The entrepreneurs of startups were the first ones to adopt the Lean Startup method when Eric Ries published in 2011 his book The Lean Startup. Big companies like Telefónica were soon enough the next ones to apply Lean Startup. Now we have witnessed how an industrial forum like the GSMA (GSM Association), the Personal Data Program in particular, adopts a hypothesis validation model to build successful products and services.
Use case in industrial forums and standardization bodies are generally defined by the forum members without market validation, and then, following a waterfall model, the technical solution for those use cases is defined.
Telefónica has been deeply involved in the Mobile Connect project since February 2014. Mobile Connect is a GSMA cross-operator proposition to simplify people’s digital lives, offering a simple and safe identification service that offers the user total control over their privacy. The authentication is significantly more secure than typical username/password schemes as access to the account is secured via the user’s mobile device.
The Lean Startup methodology is a pilar of our innovation process since 2012, hence all our innovation projects apply this methodology. Consequently, Mobile Connect has been developed following the Lean Startup method.
Lean Startup is basically the combination of Steve Blank’s Customer Development methodology and Agile Development. As we have been applying Agile Software Development since 2006 at Telefónica (specifically in Telefónica R&D), our engineers, and in particular those that have experience as scrum masters, are the ones that have adapted themselves best to Lean Startup.
Due to the deep experience with agile that the Mobile Connect team has, the Customer Development iterations were perfectly synchronized with the Agile Software Development cycles. This allowed us to design the fastest and cheapest prototype needed in each iteration to validate, or invalidate, the project hypotheses.
Also, the Mobile Connect innovation project team at Telefónica considered the use cases defined hypothesis that needed to be validated in the market before building the solution. Therefore, they got out of the building to have face to face conversations with potential customers. In fact, after carrying out 42 interviews their first hypothesis around the customer segment proved to be wrong, so they had to pivot to another customer segment.
The team focused on the problems the customers had and then on how could Mobile Connect solve these problems according to the customers’ needs and feedback. What’s more, during this process customers really interested in the service and willing to pay for it were identified and involved in the process.
Thus Lean Startup helped identifying and defining the use cases based on clear evidences and validated learnings around the customers. As a consequence, the Personal Data Program has created workgroups that organise sessions with different service providers to identify and understand the painful problems they are facing in order to work on solutions around those problems.
A successful way to transfer an innovation project to the business unit
One of the biggest challenges we face at big companies is how to successfully transfer an innovation project to the business or product units. Actually this is something we have had the opportunity to discuss with several companies in different innovation forums and also in last year’s Lean Startup Conference in San Francisco, and there is a general agreement on that.
The most delicate moment in the life of an innovation project is when it is time to scale up and get transferred into a business unit or product line. Having stakeholders in the business unit or product line is critical, but not enough to make a successful transition.
In our experience those innovation projects that apply Lean Startup survive better to that transition because they are in a position to bring to the table tangible credibility in the form of validated market traction and even customers.
In the case of Mobile Connect we have been able to transfer successfully to the business unit the innovation project for its deployment and commercialization. In fact, this solution is going to be deployed in Argentina, Spain, Mexico and Peru this autumn and more countries are coming next year.
Moreover, the way we have done this transfer has also been different: we have not only transferred the product but also the team plus prospective customers.
This has allowed us to transfer not only the knowhow of the product, the product development knowhow and the customers, but also the complete business model knowledge as well as the market contacts and the experience achieved by the team during this time. That is, who are the customers, how should the solution be commercialized, the way to get to the customers, the pitch, the sales process, etc.
In other words, we have transferred what one of our external mentors, Mario López de Ávila, calls the complete “product toolkit”.
Besides, all the aforementioned evidences and knowledge about both the market and the customers as well as the contacts network has enabled us to smoothly transfer the team of R&D engineers to the business unit. Because that knowledge they brought to the business unit has given this team of technical people credibility among their new colleagues.
This post has been written by Susana Jurado Apruzesse, Innovation Manager at Telefonica I+D and Oscar Mancebo Ortiz, Mobile Connect Initiative Leader at Telefonica I+D