Applying Agile and Lean Startup methods to power your corporate innovation strategy.

1. How to Innovate
Like a Startup
Applying Agile and Lean Startup
to power your innovation strategy
Sam McAfee - Author, “Startup Patterns”
startuppatterns.com
@sammcafee

2. About Me
• 17 years in tech startup industry.
• Founded a consulting firm, ran it for a decade.
• Early adopter of both Agile + Lean Startup.
• Coaching enterprise product and tech teams.
• Worked on 6 startups. Doing my 7th now.
• Writing a book on it: startuppatterns.com.

3. Agenda
• About Me √
• Lean + Agile, Historically
• Innovation at Scale

4. Agile + Lean, historically…
• W. Edwards Deming (1900 - 1983)
• Worked under Shewhart at Bell Labs 1930s
• Developed statistical method for quality control.
• Also developed PDCA cycle, an iterative process.

5. • 1950s Deming + Taichii Ohno (Toyota), brought PDCA to Japan.
• Japanese methods inspired by Deming. Lots of collaboration.
• Union of Scientists and Engineers still give the “Deming Prize”.
Agile + Lean, historically…

6. • As post-war boom led to mass production, statistical control abandoned in USA.
• By 1980s, US boom was over. Companies worried.
• US companies began importing ideas from Toyota, etc.
• John Krafcik coined it “Lean” production in an article in 1988. The term stuck.
Agile + Lean, historically…

7. • Jeff Sutherland reads an article in HBR on Japanese teamwork in product
development. Scrum was an analogy in the article.
• Sutherland picks “Scrum” to describe his approaches to software development.
• Kent Beck was developing “Extreme Programming” with similar team principles.
Agile + Lean, historically…

8. • Steve Blank developed Customer Development in 1990s
to better align product development and customer.
• In 2000s, Eric Reis, his student, recognizes similarity to
Agile and Lean. Coins it “Lean Startup”.
Agile + Lean, historically…

9. Meanwhile, at the
Pentagon…

10. “Waterfall” is Born
• Software systems engineering started post-WWII.
• US Department of Defense historically purchased most
software. Companies followed, but DoD pushed
innovation and set standards.
• 1950 to 1980 systems engineering mostly chaotic.
• Late 1970s, early 1980s, attempts to rein in chaos lead
to “sequenced process” of software development.
• Later known as “Waterfall”.

11. Example: Waterfall
Sequences
• Each phase (design, build, test) is discrete.
• Each dependent on previous phase.
• Time-line (and budgets) set in advance.

12. What could go wrong?
• Mistakes cascade downstream.
• Schedule and cost overruns bleed over.
• Requirements do change. So do markets.
• Basically, it’s slow, error-prone, and expensive.

13. Enter Agile…

14. Enter Agile
• Allow requirements to change. That’s good!
• Close the gap between engineer and user.
• Build smallest pieces first, and release them.
• Use technical practices to keep code quality
high and easy to change.

15. Agile’s Impact
• Agile software delivery is orders of magnitude
more stable and reliable across the industry.
• Users are getting more of the features they want
more quickly.
• Engineers have learned how to rapidly iterate
based on user feedback.

16. But…
• Somehow, projects are still failing in the market.
• Even if a product is built perfectly, who cares if
customers don’t buy it?
• Something was still missing…

17. Enter Lean Startup
• Steve Blank published "4 Steps to the Epiphany"
in 2003.
• Eric Reis started blogging “Startup Lessons
Learned” around 2009.
• It’s been about ten years!

18. Lean Startup Basics
• Solve real problems that real customers have.
• Reduce bigger risks into smaller risks.
• Iterate quickly based on market feedback.
• Be data-informed, and challenge your deeply-
held assumptions continuously.

19. Practicing Lean Startup
• Turn assumptions into hypotheses to be tested.
• Emphasize learning > building things.
• MVP: Minimal Viable Product.
• The Build -> Measure -> Learn loop.
• Metrics -> Only the ones that matter.

20. Agenda
• About Me √
• Lean + Agile, Historically √
• Innovation at Scale

21. Innovation at Scale
• Technology is disrupting every industry.
• Change happens faster every year.
• Startups are pushing big incumbents aside,
taking their marketshare.
• Consumers are demanding better design,
faster response times, more integration.

22. The Right Structure
• Startups iterate faster, not just because they are
smaller…
• Cross-functional!
• Co-located!
• Dedicated!

23. The Right Tools
• Startups use open source, existing tools.
• Slack and other tools speed communication.
• Cloud services are fast and easy to build.
• Dev-Ops enables rapid, continuous deployment.
• Metrics dashboards keep the team on track.

24. The Right Culture
• Everyone involved is values-aligned.
• The vision and strategy are crystal clear.
• Safe-to-fail experiments are encouraged.

25. Innovation at Scale
• Executive-led change initiatives (e.g. digital
transformations, agile adoption, etc.)
• Accelerators to partner with startups.
• Incubators to experiment with new ideas.

26. Agenda
• About Me √
• Historical Perspective √
• Lean Startup in Different Contexts √

27. Thank You!