On Monday, March 25, 2013, OLC attended NYC Intrapreneur's event, Innovation in the Enterprise featuring Josh Seiden, Managing Director of Neo. Josh Seiden is a designer that has developed specialties that include Lean UX, interaction and service design. He is currently a Managing Director of Neo, a global product innovation firm. Seiden also has written a book, Lean UX: Applying Lean Principles to Improve User Experience.
Lean startup is a movement popularized by Eric Ries. Using short cycles of small, small risk experiments, teams are able to do three things: build, measure and learn. The end result is innovation.
An intrapreneur is someone who acts like an entrepreneur in a large company. And an intrapreneur plus a champion—someone who supports the intrapreneur—results in innovation.
Josh Seiden said that software is continuous. "There are old assumptions to a new reality," he said. "In software, there was a manufacturing step, but now that's not the case. Software is consumed on the web. Etsy pushes new software 50 times a day," he said. "Guess how many times Amazon pushes new code? Every 11.6 seconds," Seiden revealed. "Software is eating the world," he quoted Mark Andreessen. Seiden talked about how General Electric is spending over $1 billion to build software COE [Common Operating Environment]. He said that intrapreneurs should think about how software can disrupt their business. "Think about how and when is software going to disrupt my business?" he suggested.
Seiden moved on to talk about continuous methods—processes—and he listed the idea of the lean startup: build, measure and learn.
"The continuous process is a new way of learning," Seiden said. "There are no more model years. The software system looks like a giant blob. We're making platforms that connect people. The old model was to figure it out and then built it, but that doesn't apply anymore. It's build it, then figure it out. You have to do it this way," he said. "We used to document everything in excruciating detail, but now, we prefer working in small increments collaboratively." Seiden briefly mentioned the Agile Manifesto as continuously driven.
"To make something, make it small and see if it works and experiment frequently. Small teams figure out the business model and the product over and over again, but there's a bigger loop—the stakeholders who pay your salary—small chunk, outcome-based, predictable funding," Seiden said. Regarding the build aspect of the lean startup, Seiden said to make sure that teams are small, dedicated, allocated and cross functional. "Make sure they are a two pizza team. If it takes more than two pizzas to feed your team, it's too big. Assign them one project each and make sure they are all in the same location, that is, in the same time zone. And finally, make sure that they are self-sufficient and functionally complete."
On infrastructure, Seiden first explained that it is difficult to integrate with legacy technology. "There's a lot of work to be done in organizations for your team to run efficiently," he said. He gave an example of General Electric spending millions of dollars on a front-end system. "Large companies are spending money in infrastructure so that design and production teams work on the same project," he said.
"Measure is outcome-based funding," Seiden said. "Shareholders look for output, which is the stuff we make. They look for outcomes, the result of your work and they look for impact, the sum of all the outcomes. Most teams are managed with output. Those teams might not have any value to the business. Focus on the outcomes instead. Don't make teams responsible for impact either," he said. "The goal is to get teams to think about outcomes. For intrapreneurs that want to disrupt, they have to look at the business model.
Remember to keep regular funding milestones and try different outcomes for funding," he said.
"Learning is the culture of experiments. Think about experimenting in a different way," Seiden said. "Think of them in small, safe ways. Find small, safe experiments to do.
The idea is to not take huge risks and not to keep experimenting forever. Don't design a product, design an experiment and from this, you can see if your business model works or not," he said. "Run small experiments," he advised. "Refine your hypothesis and reward learning—also known as failure—and make decisions based on objective learning," he said.
Regarding continuous learning, Seiden said to reduce inventory, risk and waste. "Make a design decision and get feedback from the market. The market is the judge—you can't control it. But you can control how long we spend on the product. It can be for months to just hours," he said. Seiden reminded the audience that a system built on continuous learning is learning and low risk. "Building for a long time is accumulating a lot of risk.
The idea of lean is to reduce your inventory. Our inventory is a backlog of untested ideas. Test it, move on, never let risk build into the project," he said. As a recap, Seiden reiterated four steps: "Get market feedback early and often. Instruct your software to measure usage and build a process that includes customers. The final step is to combine the what, which is quantitative, with the why, which is qualitative, for a holistic view of your project," Seiden said.