To get to the last phase - scaling, you need to have a product that's working and is gaining customers, a product that is solving customers’ problems and is getting traction in the market.
In the scaling phase you need to accelerate the growth in order to succeed in the marketplace. You do small experiments to increase your numbers just by little, as opposed to experiments you do in previous phases where you can do bigger changes at a lower cost.
One of the core lean startup principles is that entrepreneurs should not scale until they have achieved product-market fit. This premature scaling can bite you back in many different ways.
First, early-stage startups can lose their agility, the ability to quickly change direction based on new information, and at a lower cost because they have not yet committed resources that must be redeployed. But once they start scaling, pivots become more difficult and expensive.
Second, by scaling prematurely you run the risk of disappointing large numbers of customers if a startup must pivot to a new value proposition. Disappointing your early adopters and telling them their purchase was wasted can backlash, and have strong consequences on your reputation. The odds of a startup succeeding (staying alive) in the first years are low to start with, so you don't want to push it over the edge.
Lastly, you don't want to shorten your runway (defined as the number of months required to exhaust a startup's cash balance based on its expected burn rate), and the number of build-measure-learn cycles the team has to complete. You want to go through the funding as slowly as possible to have more time to learn.
If you can't raise more capital, which is difficult to achieve in the scaling phase when product-market fit has not been reached, scaling prematurely will increase the burn rate and shorten the runway.
It’s also important to mention that ‘’no premature scaling’’ does not mean ‘’no scaling until a product earns profit’’. This can easily be debunked by looking at examples of platforms with strong network effects such as Facebook, YouTube and Twitter, who have not fully validated their business models until they had a critical mass of users. Their plans for making money were not clear from the get-go, but relied on ecosystem partners to help experiment with ways to monetize their platform.
While they didn't have clear plans for making money, some maybe had a theory on how to cash in, but still choose to defer monetization. A great example would be PayPal, who offered their service free-of-charge in order to acquire a big user base, which due to network effects increased their value and made them the dominant online payment service that now charges a fee.
In the end of it all, unless your startup was born ‘’fat’’, a child of a successful serial entrepreneur, or was bred inside an established corporation, and can speed the time-to-market, it would be best to embrace the principles of lean startup. If it’s of any comfort, smaller startups born in someone’s garage or living room have fewer obstacles in applying lean startup principles in practice.
And some of you may think why follow principles of a method that has been dying for years. No, lean startup is not dead. Its principles have just been absorbed by other movements.
To toot our own horns, the Playing Lean game we created is a great way to experience and learn what it’s like to run a startup, and get your product to market by going through all the phases. The winner of course, is the team that scales first, but watch out not to reach it prematurely!
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Confucius is reputed to have said this way back in 450 B.C., and even though people have been thinking about this for a long time, only now are we seeing a shift in education in that direction.
Martin Bliemel, the Director of Research at the UTS:TD School in Sydney, has been implementing this philosophy in his work for a long time, and has found the key aspects he tries to embed into every subject, course and module he and Julien Marchand designed, that provide the foundation upon which they then add reflection.
Both Martin and Julien have shared their experience and findings in one of our Playing Lean Expert webinars back in February of this year. They discussed how you can double your learning from your own entrepreneurial experience through reflection and interruption.
One of those key aspects is that everything they teach is experiential. Teaching and learning is not just about classroom and book learning, or digesting materials and resources, but also making sense of them through applying them.
''The difference between classroom learning and experiential learning is like the difference between learning about roller coasters by watching one from across the street, and learning about them while gripping the front handrail during the ride.'' - McCormick, D.W.
Educators have a responsibility to guide the students through that experience, but doing it in a way that is safe to fail. One fun way to do that is through simulations, like the Playing Lean game or role-playing.
Martin has been a Playing Lean Facilitator for a long time, and has used Playing Lean since its first release. He has found that the game is highly experiential and gets the students to learn by doing.
One of the advantages the game provides educators is that it can be run in 90 minutes as opposed to some workshops that go on for 12 weeks. As the game is fast-paced, it forces the students to think all the time and the learning is immediate.
There are 3 good times when an educator can use the game (one doesn't exclude the other):
Using the game right at the beginning exposes the students to all the jargon and basic concepts. It can overwhelm them, but you as the facilitator of the game can help them make sense of all the jargon.
In this stage you can bring the core concepts to life, and explain concepts with more nuanced examples. By this time, Martin has already discussed a few case studies in the classroom, and hosted guest speakers, so during the game he can refer back to those lessons and ask how a moment in the game relates to a moment when, for example, a guest speaker was giving a talk on a specific subject..
In this stage, the game can be a lively re-cap and refresher of concepts. It's also a great way to test students and ask them to provide examples.
The other key aspect, other than being experiential and learning by doing, is that these experiences must resonate as much as possible with what actually happens in a real startup. The experience has to be authentic, and tap into the emotions students would get to feel once they start their own startup.
Contextualizing what an educator is teaching students in a setting that is as authentic as possible, makes those experiences more retrievable. So by the time students graduate and start their own startup or work in an innovation lab, they'll recognize much quicker that this feels and looks like something they've learned through different exercises.
Apart from being experiential and authentic, another key aspect is that students actually learn from these authentic experiences through reflection. Learning from experiences requires them to pause and reflect on what's been happening and relate it to prior experiences.
Unfortunately, research has shown that students are very bad at this, because reflection is a skill that needs to be developed over time. This is why an educator needs to not just teach them what to do and how to do it, but also how to learn from doing it.
Martin shared a framework that is based on Conte N. (2015) Preceptors guidance in students' self-reflection that can help with reflection.
The basic way to go about it is to:
Coaches, facilitators and educators have to figure out when are the times to reflect. On the example of Playing Lean, facilitators can stop the game (interrupt) after each round, to enforce learning. Although it may seem like it can overwhelm them, interruptions like this can be beneficial because it is something that can also happen in a real incubator, accelerator or startup.
What impact does all of this have on students – the experiential, authentic and reflection?
Martin and Julien have run a couple of experiments from multi-day workshops, and have found that if you’re running a larger workshop and teaching people to do something, you expect their experience to slowly go upwards, so their confidence and capabilities slowly increase. Most participants came in mildly confident (but not too sure), and went home with new learnings and a boost of confidence in their abilities.
But, several workshops that were done in accelerators in New Zealand have shown some other effects as well. People from these workshops came into them pretty confident, but then got a reality check where they realized how much they actually don’t know. They think they’ve unlearned something, so their confidence had a downward shift, but eventually at the end of the workshop, their confidence was boosted so it went slightly up again.
These types of situations show that facilitation is also important, where you choose how you want to run the simulation. With Playing Lean, you as a facilitator can choose how much of the rules you share with players, all depending on your facilitation style. You can choose to share nothing, or explain just the basic rules and have them learn by playing it, guiding them and slowly boosting their confidence, where by the end of the game they have learned a lot, either by winning or losing.
The takeaway from all of this is that if you’re training, teaching or mentoring people, you want to give them as real an experience as possible. You have to make sure that it’s an experience, not an education.
In one of our next blog posts, we’re going to reflect on what Julien shared in the webinar on why founders need to build a reflective mindset. To stay up to date with the latest Playing Lean news, and also get access to all of past and future webinar recordings, subscribe to our newsletter!
]]>Sean’s thirty-year career includes extensive work in change as an organisational psychologist, and service business redesign as a Lean Six Sigma specialist. He set up his first business in 2007 and continues to love every minute of it. Having read the Lean Start Up some years back he decided to add innovation to his improvement portfolio, and has since supported a number of start-ups to transform their offerings and profitability.
Sean's consultancy company Design for Service has also backed both versions of our Playing Lean game on Kickstarter, because as he mentioned in the webinar, he loves supporting innovative ideas and products he wished he had done himself but doesn't have the time. He has also presented a case study on our blog on how Playing Lean helped launch an innovative business advice service for SMEs.
There are a couple of tools Sean has extensively used over the years in a whole variety of situations, not just innovation startup space, but general problem solving. Before we examine and talk about the two tools mentioned, we should look at the context where these tools come from.
When working in the field of innovation and startup, we're constantly in a mindset of ‘’should I do it more widely'' or ‘’should I narrow it down''.
There is a simple concept that can explain this: there is a diverge phase and a converge phase. You are either in the space of creating choices, or you're in the space of making choices.
With creating choices, the more choices and ideas you can generate the better. When you're in the converge phase, you have to try to eliminate the poor ideas or the good ideas to find the very best.
This is a sequence you go through systematically as you are trying to get to the best solution. A visual representation of this would be the Double Diamond model.
We go through a divergent phase and ask ourselves: What are the different types of things that we can solve? What are the different problems we're looking to fix? From this we can define the right situation, and that allows us to start thinking in a divergent way of the possible solutions that we can come up with, and from those possible solutions we want to converge back down again into the best solutions.
One of the things he finds difficult about Lean Startup is that the literature doesn't manage these phases very well, so we can get stuck in a situation where we might be thinking convergently, when we're actually looking to diverge and vice versa. An example of this is trying to do rapid prototyping too early, when we haven't solved the right problem yet.
There are a lot of tools around Systematic Innovation. In the define stage, the 9 Windows and Problem Explorer tools are at the very beginning which is the best place to use them – at the beginning of your thinking. They can also be used if you're stuck, or if you find yourself needing to pivot. They are a divergent set of tools because we want to create as much as possible.
9 Windows is a structured method for helping you contextualize your focus in terms of both timespan and solution space.
Problem Explorer takes any start point and creates clarity of purpose and context so that you can scale up or down your ambitions to find the optimal problem to solve.
This tool can be used in a huge variety of circumstances and settings. You can either go through it in a few minutes, or spend ages working on it.
This tool tries to get us to think in terms of time which can lift us out of being trapped in our way of thinking. Usually when we have an idea and we know it's going to be a fantastic opportunity, and everyone is going to buy it, we just need to make it happen, we are usually stuck in the now. Using this tool will help us think about the context of now from the past, and what the now could be in the future. This can broaden our perspective and give us a divergent viewing point.
Then we have to look at the System. This is the context and all the things that work together: the inputs, outputs, environments, people factor, the culture, politics and anything relevant to the particular thing that we're looking at fixing. Attached to this is Around the System – systems that sit around or are on top of the system that we are a part of, and Within System is a much more detailed part of the System.
This can best be explained with an example:
We have a phone. The problem is the phone is not working the best you want it to – there might be features missing or a capability you want it to have. The System you would be thinking of now is purely the system of the phone in your hand and how you interact with it.
If you go Around the system, you might start thinking of other people's phones and how they interact with it.
If you go Within the system, you're narrowing it down, so you start thinking about the components of the phone: the battery, screen etc.
To put in plainly, Around System expands outwards, and Within System is still expanding but it's expanding in terms of the amount of detail.
By doing this, you go from the problem of the phone not having some features, to Within System and thinking about the screen and what was the process of getting to touch screens, to what the screen could be in the future and then you start thinking of a totally different problem.
The 9 Windows allows you to shift your point of focus from where you started to where it could most usefully develop. You can also expand to 12 grids by migrating your new problem to the now, and eventually you'll get to the point where you've got something that you have genuinely thought through and you understand its wider context: the microsystem, macrosystem ad you understand the potential futures from which you can choose the ones you want to influence with your new business idea.
