compute customer needs and desires. So I came up with this line “there are no facts in the building so get outside!” and that became the heart of customer discovery and customer development. The classes have now been adapted. They are team-based, they are experiential, students go talking to customers, and built around hypotheses testing of your business model canvas. You think that’s your customers, run tests and find out. You think that’s the 10 features they’re gonna want? Let’s build an MVP. In the classes I teach, these teams talked to 150 clients in 10 weeks and build an MVP every week!

I figured if students could do that, this could be the core of what could be the innovation pipeline inside a company. Surround that with innovation sourcing, prioritization, problem curation and then figuring how you can integrate this stuff with the rest of your organization, you’ve got a plan.

Investing in skills training to transform an organization

Alex Osterwalder: Experiential is important. When we work with teams, we train them and then they go back to the execution engine and we get a new team so they don’t accumulate enough experience with this process to really stick to it and they go back to the execution process.

Steve Blank: Seniors don’t realize how much you must invest on corporate entrepreneurs/innovators for them to really become professional.

We want to build successful entrepreneurs and innovators inside companies that are not afraid to experiment and learn and discover. This goes back to this culture of failure. In Silicon Valley, if you have an honest failure, we call that experience.

Make sure that you have a culture that supports successful innovation and entrepreneurship, not just that you deliver something at speed emergency, it’s about that “did you rapidly gather enough insights to kill your project”?

I see a lot of Zombie projects that never die. Because there are no internal metrics and there are no kudos to be able to shut down your own project because you’re afraid you’ll never get another chance at it. With ambidextrous organizations where the culture and pipeline process are very different from a stage gate and execution process, you will get ahead.

This pipeline I describe for Horizon 3 companies can also be implemented inside Horizon 1 and Horizon 2 organizations. It just has a very different focus inside those organizations. In those organizations, these pipelines become very tactical and focused on incremental revenue gains for quarterly stuff but it’s the same process, it just has a different focus and culture.

A startup is a matter of survival — Large corp can never get there

Do entrepreneurs move from startups to large companies or are they not the same people?

Steve Blank: In a large company if you think you are doing a startup, you are wrong. You’re innovating but you are still in a place where the lights won’t go out if you don’t succeed. You are still going to pay your mortgage and put your kids to school if your idea fails.

A startup is a year and half of terror. If you don’t find product/market fit or you don’t raise enough at the next round, you’re out of business. In a company, that sword over your head doesn’t exist so it changes the nature and motivation and the amount of risk you’re willing to take.

I’m not suggesting that one is better than the other, but as much as you try to emulate a startup in a company, you just can’t get there exactly.

And for small-size companies?

Alex Osterwalder: How can small and medium-sized companies deal with this topic?

Steve Blank: Whether you are large or small, you still have to think about your customers, the product-market fit and should be running these exercises continually. Lean Startup is an invaluable toolset whatever your scale. However, you must be wary of what you read. When you get venture capital that allows different scales compared to small capital. If you are a small business, be careful not to compare apples and oranges.

If you want to learn more about how to think and move like a startup, contact me on Tango.

Le Lean Startup en 5 citations

Voici 5 citations choisies d’Eric Ries pour capturer les idées derrière le concept de Lean Startup. Ces citations sont du extraite du livre, “Lean Startup“.

Le succès, ce n’est pas livrer une fonctionnalité. Le succès, c’est apprendre comment résoudre le problème du client.

On célébre quand une fonctionnalité sort car elle représente le travail d’une équipe. Mais c’est pas pour autant que le client va l’utilisée. Comprendre si elle apporte une solution au problème du client, ca c’est a célébrer.

La seule façon de réussir est d’apprendre plus vite que les autres

Une startup réussi lorsque elle a trouvé un business modèle qui lui permet de créer, livrer et capturer de la valeur chez ces clients. Pour trouver ce business modèle, il faut chercher, explorer et apprendre ce qui marche et ce qui ne marche pas. Plus on apprend vite, plus on a des chances de trouver ce business modèle. Et et donc… la seule façon de réussir et d’apprendre plus vite que les autres.

Si tu ne peux pas te planter, tu ne peux pas apprendre.

Pour apprendre ce qui marche, il faut essayer ce qui marche pas. Se tromper, encore et encore jusqu’à ce que en s’améliorant à chaque tentative, on arrive ce qui marche. Cet apprentissage est au coeur du modèle Lean Startup.

