Eric Ries of Lean Startup fame came to visit HubSpot yesterday, and we soaked up his input like a sponge. If you're not already familiar with him, Eric's opinions are pretty well documented. Reading his blog or buying his book would serve as a good introduction. Or you could follow @ericries on Twitter. He's been and continues to be hugely influential in the startup world, and we're big fans.
We invited Eric to spend the day with us at HubSpot because, as we've found product-market fit and continue to grow aggressively, we wanted to hear his thoughts on how we can keep applying the principles of the lean startup as we go along.
Once you have a successful product, you need to fanatically serve the needs of your installed base
Pretty obvious, right? One way to view the lean startup principles is as a logical extension of Clayton Christensen's work on disruptive innovation, which emphasizes protecting against attacks on your installed base by remembering to serve their needs first, and to innovate upwards only when it's not at their expense. Meeting Eric in person underscored the similarities between Christensen's work and the philosophy of the lean startup. If anything, it seems like Eric advocates many of the same very ideas that Christensen does, but does so in a way that is more geared toward the engineer than the CEO. The combination of these complementary philosophies ensures that everyone is on the same page, both strategically and tactically.
Innovation is cheap
This is not to say that you don't also need to innovate. Eric suggests that you invest some consistent percentage of your efforts towards disruptive innovation. It doesn't have to be a lot -- 10% or so was the number he suggested offhand. And you don't need a huge team to innovate, either. It's a straight percentage, so whatever size team you've got, take 10% of their time and apply that. Protect your 10% allocation towards innovation aggressively and maintain discipline around truly dedicating it to disruptive innovation. Remember: innovation also serves your installed base, too.
Use your technical debt as an asset
Try to think of your technical debt as a good thing. After all, if you have technical debt, that at least means that you have real customers who are relying on this code. That's great! Now you can borrow time against thatexisting asset to invest in something else. For instance, you could invest in new features (a good idea) or use that debt to invest in tools and infrastructure that allow you to iterate more rapidly and learn even faster (an even better idea).
At the end of the day, if your technical debt isn't getting in your way, don't focus on it. A system of 5 Whys analysis and continuous deployment can root out the things that are truly getting in your way.
Make customer interaction routine
This was a message especially targeted to the engineers in the room. It's easy for programmers to get their only customer interactions exclusively via bug reports. And even those are typically filtered to some degree through technical support. Eric advocated instituting a simple rule: Every engineer has to seek out some kind of customer interaction regularly, something like once a month. Watch user tests, sit in on support calls for a full day, visit a customer in their own workplace -- anything to get more direct customer feedback, more often.
Validated is better than done
At one point when we were disucssing the lean startup approach and how it related to the agile development methodology, the conversation wandered to kanban. In kanban, there are commonly at least three columns representing the lifecycle of a user story: backlog, doing, and done. Eric advocated for having a fourth: validated. Forcing product owners to own a validation step in which the measurable goal is assessed can act as a nice forcing function for increasing the likelihood that you'll learn something from each piece of work.
Jean 8:12 AM on April 28, 2012
His book is packed with measurable metrics - no vanity stuff, just scientific methods to test progress & ensure the startup keeps moving ahead - great stuff. I made a mind map with a video explaining it on my site. Free mind map download check it out BooksToBubbles.com
thinkdisruptive 8:36 AM on May 04, 2012
I'm a big fan of Eric and the Lean approach that he espouses, but you mis-characterize Lean as an extension of disruption theory. It's really the other way around.
All startups, whether they have disruptive potential or not, should use the Lean Startup approach. If your product or service has the potential to become a disruptive innovation, then you need to further refine your approach to the market to ensure your disruptive potential.
This should intuitively make sense, since disruptive innovation is a subset of all innovations.
Further, the idea that you should set aside 10% of your efforts towards continuing "disruptive innovation" doesn't really make sense for most companies, and its kind of a non sequitur even to suggest it. You can't really know a priori what innovations will be disruptive until you've discovered a unique "job to be done" that satisfies an unmet or under-served need and either addresses a new market, or offers a low-end solution beneath the incumbents.
If you take Hubspot as an example, I'm not even sure how you could do that. It's probably more practical to make design changes to adapt the platform for a use other than marketing (a new market innovation), but I have a hard time imagining what adjacent non-marketing markets you could be applied to as the functionality is largely purpose built. And, from a product perspective, it would be pretty hard to create a lower end innovation, since that's where Hubspot started in the first place. For you to do a low-end disruption now would be more of a business model innovation (e.g. offering a subset of the technology for free to individuals to come in below Wordpress), and that certainly wouldn't involve a 10% set-aside for r+d/product development.
Any innovations (other than the potential of a low-end disruption) would likely be either sustaining (bolstering the product to address more and more of the complete needs of a digital marketer, integrating outbound and inbound, etc., or in completely new areas not related to what you currently do. Given that there is still a long way for Hubspot to go in fleshing out a "whole product", it wouldn't really make sense strategically to stretch the company's resources to go after new markets with brand new technology. Ergo, there is no reason to invest 10% annually in ongoing disruptive innovation -- you don't have the resources of Apple, so this would largely be a waste of money, as it would for most recent startups.
As for how to continuing with a Lean Startup mindset, creating new hypotheses, prototyping, testing and validating them with the target market (which may be existing customers, or those who aren't customers yet), that makes perfect sense, and it's how all companies should operate no matter how big they get.