The Better Business analysis Institute presents the Better
Business analysis podcast with Kingsman watch.
Everybody and welcome back to the bitter, business analysis
podcast with Benjamin Walsh. So this week, we're going to be
focusing on one of those skills. That is not within the core
repertoire of a standard be a but it is one of the skills you
need to be a better business analyst.
And this skill is actually derived from a book that came
out a few years ago, really in the product development space.
It is a skill that it's evolved and has sparked a whole lot of
businesses ways of thinking, and some techniques that we use as
Bas from time to time. And it's really about getting
something to your customers as fast as possible.
She so you can get feedback. So it's around building, it's
around measuring and it's about learning very He quickly so you
don't waste money. Now you could say, okay that's
dead. Makes sense to me so far.
And I'm, I'm holding back about the name of this product because
as soon as you hear the second part of it, you might think that
this technique only relates to Startup companies or small
start-up companies that are developing products and I, that
is where it's come from and a bit like how agile came out of
product development. However, this technique
Technique can be used for any type of project and for any type
of organization. And in some ways I think that
enterprises need to embrace this way of thinking so they don't
waste money and the technique. I'm talking about came from a
book written by Eric Reeves quite a quite a while ago.
Now, if you don't, if you haven't read it, go get yourself
a copy of the Lean Startup, okay?
And so there might be some people they're going Lean
Startup. Wow lane lane coming from the
idea of manufacturing lean manufacturing lean development
from the Toyota, you know, Carcassonne side of things and
start up. Meaning that this technique was
how Eric Reeves was discussing, how you could rapidly test an
idea or Market generally in the it space and generally when you
didn't have much money. So the lien came in if you like
Because this was this would be companies, which either
self-funded or VC, using VC capital and every dollar matted
now, for me, fundamentally and philosophy from kind of hard for
loss of philosophy that I have, as I hate waste, I'm not
necessarily someone who wants everything to be inefficient and
unfun, but I just don't think there's any excuse for wasting I
wasting money. When you know that, Money can be
used to provide better Services somewhere else and so when I
think when you hear the word lean, this is a way in which all
be a should operate. We should always our job is to
make to produce value. And one of the ways we do that
is through lean thinking, so we don't write 300-page specs, we
do lean be a and we our job is to identify where in
efficiencies exist within business processes.
So, We can improve them. So the Lean Startup is a really,
really great mindset to put yourself in and if you haven't
read it, go get yourself a copy. And I'm going to walk us through
some of the main aspects of Lean Startup.
And I'm going to talk about some of the techniques that have
evolved out of that movement which still exists today and
people still use this concept and it's been graded integrated
into the kind of design thinking.
Being Lean Startup and agile approach that Gardener talked
about quite a while ago. Now to and that relates to our
model which is the people process Projects and product
taking take the full P plus model which is an evolution of
that little. Okay?
So let's get started and I'll explain what the Lean Startup is
about. So the Lean Startup primarily is
around building something measuring and learning and
cycling around in that format. So that is the fundamental
philosophy of Lean Startup. And the idea is that there's
this feedback loop and it involves building and MVP a
minimum viable product. It's a lot of people who don't
understand what an EVP really is.
I think the best definition, there are a lot of definitions.
Best definition comes from The Lean Startup so if you want to
have one definition that you can, you know, wave your flag
out. This is the definition you want
the build measure, learn feedback.
Back loop as wrap measuring how our customers use our product
and losing learning from data to improve the product, right?
And that doesn't mean once a product necessarily full and
complete, it is just the idea of having that first increment out
to the customer to get feedback as fast as possible with the
premise of Not wasting any more money.
So not going in the wrong direction or just not even
knowing. If your idea is desirable that,
actually what you thought was a great idea actually isn't and
it's very hard to measure that if you haven't actually demoed
something, or actually really release something to a product
to a customer such that they can use it.
Not not. So you're testing.
Team can use it. Not.