You can use this tool in a whole range of contexts. You can use it as an initial exploration that will provide you with a structured learning curve. For example, if you have an idea in an area you know nothing about, by using this tool you can make sure you've got a clear understanding of the area you're putting yourself into.
It's also a powerful way of thinking creatively about resources which is most useful for established companies, since unlike startups, they have resources. They can think about the resources they have available to them now, what resources are available to them outside of their immediate environment that they could access potentially, and how they can use resources in a newer novel way.
By the time you do the 9 Window method, you will have a strong understanding of the nature of the problem you're trying to go after, and it usually, not always, gives you insight into what's the better problem to solve, or you might end up focusing on a totally different type of problem.
A quick quality check you can do yourself is if at the end of doing 9 Windows you are still thinking of doing the exact same thing you were going to do before doing the 9 Windows, then you're probably treating this method as an exercise and you're not giving it the right attention.
Now that you have a better definition of the problem you want to solve, you want to explore it.
You can look at this method as a ladder, and it can be as long as you want it to be.
In the middle, we again have our Original problem, and two coaching questions to use.
1) Why do I want to solve this problem? Why else?
This will give us insight into something that is a broader problem, which has a lot of similarities with 9 Windows.
Example:
The Original problem I want to solve is to improve managers' understanding of agile methodology.
Then you ask yourself why do I want to solve this? The reason could be because managers' approach to digital transformation is still sometimes limited to the Waterfall methodology, or they're not understanding how to involve the customers properly.
This can lead to a bigger problem and you go further up the ladder, and sometimes that might be the better problem to solve first. Usually one or two layers is enough to get you to the right point.
The crucial thing here is that you're still adding, still diverging, but with a much more focused diverge. We want to make sure we're solving specifically the correct thing.
You can also go the other way, down the ladder and ask yourself:
2) What's stopping me solving this problem? What else?
Here you are asking yourself what's stopping you from already understanding it. You can list a series of barriers, constraints, risks, behaviours etc. These are very precise things.
Then you pick from that list, and have a much narrow problem to focus on.
Putting this into the context of our example: maybe everybody's heard of agile, but people are still naturally wanting to carry on with the Waterfall methodology. In other words, they want to have a business case up front, lots of documentation, a fixed priced contract with an IT consulting firm so that they know what they're letting themselves in for.
Then you ask yourself what's stopping them. It's not the concept of agile. Maybe what's stopping you from solving this problem is that people still have a very narrow definition of how to manage risk in setting up a project. Therefore, maybe you can solve a much smaller problem, that by itself or combined with one or two similar smaller problems will unblock the original problem.
This tool is very powerful because it stops us from trying to solve problems that are either bigger than we need to, or too many small problems.
When you've gone up or down the ladder, you'll intuitively know which is better: is it better to narrow it down, or is it better to broaden out.
Doing these two tools together will get you to where you need to be. The 9 Windows will get you to the point where you intuitively feel like you're going after the best opportunity, and the Problem Explorer gives it that one last ratchet tighter to where you've got one very specific problem with a specific reason to solve.
In the webinar, Sean went into more detail and many examples for these two methods, and also answered many interesting questions from attendees, so if you're interested in learning more about these methods, sign up to our newsletter to get a recording of this webinar, and all our past and future Playing Lean Expert webinar invitations and recordings.
]]>We were joined by Esther Gons, the author of The Corporate Startup, winner of the 2019 Golden Axiom Business Book Award and the 2018 Management Book Of The Year Award.
She is currently working together with Dan Toma on her book on Innovation Accounting that provides a practical guide for measuring your company's innovation ecosystem.
Esther’s background is in helping startups, as Lean Startup is one of her passions from way back when she started several startups of her own. She was one of the first people to bring the Lean Startup methodology to the Netherlands, and held events that would make the Lean Startup practical for other startups.
For her Lean Startup has real value when it is done for the purpose of systematic innovation. Startups know this methodology will help them because it is essential to how they can lower the risk of spending too much money – the money they do now have.
Lean Startup should be just as relevant within bigger companies because it brings a new mindset to a company, it is a way to bring innovation into a company and become more customer-centric in their digital transformation.
But if you want to professionalize innovation within your company, it is essential to guard that process of setting up innovation and make it into something that you can scale across more initiatives in a company, and not just one.
When there are more than one or two initiatives, guarding the qualitative process is needed because you need to ensure that lean innovation is being done in the same way across all teams.
This is combined with pressure from above – the board, that needs proof of the value of your innovation process, other than changing mindsets. That is why it is important that the board also commits to this innovation process, rather than just a few initiatives committing to it.
Esther pointed out the 5 conditions that are needed to professionalize innovation.
The most essential one is to avoid confusion of who is doing what. You need to have a clear understanding of what innovation is in the company, and the systems that go with them.
In her experience, when she has asked companies what innovation is she got different answers: customer centricity, digital transformation, agile transformation, startups, social innovation.
These answers can't help you understand what to do or when to do innovation, and if you can have the same approach to all of them.
Some companies tell her that they have different types of innovation in their company, being core, adjacent, and transformational, or McKinsey’s Three Horizons Model. These types will help you in terms of strategy and to determine how you want to approach things, but it will not help you determine how you should approach certain types of innovation or how you should judge them.
We are all familiar with the search vs execute dichotomy by Steve Blank. A company is based on executing business models, but startups are always in a context of uncertainty, new markets and searching for something that works.
A company has a big ''company rulebook'' which is good for them because it contains all the processes, rules, and all of the systems that are set up are based in the root of cost reduction growth for the safety of their current business model.
But for Lean Startup and innovation to work, you need to have a different system, a system that deals with searching instead of executing current processes within the company. So if you want to define your innovation, this kind of perspective may be needed.
It doesn't really matter how you call the types of innovation or if you call it innovation at all. It is important to see it from a perspective that the business goals contribute to the current business model and that you can do it within a current system. An update to a process may be needed, but the current system should be able to judge it because it will contribute to growth and sustain the current models and optimize it.
When talking about basic research we should know what to do. There is a lot of uncertainty, and there is no other business goal other than finding new discoveries that will hopefully lead to a new business model.
Fast changes in technology or science opened up a new kind of innovation, that has uncertainty and isn't aligned to your business goals in that it's contributing to the current business models. You need to find new models for the new future, that might end up being your current model, but are not aligning with your current business goals.
That kind of innovation needs a new system to thrive, to be able to do lean innovation professionally and scale it in the company. There needs to be a clear understanding so that not only you and your team, but also managers and stakeholders will understand.
Esther often sees startups as floating in space, and the business with all its attachments on earth. They have different rules and a different perspective. While managers see growth when numbers are going up, startups see growth when they get a lot of insight into customer problems.
To be able to set up lean innovation in a proper way, you also need to make sure to set up a new system that is embedded within the company in different layers, so that it helps you become less dependent on the whims of one manager or the CEO.
You need an agreement on a framework or product lifecycle so that you can judge these internal startups that are doing lean innovation on proper things, on where they are in the process.
Right questions need to be asked at the right time to be able to judge them properly, to see if you want to continue and if there is enough indication for it to be true or do we need to stop something.
Another important condition is to have a unified way of working on your innovation processes. For Esther it is important to adhere to the Lean Startup process and to give teams a structure that they can work within, that they can be creative within. If you set it up like that you will see progress, learnings and if there is enough validation within the team.
The only way to compare teams to each other is by giving them a structured approach to lean innovation. A structure of innovation sprints that go through a cycle over and over again, and don't limit people in their creativity, how they approach things or how they test something.
So a unified way of working and a unified approach to innovation is the only way to compare teams and see what value they are bringing to the table.
To measure that you need to have a new set of KPIs that reflect that search, rather than financial outcome.
In big companies it is normal that everything you ask for in terms of judging initiatives, has to do with some kind of financial output. That is the only way companies are used to assessing risk in relation to their current business model.
Since there is no financial outcome at the beginning for startups, you need new KPIs that will still give you the feeling of control, and help you make the right decisions based on data – whether or not a certain project should be continued or not.
If we combine the stages of the framework, and look at the relevant focus for each stage, we can easily come to new KPIs that reflect that search. We can ask relevant questions for each stage that teams have to work towards, to be able to see if there is still progress and if there's still validation for the basis of the idea, rather than just making up numbers because the board wants it.
If you give stakeholders insight into customer problems and learnings, and give them these KPIs over and over in the same way, then it will become normal for them, and it will become a new system they can relate to.
Last condition needed to professionalize innovation is a VC attitude towards investing because it will help the board and management to look differently at startups within a company.
Usually the budget innovation teams are given from the board is seen as a cost. As soon as the board sees something as a cost, they will ask for a return. This is where a VC attitude is needed.
They need to understand that what they're doing is a high risk investment. If they see it that way, then they will look at the process differently, and understand why lean innovation is there in the first place.
It's not a controlled pipeline, it's about betting a lot of small bets on potential in the beginning, saving for a few bigger bets of those that proof their potential along the way.
The ideal funnel should look like a lot of initiatives in the first stage, and only have a few left in the later stages – those with more potential.
When the board is looking at it that way, then they develop a different mindset, and eliminate those that have no potential at all and bet on those that show potential.
When setting up a new system and following these conditions to professionalize innovation in a company, struggle is inevitable. Teams may think that the board wants to stifle innovation, and various departments (Risk and compliance, Legal and Finance usually) will want to hold the teams back.
As these departments are often the biggest hurdle for teams, giving them a feeling of involvement and control in the sense that they recognize that they are there for a purpose, will help everyone to work better together.
If you want to watch the recording of this webinar and learn more on the subject, subscribe to our newsletter to get access to all webinar recordings, invites to future webinars and updates on everything Playing Lean!
The ''Innovation Accounting'' book by Esther Gons and Dan Toma is now available for pre-order! The book helps you to measure your innovation ecosystem's performance. You can pre-order your copy here.
]]>One of those practitioners is Mohamad Mahdi, a certified Playing Lean facilitator and a certified LEGO Serious Play facilitator, who strongly believes in the concept of learning by playing.
He has been holding Playing Lean workshops for years, making it an important tool in teaching innovation to hundreds of his clients. After seeing their struggle and hearing requests from his clients to find solutions for them, he saw that you can benefit more from Playing Lean by including it into your own custom teaching program.
That is why he created his own teaching program, introducing innovation to people and teaching them how to use innovation in order to create solutions to the problems they face.
By implementing this program, he wants to lead his clients through a real innovation inside their company and make it practicable for them. But many have a different understanding about what innovation is and how to implement it.
The definition he likes and how he explains innovation to his clients is:
Executing an idea which addresses a specific challenge and achieves value for both the company and customer.
Some people confuse innovation with creativity. While creativity focuses solely on ideas without practical implementation in a real business, innovation is tangible and could be implemented and presented to people and gain some value.
To create his teaching program, he used build-measure-learn to test and see what will bring the most value to companies looking for solutions.
Creative Partner's Innovation course is a set of 4 workshops:
This 4-hour long workshop was designed based on the article Defining Systematic Creativity published by The LEGO Foundation.
Systematic Creativity is about using logic and reasoning along with playfulness to generate ideas that are valuable.
With this workshop he explains the nature of creativity, the types of creativity, what is the creative process and what is the role of systems in creativity.
