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The Lean Enterprise


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The Lean Enterprise

How Corporations Can Innovate Like Startups

As Lean Startup crosses the chasm into the corporate world, we are witnessing a new dawn of enterprise innovation. We are awakening to a richer world for customers of all kinds. We are ever faster delivering solutions to people’s most pressing problems as well as their fleeting whims. We are embracing innovation on a scale and at a pace never before seen. Welcome to the era of the Lean Enterprise.

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About the Book

This is the original draft of the book. It DOES NOT include a physical copy.

The passing of entrepreneurship as an object of romance will signal the end of an era of dramatic, exciting change in business and society alike. Not everyone will welcome the new age, and even we have mixed feelings when we envision it! Just as online dating is baffling, even offensive in the eyes of our parents’ generation, the rise of enterprise-driven innovation will upset those who value rugged individualism over systematic efficiency.

In this book, we lay out how up-and-coming innovation empires will form vast expanses of creative exploration and business acumen on a scale never seen before. Given immense resources, savvy management, and ever more refined techniques for reaching product/market fit, innovation colonies will probe real problems and develop novel solutions at an unparalleled rate. Their organizational structure will reflect the realities of the networked market, bringing small teams to bear on unpredictable market shifts with the greatest possible speed to win emerging markets. Innovation colonies will incubate, acquire, and invest as needed to stake their claim on the most potent technologies and trends ahead of the pack. Their autonomous management will keep their usual corporate instincts for self-protection and self-promotion in check. The managing directors, liberated from fealty to the enterprise budget, will navigate the market for the colony’s wares with a free hand. The colonists, beneficiaries of a growing portfolio of projects painstakingly tailored to the needs of real-world customers, will move their projects forward with singular ingenuity and focus.

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Table of Contents

  • Introduction
    • Enterprises in Peril
    • Startups Ascendant
    • The Enterprise’s Dilemma
    • Unleashing the Enterprise
    • Why Intrapreneurship Fails
    • Enter the Lean Startup
    • New Tools For CFOs
    • Dawn of the Lean Enterprise
  • Chapter One: The Lean Enterprise Roadmap
    • The Innovation Colony
    • The Lean Startup Method
    • Three Strategies
    • Case Study: General Electric
    • Case Study: Intuit
  • Chapter Two: Strategy
    • The Old Rules No Longer Apply
    • A Framework For Action
    • Fringe Benefits
    • Case Study: Techstars
  • Chapter Three: Corporate Structure
    • From Skunkworks Onwards
    • Enter the Innovation Colony
    • Case Study: Qualcomm
  • Chapter Four: Compensation
    • The Power of the Upside
    • Case Study: Hearst Entertainment
  • Chapter Five: Vision and The Innovation Thesis
    • Know the Market
    • Formulate an Innovation Thesis
    • Execute on the Thesis
    • Case Study: Upfront Ventures
  • Chapter Six: The Lean Enterprise Process
    • Roots of the Lean Startup
    • Quick Overview of the Experimentation Process
    • Experimentation: Step By Step
    • Javelin Board
    • Case Study: Nordstrom
  • Chapter Seven: Experimentation Methods
    • Where to Find Customers
    • Case Study: Comcast
  • Chapter Eight: Innovation Accounting and Metrics
    • Vanity Metrics vs. Actionable Metrics
    • Building a Metrics Model
    • Case Study: Learnist
  • Chapter Nine: Incubate Internally
    • Low Momentum, High Control
    • Benefits
    • Financing Internal Startups
    • How to Incubate
    • Case Study: News Corporation
  • Chapter Ten: Acquire Early
    • Who are you looking for?
    • Choosing Acquisition Targets
    • Structuring the Deal
    • Pitfalls
    • Case Study: Neopost
  • Chapter Eleven: Invest When You Can’t Acquire
    • Low Control, High Momentum
    • Benefits of Investing
    • Mechanics
    • Vehicles
    • Enterprise Investment Psychology
    • Choosing Investments
    • Case Study: Intel
  • Chapter Twelve: Innovation Flow
    • Stage 1: Limited-cost proof of concept.
    • Stage 2: Vote of Confidence
    • Stage 3: Expansion
    • Stage 4: Full-scale
    • Case Study: Intuit
  • Epilogue
    • Objections to the Lean Enterprise
    • Building Innovation Empires
    • The End of Entrepreneurship
    • The Enterprise Innovation Era

About the Authors

Trevor Owens met Obie Fernandez on a cold winter weekend in Chicago. The latter cheekily strolled into one of the first Lean Startup Machine (LSM) workshops without even bothering to register. They established a quick friendship and Obie became an advisor to Trevor's fledgling startup a few months later. The two even became roommates for awhile, when Obie spent the first half of 2011 living in NYC. Over the course of 2011 and 2012, with Obie's help, Trevor drove LSM to tremendous worldwide growth, training over 25 thousand students around the world to apply Lean Startup methods to their own startup ambitions. In January 2013, Obie formally joined LSM as Co-Founder and CTO, to help propel the firm to new heights. They subsequently were accepted to the prestigious Techstars accelerator program and raised $1.5M in venture capital funding.

The Lean Enterprise presents foresight into the next dramatic evolutionary step in the Lean Startup saga. Using practial real-world knowledge gleaned from their wide-ranging application of Eric Ries's methods to enterprises both small and large, they present a vivid step-by-step handbook for those who want to pursue innovation outside of the startup world.

Trevor is an entrepreneur and thought leader on Lean Startup methodologies. He's the Founder & CEO of Lean Startup Machine, an innovation education company that has helped thousands of individuals at organizations including Google, Salesforce, News Corp, Intuit, and others, start hundreds of new businesses on five continents. He is active in the community as a coach for the White House's Innovation Fellows program and as a featured guest speaker at Princeton & Columbia University.

Obie is a widely recognized technology leader and frequent speaker at industry events. He is Addison Wesley's Series Editor for the bestselling Professional Ruby Series and a serial entrepreneur. Prior to founding LSM and his iconic web agency, Hashrocket, Obie spent years as a senior consultant at ThoughtWorks, specializing in complex custom enterprise software projects. He has been hacking computers since he got his first Commodore VIC-20 in the eighties, and found himself in the right place and time as a programmer on some of the first Java enterprise projects of the mid-nineties.

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