Lean Startup Conference 2014 Review

I was fortunate to attend this year’s Lean Startup Conference 2014. In this review, I want to discuss my expectations, my experience, and some general thoughts around what I learned, what I had hoped to learn, and what the broader Lean community can learn from the Lean Startup Movement.

My Background

I have a weird background. I didn’t know what to do with an undergraduate degree in Philosophy and Mathematics, so I went to the first graduate program that would accept me. So, off to the University of Chicago I went, where I earned a Master’s Degree in Computer Science, with an emphasis in Operations Research. I chose Operations Research because it was more business-y and the problems Operations Research focused tended to be in the areas I was interested in. Plus, back then I wasn’t a very good programmer, though I was able to keep up with the best of them. Not anymore though.

Then came Toyota.

As part of my graduate studies I spent time deeply entrenched in the Toyota Supply Chain – especially in their supply parts distribution network. It was then that I realized that all that stuff I was learning in graduate school was pretty much a waste of time.

Immediately after graduate school, I joined a medical device startup. Love it. It was acquired and then I joined Amazon.com, where I would rotate between product and fulfillment and distribution. As part of my stint there, I was also in their Six Sigma Black Belt program. Only 15 were nominated to go through the 8 week training per year, so I felt fortunate to have done so. I completed a few DMAIC projects, etc.

So, since then, I’ve gone on to become even more steeply entrenched in Lean and have gone on to practice and apply it a several companies in various industries, including eBay, Backcountry.com, Kaiser Permanente, and others.

So, Operations Research background; Learned Lean at Toyota; Six Sigma Black Belt at Amazon. Some startup experience. And spent a lot of time in digital, service, and eCommerce businesses.

Here’s a weird thing: I’ve actually spent almost no time in heavy manufacturing.

That’s why my background is weird.

My Expectations

I had read Eric Ries’ book a few years ago. I like it a lot. I also did a podcast with Eric Ries recently, as well as several interviews with various Lean Startup practitioners. So, I felt like I had a good understanding of its principles, how it was influenced by Toyota, and how it’s also different from Lean as most people understand it.

I expected stories of Lean Startup practitioners and their experience in the trenches; and what they learned and how the rest of us can learn from their stories. I also expected that the other attendees have a good solid grounding in Lean principles as influenced by Toyota.

And because I had previously attended other conferences in both Lean Manufacturing and in Six Sigma, I have a particular vantage point from which I can compare and contrast.

My Conference Experience

Below are my notes, opinions, recollections regarding the conference content.

Where to Stay

The conference was held at the historic Fairmont Hotel in San Francisco. Hotels in the area were really expensive. And even though the Lean Startup conference had a deal with the Fairmont Hotel, it was still not cheap. I thought we could do better. So, my colleague and I got an Airbnb about 3 blocks from the Fairmont. It was a screaming deal and we ended up paying about $1000 less for the week than if we had gotten a hotel.

Getting There

My work colleague and I flew from Salt Lake City, where I’m based. Then we took a Bart train and got off the closest stop to our Airbnb, which was Market Street. From there and pretty much the rest of the week, we just took Uber or Lyft to get places. I know that Uber has gotten a lot of bad press lately, but really Uber and Lyft are amazin services.

PS: I’m the Asian guy to the right. That’s my buddy Jeff.

Day 1

On this day, we all had the option to attend one of 3 all day workshops:

• Lean Startup 101
• Innovation Accounting
• Metrics – the data that will make or break your business

I decided to attend Lean Startup 101. I wanted to make sure I had a good grounding in it before the rest of the week. I quickly realized that when they say “101”, they really mean it. So at about lunch, I left the workshop, feeling it was too rudimentary for me, but I think it was perfect for those looking at an introduction to the Lean Startup.

Ignite Presentations

Later that evening, there were 12 Ignite Presentations. This was cool. The Ignite format is interesting:

• Each presenter only gets 20 slides
• Each slide will automatically change every 15 seconds
• The maximum each presenter gets is 5 minutes

The breadth of the topics was fascinating. It was here where I got a good sense of where Lean Startup principles are being applied and how they are doing it. The breadth ranged from city planning to church management; from branding to a comedy business. Really interesting and entertaining.