It will also teach you that creativity is under your control and that you can work on it.
He divided this workshop into two 4-hour game sessions using Playing Lean 1 and Playing Lean 2.
As an experienced Playing Lean Facilitator he has adapted the game to maximise learning, and with new rules he can control the learning curve, and the understanding of the concepts the game teaches. This creates a deeper learning after playing both versions of the game.
First he uses Playing Lean 1 that has 4 variables that the participants can control and go to global market with: building the product/features, going to classes to build the company (a rule he introduced), doing market research and selling.
After this workshop many of the teams that lost want to play again and test their assumptions to see if they'll win by going to market with a different approach.
Then he introduces Playing Lean 2, whose company building mechanics are different and adds new rules.
In the real world, you have both company building and the option of recruitment. With Playing Lean 1 you get a deeper understanding of company building, and in Playing Lean 2 he shows them that you can bring new employees to your company to make some jobs easier.
With Playing Lean the participants get a full experience of starting/running a business, without having to risk anything, and learn the main concepts that will stick and be valuable later in the program.
With the help of both games, he explains the Lean Canvas, which is an introduction to learning for the next stage of the teaching program.
This workshop is designed on the concept of The Lean Canvas Business Model designed by Ash Maurya. The 8-hour long workshop uses the LEGO Serious Play Method.
In this workshop the participants build a business model, and will learn how to ask questions, because LEGO Serious Play is focused on building models instead of answers.
To build an idea, you need to build a business model first. During building the business model many of the participants understand that the idea they have is not working because they don't have a good unique value proposition.
They may understand that their idea has some problems and weaknesses in the value proposition. Sometimes there is no interest in the market segmentation for this problem.
When the group he's holding this workshop for is from one company, then they can find some real ideas and build a business model for them, and understand if it will work or not.
At the end they find a good business model for a new service or product that makes sense. With this workshop they can bring innovation into their company.
Service design is a method for designing experiences that reach people through many different touch-points, and that happens over time.
He created this workshop in 2015 and presented it at the annual LEGO Serious Play conference. The reference for creating this workshop was the Service Design Toolkit by Namahn, and This is Design Service Thinking by Marc Stickdorn and Jakob Schnedier.
In this 4-day workshop, he uses different methods to implement all service design levels.
Each of the 4 levels is an 8-hour challenge in itself.
A) Pose the question, service challenge
B) Persona
C) Ideation and design
D) Scenario play and test
This workshop needs a focused team with a special service/product target to implement.
After 3 days you will have the full design of the user and service provider journey. At day 5 you finish off by playing scenarios with elected personas to see the effects on the system and get feedback from the system.
With Creative Partner's Innovation course you go from exploring creativity and learning, to experiencing how it is to run a business by simulating, to building a business model for your idea, and finally to designing and delivering a new service with all elements of the real world.
When we held this webinar we hoped it would inspire other coaches around the world to create their own innovation program using games as a way to teach sometimes hard to understand concepts. The time of PowerPoint presentation workshops is over and outdated.
The success of a workshop lies in getting participants to learn, experience and take action. Only then the lessons they take away will truly bring innovation into their organization.
If you want to play Playing Lean and see why it’s one of the best tools for facilitators, coaches and consultants around the world, join us on 15th June 2021 for a remote (online) Playing Lean workshop!
]]>On our blog we've published a case study which examines key learning points that helped them get started, and steered them in the right direction.
Now, in our next webinar, Sean will share two practical innovation techniques that ensure you’re focusing on the best opportunity.
One of the downsides of “That Great Idea” you’ve just had is you suddenly develop tunnel vision. The brain kicks in to overdrive and starts rushing to make the facts fit the theory.
Sean has been there, and you've probably been there as well.
From the field of Systematic Innovation, in this webinar Sean will introduce two simple, yet stunningly effective ways to help you keep your eyes wide open to finding the right problem to solve.
‘Nine Windows’ is a structured method for helping you contextualize your focus in terms of both timespan and solution space.
‘Problem Explorer’ takes any start point and creates clarity of purpose and context so that you can scale up or down your ambitions to find the optimal problem to solve.
This webinar is especially relevant for people who are interested in creating better solutions and finding gaps in the market.
The webinar will be broadcasted on Zoom, on Monday December 14th, 18:00 UTC/GMT+1.
Please register here and reserve your seat!
If you can't make it and would really love to watch it in your own time, a recording of the webinar will be sent to our newsletter subscribers. You can subscribe to our newsletter here to get access to our webinar recordings, as well as future webinar announcements, Playing Lean updates and more great content!
See you there!
Sean’s thirty-year career includes extensive work in change as a organizational psychologist, and service business redesign as a Lean Six Sigma specialist.
He set up his first business in 2007 and continues to love pretty much every minute of it.
Having read the Lean Start Up some years back he decided to add innovation to his improvement portfolio, and has since supported a number of start-ups to transform their offerings and profitability.
]]>Business modelling
Problem/solution fit phase
Product/market fit phase
Scale
In the first phase, the business modelling phase, we quickly try to sketch out and test the biggest parts of our business model.
Business modelling is about understanding how you will create, distribute and capture value. The traditional approach to this was making a business plan, but we have found that business plans take too long to make, and by the time they're done they're already outdated. They're filled with wrong assumptions, wrong numbers and usually lead to failure.
In the Lean Startup we have two alternative tools to solve this problem: Business Model Canvas and Lean Canvas. Which one you pick depends on the context of your audience and workshop participants.
In our Business Modelling Facilitator training we go through both of these tools by going through each of the blocks of the two tools, explaining the structure and relationship of the canvasses. We also compare the tools conceptually and discuss which tool is preferable in different settings.
When you're happy with your business model, you proceed to the problem/solution fit phase.
The questions innovators should ask themselves here are:
Do you have a problem that's worth solving?
Do you have a solution that would actually solve the problem?
To answer the first question, you use problem interviews. To do this you have to get in touch with people that are in your customer segments and interview them. In the problem interviews you try to figure out if they have a problem worth solving. You want to approach this with a scientific mindset.
A common mistake for entrepreneurs is going into problem interviews or interview situations trying to convince the users, the customers, that you have a good idea and that they should sign up to use your product. You don't want to lead your interview subjects on, but you want to figure out what they're actually thinking without trying to sell them anything.
In the problem interview you try to follow a structure. Start out with getting demographics from your customers. After you have the basics, you can start with the questions.
The problem interview is an experiment, and you need to have a test as a part of the interview. As an example, you can have three different problem statements that you have been working on and you're not sure which one is the best. You can ask the customers to rank their problems to let you know which one is their most important one to solve. If you have a theory about what the biggest problem is, you can interview a certain amount of people and see how many will actually put your problem as the biggest problem.
In this phase your goal is to speak with enough customers - at least ten, but it can be hundreds. Before you're done, you should be able to identify an early adopter, you should have found a must have problem to solve and you should be able to describe some existing solutions.
When you're satisfied the next step is the solution interview. Here you test the outline of your solution, how you're actually going to be solving the problem that you have identified.
You start by interviewing a group of customers, some of which you've already spoken with and some new early adopters that you have identified but are fresh to the process, and you walk them through your solution using a demo. A demo should be easily changeable, a paper based prototype for example, and simple enough so that in between two interviews you can change it based on what you have learned from the first interview.
When you have gone through the solution with the interview subject, you should test your pricing and ask for commitments. You should tell the customer the price of the product, and not let them guess what the product should be priced at. The best commitment for you to have here is for the customer to sign up or even buy the product and have it delivered later.
When you're happy with the answers to your questions, you have a problem that's worth solving and a solution to that problem, you can move to the product/market fit phase.
The question you need to answer here is, is there a viable market for your product, is there enough of a market to support your business and can you get traction in your market.
In this phase you build your first version of the product, a Minimum Viable product (MVP), and release it into the market. It's minimum because it's the smallest thing you can build, and it's viable because it has to actually solve the customers’ problem.
Eric Ries defines an MVP as that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
Popular MVP approaches are Wizard of OZ and Concierge MVP. In both cases we don't build the full product but rely on human beings carrying out the work instead of the technology.
When you have built your MVP you don't release it to everyone. You start out by doing MVP interviews. You meet with users face to face and show them the product, because you want to see their reaction and how they use it. If there is a sign up flow, make them go through it and see if they have any problem. You use this early phase to iron out your biggest bugs, mistakes and usability issues. You should also test the pricing – if you can't sell your product face to face to live customers, selling it online to a lot of people is going to be very hard.
You proceed from this phase to the last phase – scaling, when you have a product that's working and is gaining customers, a product that is solving customers problems and is getting traction in the market.
Ash Maurya describes traction as the rate at which a business model captures monetizable value from its users.
When you have a product that does well in the market, you need to accelerate the growth to succeed in the marketplace. You need to grow even quicker.
This is where you start to see that the kind of experiments we do in the beginning are really different from the kind of experiments we do towards the end of the lifecycle.
In the beginning you did the business modelling phase where you can do big changes by simply erasing something from the Lean Canvas and putting in something else. Those changes came at a very low cost. In the scaling phase, you have a product that works and you're actually doing small experiment to increase your numbers by just a little.
This is the right place to use one of our most important tools and something you do when you have enough traffic - A/B testing. As an example, you can show people two different versions of the same webpage. Half will see the old version of the page, and the other half will see a page with a different button colour or an added feature that you want to test. This will show you which page performs better, and here you're looking for tiny improvements. If you go from a 3% conversion rate to a 4% conversion rate, that is a major win in this setting.
While the philosophy and concepts behind everything here are the same all the way, the actual experiments and what you do will change a lot during the lifecycle of the product. Going through all of this can take years.
Our Lean Startup board game Playing Lean is a great way to learn the Lean Startup concepts, and really understand them by simulating an environment where you have to use experiments to figure out what your customers really need, build features to your product that will meet their needs, market it and sell to get the customers in.
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Mohamad Mahdi, Playing Lean Facilitator and a certified LEGO Serious Play facilitator, strongly believes in the concept of learning by playing.
He has been holding Playing Lean workshops for years, making it an important tool in his training program, teaching innovation to hundreds of clients.
But is playing a game enough? In his opinion, you can benefit more from Playing Lean by including it into your own, custom teaching program.
Join us for our next webinar and learn how he created his own teaching program, introducing innovation to people and teaching them how to use innovation in order to create solutions to the problems they face!
The webinar will be broadcasted on Zoom, on Tuesday November 10th, 13:00 UTC/GMT+1.
Please register here and reserve your seat!
If you can't make it and would really love to watch it in your own time, a recording of the webinar will be sent to our newsletter subscribers. You can subscribe to our newsletter here to get access to our webinar recordings, as well as future webinar announcements, Playing Lean updates and more great content!
See you there!
Mohamad Mahdi is a creative and energetic guy. He graduated from MBA and focused on Strategic Human resource management in many companies. He started his career by teaching in schools, and is strongly committed to the concept of learning by playing.
He is the only certified teacher trainer of LEGO Education Academy (STEM) in Iran, and the first certified LEGO Serious Play facilitator and Workshop designer. He implements many workshops and trainings in the Middle East every year, making him an experienced and highly skilled workshop facilitator.
A pivot is a change in strategy, often necessary to realise the full potential of a vision and par for the course. It's designed to test a new fundamental hypothesis about the product, business model and engine of growth.