Un bon design est celui qui change pour le mieux le comportement des clients

Face a un design on a très vite des options et des préférences. On aime ou pas. Mais la seule vérité c’est celle du client et de son comportement. Est-ce que fasse a ce nouveau design, les comportements des clients. Cela se test sur internet simplement avec des tests A/B.

En cas de doute, simplifier.

What else?

Je vous recommande la lecture du livre complet, disponible chez amazon.

How the Lean Startup is transforming GE

The Lean Startup started as smarter way for startups to build product. Today, the Lean Startup ideas transforms how people think, work and operate together inside organization. The perfect example of such transformation is happening at GE (General Electric).

Janice Semper who is leading an effort to drive a cultural transformation to make GE a simpler, faster and more customer-centric organization shared that story on stage at the Lean Startup Conference in San Francisco last November.

GE recognized that in a rapidly changing world and a companies that strive have the ability to learn, react and adapt faster. In a quest to achieve this, GE tried to re-organise by removing some of the middle management functions. But this had no impact on their ability to react faster.

Interested by the Lean Startup concept, they asked Eric Ries to come-in for a week and work with a few team to show this approach to build new products. After a week of work, the team feedback was very positive. They felt more productive, that they achieved more, collaborated more and had more fun.

But that’s when the teams went back into the organisation problems started. The rest of the organisation didn’t understand how those teams operated. “It as basically like an organ reject.” said Janice. Although the benefits of working in this new way were clear. “So, we took the tools of the Lean Startup and made FastWork”. FastWorks is GE version of the Lean Startup. Renaming it allow GE to make the ideas their own.

To deploy FastWorks, GE trained coaches to the Lean Startup tools and to change management technics. Janice explains GE started using FastWork on projects in its Heath Care division, because it was the most regulated. “If we can make it work in highly regulated industry then we can make it anywhere.”. And it worked. The teams using FastWork managed to work with regulation to find out what was acceptable or not and define a safe framework to run experiments.

Rolling out FastWork to the other divisions helped get new leads and bigger orders, leading to better outcomes. Even in the aviation division where the command book is already full for the next 10 years. People in the company started to apply FastWorks on everything, for instance for before making a powerpoint presentation, they would ask: who is it for? what is the expected outcome? how can I measure it?

Focusing on being fast, agile and customer centric, slowly transformed GE.

As more and more project used FastWorks, the discrepancy between this new way of working and the historical style of leadership became a problem. GE leadership style was about command and control (Six Sigma), prescribing what should be done and valuing perfection.

Realising the problem caused by this discrepancy, GE promoted a new style of leadership and shifting from:

command and control – we tell, you do, we check
⤷ empowerment – your lead, we help you

prescription – we know what needs to be done
⤷ discovery – let’s find out what should be done

measuring activities – this what you did today
⤷ measuring impact – this is the impact your activity had

perfection
⤷ iterations – make in imperfect and then improve it

This transformation pushed GE to question the company core value. This lead to the creation of 5 GE Beliefs, explains Janice. As you can see they are strongly inspired by the Lean Startup principles.

ge-beliefs

GE Beliefs:
1. Customers Determine Our Success
2. Stay Lean to Go Fast
3. Learn and Adapt to Win
4. Empower and Inspire Each Other
5. Deliver Results in an Uncertain World

Read more about GE Lean Startup transformation:

Comment Neopost innove grâce au Lean Startup

Depuis plusieurs années, l’envoi de courrier baisse. Malgré cette baisse, l’un des principaux équipementiers du secteur, Neopost (1,1 milliard de CA en 2014) continue de croître. En effet, l’entreprise a su compléter ses offres courrier par des offres autour de la communication digitale et de l’envoi de colis. Pour créer de nouvelles offres, Neopost organise entre autres un Challenge Innovation qui incite les employés à présenter de nouvelles idées de services. Cette année les participants ont été accompagnés par des experts Lean Startup.

Les 12 projets, coachés par les experts Lean Startup ont en premier décomposé leur idées en hypothèses et puis par des itérations ultra-courtes ont cherché à vérifier chacune de ces hypothèses.

Ils ont interrogé les clients pour comprendre leurs réels besoins, testé et dé-risqué leur proposition de valeur et construit leur MVP. Ces retours leur ont permis de tirer des apprentissages concrets pour faire évoluer leur idée.