Day 2

In the morning, there was the opening keynote, by Eric Ries. This was followed by 5 talks and an on stage interview with Ben Horowitz, partner at Andreesen Horowitz, a leading venture capital firm.

The morning talks were interesting, but I didn’t hear much that actually related to Lean Startup. I suppose there were bits of experimentation, hypothesis testing, validated learning here and there, but I heard pieces. Not really a system. Nevertheless, I enjoyed the talks and was happy to see entrepreneurs so excited to have found a methodology to help them reduce their chance for failure (and increase their chance for success). I’m all for anything that helps entrepreneurs.

Minimum Viable Diesel Engine

Later that afternoon, I attended a session with Cory Nelson, a Senior Executive with General Electric, in charge of Product Management. Little do most people know, but the Lean Startup principles is officially the new operating system at GE, which means that in their product development, they follow the methodology. Cory Nelson shared his experience in applying Lean Startup principles to the development of a new Diesel Engine. I thought this was fascinating.

Mikkel Svane CEO of Zendesk

Shortly after, Mikkel Svane, the founder and CEO of Zendesk got on stage to share his thoughts on entrepreneurship and to promote his new book, Startupland. His talk was very interesting and entertaining. I think Zendesk is a great company. Love their focus on the customer and in humanizing the customer service experience for end customers and also for the corporate client.

Later that day there were other talks on various topics such as “How to Conduct an Experiment”, “What is a Minimum Viable Product”, “Get Comfortable Shipping Imperfect Products”, “How to Integrate Customer Feedback Into Your Products”.

Todd Park Technology Advisor to the Whitehouse

That night, Todd Park went on stage. This was really cool. Todd Park is the Technology Advisor to the White House. He brought with him 3 of his team members. They shared how Lean Startup is being applied inside the US Government and, in particular, they shared some really great stories about how they fixed Healthcare.gov. Here’s a notable quote I remember from their talk:

We had a gift in healthcare.gov – it gave us a minimum viable product to work with

 

After Todd Park’s talk, we were able to meet with him and mingle a bit. I thought that was a really cool experience. Oh, one more thing:

 

Day 3

On this day, there was, in San Francisco, a huge storm. Anywhere else, it wouldn’t have been a big deal.

Power Outage

But in the Bay Area where California hasn’t seen rain in 2 years, getting 8-10 inches of rain was a big deal. How big? All the power went out. But a really cool thing happened: Several Attendees took over and started to form their own breakout sessions in the dark. This was a testament to the types of people that the Lean Startup conference attracts – builders, creators, and entrepreneurs. Eventually, the power turned on and the conference continued according to plan – but just pushed out a few hours.

Intuit Design for Delight

For lunch, I was invited to a special Lunch sponsored by Intuit Labs. There were about 30 people attending. During lunch, Intuit shared with us their Design for Delight approach to product development.

Bob Sutton Closing Keynote

In the final session, Bob Sutton, the popular Stanford Professor and author of many books was interviewed by Eric Ries. He shared a lot of great nuggets including how to treat people, how not to treat people, and a lot on Design Thinking.

What The Lean Startup Can Learn from Lean Manufacturing

Of all the good things I experience, I also did observe a few things that I found lacking.

An Orphaned Mother

In several sessions I was in, there were discussions that were completely detached from the influence of Toyota. This is akin to her children growing up, but fail to hearken back to her, as if they had given birth to themselves.

Here are a few examples:

Get Out of the Building

I was in a session where there was a significant debate on the purpose of “Getting Out of the Building”. Within a Lean Startup context, to go out of the building has to do with Customer Discovery, which has everything to do with building a product that someone will actually buy. And, as many of us know, one of the most evil of waste is building something that nobody wants. Or a corollary to Lean Manufacturing is improving a process that shouldn’t exist in the first place.