You pivot when you see some element of your product is getting way more traction than what you thought was your core use-case.
For a startup, a pivot is like a roommate, always there, sometimes fun and a good friend, and other times you don't want to see him or listen to what he says. For large companies, it's often the latter.
In their master's thesis, Johan Karlsson and Johan Nordström surveyed companies and found that there are three main factors that hinder large companies to pivot or iterate.
First reason is because project teams get funding for their work based on a plan which has been agreed upon with the project funders, sponsors. Their job is to work towards that goal which has been set, and failing to reach that goal could be seen as a failure, dead end. If they cannot stay on track with the plan for which they have received funds, there is a big chance that the project will not get any more funding and will be shut down. This is simply because the sponsor of the project doesn't benefit (as much) from anything outside the initial plan.
But this goal driven way of working is not possible, because at the beginning of a project it's not possible to see all possible actions you can take. New possibilities might come up that are better for the project than the previous ones, and sometimes you should take that path although initially it doesn't seem right.
Second reason why large companies have a problem with pivoting is because communication in big companies is slower than in startups. This is because there is simply more people involved in a project in a company, then there are people in a startup.
Several factors attribute to slower communication. There are more communication channels you have to go through and this has a negative effect on the speed in a team. Also, team members are often in different locations, geographically dispersed, which also takes away from the speed at which a project should be carried out in.
There is also a long response time between team members, which is not good when you need input from someone else to continue your work. The long response time could be due to the fact that team members often work on several projects at the same time, so team members don't have a normal flow at which tasks should be executed in. Another reason for long response time is because of the culture in a company. Sometimes team members wait longer than reasonable to respond, or they choose not to respond.
This slower communication inside a team leads not only to longer product development processes, but also makes rapid iterations impossible. And rapid iteration is important in fast-changing industries where the environment can change before the actions that were based on the environment have been taken.
The third reason Karlsson and Nordström found from results of their research is that project funders in large companies are less willing to allow pivoting and iterating in projects than VCs for startups. This is because project funders fund a project if they want the product, not because they believe the team will come up with something more valuable.
In companies, when employees want to get funding for a project, they put together a proposal with an expected outcome and required funding. A project with a higher ROI is more probable to get funding, so employees often exaggerate forecasts to improve their chances of getting funded. They also have to compete for funding with other projects in the company, so giving the funders what they want is a safe bet.
If teams used a Lean Startup approach and didn't forecast the financial outcome, they would probably not get the funds because in the Lean Startup approach there is more testing and more iterating and much more uncertainty.
Even though in many aspects large companies are better equipped than startups, they still face serious hurdles and don't really create a good and fast environment for new ideas.
This leads us back to a webinar we held, where Cris Beswick talked about re-defining strategy, leadership and culture and what we need to do to drive innovation.
In our Playing Lean Expert webinar series we have hosted some of the best practitioners in the world such as Katie Anderson, Cris Beswick and Esther Emmely Gons!
After a short break, we are ready to continue, and we'll be announcing dates and expert speakers soon.
If you want to be notified of future webinars and get access to webinar recordings, subscribe to our newsletter.
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In Playing Lean 2 we wanted to capture the fact that reality is less linear. Opportunities will come and go and can’t necessarily be saved for later. Now teams can improve their abilities by bidding for new “company blocks” that go up for auction every turn. The company blocks come in three flavours:
If you win such an auction, the new block will replace one of the existing ones. This will make you experiment more, build faster or sell cheaper.
It also pushes players to pursue different strategies. The company with cheaper experiments might go for more customer insight, while the company that builds faster might go for more features in their product.
Players often ask what the auction represents in real life. It is meant to represent limited resources. It might be employees with a special skill set that are just now available in the market or some kind of accelerator program that requires effort from your team. Either way, you have to commit the resources required to win the company block.
We have collected some tips for you to consider the next time you, as a facilitator, are setting up a game of Playing Lean:
Organize the stacks. If you’re not playing the game yourself, remember that the order of the blocks in the draw stacks doesn’t have to be random. You can organize them into any sequence you prefer, for dramatic effect.
Sharpen the competition. There’s exactly one “Engineering” company block per team per phase of the game. That makes for a “nicer” game where every team gets their upgrade in the end. Feel free to remove some of them! Having fewer Engineering company blocks will create a more competitive game.
Get your stories straight. Go through the company blocks before the game and come up with stories of your own. Why are the MVP ninjas so fast? How can the rapid prototypers learn so much? Add some fun and a personal touch to the game with your own stories.
The auction is blind, carried out by having players hide their bids in their hands, with everyone revealing at the same time. This adds a fun, interative and competitive element to the gameplay. Teams will discuss tactics such as bidding on something they don’t really need, in order to prevent other teams from getting it.
You might do well to advise teams not to get too hung up on what the competition is doing, though. It’s the team that values the insights they get from customers highest that will win in the end.
If you're interested in finding out what other changes we've made to Playing Lean 2, check out our FAQ. There is also a gameplay video that will help you understand the rules of the game better and show you how it all works!
]]>Actually, throughout the series several companies tried to steal their algorithm, and one even went to market with it before them, though they didn't quite have the whole algorithm and didn’t quite understand the whole point behind it, which resulted in a product that wasn't as good as the idea's main inventor intended it to be. In the end, Pied Piper still had the better product, despite all the competitors with similar products.
You may also remember our blog post on Wimdu, who was essentially Airbnb's clone. Wimdu was accused of copying their website and poaching from their community, taking information from Airbnb's listings without permission. In the end, Wimdu didn't survive because of their business model and the lack of a long-term mission.
These are both examples (real and fictional) of startups who had their ideas stolen or had clones, but still managed to end on top, because their product appealed to customers better. It could have easily gone the other way, because customers don't really care whose idea it was first, but which product performs better and which product solves their problem.
This would mean that ideas are actually worthless, and it's really about how you execute them, when and how much work you put into it. Going to market early with an MVP is crucial even at the risk of competitors stealing your concept, because it tells you if the product should be built to begin with, which features to add and remove, and to fix bugs. The feedback you get from testing the MPV will also tell you if you need to persevere, pivot or perish. Testing is key.
One of Playing Lean’s biggest supporters, Mentive, took the Lean Startup methodology to heart and tested their project Kiwiik early and often. They first created a prototype of the idea to let the potential customer better understand what the idea was. The product went through many prototypes and many tests, but every time something wasn’t working and it needed further changes. After pivoting, they did a beta launch of their MVP, focusing on testing their hypotheses by observing the customer’s behavior with the product. After much testing, they managed to raise brand awareness and capture the attention of investors.
When I was browsing the internet and researching idea-theft, I found a lot of articles on how to prevent your idea from getting stolen. I soon realized that rather than spending your time and energy on preventing your idea from getting stolen, you should focus on building a product that people will love. That is something that nobody can steal. And nobody can steal how you execute your idea.
Maybe the success of an idea is like the success of a professional athlete – it’s 10% talent and 90% work. A lot of athletes have the same talent, but only those that put in the extra work and pour their heart into it make it. And of course, a little bit of luck and a good pitch will help attract sponsors/investors and help your idea come to fruition.
One of the benefits of playing our board game Playing Lean is actually learning how to test your ideas without having to risk your life savings. It will teach you how to understand the needs of your customers better and how to design the products and services they want.
So maybe if you have an idea and you’re not really familiar with the Lean Startup methodology, but want to quickly learn the concepts and how to experiment, play the game and later use that knowledge to work out your idea.
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In the pre-Lehman world, Peter Drucker's quote “Culture eats strategy for breakfast.” probably was valid, because the world then was much more linear and predictable. But now, in this time of the pandemic, he believes that culture isn't enough on its own to differentiate organisations and help them shape the future.
What Cris finds frustrating when sitting down and talking to CEO's, board members or senior teams, is the continued level of innovation theatre, and the continued self-professing by organisations that they are innovative, when really most organisations don't understand innovation and all its components, or building a culture of innovation.
He still sees big organisations, global brands we all know very well and love, creating products and providing services that are not sustainable, with brand promises that are just marketing spins, because those brand promises are all based around products that no one really needs because they don't solve genuine deep problems. And they label it as innovation.
But the reality about innovation is that we're now trying to solve really wicked problems, and Cris thinks that “wicked problems now require really wicked solutions”. The challenge around providing wicked solutions and genuine innovation (not theatre), is that wicked problems which require wicked solutions require wickedly different ways of doing it. And we do that by understanding culture, strategy and completely changing the way we do things as organisations.
Innovation really boils down to three things: the strategic overview and strategic imperative, the leadership context and leadership capability required, and the cultural component and the scaling capability and how we embed it.
One of the biggest problems in the corporate world is that most organisations are actually brilliant at invention, and very poor at innovation because there's isn't a clear understanding of the definition of innovation.
If we look in the dictionary, creating or redesigning something that has not existed before or the introduction of something new is actually the definition of invention.
And Cris sees the definition of innovation as:
“The process of introducing something new or different in order to solve a problem, add value for the customer, and drive growth for the creator.”
When we define innovation in this way, we're able to use the definition itself to sense-check progress. At each stage of the innovation process we can validate if our solution is still genuinely interesting, does it really relieve the pain that our customer is experiencing, does it really deliver extra gains on top of that, and are we able to execute it well, is our measure of success still going to be achieved.
In order to do all of that, to sense-check, everything has to be human-centred. As organisations we have to understand people better, we have to understand design thinking and Jobs to be done, the essence of those frameworks and what they stand for: how good are we at unearthing genuine problems and genuine opportunities, and how good are we at going deeper into those problems than our competitors are. We need to build human-cantered organisations to do that.
Since Lehman brothers, despite the crash, what we actually see and all the data suggests, is that organisations that capitalized on that downturn and went really long on innovation, prospered beyond all the organisations that waited for the world to get a bit more stable to do anything. And we've seen some great organisations emerge: Airbnb, Stripe, Instagram, WeWork, Lyft, Tinder.
Now we're in 2020, Covid-19 time, and the challenge is that the typical approach to strategy doesn’t cut it anymore, and we must start moving away from Peter Drucker's quote.
The world we live in now requires a different approach to strategy. It requires us to start in the future, and be much better at building a picture of the future state that we as an organisation want, and then reverse engineer that back to our current context and current situation. Then, in a hypothesis driven way we have to push forward and project in timelines that we can confidently predict, put things into place and execute.
We need to constantly review that hypothesis, and move the organisation forward. and balance it with a human-centred approach.
The reality is that we operate and have to build organisations in a volatile, uncertain, complex and ambiguous world. But as leaders, the challenge is how do we navigate that and how do we change that world and reframe it, so that it isn’t something negative.
The first step we have teach senior leaders is to help them understand why things that worked yesterday don't work today, and why things that they might have not even heard of yesterday are now relevant and are going to work for the future.
If we look at management and leadership development over the past 20-30 years, senior executives have been trained and developed in business schools and been to leadership development programs, all in the pursuit of leading as we did yesterday. Very few of those leaders have the capability to lead in the world that we are in now, and for a world that is constantly re-emerging in the future.
We have to shift the narrative away from short term gains and short term metrics, and we do that by focusing and going really long on purpose.
Purpose is one of the most underrated components of leadership.Organisations have to find and re-frame what that purpose is, and build an innovation strategy in line with delivering against that purpose.
