Download The Minimum Winning Game

The Minimum Winning Game
What Start-Ups Can Teach Corporations
Date:
Presentation:
16. Jänner 2017
Controller Institut
Dr. Christian Kreuzer (Controller Institut)
www.controller-institut.at
Corporate Venture Capital
Corporate Venture Capital
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Corporate Venture Capital (CVC) beschreibt die
Beteiligung von etablierten Unternehmen in
Start-Ups.
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Corporate Venture Capital bietet Vorteile für
etablierte Organisationen abseits der
klassischen Strukturen und Prozesse
innovativ zu sein und rasch auf
Umfeldentwicklungen bzw. Opportunitäten zu
reagieren
▲
Die Ziele von CVC sind nicht immer rein
finanzielle, sondern die Sicherung von KnowHow und die Entwicklung neuer
Geschäftsmodelle.
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Folglich kann auch die Bandbreite der
Beteiligungsformen sehr groß sein und von
einem losen Inkubator Hubs bis zu einer
engen Integration in das Unternehmen
reichen.
CVC Cycle
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Der Ablauf von CVC Aktivitäten ist
besonders kritisch, da idR hoher Wettbewerb
um die besten Start-Ups besteht und die
Unsicherheit hoch ist.
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Der Corporate Venture Capital Cycle umfasst
folgende Phasen:
─ Screening – Sourcing – Decision –
Controlling - Exit
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Die Realität zeigt zumindest drei
Problembereiche bei der Ausgestaltung von
CVC:
─ Ausgestaltung der juristischen und
finanziellen Governance-Regeln
─ Klärung der Entscheidungsläufe und
Befugnisse, für die es im Konzern keine
erprobten Standards gibt.
─ Sicherung der Konsequenz in der
Umsetzung und Bewertung
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What Start-Ups Can Teach Corporations
The Lean Start-Up
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Key Words
Start-Ups are characterized by two critical
conditions: fast growth and high insecurity.
Fast growth is vital to secure financing. High
insecurity makes decision-making and execution
very demanding.
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The Minimum Winning Game
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The Minimum Viable Product
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OKR, PPP and SCRUM
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Validated Learning
The Lean Start-Up methodology resolves this
conflict through describing relevant
intermediate-goals, which at the same time
serve as a platform for development.
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Build – Measure – Learn
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Innovation Accounting
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Pivoting or Persevere
Large Companies do not share the high
pressure for growth as start-ups do, but they
experience just as much insecurity. Execution is
even more relevant due to the more complex
organization.
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Fake it till you make it
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A/B Testing, Split & Start
Start-Ups offer numerous learnings for large
companies which will be the basis for future
management styles.
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Speed of innovation
What is a Start-Up?
“A startup is a human institution designed to deliver a new product or
service under conditions of extreme uncertainty.”
Eric Ries
The primary question is:
Can we build a sustainable business model around this set of products and
services?
The real job of an entrepreneur is to systematically de-risk that business model
over time.
It is not "Can this product be built?"
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The classical approach does not work
Month
Calendar Week
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Workpackages
Planning Model
Draft Market Potential
Draft Target Finding Model
Controlling - Customer Sounding on Prototype(s)
TAG Mgt Sounding on Prototype(s)
Work in Feedback from Sounding
Integration of "Actuals" (FC-values) from EPM
Views for Presentation
Testing
Bug Fixing
User Training
Planning Process
Define Target Finding Process
Define Content Input (besides Model)
Define Timeline
Customer Sounding of Process
Test-Workshop (CFO & TAG-Mgt)
Adjustments based on Test Run
Communication
HoC Communication
Planning Teams Communication
Rollout (= Target Finding Process)
tbd
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Methods
The Build – Measure - Learn Feedback Loop
Feedback Loop
Ideas
Learn
Build
Data
Sell
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IDEAS: Identify the problem that needs to be
solved
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BUILD: Build Minimum Viable Product
3.
SELL: Bring it out to the customer
4.