Here’s the thing: in the conversation during the workshop, there was nothing said of “waste”, “genchi genbutsu”, or anything remotely close. The crazy thing is that Eric mentions all these things in his book, yet none of it came out in class. Would it have helped to have hearkened to the original Toyota principles during the conversation?

Yes. Why?

There are numerous case studies on Genchi Genbutsu and how seriously Toyota takes it – including riding across the country in minivans with soccer moms to truly experience what they experience. Stories like that are invaluable and would’ve added much to the conversation.

What is Visual Management?

I was speaking with a Vice President of Innovation at a well known company. Internally, they had implemented Lean Startup in their product development. As we discussed, he mentioned that they had begun the process of gathering ideas in a virtual suggestion box. I recommended to him that when things are hidden virtually, the normal human behavior is to forget about them and ignore them. What’s needed is simple visual management. Then he said “Visual Management. Cool term. I’ve never heard of that before”

I’ve never heard of visual management before.

I then went on to explain the principle and he got it and could immediately see how he could apply it in his work. But what surprised me was that he had never heard of the term. In Lean Manufacturing circles, that term is common and is accepted as a key underlying element that supports many principles in the Toyota house. This surprised me that he had never heard of the phrase.

What are the Key Lessons?

Understanding the heavy influence of Toyota in the practice and language of the Lean Startup will help Lean Startup practitioners become even more effective. Here are some questions for Lean Startup practitioners to consider:

• What influenced the creation of Build-Measure-Learn? How is it different from Plan-Do-Study-Act? What problems does Build-Measure-Learn address that Plan-Do-Study-Act does not?
• What can Genchi Genbutsu teach us about knowing our customers in a deep, empathetic way?
• If building a product nobody wants is the ultimate waste in Lean Startup, what are some proximate waste in entrepreneurship? Can the notion of Muri, Mura, and Muda inform our thinking?

In sum, I think the Lean Startup Movement can learn a lot from its older brother in Lean Manufacturing.

What Lean Manufacturing Can Learn from The Lean Startup

But things aren’t asymmetric. You see, I saw A LOT that the Lean Manufacturing folks can learn from Lean Startup. Here are just a few:

The Prodigal Big Brother

In my opinion, Lean Manufacturing, as a community, has strayed from its original roots. The irony is that while Lean Startup fails to hearken enough to Toyota, it has still retained the spirit of what Toyota practices. Here are several things I think the Lean Manufacturing community can learn from our Lean Startup brethren:

Focus Less on Tools and More on Experimentation

The Lean Manufacturing community, at large, is very focused on tools – Kanban, Heijunka, etc., etc. But not enough on experimentation. The Lean Startup Movement is very focused on experimentation as a way to validate learning and reduce risk. Instead of focusing on tools, I believe the Lean Manufacturing community would greatly benefit from stepping back, thinking about the problem, and approaching it using real Kaizen, which involves a lot of trial and error – NOT tools.

Lack of Energy and Excitement

From my experience, the Lean Manufacturing community doesn’t appear or – I don’t feel – it has energy or excitement. That was the exact opposite I experience at the Lean Startup conference. I visibly saw excitement; I felt people get energized; I observed very curious attendees soaking up learning. It was gratifying to see for sure. I thought to myself, what is the difference?

I believe the answer is simple: Lean Startup practitioners are entrepreneurs. They are in the business of building and creating businesses or products that solve a real human need.

What about the Lean Manufacturing folks?

It’s not so clear. In my mind, Lean Manufacturing is often used to improve current processes, not necessarily in creating new ones. In either case, it’s not as exciting as creating a new product or a new company.

Conclusion and Discussion

I absolutely love what Eric Ries has done and what he’s accomplished. This young kid is teaching a lot of us older folks some new things. For that I’m grateful.

At the same time, we have some things we can teach as well. It’s my hope that the Lean Startup Movement and the Lean Manufacturing Communities are accepting of each other and understand our shared roots and help each other grow in our respective fields.