Language is also an important component of leadership. The language that leaders use and how inspiring that language can be, is one of the most underrated and undervalued components of leadership.
One of Cris's favourite quotes is: “Our goal is to have customer service that's not just the best, but legendary.” - Sam Walton
Creativity is also a massive component of what leaders now know, and is one of the key skills of shaping the future.
For Cris, the two components are purpose driven and creativity driven. And both purpose and creativity share one common thing - they share a huge component of empathy.
When you combine it, it makes people curious, and curiosity means people want to ask questions, and asking questions means people want to explore, and when they explore they experiment. All of those ingredients are needed if we want leaders to lead our organisation for innovation.
We need to get leaders to shift from volatile, uncertain, complex and ambiguous to visionary, unbounded, creative and authentic.
As leaders, our ambition has to match our action. We have to be sensitive about what it looks and feels like to lead for innovation.
That feeling of leading for innovation as a person and as a team is the one thing that lacks in organisations when it comes to innovation.
The challenge is that we don’t separate different behaviour well enough that innovation requires. If you're building something that nobody wants, then you are the source of failure, and not the competition.
We have to help leaders understand and unpack what it genuinely means to own the innovation agenda. When you do own it, then you understand what you need to do to help the most important layer of an organisation drive innovation on a daily basis. And when they understand how to drive innovation on a daily basis, then they make it easy for employees to contribute to innovation on a daily basis.
The physical things that need to be in place to make ownership, driving and contribution happen are strategy, budget, tools etc., but the psychological things are is there a learning culture and is there a culture of collaboration.
As leaders, we also have to ask the right questions and Cris puts them as:
In summary, for Cris strategy used to eat culture for breakfast, but if you really want to shape the future “Strategy, Leadership and Culture need to eat breakfast together.”
We have to find a way of aligning all of those three components into an eco-system approach.
If you liked our summary from Katie Anderson's and Cris Beswick's webinar presentations, and don’t want to miss out on future Playing Lean webinars, sign up to our newsletter to receive invites and full webinar recordings so you can watch the webinar in your own time!
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Why would I ever want to remove a feature that I have already built?
That’s such a good and important question! It’s the que to a training moment, one of those golden opportunities to facilitate insight and understanding.
I’ll tell players that owning a feature is not free. If a feature does not add enough value to customers, you should remove it, even if there’s a cost to do so.
There are several factors that make features costly to own:
This list is quite self-evident. But there’s another factor which is more of a silent killer: The complexity added to your product by your (unnecessary) feature will slow down development speed. That means your next feature will be slower to build. Keep adding and preserving even more features, and the problem compounds.
It’s all about being lean. You should have nothing more than the exact features that serve your user’s needs. The next time you get a valuable and validated insight, you’ll have the speed you need to go after the new opportunity.
In Playing Lean, the cost of developing a new feature increases with the number of features your team has. That drives a lot of the behaviour needed to win. You need to find the easy customers in the beginning, not the ones that are demanding and will bloat your product from the start. You need to search for customer groups that have similar requirements, because a product that seeks to please everyone will lose out. Finally, you need to change fast and remove features when you realize you’re on the wrong path.
Just like in real life.
It’s very common for companies to add a few tweaks and features to make a sale or accommodate to a new set of customers. Then the next customers come along and demand more tweaks and features. In the short term, it might make sense. You want to sell your product. If a little more complexity closes the deal, it might be a good trade-off.
Over time, however, you build a debt of special features and tweaks. You have to pay interest on that debt with every new feature you build. If you keep adding to your debt, the problem will quickly become unmanageable. Development teams will be consumed by putting out all the fires, doing maintenance just to keep everything running and fixing bugs instead of creating value for customers.
While it may not make intuitive sense, paying down on your feature debt improves your speed in the long run.
Join us on 15th June 2021 and play Playing Lean with us from the comfort of your home or office!
Check out Playing Lean FAQ to watch the Playing Lean 2 gameplay video and read answers to the most asked questions about the game.
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This is why the perfect guest to kick off our webinar series was Katie Anderson, where she talked about people-centered leadership practices that can enable you to foster a culture of innovation and continuous learning.
But what are those practices and how do you create that safe environment for people to innovate? How do you create that culture where people are not afraid to fail, because it will ultimately lead to learning?
At the beginning of her book Learning to lead, leading to learn she talks about how it all started and came together for her. In 2014, weeks after she found out she and her family were moving to Japan, she was at a Lean coaching summit where she connected with John Shook, and talked about moving to Japan. It just happened to be that his mentor and very first boss at Toyota, Isao Yoshino, was in LA at the same time. Mr. Yoshino gave her his business card and invited her for a tour of Toyota, which she saw as a once in a lifetime opportunity. This was the beginning of the most impactful and important relationship in her life, personally and professionally.
Yoshino shared many stories with her, and when she moved back to the US, she asked Yoshino if he would be willing to do something more. She felt that his stories needed to be amplified, and the book turned out to be a bigger project than she anticipated. The book is based on stories of leadership and learning. It's not about the perfect leader, and it's not about the perfect organisation, as so many books are.
Isao Yoshino had many stories to share, as he was in Toyota during periods when Toyota started developing the Toyota way, the way of people management, the philosophy of leadership. The stories showed how Toyota intentionally built its culture.
One of the stories was Yoshino's experience with a startup he had at Toyota, and how it resulted in failure.
In the 1980s the company set a department to create mini companies to explore ideas. There was one in aviation, one in creating homes and one for the marine division. Yoshino spent 10 years at Toyota in the marine division. As he loved the US, he wanted to create high-end water ski boats using high-grade Lexus engines for the American market. He moved to the US and opened a factory to produce water ski boats. He encountered a lot of challenges, mainly in production, and in the end the business failed, costing Toyota 13 million dollars.
Toyota didn't fire Yoshino but asked him to conduct a reflection summary so that they don't replicate the same things when they start a new business idea inside the company.
Yoshino said that failure is only a failure if you don't learn something from it. That is the secret to Toyota, its attitude towards learning, and they do it more effectively than any other company out there.
“Reflection is the beginning, not the end of learning.” – Katie Anderson
Katie tells this story in her book because when we're pursuing innovation and new ideas, we're always going to fail, so we need to have a target and a goal. She highlights how it's about perseverance, knowing that you're going to fall down, knowing that it's a part of the learning process, but also getting back up and knowing how to pivot and adjust.
She says how intention is an important word for her, because it's about understanding what is important to us, and then aligning our actions and our behavior in service to achieve that purpose. It's the same when we think about our services and companies - what is our company's purpose, what are we trying to achieve and what are the most important actions we need to take to move in that direction to serve that purpose. “We have to be intentional in how we show up as people and as an organisation.“
Fundamentally, the Toyota way and lean management is about developing people before developing products, respecting people's humanity, respecting people's contributions and thinking. When we start with that, then we will be able to develop the products and services that are a part of our company's purpose.
In the webinar she also shared some concepts and practices she learned from Yoshino.
A leader's role is to set the direction, provide support and develop himself/herself. If you can do these things, then you are going to create a successful people-centered learning organisation.
1) Provide a challenge, direction or target. You need to set a challenge that keeps alignment for people. Usually, people don't know what the direction and target is. Something she learned from talking with Yoshino is ''targets need to be determined by what is needed, not by what is achievable.'' Set a direction and targets that are needed, and learn your way towards that target.
2) Set the conditions for success and take responsibility when mistakes happen. What she also finds important for leaders is to balance the concept of challenge and nurture. We need to set a challenge, and push people into a little bit of struggle, because in that struggle is where the learning happens. But at the same time, we also need to provide support and be a safety net. Managers, leaders and coaches need to take responsibility for when mistakes happen.
Yoshino shared a story about his experience during his first 3 months at Toyota in the 60s, when he was assigned to the paint shop, where he had to pour paint every hour or two for when they were spraying cars. He made a mistake, and the shop manager came running in. Because of his mistake, hundreds of cars needed to be repainted. Instead of yelling at him, he asked Yoshino to show him what he did. Not only did the manager not get mad, but he thanked Yoshino for making the mistake because it allowed them to see what they needed to do to create a working environment that allowed him to be successful and not make mistakes. That was their responsibility as leaders.
3) Teach the process of learning. We need to create conditions to allow learning to happen. We can’t just give out answers, but also ask questions, teaching people how they can go out and explore. You as a leader have be a guide.
4) Be curious, ask questions, let people learn. You have to give space for failure.
5) Focus on the principle, not the tool. She found that in organisations we are often hung up on the format. Formats can help, but when we're so hung up on formats, we're not focused on what the purpose is behind the tool. We need to be flexible so that it meets our purpose.
6) An extra effort can make a difference. This is Yoshino's favorite motto. Yoshino shared a story when he arranged for a group of people in HR, that have a data entry job and never really traveled in Japan or outside, airline tickets so that the staff can experience the world because he wanted for people to have great experiences. Of course, such grand gestures are not necessary, but even the small things are meaningful. We have to think about the things that are not in our job title, so that we can make a meaningful difference to other people.
7) Never stop learning and growing. When we start thinking that we have all the answers, that is the end of learning.
At the end of the webinar, Katie also shared some tips she found helpful no matter what she's focusing on.
If you don’t want to miss out on future Playing Lean webinars, sign up to our newsletter to receive invites and webinar recordings!
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Do you know what your customers currently want?
Do you know if they understand what you are offering them?
Do you know if they are willing to pay?
If you are trying to answer any of the above, then this is the workshop for you.
You will benefit from attending this workshop by:
The How to do remote Lean Startup experiments workshop is a hands-on workshop, where theory will be kept to a minimum and practical exercises to the maximum. Expect time to fly, as you'll be working from first to last minute!
Every experiment goes through three phases: design, conduct, learn. Most likely failure point is in the design phase, and that's why we'll heavily focus on it in this workshop.
We can break design of the experiment in three steps:
You will work in groups to design an experiment for a specific case, using Playing Lean Experiment Report and reference materials you'll be given for the workshop.
Once we have designed our experiment we will discuss some common traps and issues when conducting experiments remotely.
At the end of this workshop we will address how to maximise learning from experiments and prevent discarding knowledge.
This workshop will be conducted completely online, on Zoom.
It's scheduled for Wednesday, September 23rd, from 13:00 to 17:00 Oslo (GMT/UTC+2) time.
We hope you will join us in this learning process! We have two tiers of tickets, whichever fits you best!
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Shortly after it was founded, the company received $90 million in funding (the largest investment in a European startup ever), from two investors who were no strangers to the cloning of successful tech companies. The infamous Samwer brothers were known for creating European clones of popular American internet services, copying their website and then attempting to sell the company back to the original. This exactly happened with their eBay clone Alando.de which they sold to eBay in 1999, and Groupon clone CityDeal which they sold back to them in 2010 for around €100 million.
Wimbdu was known as the clone to Airbnb.
Airbnb was not happy with Wimdbu, and even called them out (but not by name) in an email sent to over 100k hosts, saying they were imposters and ''scam artists''. They criticized their business model saying that they are copying their website and poaching from their community, duplicating personal profiles, descriptions and photos from Airbnb listings without permission.
Later, Airbnb representative Christopher Lukezic, said they had 572 reported cases of these “competitors’ employees soliciting Airbnb hosts in their homes and, in many cases, going so far as to scrape host’s personal profiles and listing their homes to populate their site without the hosts’ knowledge or consent.”
