Lean Startup in a Large Company

I’ve started reading Ash Maurya’s book, Running Lean, and have begun educating myself on Lean Startup practices, a term trademarked by Eric Ries. It’s is a fascinating approach to launching a startup, and has a passionate cult following that’s trying to break through into mainstream practice. Being a product guy, I view startups as new product development – both require business modeling, validation with customers, investment, product build and market launch. (I’m not saying a startup is the same as NPD in an established company – I’m just saying they share similar traits.)

I like Ash’s Lean Canvas that he discusses in his book. For capturing an initial vision of a business model concept, it’s fast, concise and portable, with key building blocks identified all on one page vs. creating a 20-page or 15-slide business plan that takes too long to build and no one will ever read anyway. Multiple models or canvases can easily be sketched out in a single afternoon. It allows for fluidity, as sections can be left blank and then filled in or refined based on learnings. It also forces thinking in the present with a “get it done” attitude. Most importantly, it uses a customer-centric or “tuned in” approach. (Tuned In is another book I admire.)

Ash candidly admits the methodology he proposes in his book is for web application startups. But at the end, he throws down a challenge: “What about ‘Running Lean for X’?”

So I began to think:

  • Can Lean Startup practices be applied at an established company? At a large enterprise?
  • What about Running Lean for a B2B2C product?
  • And what if that B2B2C product wasn’t software, but a service?
  • Can Lean Startup practices be applied to Product Management?

This last question intrigued me the most, because I have always felt that Product Management could be more entrepreneurial in its approach, yet like almost all Product Managers, I’ve had Pragmatic, ZigZag, Crossing the Chasm, and other frameworks drilled into me as the gold standards for identifying, developing, positioning and launching market-driven products. If Lean Startup principles can be applied to Product Management at enterprise firms, does it challenge these tried and tested methodologies, evolve them, or – dare I say – render them obsolete?

Ash encourages his readers to field-test concepts and models first-hand. I like that approach. And because I do currently work at a large B2B2C company that sells services rather than software or tangible products, I’m doing just that. I started applying Running Lean and Lean Startup concepts on some new ideas I’m kicking around. The focus, as Ash encourages in his book, is “Validated Learning”. As I tried to capture my vision onto a Lean Canvas, I immediately ran into challenges:

Who is the real target customer? In B2B2C, consumers may be the end-users of the product, but what if an intermediary is actually the one paying for it? So do I have two target customer segments?

The first question cascades into a series follow-up questions.

Whose problems are we really solving? If I do have two target customer segments, do I have two sets of problems to address? Two sets of solutions? Different unique value propositions for each one?

How to succinctly capture the Solution? In B2B2C, doesn’t the product ultimately have to have features appealing to both the C and the B?

Revenue streams: The nice thing about B2B2C is you can get pretty creative with revenue models. In the services industry, you can get even more creative. And that’s where again I found the Lean Canvas constraining at first. How can you concisely capture a potentially complex revenue model?

And how do I capture all of this on a 1-page Lean Canvas?

In the end, I decided to focus on the C, approach it strictly from the customer standpoint, and treat the B as a channel, largely because it made the exercise easier and thinking from the customer’s perspective comes more intuitive to me. I’m not saying this is the right approach. I’m saying it’s what allowed me to get through the exercise (so far).

I’d love to hear from you. What do you think?