So your mate, who always tells you, you've got a great idea can
use it. Okay, this is around your
customers. And when you release a product
to customers to people, you don't know who, you know, are
not involved in, your are not necessarily there to support you
emotionally or to, you know, to Pat you on the back because
you've produced something that looks cool.
Customers are people that are willing to pay for your product.
So therefore a customer is going to be much more critical and you
know, Even know the extent of how a customer will use your
product until you put it in their hands.
And as you get more, and more customers using the product, you
will find bugs in it. You will find things that you
never never expect a customers to do with your product.
It's quite interesting out in the natural environment.
Sometimes, people use whole products have been released to
the market and have been used in a different way, then the vendor
or the Ooh sir. Expected and you know, and
that's where Innovation comes at.
This is where the unexpected that's kind of learning what our
customers use. Our product is quite interesting
and some some well, no, and companies, you know, have have
learned some amazing things from their customers and then they've
Incorporated that back into their product.
Okay? So when we talk about the Lean
Startup, I guess it's around developing businesses and
products that I am to shorten the development lifecycle and
rapidly discover of a proposed business model is viable, okay?
And this is achieved by adopting a combination of what we call a
business hypothesis-driven, experimentation.
Okay. So, it's basically
hypothesis-driven or we create a hypothesis, which is the word we
use in science, which says, we, I think that this is going to
happen and we're going to go out and test that and we got to
learn whether or not that's true or not and that might not just
be customers, want our product but this feature is useful or
this many customers will use this feature when we release it.
And so that's the idea, you don't know, if 100 customers,
you know of your 200 customers, 50% 100 of them are going a
little embrace, your new feature when you add it to your product,
you don't know. That until you release it to
Market. So you've got to have a really
good idea about how you're going to measure that.
And so this is you know this is this is parsed Agile development
as you may know about in terms of some of the organizations you
work at here in New Zealand. This is around getting even
features out there to Market. This is passed a be testing.
This is knowing that that that feature you've added is actually
usable and them so companies like I guess Spotify in some
ways. I mean lots of says It's use
this technique to get rapid feedback to turn off.
Features. Microsoft, does it all the time
in terms of going? Oh, that didn't work or no one's
using it. Let's turn it off.
I mean, some of these things are invested in a little bit, some
of them not. We're going to be talking about
how those companies do that without investing a lot of money
which is which is the other side of the Lean Startup that I think
is really important. What we need to focus on when we
do, Lean Startup is, we need to emphasize customer feedback.
Over intuition and flexibility over planning.
Okay. So we got to be a little bit
less rigid in the way in which we assume we've got the right
answers. We should be we should be out of
file and we should be out of fail fast and that's the idea we
should be saying. Okay no that's not killer work
that's far fast that saves US money.
The idea of you know trying things quickly and in a very
cheap way and if they fail we fail fast and we learn.
So we start to reduce the number of variables in terms of our
guesses, our hypothesis until we find a hypothesis that actually
proves to be true and then we go down that cycle.
And that's just the I mean if you look at and science its
natural Evolution, it sort of survival of the fittest of you
like and and so it's allowing us to use that natural technique to
be able to, you know, natural selection.
If you like to be able to to choose and focus our energy on
the, I guess the pathway that is actually going to be the most
successful. So we've talked about bold
measure and learn that which is number one validated learning.
So that's about using data to measure whether or not I'll pop
the sis is correct or not and the our customers are telling us
that while the data points from our customers are telling us
that we're not just asking, was it cool we're saying or are they
using it? Are we watching?
We're watching, we're observing whether or not they use it and
they use it the way we thought. They were, they willing to pay
for that extra feature. Okay.
And this helps not only does this help our product, but if
we're a smaller company and I would argue this applies to all
Enterprises within a product, sorry, within a project or
program team, we know whether or not our by the business model or
a project model or our Enterprise architecture or our
business architecture is actually valid.