Un des projets proposés visait à modifier un dérouleur de ruban adhésif pour poser simplement une poignée sur un colis. Cas typique de l’invention qui cherche son public. Le porteur du projet ayant pris conscience de l’importance de comprendre le besoin du client a vérifié sur le terrain si son idée présentait un intérêt concret pour les commerçants. C’est en interrogeant les cavistes qu’il a réalisé leur besoin de faciliter le transport des caisses pour leur clients.

Neopost-Lean-Startup

Suite a cet accompagnement, les équipes ont présenté leurs résultats au Comité de Direction, puis à l’ensemble du personnel. Par rapport aux années précédentes la différence était marquante, avec notamment :

  • des projets plus matures, plus complets et plus cohérents
  • des business cases plus solides, grâce à une validation poussée des hypothèses.

Ces améliorations a permis un engagement plus grand du management ce qui a eu un impact direct sur la mise en œuvre de certains projets. Parmi eux, un « carnet de santé numérique » qui permet de mieux planifier les interventions et mises à jour des machines sur le terrain. Cet outil s’appuie sur une infrastructure big data récemment mise en place chez Neopost. Le fameux dérouleur de poignée, quand a lui est en phase d’industrialisation. Il a été présenté au concours Lépine 2015 où il a remporté une médaille d’argent.

Laurent Farlotti, Directeur Innovation et Brevets, a observé : “Les projets sont plus matures, avec plus d’éléments business. Les participants étaient très motivées et il y a eu une très bonne réaction du management. Sans Lean Startup, ces projets seraient restés au stade de l’idée et n’auraient probablement jamais eu de suite.”

Le Lean Startup a été introduit en 2013 à Neopost par Philippe Boulanger, CTO du groupe. 80 employés ont été formés à la méthode à ce jour.

Lean Startup: Impact pour nos Grandes Entreprises

ladefense-une

Venu de l’ingénierie de la Silicon Valley, le Lean Startup est en train de révolutionner la façon de créer les startups. Mais pas que. Cette approche pratique et systématique commence à faire son chemin dans nos grandes entreprises françaises.

Le Lean Startup reconnait que la réussite d’un produit passe simplement par son adoption par le marché. Les clients et utilisateurs sont au centre de la démarche dont le but est de comprendre comment créer, livrer et capturer de la valeur pour ses clients.

Face à la planification de développements souvent sans fin, elle prone des itérations rapides sur une version minimal du produit (MVP = Minimum Viable Product) qui permette de mesurer les comportements des clients et à terme de mieux comprendre leur besoins et attentes. Partir d’une idée de service, construire un premier proto avec le minimum d’efforts, mesurer les comportements des utilisateurs, apprendre ce qui marche et qui ne marche pas et itérer. C’est le cœur du Lean Startup, la boucle build-measure-learn.

Le principe est simple : comme la voie du succès est ponctuée d’erreurs, autant les faire le plus vite et à moindre coût afin de pouvoir réorienter ou faire « pivoter » le concept autant de fois que nécessaires.

Aujourd’hui leadées par quelques spécialistes visionnaires (peut-être même illuminés aux yeux de certains), les grandes entreprises en France adoptent le Lean Startup.

    Dans l’entreprise le Lean Startup sert:

  • aux directeurs innovation qui cherchent à équiper leurs équipes de méthodes
  • aux product managers qui utilisent ces outils pour comprendre les besoins clients et faire évoluer leur produit en fonction
  • aux départements marketing qui comprennent les limites des études de marchés et cherchent à renouer le contact direct avec leurs clients

Dans ce monde en constante évolution, le Lean Startup émerge comme l’approche business adapté à notre temps.

How to use surveys to learn from your customers

Too often I have seen entrepreneur trying to understand their customer need by sending them … a survey.

“Please rank those feature in order of preference”

Because surveys capture what people say – which is different from how they behave – they don’t provide insightful data.
Worst, they provides data that too is easily misinterpreted and lead wrong insights…
The most useless survey question I have ever seen:

How much will you pay for a service that does such and such…

Whatever the answer, make sure you ignore it.

no_more_surveys
I have seen 2 rare occasions of useful surveys:

  1. to (scientifically) pick the best domain name
  2. to measure the customer pain. An entrepreneur sent a very long and boring survey his potential early adopters. When the results came back, he did not look at the actual answers but at how many people actually finished the survey. A direct measure of how much trouble they are will go through to get a closer to the solution to their problem. A measure of their pain. He then identifies the most eager early adopters.

Both of those examples are about validation, not discovery.

What do you think ? Do you have other examples of survey that worked ?