Lean is Lovely!
16 Dec 2011
Did I catch you with that title? Perhaps not what you thought, but an eye-opening topic nonetheless!
There is a movement called Lean, that has been happening among internet startups in the Silicon Valley for a few years now. It aims to solve the central problem that plagues most startups – how to arrive at a product that customers will pay for, with the least cost and risk. By following Lean practices, a startup can maximize their odds of success, and reduce what’s at steak if they fail, enabling them to try again later.
First a little background: Lean Manufacturing is a process originally developed by John Krafcik and published in a paper titled “Triumph of the Lean Production System in 1988. The name comes from the idea of “thinning warehouse inventory” to only what’s necessary for current work in progress. The concepts were later applied at Toyota along with their concurrent development of concepts such as Flow and Just in Time (JIT). These concepts were subsequently studied and applied by Steve Blank at Stanford and applied by his student, Eric Reis, to the Internet startup movement, reflecting his experiences with a startup and the needs of a process while working in Venture Capital at Kleiner Perkins.
At the heart of the Lean movement for startups, is a focus on the risk that a startup takes and how to reduce it and find Product-Market Fit. Assuming a startup can have considerable time and capital requirements during that time, a founder is taking considerable risk to start a company. But imagine the innovation that could occur if you were to reduce that risk and encourage more young technologists to take a chance and develop something. The Lean Startup methodology is thus aimed at reducing that risk identifying a systematic and empirical approach to reaching Product Market Fit.
To solve these problems, practitioners of Lean process focus on the creation of a Minimally Viable Product (MVP – a term coined by Mark Andreessen), and on a continuous iterative method of testing and refining the product. Test early, and test often. If one creates a simple prototype, gets it in front of target customers early, then they can revise or “pivot” in a new direction, as needed and not waste the next 2 years developing the perfect product that no one wanted.
There is an assumption with Lean, that the problem with traditional manufacturing methodology is batch size. The assembly line of Henry Ford was a revolution and lead to mass manufacturing, and it is massively efficient, if you assume nothing is wrong. But when something does go wrong, this approach can lead to catastrophic results. And when you’re in a highly unpredictably environment such as an Internet startup, this only serves to maximize a possible negative outcome.
So the solution is the use of smaller batch sizes with a tight Build > Measure > Learn feedback loop that minimizes mistakes and offers course correction along the way. Larger batch sizes may be appropriate in some cases down the road though certainly not in an early stage startup.
There are three core values in the Lean manufacturing process that can still be seen reflected in modern adaptations of the lean startup method:
1. Challenge – Challenge your beliefs and assumptions. Do not allow yourself to believe that you know what will work best. Empirical testing often proves assumptions of even the best expert, to be wrong!
2. Kaizen – Continuous improvement is a part of the daily process. There is never a ‘good enough’. Seeking improvement should be a part of the process every day.
3. Genchi Genbutsu – Loosely translated means “go see for your self. Or as Steve Blank said, “There are no facts inside your building. So get the heck outside your building and go find the facts.” You must engage with customers as part of process, and see how they use your product, to look for opportunities to improve.
At a high level, Lean is not complicated, but for anyone skilled in traditional waterfall production methods, this can be a powerful concept that turns things upside down. Getting started and applying these principles need not be hard either; it is really just about shifting the focus away from a supply-driven mindset in which you focus on what you are building, and shifting toward demand-driven production, in which you’re focusing more upon listening and responding to the needs and desires of your customer.
If you focus on that paradigm shift, the rest is just tactical details that will come naturally. Lean may not be appropriate to introduce into every organization, for any project, but it can be invaluable for environments involving significant unknowns and the need to reduce risk.
Technologist living in Los Angeles, California.