MEASURE: Measure your success by
Innovation Accounting
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DATA: Collect data vigorously
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LEARN: Establish Validated Learning
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Pivot or persevere
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Start again with a new problem to complete the
Build – Measure - Learn Loop
Measure
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Methods
Build: Minimum Viable Product
"The minimum viable product is that version of a new product which
allows a team to collect the maximum amount of validated learning
about customers with the least effort."
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Build the product step by step – small batches
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Each MVP is an experiment that you (have to) learn from.
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You have to commit to iterations
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Examples of Minimum Viable Products
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Dropbox - teaser video
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AirB&B – one single room
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Zappos – pictures of shoes
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Tesla - Model 1
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Lomography – Kickstarter Lenses
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Flats in Korneuburg – A/B Testing by website
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Tim Ferris – book title
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Snapshot – Minimum Dashboard
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Methods
Sell: Find real customers
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The product is delivered on time
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The product is delivered on budget
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Implemented in a high qualitative manner
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The product has a beautiful design
"Fake it till you make it"
We did a great job right?
What if nobody actually wants the product?
Only the customer can tell you,
if your product is good.
Achieving Failure = successfully executing a bad plan
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Speed of innovation
Measure: Innovation Accounting
Seeking profit too early is a pre-optimization trap.
Innovation Accounting defines a set of metrics that can be used to model the
customer lifecycle. They provide leading indicators to revenue before revenue is
actually realized.
DATA is key:
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Clear
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Real
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Fast metrics
techcrunch.com
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Speed of innovation
Learn: Validated Learning
Progress in manufacturing is measured by the production of high quality goods.
Progress in corporations come from financial results.
The unit of progress for Lean Startups is validated learning –
a rigorous method for demonstrating progress when one is embedded in the
soil of extreme uncertainty.
Progress comes from figuring out, what is the right thing to build - the thing
customers want and will pay for.
techcrunch.com
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Speed of innovation
Questions for Validated Learning
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Vanity metrics allow entrepreneurs to form false conclusions and live in their own reality.
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When you have an unclear hypothesis, it's almost impossible to experience failure.
Without failure there is no impetus to embark on the radical change a pivot requires.
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Many entrepreneurs are rightly afraid that their vision might be deemed wrong without
having been given a real chance to prove itself.
techcrunch.com
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Speed of innovation
Pivot or Persevere
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Pivot: Change directions but stay grounded in what you have learned
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Persevere: Continue with what the customer pays you for
The lean start-up method is not about cost, it is about speed.
Speed is measured in the amount of learning you achieve.
Learning requires making mistakes, just make sure the mistakes don’t kill you.
Each Pivot needs to reduce the risk of the venture and bring you
one step towards financial results.
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Corporate ventures MVPs: Every step is a Minimum Winning Game
Source: Eric Ries, Lean Startup
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Start-Up Management Methods
OKR, PPP, Scrum and Sprint
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Management Methods
OKR – Objectives and Key Results
─ Set 2-4 quarterly objectives for each manager
─ Break each down in 2-4 key results
─ When you reach 80% completion, consider it
done.
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All start-up management methods focus on
small steps, fast implementation and quick
learning loops.
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The customer is involved at an early stage to
prevent developments without benefit.
PPP – Progress, Plans and Problems
─ The workload is divided in weekly work
packages (max. 5). You focus only the most
important work package, until it is done.
─ Every week you report on your progress and set
a new plan for the next week.
─ If you cannot proceed you report a problem. A
plan always becomes progress or a problem.
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Time defines work packages, not vice-versa.
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Start-Up methods work best with highly
motivated and capable people. Everyone
needs to trust in the abilities of the others,
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Success is measured as much by results as by
accumulated learnings. These need to be
documented to see progress (innovation
accounting).
Scrum - Agile Software development
─ Fast feedback cycles, independent teams
─ Breaks down project in small work packages
─ Sprints through packages, Shows results on
canvas
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The cash burning rate determines how quickly
the company needs to learn.
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Back-Up
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Example for OKRs
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Example for SCRUM
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