Ventures in Pursuit of Startup Happiness – interview with Tore Rasmussen

Interview with Tore Rasmussen conducted by Ewa Serwa

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Could you tell me something about you? Who are you, what do you do?

I currently work full-time for Playing Lean. I travel and conduct workshops and facilitate trainings all over Europe. I came into contact with Playing Lean through my master’s thesis. I needed a subject to write about and I met Simen Fure Jørgensen. He had made a prototype of a game and I said ok, it looks promisingly, and basically after one or two meetings we agreed that we should work together and we also decided that we would sell the game on Kickstarter. Before I started to work for the Playing Lean I was working in sales, market and business development in different projects.

How did you get involved in Lean Startup?

I’ve read Eric Ries’ book The Lean Startup, then I understood that is a very smart method to work on new ideas and I tried to form my own startups without this concept and it didn’t work. Apparently it works better when you use the Lean Startup method.

You are passionate about Lean Startup techniques and putting them into practical use. Could you tell me about Lean Startup and its philosophy?

Lean Startup uses scientific method on new ideas. So, instead of writing a really long business plan that is filled with assumptions you start by addressing that all you have are these ideas and assumptions but you don’t know anything. Let’s try to formulate our assumptions into falsifiable hypothesis and let’s identify the most critical assumption and test it with real customers. So, you don’t start building. You take the minimum viable product and you try to test different aspects of your business model on real customers and you get real feedback when you’re early in the ideas. You just test with problem interviews, paper or a prototype and get feedback and you can learn from that. In comparison to agile software development, Lean Startup method suggests to deploy the product to production on the first day. You build something straightaway just to test it and tasks don’t come from uses stories but they come from experiment. Lean Startup method doesn’t use estimates to measure progress but it uses validated customers’ feedback to measure progress. So if you do Lean Startup well you instead looking at the backlog you focus on validated learning and what it is the next step based on it which you have received after doing an experiment. That’s the main difference in comparison with Agile.

As an experienced innovator you have a lot of ideas to turn into reality. What do you think about innovation? Do you perceive it as an important component of a successful business?

So, that’s a really good question! I think that a company that is not willing to cannibalize itself will be cannibalized by somebody else. I know that at Apple the job of the iPad is to make MacBook insufficient. So it’s like the Kodak moment analogy. The Kodak actually discovered the digital camera but did not execute on it because it would destroy the current business model. They’ve lost the last opportunity, so I think that it’s a mindset. Innovation is a mindset. You can do continuous innovations and improve your products, but I think that all companies should develop a mindset on destructive innovation and be willing to destroy a business model and form a new business division to complete the product. I think that mindset is very important for everybody from managers to executors.

Do we need to focus on design thinking?

Yes, Lean Startup is a space for Design Thinking, Extreme Programming, Agile and Customer Development by Steve Blank. I think that Design Thinking is a really good tool and sometimes when I work on a project I take a design thinking book and I just use it as a framework. It works great. Also, government agencies use waterfall planning instead of being agile which is a disaster. And most businesses use also some Lean Manufacturing principles and naturally Steve Blank’s Customer Development method as a part of Lean Startup. And a fun fact is that Eric Ries was so impressed by Kent Beck’s book Extreme Programming that he considered naming Lean Startup Extreme Startup instead. He considered calling the Lean Startup method Extreme Startup but the Lean Startup refused that. So it shows how important the agile aspect is in Lean Startup method.

Our readers are mainly project and programme managers. I have to ask, how you perceive project management vs. Lean Startup?

I think that you need to know the difference between the search phase and the execution phase. As a project manager sometimes in the execution phase of a business idea or project you can use best practices for management and project management and during execution you can use agile method. But in the search phase you need to have a qualitative approach and learn from customers and figure out if you should build your product. Many people focus on what they should build and how to do it but it is important to look if we are actually solving a real problem our customer is facing. Sometimes the product simply shouldn’t be done.

How can we bring project management together with Lean Startup?

I think we can do this by combining Agile Software Development with Steve Blank’s Customer Development. If you have a project manager that knows Agile, basically bring together Agile with Lean Startup method and have a good understanding of Customer Development and customers interviews. Basically, if your boss comes to you and says “hey we need to launch on a new product to face off competition”. You should say: “OK, I need two months to figure out what product to build”, maybe not all managers would understand you need to take that time. It’s nothing more than well spent time. You need take more time to understand customer’s problem. So it is again design thinking. I think project managers need to have many hats. They need to understand when it is time to get the prototype to the market and look at agile manufacture principles, when they need to know more about the customers, look at Steve Blank’s Customer Development and need to understand that their environment is changing, look at system engineering. I think that a model project manager needs more skills and take up different roles throughout the projects. So it becomes more challenging.