Is that model actually true. Our assumptions, true you would
have heard this word used a lot, which is Pivot.
I'm going to Pivot. I mean, there's lots of means
about it and perfect. A bit.
Okay, that's where this came from.
So the word pivot was, if things are not working.
We pivot to either a different different tests or we pivot
completely to a different idea which is still under our company
vision and Mission. So if we want to develop, we
talked about a minivan that could drop people down at the
train station. And one example, one of our
podcasts and for example we said, well, we you know, we
haven't actually tested That year we don't know if it's
desirable yet. So we're going to do a little in
VP and we can use that as an example as we go through this.
Let's say for whatever test we did we've found out that people
weren't willing to pay the cost that we needed to get in order
to you know make it a sustainable and viable business
in order to pick people up, they weren't willing to pay the $20
charge that we needed to to be able to bring in a profit. per
customer per, you know, per per day for example per week and so
we needed a pivot and so we realized okay a minivans not
going to work, you know, maybe we do a bus and a bus or changed
our cost model, we could pick up more people and maybe the $10
they're willing to to pay would be a different business model,
because we've got a different cost structure there and we've
changed, you know, the inputs and the processes we use in
because we're using a Buffs to pick people up and that's quite
a different business model that's the idea of Pivoting.
So we've pivoted, with NL, same Mission, our same kind of Target
kind of state or problem. We're trying to solve that still
the same, but we've pivoted how we're going to solve that
problem. So that's permitting and then
the other one is I guess we can. We could just preserve what
we've done and say. We're going to preserve this
where we've learnt that this B working.
This isn't so we're going to focus our attention on to on
this area. So so I'll say that again.
So, Say you've releasing the service we talked about with the
van. You said, that's a really great
idea, but actually, we can retain that whole business
model, but it's not just the train station.
People necessarily want to go to their want to go to the city.
And so, we're preserving the business model, but we're
changing some of the aspects of it.
And that's, we're preserving that.
We've learned that a whole business model that actually
viable. And the willing to pay for that
service, but we're changing some of the parameters, that's
preserving. The other the other thing is
it's really important to learn how to serve a how to run
experiments we talked about and how we need to observe our
customers and that's something you learn through.
Lean Startup it's really putting the customer in the center of
your development, literally. Okay.
In some cases they are involved are the of course, the other
part that I like about Lean Startup and joins, the world of
internal, kind of Really internally focused what we used
to call business Improvement. If you take the Lean Startup
approach and start to bring it right to the customer and don't
make it an operational problem and you actually incorporate it
up front. You actually have true custom,
sorry, continuous Improvement because you're continually
talking to your customer and feeding their into your kind of
Enterprise and strategic planning.
And Obviously into your product development.
So for me that's where true continuous Improvement comes
from is when you apply and Lean Startup approach.
Okay. So I guess the benefit is we
were reducing risk here by not you know, by filing fast and
learning which of our hypotheses are actually true.
So we actually learn our data straight away.
So actually more sure that the path that we getting down is
true or is or at least know that the path that we thought about.
About hitting down and got feedback on.
That's it. At wasn't working very, very
quickly meant that we weren't wasting our money on a bad idea.
So we're starting to like really tuned in on the right path and
that actually reduces risk. So you could say this sounds
really loose been how could we apply this to you know, program
planning or business casing? This is actually statistically a
better model for reducing risk and of course it the idea of
using MVPs which we'll talk about soon.
Increases speed to Market, we gettin it, we gettin things to
be getting a product to the market faster, so that we can
actually start generating room profit, potentially and getting
feedback well before. You know, we've spent six months
in a dark room here and improves our decision-making by making
sure that we've actually got data-driven insights from
customers with measuring all of those.
So data is a huge part of this and having playing, you know, No
data science to the data points that we need to capture from our
customers AKA. I don't know, measuring their
Mouse Clips on our website seeing if they're using the new
menu and features we've got, you know, seeing whether or not that
where they dropped off in the sales process to that it cart,
or did they love the landing page?
