The Lean Startup - Eric Ries [102]
Although the primary changes that are required in an adaptive organization are in the mind-set of its employees, changing the culture is not sufficient. As we saw in Chapter 9, lean management requires treating work as a system and then dealing with the batch size and cycle time of the whole process. Thus, to achieve lasting change, the QuickBooks team had to invest in tools and platform changes that would enable the new, faster way of working.
For example, one of the major stress points in the attempt to release an early alpha version the previous year was that QuickBooks is a mission-critical product. Many small businesses use it as their primary repository for critical financial data. The team was extremely wary of releasing a minimum viable product that had any risk of corrupting customer data. Therefore, even if they worked in smaller teams with a smaller scope, the burden of all that risk would have made it hard to work in smaller batches.
To get the batch size down, the QuickBooks team had to invest in new technology. They built a virtualization system that allowed them to run multiple versions of QuickBooks on a customer’s computer. The second version could access all the customer’s data but could not make permanent changes to it. Thus, there was no risk of the new version corrupting the customer’s data by accident. This allowed them to isolate new releases to allow selected real customers to test them and provide feedback.
The results in year three were promising. The version of QuickBooks that shipped that year had significantly higher customer satisfaction ratings and sold more units. If you’re using QuickBooks right now, odds are you are using a version that was built in small batches. As Greg heads into his fourth year with the QuickBooks team, they are exploring even more ways to drive down batch size and cycle time. As usual, there are possibilities that go beyond technical solutions. For example, the annual sales cycle of boxed desktop software is a significant barrier to truly rapid learning, and so the team has begun experimenting with subscription-based products for the most active customers. With customers downloading updates online, Intuit can release software on a more frequent basis. Soon this program will see the QuickBooks team releasing to customers quarterly.3
As Lean Startups grow, they can use adaptive techniques to develop more complex processes without giving up their core advantage: speed through the Build-Measure-Learn feedback loop. In fact, one of the primary benefits of using techniques that are derived from lean manufacturing is that Lean Startups, when they grow up, are well positioned to develop operational excellence based on lean principles. They already know how to operate with discipline, develop processes that are tailor-made to their situation, and use lean techniques such as the Five Whys and small batches. As a successful startup makes the transition to an established company, it will be well poised to develop the kind of culture of disciplined execution that characterizes the world’s best firms, such as Toyota.
However, successfully growing into an established company is not the end of the story. A startup’s work is never done, because as was discussed in Chapter 2, even established companies must struggle to find new sources of growth through disruptive innovation. This imperative is coming earlier in companies’ lives. No longer can a successful startup expect to have years after its initial public offering to bask in market-leading success. Today successful companies face immediate pressure from new competitors, fast followers, and scrappy startups. As a result, it no longer makes sense to think of startups as going through discrete phases like the proverbial metamorphosis of a caterpillar to a butterfly. Both successful startups and established companies alike must learn to juggle multiple