Even though Airbnb was criticizing them, at one point they considered acquiring Wimdu, but finally decided against it. In an interview for TechCrunch TV, Airbnb co-founder Brian Chesky and Sequoia Capital partner, Airbnb board member, and former Zappos COO Alfred Lin explained why.
By 2011 Airbnb was primarily an American company, but it became clear to them that becoming international was very important because in their essence they are a travel company. They started investigating if Wimdu's strategy is going to work, and it became clear that there was one thing they did very well - they had local people in local offices. They tested this strategy and realized it actually works. They needed local presence, because people wanted to meet in person, and not just over the website.
Brian ended up going to Berlin to meet up with now former board members od Wimdu to discuss if they were going with plan A - buy Wimdu, or plan B which was non existent. Without knowing what plan B was, they decided to go with it. They explained it as they'd rather go with plan B and maybe win or maybe lose, then inherit this company that wasn't mission based. It wouldn't be Airbnb and he wouldn't want to be a part of this company. “I'd rather loose and keep our soul, then win without it”. They thought they'd win because they had a long-term mission. Their community loved the experience, employees loved working there, they had better customer care. The key to going global was product and community, but also local culture so they opened local offices around the world and hired local teams. It didn't turn out too bad for Airbnb as they raised some $3.38 billion. In the end plan B worked out very well and they now offer 2 million listings worldwide.
Wimdu continued with their business model, and by June 2013 they offered 100,000 accomodations in 150 countries. But inside the company there were some shifts. In 2014 two founders, Bleckwenn and Dreiling left the company at their own request, and took a position in the advisory board. Everything was going well for them in the next year. They increased their number of bookings by 31% and expanded to other European countries.
In 2016 they merged with their rivals, 9flats. 9flats CEO Roman Bach said he was excited about joining forces to create one of the largest businesses within the online accommodation industry. “The combined company will enable us to create an even stronger value proposition for our guests and hosts, while simultaneously accelerating growth and improving long-term profitability.” The two of them combined offered about 500,000 global listings. Even though it sounds like a perfect match, it's speculated that the merger with 9flats was to save Wimdu from shutting down.
Only two months after the merge, Danish company Novasol (one of the largest European vacation property managers) owned by Wyndham Worldwide, signed a deal to buy Wimdu. Wyndham Worldwide then sold Novasol in 2018 and as a part of a in-house clean up, Wimdu was one of the first to go.
Idea-theft is common among startups, and there are clones everywhere. If there is a market free to be taken, a clone can be faster to reach it than the original. But rarely both survive. In this case, Wimdu got cut-off and Airbnb is showing no signs of slowing down.
Wimbu is one of the company cards in our Hospitality Scenario that comes with the Playing Lean 2 game.
]]>Continuing on the post The who's and how's of marketing Playing Lean where we answered the most interesting questions we received in our Playing Lean webinars, we bring you more answers that will be interesting to those working in public sectors or those working in companies that have a physical product.
When you look at Playing Lean mechanically, game wise, it consists of two parts. You have the board game with all the supplemental material, which is the marketplace and where the action happens, and you have the experiment or scenario cards.
Experiment deck is critical for teaching. It's the experiment cards that contain the stories, events, concepts, principles and results of what is happening on the board. It's the experiment cards where you can have the most influence.
The board is unmarked, it's an empty slate. You can give meaning to different colours if you need to. The green doesn't need to be business modelling. It can be something else, e.g. if there is some specific stage in the government agency.
If you look at all three scenarios we have for Playing Lean - Social Media, Ride Sharing and Hospitality Industry, even though they aren't purely internet scenarios, they all have a big digital component in their value chain and in their supply chain. There is a business model component in all of them being some sort of a market place or having multiple customer segments being served multiple value.
Transferring the learning into the hardware world is simple. Whenever you pull an experiment card, you don't need to share the example that we included on the card but you can share specific hardware related examples.
A lot of concepts that are used in Lean Startup come from the hardware world - prototyping, rapid prototyping, testing (e.g. you want to blow up things in simulations before you blow up something that's worth several million euros). Use your own examples and experiments that are related to the hardware world.
We’ve been to public innovation seminars and we’ve applied the same concept we’ve explained in the previous question.
Use the scenarios that come with the game but tell your own stories and use examples relevant to public sector innovation.
In our Playing Lean Facilitator Club we have a lot of members interested or working in the public sector, and they have successfully incorporated Playing Lean into their workshops.
Our Playing Lean Facilitator Andy Sandford, the founder of Lean and Agile, hosted a webinar Lean Startup in the public sector and beyond with our game co-creator Bruno Pešec as a guest, where they discussed how the public sector can benefit from the Lean Startup, how does the Lean Startup dovetail with traditional improvement methodologies and more.
If you are interested in hearing what they had to say, you can listen to a recording of the webinar here.
Join us for our next Playing Lean Expert Webinar on August 26th, where we will have Esther Gons as our guest!
Esther will discuss how to ensure the quality of the lean process and tracking that process when there is more than one internal startup in your company.
You can read more about the webinar and register here! And don't be shy about leaving a question for our guest!
In our first two Expert webinars we had the pleasure of having Katie Anderson and Cris Beswick. In future blog posts we will go in depth what they discussed, as we now turn to our next webinar.
For our third webinar, on August 26th, we are happy to invite Esther Gons as our expert speaker.
Esther is the co-founder of GroundControl, a moonshot management platform, grown out of her startup experience combined with years of corporate experience leading NEXT Amsterdam.
She is the co-author of the Corporate Startup and is currently working on an innovation accounting book together with Dan Toma.
In this webinar she will discuss how to ensure the quality of the lean process and tracking that process when there is more than one internal startup in your company.
If you want to join us for this great webinar, you can register here. You can also leave a question for Esther in the registration link, as we always love a good discussion at the end of the webinar!
If you can't make and would really love to watch it in your own time, a recording of the webinar will be sent to our newsletter subscribers. You can subscribe to our newsletter here to get access to our webinar recordings, as well as future webinar announcements, Playing Lean updates and more great content!
See you there!
]]>In the ride-sharing market they were always far behind Uber and Lyft, even though they were first to build and introduce new ride-hailing features that we now see as the main features. Unfortunately, their competitors adopted those features and implemented them more effectively at a larger scale.
One of those features was drivers picking up passengers in their own cars - something that we now see as a primary service of the ride-sharing companies. They were also first to do driver destination, a feature that allows drivers to control the rides they receive by the destination point they set. Another feature was back-to-back rides, which would let drivers accept a new trip before dropping off their current passenger. Shared rides was also their idea, a feature that lets passengers going in the same direction split the cost of the ride.
Despite the many innovative features they rolled out, there are two reasons why Sidecar was pushed out. Certainly the main one was that they were outfunded. Sidecar raised only 35 million US dollars compared to Uber's or Lyft's several billion dollar funding. This allowed their rivals to offer discounts and fare cuts in order to increase market share.
The other reason was the network effect, which is described in economics and business as the effect “that an additional user of goods or services has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.” Uber realized this early on, and backed with good funding, they were relentless in getting the market share and could survive the millions of dollars in losses getting there. They also had a head start with their existing black car business, while Lyft was attracting users with their pink mustache cars.
In December 2015 Sidecar shut down, and shortly after General Motors acquired Sidecar's assets and intellectual property. This transaction included a licence to Sidecar patents, with Sidecar retaining ownership.
Sidecar's CEO Sunil Paul explains why they were forced to shut down. “We were unable to compete against Uber, a company that raised more capital than any other in history and is infamous for its anti-competitive behavior. The legacy of Sidecar is that we out-innovated Uber but still failed to win the market. We failed — for the most part — because Uber is willing to win at any cost and they have practically limitless capital to do it.”
Aside from the funding, their story is almost similar to the story of Friendstar’s fall, where Facebook was focused on the right things at the right point, while Friendstar was dealing with technical features. While Sidecar was building more features, Uber and Lyft were focusing on the features that would give the user most value - lower estimated pickup time, lower prices and more drivers.
The innovation part in the company was not missing. Maybe what was missing was leadership and a viable business model.
Not everyone in the same market can be a winner. It would be utopia. That is why we say May the fastest learner win!, because in Playing Lean there is also one who wins the market!
Sydecar is one of the company cards in our Ride Sharing scenario, which can be used to extend your Playing Lean 2 game.Besides using the office after hours, and maybe a budget for pizzas, you don’t even have to ask anyone for approval. To make it even easier, we’re providing you with the simple recipe for setting up a game night with Playing Lean.
We recommend having up to 12 players per game. That’s 4 teams with 3 players. Playing Lean is most fun when played in teams.
A pro tip is to share the gameplay video with the players as well. Even If just a few of them watch it, you’ll have some extra helpers to explain the rules.
If you want to improve your game facilitation as well, you can consider joining the Playing Lean Facilitator Training online. You will get both the theory and practice you need to set up a great Playing Lean workshop to teach your clients or students about Lean Startup and innovation.
]]>But how does one experiment?
One of the five principles of Lean Startup is the Build - Measure - Learn loop. In order to design an effective experiment you have to start backwards! Ask yourself - what is it that you want to learn? How can you measure that? What do you need to build in order to learn that?
Playing Lean Experiment Report is a template that guides you how to design an experiment and how to capture the learning from that same experiment.
Let's go through each block.
Why are you doing this experiment? What is the context? Is there a decision to be made? How does it relate to what you are trying to achieve? Are there some assumptions that need to be tested?
Those are some of the questions you should be asking when writing down the experiment background. This is not an "admin" field, and will provide much needed context for interpretation once the results are in.
Each experiment report should be self-standing, meaning that people that haven't run should be able to make sense of it. It's good practice that'll help you onboard new team members.
Background should be concise and to the point. No problem if you begin verbose, but work on cleaning and simplifying it until you have a sharp background statement. Don't be afraid to include numbers and visuals that support it. Use the limitation of the medium as a creative constraint.
Translate your assumption into a falsifiable hypothesis by restating it with numbers.
We have included the simplest format to get you started, which is:
[Specific repeatable action] will [expected measurable outcome].
Example:
Adding photographs to our listings will reduce the time it takes for the listing to be booked by 30%.
Once you feel like you are getting comfortable with phrashing hypotheses, I suggest to start using one of the following two formats:
Hypothesis format from The Real Startup Book:
The change - the metric - the impact - the timeframe.
Example:
If we add a lock icon next to the credit card information, the completion of the checkout process will increase by 15% in 3 months.
XYZ format by Alberto Savoia:
At least X% of Y will Z.
Example:
At least 15% of dog owners will add a six-pack of beer for dogs for $4 when they buy dog food.
Depending on how much you know you might not be able to formulate a falsifiable hypothesis. If that is the case, rename the field to Assumption, and specify what is that you want to learn.
How are you going to test the hypothesis? Who are you going to test it with? Don't just write experiment type (e.g. customer interview), be specific!
Think of cookbooks, and lay it down step by step. It is easy to bungle up experiments by our interference, and that's why it is important to have the steps clearly written. Some experiments are linear (you can execute them by following steps in the exact order), some are not, and that should not prevent you from writing them down.
