Thanks to Lean Startup Co. Education Program Senior Faculty member Jonathan Bertfield for contributing this piece. His specialty is supporting digital transformations inside large enterprises. If your company would benefit from his expertise in bringing the Lean Startup practice to large complex organizations, drop us a line.
As companies of all sizes adopt organizational changes and frameworks such as Lean Startup, one of the core imperatives is to avoid getting too bogged down in the academic language set associated with any of the strategies or tools. Language is a critical component of the cultural fabric that underpins any new approach, and getting it right is a combination of understanding the purpose of the tools, a little creativity and a decent dose of “just-get-it-done.”
One of the strategies at the heart of the Lean Startup methodology is the MVP, the minimum viable product. It is a powerful strategy designed to encourage teams to focus on learning before execution at scale. Specifically, it drives teams to use whichever artifact works in their circumstances, in order to generate the maximum amount of learning using the minimum amount of effort. Unfortunately, this term has been misinterpreted and abused since it was first introduced by Frank Robinson, and later given broader distribution by Eric Ries in The Lean Startup. Some teams consistently declare MVP’s “unworkable” in their organization because they deliver services not products. Others struggle getting the “level of minimum” exactly right the first time. (Hint: It’s not about products, and it’s OK to not get the scope right as long as you move fast and cheap.)
In response, plenty have attempted to refine the acronym to become more user-friendly, i.e. consumable. Back in 2013 Steve Cohn coined “MVE” to get away from the literal and limited, thinking associated with “a product.” More recently, Rick Hingham declared the MVP dead, and introduced the RAT as a replacement; focusing instead on the assumptions that inspire the learning (hat tip to Adam Berk for finding that one). I applaud any of these concepts, because the goal is to help organizations better absorb this fundamental idea: Resist industrial scale development before you know the answers to key questions about desirability, feasibility and viability.
As a Senior Faculty member with Lean Startup Co. I was recently on a consulting project with the team at LegalZoom, I came across the latest addition to the conversation, the “SAVE,” or Scrappy Assumption Validation Experiment. I don’t want to get too mushy here, but I really did have a love at first sight reaction on hearing about SAVEs.
Let’s break down the acronym, and I’ll try to explain my enthusiasm:
- Scrappy – This is a flexible interpretation of the words minimal and viable. As a company with a strong sense of its entrepreneurial roots, LegalZoom has a clear understanding of what scrappy means. The company is 15-years-old, PE funded and still run by leaders from the startup years. “Scrappy” is what it takes to move fast and get results – the opposite of industrial strength. Recognize that what “scrappy” delivers may bear little, if any, resemblance to what might emerge as a polished version down the line. (see Paul Graham – Do things that don’t scale).
- Assumption – The classic interpretation of this term remains in play here; what are the guesses we might have made in our vision that we have prioritized as being worthy of testing. (See David Bland’s great assumption identification and mapping explanation)
- Validation – The teams are looking for market learning, from whomever is getting value from the vision, that delivers a clear signal as to whether the original belief statement, wrapped up in the assumption, holds true.
- Experiment – A trickier one for sure, but at LegalZoom this simply means whatever the team can do to quickly put the assumption into play in order to solicit market feedback through observable interaction.
Since LegalZoom began introducing the Lean Startup framework early in 2017, the cultural shift at the company has been significant—with a key question early on in the lifecycle of any new idea being, “What’s the first SAVE we should run?” Even more impactful, the company’s leadership have integrated the discipline of running SAVEs into the management compensation structure, with a portion of bonuses dependent on the company reaching its target for SAVEs run through the end of the year. Nothing says, “We are serious, as a company, about making a change” like putting some skin in the game to drive the change home.
I spoke with Frank Monestere, President of LegalZoom, to get more detail on how SAVEs emerged. As the organization began to adopt the Lean Startup approach, it became clear to the leadership team that there was an opportunity to introduce the strategies and tools across the whole company—not just inside the product team. One thing Frank made clear was that generating new ideas had never been a problem at the company. The challenge was that new ideas quickly snowballed into expensive, and slow to deliver pilot programs. John Suh, Co-Founder and CEO of the company, coined the term “SAVE” to reflect the plain-spoken culture that the leadership team have always nurtured, and to encouraged everyone in the company, regardless of their function or level of seniority, to adopt the discipline.
One of the recent examples Frank shared was a customer care team experimenting with different ways to service customers using SMS. The legacy approach, which always encouraged teams to run with their ideas, would have quickly driven the team to build a robust system to run a pilot program with the solution. Using the SAVE approach the team instead chose to avoid building anything at all. Applying the absolute epitome of scrappy, they had three of the customer service operators send customers SMS messages on their personal cell phones. The team was able to quickly and cheaply generate market validation on their core assumptions that customers would value brief, and to the point communication, and would not miss the personal interaction with a human operator.
For Frank and the LegalZoom leadership team, the goal for the first phase was deep, cultural immersion with the Lean Startup toolkit. Enforcement of the academic terminology was not anywhere on the list of requirements. What’s more, the leadership team only focused on the raw number of SAVEs the teams were running. In a later stage of maturity, what would be seen as a vanity metric, is absolutely actionable here as an indicator of broad adoption. The specifics of what they experiment on, or how many experiments result in revenue-generating outcomes, is far less important at this stage in their enterprise-wide transformation than the fact that everyone is involved, and the organization—as a whole—is learning what works and what doesn’t.
My takeaway, and the driving force behind my enthusiasm for what the team at LegalZoom came up with: Call the tools you adopt whatever makes sense for your organization. In the case of experiments, don’t stress about the acronym. Instead focus on generating learnings from your target users as fast, and as cheaply as possible, before you decide whether to invest in industrial strength scaling.
If you are seeking to bring the entrepreneurial spirit to your large, complex organization, Lean Startup Company can help. We offer live and virtual training, coaching and consulting to empower people and companies to solve their own problems using entrepreneurial management, no matter their industry, size company, or sector of the economy. Email us today to schedule a Discovery Call, and find out how we can help you reach your goals.