But when they looked at the price, they dropped off a
website that these are all the kind of data points that need to
be really you know, measured front and center.
We can start to measure therefore whether or not that
new feature, the estimate the parameters around, it around
price description, kind of experience or demo or you know,
pictures or video describing service pop the customer off or
made them want to know more. We can measure, you know, the
time they watch the video for, you know, whether or not this
was something they added to their cart after That it is
another product, was it, something we could upsell.
So these are all know, this is all modern-day insights that we
using here. So that is, you know, that is
all the Lean Startup. So if any of that interest you,
if you can think of any of that and think I could apply that to
my project today or to my organization, read The Lean
Startup. Now, the other aspect of Lean
Startup which it talks about, and that's kind of now the rule
When it comes to projects and products is MVPs.
And what we talked about in The Lean Startup is different types,
okay? And, and by defining these types
of MVP and describing near these various, I guess variations of
how you can test a product rapidly.
So the MVP being the minimum viable product, meaning you can
get to Market ASAP. When we in agile, we talk about
it. As an increment.
And so an MVP could be your first increment at the end of
your first Sprint. How can you achieve the idea of
a Indian product and only two weeks print, but that's what
agile talks about. So, when you delve deeper in
terms of these types of in vp's, you can start to understand how
you can apply these techniques in order to release something to
your customers, very rapidly. Okay, so I'm going to describe
these in vp's. One is kanji used in VP, This
type of MVP is where you provide a service to a customer
manually. Okay.
So the purpose of doing this not no automation, you're providing
a service to the customer manually and I will say that you
can Mash these MVPs up. So for example, your back-end
could be manual and your front end could be a website or the
other way around. You could have a person taking
orders manually and then you're backing, could be automated.
So you can match these up, they don't stand alone.
However, the idea of a conscious MVP, Is that as a good way to
test the demand for your product before you're actually investing
in building anything? If we were to take our example
of the minivan driving around lower her up, you know, to pick
up customers to drop them at the train station as we talked about
in our last podcast. Well then what we could do is
focus on just delivering the service AKA just have the van
driver driving around. And instead of building a whole
web interface that has smarts like peak times and a schedule,
we could simply just have a Number or you know, email
address and say people email us and outpost it, you know,
posters to and brochures to the local area.
And the whole point is for us just to focus on whether or not
there's any demand for the product.
So instead of building the whole interface which might actually
cost money and you know, that's, you know, we might be a tech
company. That's what our true product
actually is, we could perform cons years in VP, which It means
that we are actually manually scheduling were mentally calling
our van driver. We manually manually notifying
customers that the van is leaving.
And, you know, to be at this location at this time and all
the rest of it. So that's con Jewish.
The second MVP type is what we call Wizard of Oz.
In. VP, this type of in VP is when
we use automation to simulate a fully functioning product.
So this is a good way of kind of having Magic or smoke and
mirrors happening in the background.
So we might automate something, which is only, you know it's not
actually happening but the user feels like it's happening.
So in the example with our van, we might have a website that
looks like it is automatically emailing back and forth and
might even have a video of the van picking someone up, but it's
all smoke and mirrors. It's not all connected.
Third and a fully functioning product.
So it's what we call Wizard of Oz, you know, there's stuff
happening behind the curtain that you don't see that we are
rapidly moving data from one system to the other, it's not
full. So we're only only exposing the
front end of your like the interface.
So it looks like it's automated and there might be semi and
automation happening. The other MVP is a landing page
in vp2 might simply just have a landing page and say, for
example, coming soon or This product and might have
description of what the product is.
And again, I might have a video and I might just have a sign-up
page, so that's an MVP. This is a really good way of
testing whether or not there's demands, its feels like it's all
there. But actually you're not going to
launch the product unless there's say 100 people that have
pre-ordered this or suggested that they want to know more.
