Get Started Now: How to Employ Lean Practices in a Regulated Industry
Anne Boden, founder and CEO of Starling Bank, bought her second copy of The Lean Startup in an airport on her way to holiday in South Africa in 2013: “I was working for AIB [Allied Irish Banks], and I had decided to quit my job to start a bank. I went to South Africa for a two week holiday, and I read it on the plane. … I didn’t think a bank could use any of the methodology, but I’ve picked bits and pieces out of it ever since.”
With over 30 years of experience in the banking industry, Anne understands the tensions between Lean Startup practices and regulation, but she has learned that the two can be compatible. Before joining AIB and starting Starling, she worked in fintech for a year and “came across small companies building technology for two to three hundred thousand pounds that took the big banks 20 to 30 million pounds to build.” “I was amazed how things could be delivered quickly and easily,” Anne recounts. She applied insights from fintech successfully as the COO of AIB, but, as she likes to say, “I decided the world needed a new bank.”
Given her years of experience working in large banks and her newest venture as the founder of a banking startup, Anne has repeatedly tackled regulations — and she’s prevailed. With each triumph, she’s gained the know-how necessary for reinventing a regulated industry through Lean Startup experimentation.
Tackle those regulations early and head on
“I speak to so many people who say, ‘I’d love to start a bank, but I’m trying to raise money, and I’m trying to get some people to help me.’ I say you can start today. Print off the [regulatory] forms from the website, and start filling them in. It’s putting the first pen to paper. It is cutting the first line of code. It is having your first investor meeting,” Anne says. Don’t become overwhelmed by the magnitude of the regulations. Just tackle them head on, and make progress where you can.
Find the team members who are comfortable with experimentation
When you decide to disrupt a rule-laden industry, you want to work with people who believe that the seemingly impossible is possible. “The important thing is that everybody at Starling is passionate about doing the right thing for customers and also is tolerant of experimentation and trying new things and failing and putting them right,” Anne says. “Around here, we believe we need to start — we need to experiment, we need to sit down, and try to make it work.” An attitude of experimentation that embraces failure, instead of a culture of presentations and hesitations, keeps the wheels of an organization ready to pivot when confronted with a roadblock.
Just keep building (and learning)
Because they require “everything to be finalized,” according to Anne, regulations may force you to come to market with a clearly defined, but limited, product. Once to market, though, Anne knows you can adapt and change quickly.
Starling became an authorized UK Bank in July of 2016, and since then Anne and her team have employed two week sprints to keep their product evolving. At the beginning of the sprint, the team plans out what they want to build. A few days later they start building designs, and by the end of the first week, there is a basic demo available. By the end of the second week, the new features are ready to implement in production. The team is also constantly collecting feedback from customers through multiple channels, including calls, a dedicated customer service Slack channel, and social media, to inform what they build next.
Sometimes you get lucky
Anne says the thing that really enabled the creation of Starling was a change in UK banking regulations that allowed banking upstarts to develop the business in stages. This isn’t to say that the only hope in an industry like banking is for a legislative upheaval. Being proactive always helps. As Anne advises, “Starting a bank is not for the faint hearted. There is no putting it off until tomorrow. It is lots and lots of work, so you better get started, and get started now.”