I usually list experiment type, key questions, and experiment outline. Everything else (e.g. interview script, variant images, etc) I either include as attachment or link to.
Once you have run the experiment you want to capture that sweet, sweet, learning.
Start by putting down raw numbers. No interpretations, no fluff, just write them down.
Here are some examples:
7/11 interviewees ranked problem #2 as the top issue.
7% (432/6177) of website visitors left their email.
21% (23/111) of commuters purchased the £17 milkshake with thin straw.
Easy!
This is where you capture your interpretation!
Transform into Dora the Explorer or The Grand Inquisitor, whichever imagery you prefer, and ask the following:
Again, it is all right if you begin quite verbose, and then work through it to make it concise.
Specific, actionable next step.
Pivot? Where to, why, and how?
Persevere? More experiments? If so, which one and what for? If not, what activities, when, by whom, and by what time?
Perish, perhaps? There is no shame in deciding to stop exploring certain opportunities or leads, if it is backed by your findings.
Once you have written down your next action, take a moment to reflect upon the whole experiment.
Read it in reverse order, from next action to background. Then read it in proper order. Does the action you are proposing make sense? Is everything logically connected? Give it to a colleague, and ask them to do the same. If anything pops up then revisit Validated learning and Next action.
May the fastest learner win!
Playing Lean Experiment Report is one of the templates Playing Lean Facilitators get access to. It has been adapted with permission from Ash Maurya.
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Uber drivers must meet many requirements and undergo background checks, and in many cities driver's vehicles (which can be their own or a rent or lease) have to pass annual safety inspections. In some cities drivers are even required to have a business license. To ensure the safety of the passengers and eliminate any misuse from their drivers, Uber occasionally requires drivers to take selfies when logging into Uber with their Real-Time ID Check mechanism.
Uber's pricing model is dynamic. The price for the same route can vary based on supply and demand, so if a ride in a certain area at a certain time is in high demand, fares increase. The rider's final cost of the journey can also increase if the driver has to travel a long way to the pick up point, and even if the driver has to wait more than 2 minutes for the passenger to show up. But if you schedule your ride more than an hour before pick up time (feature available in the US), the price is locked in and cannot increase. This upfront pricing model was first rolled out by Uber's rival Lyft.
While Lyft was first to introduce this feature which eased the stress of travel for the passengers , Uber was more successful in rolling into the ebike market. Since more people live in the city and need more and quicker options to move around, Uber acquired bike-sharing startup JUMP. Uber CEO Dara Khosrowshahi said she sees Uber “moving from just being about car sharing and car hailing to really helping the consumer get from A to B in the most affordable, most dependable, most convenient way.”
A market that still has no clear winner is the self-driving cars market. By 2018 Lyft has successfully completed 5000 rides using self driving cars in Las Vegas, and is vigorously working on the safety issues that come with this. Uber, on the other hand, has had problems in their testing.
In 2016 Uber launched its first self-driving car services to select customers in Pittsburgh with a fleet of well equipped Ford Fusion cars. The vehicles also had a safety driver up front in case of bad weather or other situations where a human driver was needed. A few months later, Uber began using self-driving Volvo XC90 SUVs in its hometown of San Francisco, but California's DMV “has ordered Uber to stop testing its self-driving hardware and software on California roads until the company gets proper permission from the state.” They then moved the testing to Arizona. These test trips included two Uber engineers in the front as a safety precaution. In 2017 there was an accident in which an Uber self-driving car was flipped on the side, but thankfully no one was injured. After taking a short break from testing to investigate what went wrong, Uber returned to testing with only one safety driver.
In March 2018, a woman was hit by an Uber self-driving car while crossing the road. She died from her injuries in a hospital. The car was in autonomous mode with an operator behind the wheel. She was the first person to be killed by a self-driving car. Arizona’s Governor suspended the company’s right to operate autonomous cars on public roads in Arizona and Uber stopped testing. Although Uber faced a lot of fallout because of the accident, Arizona also took a lot of heat for being “the wild west of robot car testing with virtually no regulations in place.”
In December 2018, after they were approved, Uber started testing the cars again in Pittsburg, but only during daylight hours and at lower speed. In February 2020 they managed to get a permit to test self-driving cars in California with backup drivers.It seems that the testing and development of this service is costing Uber quite a bit, a reported $20 million a month, according to TechCrunch.
The self-driving car research is not the only field that's burning Uber’s money. Uber is developing UberElevate, a shared air transportation service. They will use small VTOL (vertical takeoff and landing) aircrafts to transport people from suburbs and cities, and ultimately within cities. Building these small aircrafts probably won’t be the hardest part of this journey.
Staying on top of the ride-sharing market is not always easy. Sometimes being the first mover is not the best option. As we learned from Lyft and BlaBlaCar, you win some, you lose some. Uber has also won some, and lost some, but at what cost?
Uber is one of the companies represented in the Ride Sharing Scenario. You can use this deck to expand your Playing Lean 2 game. Take advantage of free shipping (offer expires 1 Aug) and grab your copy!In order to overcome their lack of software development capability they were running two types of experiments. Growth experiments were all about testing the market demand, while product experiments were about testing the solution at different levels.
Once they exhausted all product experiments that didn’t require significant coding they decided to expand the team by several software developers.
The question of onboarding was raised.
How can we explain the way we work?
By playing of course!
So, let me share with you how we used pizza and Playing Lean to onboard new team members.
With simulations you can generate an imaginary context which creates real lived experiences with genuine emotions.
Here is how we set up the session:
In just four hours new team members got to experience how their new colleagues work and think, while having fun and getting to know each other better.
When I was facilitating this workshop I emphasized teamwork more than Lean Startup principles, since the goal was to onboard new team members.
Although we made Playing Lean for teaching Lean Startup, you have full control in deciding how and what for will you use it.
Don’t be afraid to experiment!
Join us this Wednesday, 22 July, for a free Playing Lean Expert Webinar with Katie Anderson. You can read more about the webinar and reserve your seat here.
]]>The game engages them, develops problem-solving and decision-making skills, and opens them up to understanding new (and sometimes difficult) concepts.
But, as players make mistakes during the game, facilitators do them too while facilitating a game session.
Simen and Bruno have both seen a fair share of beginners mistakes after training more than 150 Playing Lean Facilitators worldwide. They have also learned from their own mistakes, and shared them in one of our first Playing Lean webinars.
The biggest mistake Simen has seen, and has also done himself, is managing expectations with stakeholders what the workshop is about. You can expect the players to be energized and curious about Lean Startup and innovation, but you can't expect to have fully formed Lean Startup experts after a couple of hours of playing the game.
This is critical in the beginning, as it can be very painful for the facilitator if he/she isn't fully clear on what the workshop is about and what to expect.
The game is fun, but you've been hired to educate people, to teach them something new and create some results. You need to be in charge of driving the learning and identifying points.
It’s also important to note that each facilitator has their own style. Some are more hard driven and some are more relaxed. Both styles are fine, as long as you don't give in to the chaos and noise.
This may seem like a trivial thing, but you don't want to waste precious workshop time on setting up the table and looking for accounting sheets and cards. That time should be used for an introduction to the players to Lean Startup, some key concepts and the rules of the game. You don't want to dive straight into playing the game.
Once you have done the introduction and started playing the game, a common mistake is failing to follow the flow of the workshop. As Bruno says: “Meet them where they are.” Step in if you see a struggle with learning, but also if you see them having fun allow it but still make sure they're learning.
One way you can influence the flow of the room is team setup. You will have people of different skills and levels of knowledge of Lean Startup. At the beginning of the workshop, ask people who knows something about Lean Startup. Usually the people who are Lean Startup experts, will want to let you know they are. You can even mingle before the workshop and to get to know more about your workshop attendees.
If you, for instance, have a few Lean Startup experts, you will want to distribute them on teams, and you will also want to give them some responsibility to get them on your side during the session. You don't want them challenging you and asking you some hard hitting questions. You also want to look for board game experts, people who play strategy games, as they can help you with explaining the rules.
Bruno recalls a workshop where he had 4 teams - two teams of 3, and two teams of 2. In one of the teams with 2 people he had a Lean Startup expert and a player of strategy games. The team absolutely crushed the game. They didn't just win the market, but also cut out other teams from entering the market. The workshop was still fun, but also a good learning experience for Bruno for future setups.
Another important thing in managing teams is setting up the number of players you have on each team. Plying Lean is best played with 12 players - 4 teams of 3. 4 teams of 4 is the absolute max. If you have fewer players go with fewer teams, but you still want to have more than one player on each team. The dynamic is better and they will learn more as they will have a teammate to discuss with.
If you're in a situation where you have so many people that you need two tables, it would be best to have a person at both tables who knows the rules well, so you can go between tables and facilitate. We don't recommend this for corporate clients, but for open sessions on conferences and meetups, where you can have walk-ins, and the whole session is more about having fun.
Another mistake that falls under the flow of the game is your role as a facilitator. It is easy to become overeager. You want to teach attendees everything, but time flies fast in a workshop. You should keep your stories that are related to the lecture point 30 seconds long. Also, it's great to insert your own stories that are relevant to the audience. Playing Lean is a framework and you build your own stuff on that.
A reflection at the end of the game rounds everything up, it gives some closure. You want people to leave with more energy and with more knowledge, and you can also provide some hints where they can learn more (books, podcasts, online courses).
We hope that these points will help you in setting up a great Playing Lean workshop!
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This is just one of the things that differentiates them from other ride sharing companies, as well as the fact that their drivers don't make any profit, other than sharing the cost of the journey. Although they are often compared to Uber, based on their model they are more in competition with buses and trains, since the average distance of a BlaBlaCar trip is 263 kilometers.
Since the rides are long distance, the rating scale of drivers is based on their chattiness - "Bla" for not very chatty to "BlaBlaBla" for being over talkative. This is how the company, once called CoVoiturage, got its name. Based on those ratings, you can decide if you're in the mood for a quiet ride, or you want to have a more talkative journey companion.
The founder, Frédéric Mazzella, came to the idea when he was going home to visit his family in the French countryside for Christmas. He didn't have a car, and all the trains were full. After his sister picked him up, while driving, he noticed that most of the cars were empty with no one but the driver in them. Over the next 10 years and after many iterations, together with two other co-founders, they have built a successful company with a good business plan.
One of BlaBlaCar’s core values is “Fail, Learn, Succeed”. In the beginning they didn't receive any commission for their service, but they now charge a small fee for every booking. Looking for a viable business model was not easy, and it took them 5 years and six various business models to find something that was economically sustainable and still created value for customers.
One of the failed business models was providing a business-to-business service. They had over 200 companies using their platform to provide their employees with rides from home to work and back. Although this model was bringing in revenue, it wasn't on track with their initial idea since the distances of the rides were not more than 20km. They were also spending too much time and resources on implementing this, so they decided to phase it out.
Other failed models included a Premium model where a member could pay to have their post ranked first in search but it didn't seem fair to others, an advertising model which was quickly discarded because they didn't want personal data of their members being sold for commercial purposes, and a Phone Bridge model where members could hide their mobile number and pay for the phone-bridge connection. This was one of the most unreliable systems that had many problems.
The last failed model was the Event Agenda model in which event organizers could create an event page with pick-up/drop off points for attendees to travel together. Although this model lasted for several years, a lot of work went in keeping it alive with no return on investment.