There is actually other two. Other products is something
called a minimum lovable product.
And that, That focus is focuses on creating product, that is
both functional and appealing to users.
So an MLP is a product that uses loved use even if it doesn't
have all the features they want. So, this is about a fully, you
know, a fully functioning product, for example, with our
van service, but it might not. It might only just do it, might
not have all the in features we want.
So it might just have the, you know, Landing Age must have
email and a might just pick people up and it may only work
on a Tuesday because we can't afford to expand or scale to a
Wednesday, Thursday, just yet. But people are loving that
Tuesday, pick-up day, so that's minimum lovable product and they
love that and you can measure that by Customs coming back and
paying for it and it being viable in terms of an
organization. And then there's the idea of a
minimum viable feature. And that's just means that
there's a, the idea of focusing on a single A core feature of
your product and releasing it straight away and getting
feedback straight away. So, that's quite interesting.
And a lot of times that when we talk about MVP we're actually
talking about an MV. If m.
V, if being a minimum viable feature, okay, the development
team and an agile environment have worked on one feature, one
part, maybe the back end or the Middle where layer or the
landing page or the, you know, that's actually fully
functioning but it's, it's been chopped and a different way.
It's A full slice of the cake, it's just the topping and so
that happens a lot. And it's kind of used as a
replacement for every pain. It's not actually the case in BP
being a full experience for a customer all the way showing the
truth full service. Even if that true service is
happening, manually behind the scenes or hasn't fully evolved
yet or just simply a video of what the possibility could be.
So that's the idea of an BP. And I really hope that you've
learned more about what that means and you now know what Lean
Startup is the final. But I'm going to talk about here
is something I use often in the be a world.
You may have heard of the business model canvas, it's a
great one pager that you can use to use internally.
When you do strategic strategic analysis internal locking, you
don't know what it is. Look it up business model canvas
and when the Lean Startup Evolved.
There's actually a guy called Ash hope I get his last name,
right? It is a I'm pretty sure it's
called miren, miren, ra and Asthma and Asthma and he runs a
website, these days called lean stack, but he developed the lean
canvas, and the lean canvas was integrating, The Lean Startup
and using the business model canvas as As its kind of origin
and its format a one pager and so you end up having what we
call a lean canvas and you may have use those at your work
except for people would really notorious using them.
So if you don't know what, I'll lean canvas has look it up the
you may think they're fill-in left to right, you don't you
start with your customers or your early adopters.
They're people that are the people who are going to use
your, you guarantee they're going to use your product or
pretty much guarantee that you'll use your product.
If it's got any desirability, And then you've got your Target
customers and you look at your problems you're solving and then
the solutions to those problems and then the product and any
against unique, value proposition that you've got, and
any kind of special Advantage you've got and the existing
Alternatives, the cost model Revenue model and then kind of
your channels out to your customers.
So, I've rapidly talked about that and it's something that you
really need visualize. I'm not going to spend too long.
Long on the podcast about it, but I will have to check a link
up on to our blog on the Better Business analysis website and so
you'll be able to look at that and it's really fantastic if
you're doing strategic sorry, Enterprise analysis, and helping
your customers look externally by.
Trying a new idea, a new feature, any of these things.
We talked about trying a new product taking your existing
products and actually seeing whether or not, they're heading
your Target customer. And having a conversation about
who your Target customers are Because I will say that a lot of
companies have no idea who their end Target customer is, or at
least their personas and their customers segments.
So Lean Startup, your action today is to go get yourself a
copy either online, You Know, download the Epub for the book.
I've got the book at home and I have a copy that ePub which I
constantly refer back to check out lean stack as well and you
know Ash has there's a Very smart guy who's got other books
around skating lane? We won't talk about that today.
But if you're into business, the really great website to check
out and Eric Reeves is the man. And that's all we've got time
for today, so I'll catch you next time.