Lean Startup Principles in Custom Application Development

Modern SDLC:

Agile philosophy represents the embrace of the near-chaos of the tech industry.  Scrum provides an empirical process control framework to keep good practices and outgrow bad practices.  Extreme Programming ensures that this framework is supported throughout development by fast feedback loops, high-quality code and minimal information asymmetry.

Where does Lean come in? Lean practices to ensure that not only great solutions are created but they are created as part of a rational but “unplanned plan” that can emerge as new information is discovered.

Custom Application Development:

Companies in the Custom Application Development space provide a mix of consultancy and production in creating software solutions.  By taking a Lean Startup consulting approach, the often tight budget and big dreams of a new client can be embraced, prioritized, and realized.  Why treat an application requested by a mature company as though it were startup?  Whether an application is consumer or enterprise, built for web, mobile, or both, every new solution has a “seed” budget, its owner is typically new to the space in which the app will compete, and the client’s subject matter expertise in their field does not fully prepare them for driving new technology solutions to market.

Defining the MVP:

While the “big dreams” white-boarding session is an important first conversation, the Minimum Viable Product is the primary goal of a new and emergent application strategy.  This consulting process takes a whiteboard full of priorities and turns them into a backlog that is prioritized.  The broad ideas of value that could be created are turned into independently deliverable product increments.  In Scrum, the development team’s goal is to create “potentially shippable” software every sprint.  A clear understanding of real versus perceived dependency and necessity is essential.  After all, when developing new applications there are often features that lay the foundation for the solution: though they could be independently shippable they are not independently valuable without the rest of the product.  Once this minimal foundation is laid, the most important features are delivered first to minimize time-to-market.  At that point the client can “inspect and adapt” – either continue investing or pivot.

We can represent this graphically using statistics:


This is a positively-skewed probability distribution.  In this case we are estimating the probability that any given product increment can independently create value to the user that can be captured by the owner.  For custom application development there is always a positive skew because the Lean Startup principle in software roughly follows the 80/20 rule.  The mode here is the point at which the first 20% of features are delivered it is the highest action that is most likely to create value that can be captured by the owner.  Everything after this point is a long tail that represents follows the Law of Diminishing Returns.  A well-planned MVP should be released at roughly the halfway point in climbing the value curve

As I have noted above, there is a difference between consumer applications (creating revenue in a marketplace) and proprietary enterprise solutions (creating cost savings internal to a business).  In consumer applications, additional enhancements beyond the first 20% are focused on retention and engagement of a user.  The rate at which these increments are delivered should slow drastically while revenue is captured and a new product is planned.  In the enterprise, investment should typically continue to the median because the first 20% serves the most users and the next 30% serves the job satisfaction of the application’s “power users”.

Just-in-Time, Just-Enough:

Naturally, a Six Sigma Black Belt is not necessary to find the MVP or “stop and pivot” point.  By repeating this process thousands of times as a company, a good Custom Application Development partner has the expertise to discover the right decision “just-in-time” to build it, while delivering “just-enough” to gain feedback from the client and (eventually) the user as quickly as possible.  This is not about cutting corners, but about reducing waste.

Avoiding Perfectionism and the Importance of Pivots:

Perfectionism – as a fear of commitment or judgement – is the most dangerous habit to avoid as the decision-maker of when to release a product. While Lean Startup principles apply to any new business, the technology industry moves so fast that time-to-market is always key.  In software, within six months, what you are building, how you build it, and who you build it for will change!  This is why the MVP – and the “pivot or persevere” point – needs to occur at the halfway point of what a client originally perceived as likely-to-capture value. By the time this foundation has been established, the market may already demand a different feature the product can easily provide.  By prioritizing and staying lean, your solution can capture value and feedback, inspect and adapt, and evolve to fit the ever-changing market.

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