Talking about skills. Which skills does a good manager need to have?

To answer this question I will mention the book about leadership Extreme Ownership which I like a lot. It’s written by Jocko Willink and Leif Babin. They define leadership and give cases how sale and conduct the business. It’s not just leading the people with whom you’re working with. Sometimes you need to stand up and help your boss. If you have a boss who demands to run a project using waterfall method then you are responsible for helping your boss understand that he should take agile approach instead of waterfall planning. It’s simple, you are responsible for everything that you can have an impact on. It’s really powerful. It creates a lot of opportunities. That approach to leadership is useful also in negotiation process, it brings a lot of benefits.

Where and how can we use Lean Startup approach in traditional projects? Can we use it in a corporate environment?

We have an example of advertisement company called the finn.no. So they did put ads in the newspapers. They cannibalized their own newspapers ads and classified advertising. This business solution had 60% of the revenues for the Newspaper house. That is one example. We also have a company, which is delivering food door to door. They used Lean Startup approach when they learnt about their product. Definitely it doesn’t have to be software driven. Let me give you one more example. Let say that you want to launch a restaurant. So what would be a Lean Startup approach to launch a restaurant? Well, the first and at the same time, the most critical is to create opportunity to test. People will test your food. Ask if people like your food. Then you can start doing corrections. When people like your food, they accept it and they are willing to pay. Later, you can make a more expensive restaurant and you should invite same people and check if they are still willing to pay for it. As the next step we can take a food truck. You will see at what time and which days and locations people would buy food. Once done, you can start providing catering. Before you will invest your money for infrastructure you need to have a data, where or if you can make a money back and earn, before you have expenses of staff, salaries, etc. When you have a lunch restaurant, customers coming in and you know that the venue is set, the prices are ok and it is the best in town, then you will find other problems. How to sell, how to find customers who will pay for it, etc. You create a demand before having costs. In America for example food trucks are opened in front of restaurants, they can test the new venues and get real feedback or bring a really wrong reputation if somebody doesn’t like the food or someone doesn’t come because the people eat food from the food trucks. That’s the part of game, food track may experiment. That’s the way why people like a food truck.

Does Lean Startup or Lean in general have specific branches or extensions tailored to a specific area, market or domain? If they have, what are the differences?

Lean Startup is a method which consists of lean manufacturing, agile, design thinking, customer development. Lean Startup is a part of this. And Eric Ries shows how lean startup is being used at General Electrics, at non-profits and any different you can imagine. Basically, the only problem when you use Lean Startup is production cycle, it is very long and you need to make a big investment before you can do tests. It’s hard to do tests, where there is no minimum viable product. If it is that kind of industry it’s really hard.

What are the advantages and challenges of the Lean Startup approach?

The advantage of this approach is that you hopefully learn faster, so you would be able to get the opportunity to get the product on market which people actually want and are willing to pay for, faster than doing traditional business planning. And it is reducing risks a lot. The important challenge is still how to find what the minimum viable product will be, what we need to have in order to get a real customer feedback. I think that a big challenge in a Lean Startup is a good understanding of this method. People say they use Lean Startup and actually they don’t understand it.

You are the co-founder of the game called Playing Lean, which becomes more and more popular around the globe. Who should be interested in playing your game?

People who show up on our workshops or become our facilitators are mostly consultants. Also some big enterprises that want to know this and use this method in-house. We should realize that innovation culture help companies. Consultants, big enterprises and startups advisors – these are our clients. Some of them want to be Lean Startup coaches and want to teach others about it. We have also teachers who teach entrepreneurship in business schools. Playing Lean is a part of studies about entrepreneurship. It’s safe and good for students. They can test and learn and don’t care about the failure because it’s a safe environment. They can learn really fast and they don’t lose real money.

What do you think about the future of Lean Startup and what are the areas in which lean might be developed?

I think it will be more adapted at universities, where they will be teaching this method. I think it will be more adopted in a bigger scale in private industry and maybe in public sector.

Which economic sectors should be interested in lean?

Well for software companies, it is very logical thing, but I think everybody will do software. When we look at the brick-and-mortar stores I think that every company will have a software approach in the future. So any company which do innovative projects should be interested in this method. And of course, startups.