Customer Experience

Customer Experience

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Lean startup: how large companies can deploy MVPs (Minimal Viable Products) [Part 3 of 5]

This blog is the third part of a five-part series. Click to read Part 1, Part 2, Part 4 and Part 5.

In Part 2, we explored the need for large organizations to adopt new approaches to product development in order to stay competitive. Lean startup uses agile during the “Build” phase of the “Build-Measure-Learn” loop. We now look at what to build rather than how to build.

What is your business’ new product success rate? Over 85% of new products fail and an overwhelming 90% of companies consider they are too slow in launching new products and services, according to research by Capgemini Consulting. Lean startup methodology offers an opportunity to raise this success rate and do it quickly.

Deploying agile as a lean startup tool only satisfies the “Build” phase of “Build-Measure-Learn”. Lean startups also need to create a Minimal Viable Product (MVP).



Minimum Viable Product

An MPV is a version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort, says Eric Ries, Silicon Valley entrepreneur.

Bringing products to market faster creates customer engagement and satisfies incremental need for innovation. However, rapid iteration’s largest benefit is customer feedback with the idea of making iterative product developments and to gain customer feedback.

At the same time, this helps to avoid long, costly development cycles that don’t align to customer desires. Mature firms can learn from start-up methodologies while utilizing their benefits of scale to fend off disruption and maintain or grow market capitalization.



An MVP is not a minimal product

The focus must shift from antiquated business lines to the changing dynamic of the customer. Sony’s PlayStation gaming system has for a decade been a home for Indie developer, single player titles popular in Japan.

However, Sony realized the increasing social inclination of the larger US market has shifted to big budget multiplayer experiences, and in response honed their product line. Sony has effectively doubled the life of its current generation systems compared to the first iteration of the Sony PlayStation in 1995 through committed feature updates.

Instead of making big bets on how the firm will shift strategic alignment for future hardware launches; Sony continuously seeks input from its customers. Sony has established an online forum where customers can request new features that make their way into systematic releases that happen on a nearly monthly basis.

Dedication to implementing customer’s opinions and an open source offering for developers has allowed PlayStation, formerly in the shadow of Xbox 5 years ago, to double market share today of its chief rival.



How to build a platform for success

Mature companies have the benefit of looking at innovation from a portfolio perspective. Large organizations have the benefit of large cash reserves to create an internal organization that can operate like a venture capital fund.

This means that they can push products to market, tolerate failure, and quickly test and analyze what did and what didn’t work.

This does not mean that half-baked ideas should be tolerated as brand equity is increasingly sensitive for large companies. Consider these strategies instead:



  1. Customer Focused Employees: instead of executives pushing to market what they believe the customer wants; there must be an increased focus on hiring intelligent and capable people who interact with the customer, and then placing trust in them
  2. Grassroots Approach: a bottom-up approach to feed the product management cycle will ensure that the customer’s views are reflected in the finished product
  3. Limited Bureaucracy: cutting down on bureaucratic policies and procedures for approval will increasingly help push products to market

Software is the most referenced example of using MVPs, however even brick-and-mortar retail has developed processes to help engage customer opinion. Macy’s utilizes test stores to soft launch products with customers before launching nationally.

Retailers increasingly use technology in test stores to heat map how customers interact with product displays and even use facial recognition software to analyze customer reaction to products. Employees on the front lines must be empowered to collect this data and feedback information into product management to ensure successful launches.

When the organization has developed an environment supportive of ideation, leverage deep pockets and direct funds into products customers want.

In Part 4, we’ll look deeper into the “Measure” and “Learn” phases of the “Build-Measure-Learn” cycle. Additionally, we will explore the formal structure of innovation labs which large firms have increasingly adopted. Can large companies master collecting measures that matter and become a learning organization? Stay tuned (and lean).

About the author

Chase Croft
Chase Croft
Chase is a Senior Consultant based in New York City. He specializes in business unit transformations, analytics, and innovation with extensive experience in financial services and energy.

Leave a comment

Your email address will not be published. Required fields are marked *.