The business model that stuck was one that was in correlation with trust being fundamental to BlaBlaCar. They had a situation where a ride was booked with three other passengers. Everyone showed up on time, except for one passenger who overslept and wasn't answering his phone. After getting in touch with him and offering to pick him up at his house, the passenger cancelled his ride. This wasn't fair to the driver or other passengers who had to wait, lost time and money (and trust).
Since the passengers didn't have to pay for the cost of the journey before the scheduled trip but with cash in the car, there were a lot of empty cancellations where drivers didn't know if the agreed ride was sure to happen basically an hour before the pick up. Because of this lack of commitment from the passengers and loss of trust of drivers, the company started working on a transactional model where members would pay before (trip expenses + fee) which would bring the number of cancellations to a minimum. This would also bring back the trust to the members of BlaBlaCar. This new model reduced the number of cancelled rides from 35% to less than 3%. The new model was fair to everyone and scalable which meant it could be applied internationally without a problem.
It seems that the team at BlaBlaCar has truly adopted the Build-Meausure-Learn loop, or as they call it “Fail, Learn, Succeed”, which successfully drives innovation in their company. They analyze their failures, learn from them and try to solve the problem in the end.
BlaBlaCar is one of the companies represented in the Ride Sharing Scenario. You can use this deck to expand your Playing Lean 2 game which comes with the Hospitality Industry Scenario.Lean Startup is all about building a viable business, so you need to measure the things that make your business viable. One of the most important questions to answer is this:
What does it cost my business to get a new customer?
To figure out the answer, you need to look beyond the individual data points and take a look at the whole system. It’s easy to figure out how much you spend on Facebook ads and how much traffic it brings you, but traffic in itself does not bring you revenue. You may know how many sales you get, but do you know how many of your customers are so satisfied that they will refer new customers to you?
To bring some clarity to the question, we have Pirate Metrics. The term was introduced by Dave McClure. There’s no evidence that pirates were especially gifted at startup metrics, but the abbreviation AARRR (which will be introduced shortly) could sound like something a pirate would say.
Let’s pretend that we’re in charge of Wimbu, one of the companies fighting for market dominance in Playing Lean 2. Where do our customers come from? From Facebook Ads, from organic Google searches or from the local travel fair?
We need to know how much we spend on each channel and how well they convert that money (or time writing blog posts for improved search ranking or effort that goes into organizing the fair presence) into traffic.
Now that we have traffic, how many of our users engage with our website in a meaningful way?
For Wimbu, this may be customers actually researching the available hosts in a specific city. It could also be signing for a freemium service, getting on the newsletter or something else that is right for your business.
If we hold acquisition and activation together, stats start to get interesting. We’ll know the cost of activation: What does it cost us in marketing money or hustling time to get one customer to have a meaningful interaction with our business?
For the three R’s, the order will vary according to your business model. For a freemium service, retention will come before revenue. You have to ensure that customers are returning and getting value from your business, or they will not give you their credit card details when the free period is up.
For Wimbu, retention is probably after revenue. We want our customers to come back again for their next after a nice stay with one of our hosts.
Retention is very important for most businesses and should be measured regularly.
Once you have activated or revenue customers you would like them to recommend your business to others. This might be pure word of mouth, which is a bit difficult to measure. You might want to consider putting in a referral program.
The referral program at Wimbu is one where both referrers and referrees get a discount for their next stay. We measure how many customers copy the links, and we measure how many new customers use the discount in the end.
So long as you keep the discounts you give lower than what you would pay for a customer through marketing, referrals are a great way to build your business.
In the end, it’s all about getting those sales. Now that we have set up the whole pirate metrics funnel, there’s no need to guess. We know exactly how much we pay to get a new customer, our customer acquisition cost.
All we need to do to have a viable business is to make sure that the contribution from delivering our product or service to our customer is higher than our customer acquisition cost (Customer Life Time Value > Customer Acquisition Cost).
It’s like any good game: Easy to learn, but may take a lifetime to master.
Pirate Metrics are a good starting point, but you will have to iterate. Change it up, drop something, be more precise or adapt it any way you see fit. As always, tools and methods provide good starting points, but will never be precisely right for your business.
Pirate Metrics is one of the experiment cards in the Social Media Scenario, which will teach you a valuable Lean Startup lesson while playing Playing Lean 2.
]]>Passion can be a great driver, but it can also fuel a powerful reality distortion field.
If there is someone who has an abundance of passion for an idea, that must be entrepreneurs and innovators. This helps them to persevere on their path, and survive this emotional journey.
But if they are not careful, and become too delusional and disconnected from reality, then they are risking wasting time, money, and their well being.
So, what can one do?
Assuming a beginner’s mind is one way to reduce the impact of this reality distortion field:
The mind of the beginner is empty, free of the habits of the expert, ready to accept, to doubt, and open to all the possibilities. It is the kind of mind which can see things as they are, which step by step and in a flash can realize the original nature of everything. - Shunryū Suzuki in Zen Mind, Beginner's Mind
Here is what you can do:
Beginner’s mind is also a great stance for dealing with the curse of knowledge, an assumption that something is obvious to everyone just because you understand it:
Things make sense once they make sense, so it can be hard to remember why they didn't. We build complex networks of understanding and forget how intricate the path to our available knowledge really is. This bias is closely related to the hindsight bias wherein you will tend to believe that an event was predictable all along once it has occurred. We have difficulty reconstructing our own prior mental states of confusion and ignorance once we have clear knowledge. - yourbias.is
Better thinking leads to better ideas.
May the fastest learner win!
Beginner’s Mind and Reality Distortion Field are experiment cards included in some scenario decks.
]]>In 2013, after a hackathon, Zimride changed its name to Lyft. Only a month later they sold Zimride and focused on growing Lyft. It became a ridesharing company for shorter trips within cities. Lyft was known for the large pink furry mustaches drivers had on the front of their cars, but they later removed it because some riders didn't want to arrive to business meetings in such cars. In the following years, Lyft introduced electric scooters to their service, as well as a bicycle-sharing system and a food delivery service.
All ride sharing companies had their share of drama, and Lyft wasn't exempt from it. They were in the public eye for a sexual assault lawsuit, in which a number of women reported that they were assaulted by Lyft drivers, and even after reporting it, Lyft did nothing to stop this and continued to allow the drivers to use the platform. Lyft was also sued for sending a large number of unwanted commercial text messages, but settled with a huge payout.
With the ridesharing market being competitive, Lyft missed out on some opportunities. Even though Lyft has become one of the leading ridesharing and bikesharing companies in the world (second best after Uber), they lost the battle in the electric bikesharing market.
They were the first to begin testing ebikes in New York, Washington DC and San Francisco. Unfortunately, due to some accidents where riders were thrown over the handlebars and batteries catching on fire, they had to pull the ebikes from the streets. While they were repairing them, Uber took over with their custom built electric bikes that were superior to Lyft's. Even though Lyft won't disclose how much money they invested in the ebikes, investors are putting pressure on Lyft to limit it because it's not exactly bringing any profit.
Maybe self-driving cars is where they will win, but the competition is fierce. One of Green's dreams for Lyft from the beginning were self-driving cars. It took around 6 years of partnering with different companies and startups, testing and developing autonomous vehicles systems, working on the safety and accessibility to make this possible. By 2018 Lyft successfully completed 5000 rides using self driving cars in Las Vegas. They haven't stopped there and have acquired an augmented reality startup Blue Vision Labs to help autonomous cars extract useful information from street-level images.
For this potentially lucrative market, they are up against Uber who has an autonomous vehicle division of their own, Google's Waymo, GM’s Cruise Automation, Baidu’s initiative, and many autonomous vehicle startups including Zoox. The one who can insure not crashing into things and people will be the winner. May the fastest learner win!
Lift is one of the company cards in our Ride Sharing scenario, which can be used to extend your Playing Lean 2 game.
]]>The risk iteration path is a proposed sequence of testing to validate your business model hypothesis as laid out in the Lean Canvas. It’s divided into product risk, customer risk and market risk. The concept was introduced by Ash Maurya.
Let’s assume that you have already filled in your Lean Canvas. You know you’re supposed to start testing, but where? The risk iteration path gives you some guidance.
The blue circles suggest a path for testing risk related to getting the product right.
The green squares represent risks relating to building a path to customers.
The orange hectagons represent the risk that you’re not able to charge enough for your product to make your business go around.
That’s it. We can show you the path, but we can not walk it for you. Get out of the building and start testing.
In our Business Modelling Facilitator training we go through the Business Model Canvas and Lean Canvas. We take you through each of the blocks of the two tools, and explain the structure and relationships of the canvasses. We also compare the tools conceptually and discuss which tool is preferable in different settings.
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At the end of each webinar, we have a Q&A in which our speakers answer questions by participants. Apart from the general Q&A for the game which relates to setup and game mechanics, here are some answers to interesting questions we thought might be useful to anyone who wants to use Playing Lean in their training program and wants to know who to sell it to and how.
In our own experience, the best approach is to find out what entrepreneurs really want. Entrepreneurs want to build successful businesses. They look for time efficient ways of learning something. They, for example, want to learn about the Lean Startup but there are so many books and articles out there that they don't know where to start. Even though Bruno compiled a list of great books to start with, playing the game can be the first step. It's easier to get someone to play a game than to read a book.
When it comes to entrepreneurs, we rarely sold a workshop directly to them. The clients were accelerators, incubators and startup hubs, because they usually want to have interesting events to attract new people, and keep the current subscribers they have to show them that it's worth staying with them.
Conferences are usually for corporates, and the tickets are pricey. Often workshop tickets are charged extra. The logic behind selling to conferences is similar to the one explained above. Conference organisers want something attractive to offer their attendees, something that's fun and can produce results. Playing the game generates an understanding of Lean Startup principles, and Bruno explained why and how in a post he wrote for Planet Lean.
It's also easy to market a fun workshop to an old school type conference where you have lectures in which people go through slides that are cramped with text. In our experience, these workshops always had a large turn out and the organiser and participants were very happy with the value they got from them.
Within a corporate setting, Playing Lean can be used to drive engagement, while also building a foundation for further development of the Lean Startup expertise.
Let's say you're running a 12 week corporate accelerator. Playing Lean would have a perfect spot in the early stages, where you need to build down the resistance to accepting new concepts. You want to create awareness, reduce resistance and get people to work with each other. Playing Lean is great for team building, to see how people engage with each other. People will be happier after playing the game, and the game can also build some critical discussion.
Depends on your workshops and who you are aiming for. The most often group of people that seek this type of knowledge, and that we have in corporate workshops, are roles related to product owners, product managers, agile teams, developers, business developers, innovation units, service designers and innovation support units. Of course, Playing Lean workshops are not limited just to them.
We hope these answers will help you to figure out how to market your Playing Lean workshops. Combine them with our guide on How to sell Playing Lean workshops, and incorporate all of the learning into your training program.
If you want to master your Playing Lean workshop facilitation, we offer an online training course - Playing Lean Facilitator training. We'll give you an introduction to Lean Startup that you can use, insight into the Facilitator Theory making sure you know all the tips and tricks we use ourselves use, the backstories for the Hospitality Experiment Cards enabling you to teach lots of Lean Startup lessons as your games progress, and personal feedback by Playing Lean game creators on your facilitation skills.