"90% of the startups fail" a recent Fortune review tells us. The biggest reason for this, based on the same study, is that startups create products or services that nobody wants.
It often starts that the team has this great product idea, spends rather long time to make the features and all, and then tries to put it out "to be found" by the customers. But the channel to sell and promote seems to be the problem. Some interest arises but not substantially enough to raise the user base for the product or the service. One tries to improve the situation by changing the product by adding more helpful features into it, but no real big change seems to take place. "If customers just would be sensible and see how good this product is".
Our Agile operation might not differ so much, in fact. We have learnt from the agile books and seminars that the way to do it, is to have a backlog driven tight agile/scrum based product creation where the order of the items are the order of importance that we believe customers want their functionality. And of course if you are making a product to a specific customer order, you can validate this with them by asking.
But in many cases customers are nowhere to be seen, and if one searches truly new things, the customers do not know what they want. Horseback riders did not know they needed the T-Ford before it was there. So therefore the development teams need to follow their intuition on what is important and which kind of a product to create. See the analogy with the failing startups?
Lean startup methodology was developed originally for the startups few years back, but recently it has been applied into many other cases as well. Companies like GE use it to improve their innovation and radical product concept capability (you can google FastWorks).
But it can and in the opinion of the writer, should be used in agile. The logic goes so that companies should more and more find innovative new things. New things that create value are such that customers are willing to pay a premium, and no competition exists. So why would you want to market follower and do me-too-products with low margins?
We will examine in the following blog posts how you can easily improve process capability and create innovative new products just by enhancing it with lean startup methods.
Some keywords will be: MVP, Vanity metrics and Pivot.