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4 Tips for Launching

Minimum Viable Products
Inside Big Companies
You have to act like a real startup. by Debbie Madden

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4 Tips for Launching

Post Minimum Viable

Products Inside Big
Companies
You have to act like a real startup. by Debbie Madden
Published on HBR.org / September 30, 2015 / Reprint H02DZN

“We have to disrupt ourselves before the market does.” It’s not an
uncommon mandate today. Established enterprises need to innovate to
keep pace with the more nimble, smaller startups. Perhaps no approach
has captured the imagination of big companies yearning to get more
nimble than the lean startup method: quickly building and launching
minimum viable products — MVPs — and then iterating and pivoting
based on market feedback.

Take the example of Beth, Director of e-Commerce & Digital Innovation

at a company I’ll refer to as Acme, a 20-year-old, global enterprise. Beth
manages a team that’s considered a “startup within the enterprise.”
Acme expects Beth’s team to create $50 million in incremental revenue
over the next 3 years by following lean startup principles.

But Acme isn’t a startup. It’s a large, established global firm. Like
most big companies, it relies on efficiencies of scale for competitive
advantage. Innovation by definition is inefficient.

However, there are in fact a few tricks of the trade that, if done well, can
make an impact for large companies trying to act more like startups.

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1. Make true failure a real option. A colleague said to me the other day:

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“I figured out what bothers me so much about my job. I’m working on
a startup team that has no real threat of failure. It should have failed
months ago but hasn’t.”

This often happens inside enterprise companies. At Acme, Beth should

have a threat of real failure — a salary cut, getting fired, stopping the
project, having to fire or reallocate her team. On the flip side, if she
wins, she should have skin in the game. If she’s tasked with building $50
million in new revenue, she should be rewarded for success — a raise,
equity in the startup part of the business, a promotion.

The point is, the team building the MVP inside an enterprise should
truly act like a startup. They should have funding to pay for salaries for
the team as well as for any and all expenses, and that funding should
come with expectations around performance. If those goals are not met,
the funding should run out. If funding runs out, the team no longer has
those jobs. I know it’s harsh, but without these consequences, too many
skunkworks teams go on and on, and on and on, and on and on…..

2. Get the right people on the bus. Jim Collins, in the classic
bestseller Good to Great, famously wrote: “The executives who ignited
the transformations from good to great did not first figure out where to
drive the bus and then get someone to take it there. No, they flrst got
the right people on the bus (and the wrong people off the bus) and then
figured out where to drive it.”

Enterprise companies can fool themselves into thinking, “Mary in

product will be a great fit for digital product.” Wrong. Mary has spent
the last 20 years outfitting brick and mortar stores with physical
product. She is not an automatic fit for the digital innovation side of
the business.

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Real startups are forced to seek new team members from outside their

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organization. In a “lean” team inside a large company, it’s wise to go
through a true hiring strategy exercise. Take the time to get the right
people on the bus. Even if it takes longer. Even if it means having to hire
people from outside the firm.

3.Get out of the building. Again, take a lesson from actual startups.
Startups find it easy to get out of the building, often because they don’t
have an office building to begin with. Even as they grow and get their
first office space, they aren’t bogged down with executive team meetings
and processes, so they have more freedom to get out of the building.

Take the time to identify what hypothesis your MVP is aiming to

confirm or disconfirm, and get yourself out of the building, talking to
actual users and potential users, and work like mad to confirm or deny
this hypothesis.

Note: Technology is not required to do this step. Sure, we could

design prototypes, wireframes, scope documents, write code. But none
of this is required to get out of the building. All that’s required is
understanding who your target market is, figuring out where they hang
out, and going there.

4. Create a realistic, disciplined MVP. It didn’t take long for the

concept of an MVP to mean different things to different people. Stick
to the basics. It’s just meant to be a very simple product that will let you
test out the concept. What are the core features you really need? What’s
the minimum you can do to deploy the project?

Building MVPs is fun. When done well, it can be the catalyst that
enables enterprise to innovate and keep pace with the smaller more
nimble competitors. What doesn’t work is acceding to political requests

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from different departments who’re all trying to staple their pet project

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onto your MVP.

Using lean startup principles inside large companies is not impossible –

as long as your innovation team acts as like a real startup.

This article was originally published online on September 30, 2015.

Debbie Madden has built 5 companies from the ground up and

has been CEO of three of them. She is currently the CEO of Stride,
an Agile software development consultancy in NYC. Prior to Stride,
Debbie was the CEO of Cyrus Innovation, which she ran for 10 years,
grew into a 5-time Inc 5000 winner, and Crain’s NY Best Place to
Work.

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This document is authorized for educator review use only by Ken Libranza, University of Santo Tomas until Jun 2023. Copying or posting is an infringement of
copyright.
Permissions@hbsp.harvard.edu or 617.783.7860