LeanStartup PDF

O C T O B E R 2 0 1 5
Innovate the Lean Way: Applying Lean Startup

Methodology in the Association Environment
By Guillermo Ortiz de Zarate, Director, Information Systems, National Council of Architectural
Registration Boards, and Elizabeth Weaver Engel, M.A., CAE, CEO & Chief Strategist,
Spark Consulting LLC
Introduction: An Innovation Parable

CONTENT
1 Introduction The phone rings. It’s Board Member Smith, who sounds excited: “I’ve
3 What is Lean Startup been talking to some of my colleagues, and I have a great idea for a new
Methodology? program for our members!”
5 Keys to the Lean Startup
Method You may be nodding your head in recognition, if not experiencing painful
13 What’s Different for flashbacks or wondering if it’s too early in the day to start drinking.
Associations?
15 CASE STUDY: American We’ve all been on the receiving end of that phone call. Someone—a
Speech-LanguageHearing board member, a volunteer, a fellow staff person—has an interesting idea
Association (ASHA): for a new program, product, or service, inspired by a conversation with a
Pivoting From Lean Process member or by learning about something another association (or for-profit)
Improvement to Lean Startup has launched to great success. And it usually is an interesting idea, with
17 CASE STUDY: Institute of exciting potential and significant possible benefits.
Electrical and Electronics
Engineers (IEEE): The Power The idea gets developed and discussed. You write a business plan. The
of the Pilot project gets approved and included in the budget. You form a project
19 CASE STUDY: NAFSA: team and set up your project schedule. Staff devotes time and resources.
Association of International Volunteers contribute their (often substantial) input. You may hire outside
Educators: Combining Design
consulting help, or seek new or expanded vendor relationships to provide
Thinking and Lean Startup
technical support. You hold status meetings and deliver progress reports.
21 CASE STUDY: National Council You provide deliverables.
of Architectural Registration
Boards (NCARB): Learning
With Lean Eventually, after months or even years of effort and thousands of dollars
invested, you’re ready to launch, which you do, to much internal fanfare. And
23 Conclusion: Getting Started
With Lean then…nothing. Members and other audiences not only aren’t excited, but
they don’t even seem to notice. You realize your initial sales projections were
25 Questions for Reflection
far too optimistic. You ramp up your marketing. Sales are still disappointing.
26 Additional Resources But you have too much invested—staff time and resources, money, volunteer
energy and attention—to kill the program, so you continue trying everything
you can think of to make this new initiative work.
What happened? How did a good, interesting, innovative idea that people
seemed to want and that maybe even worked well somewhere else fail?
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Introduction: An Innovation Parable
Your association has been wasting precious resources The key to escaping this cycle is to articulate and seek to
working on the wrong thing. validate assumptions as early as possible. This is vitally
important to associations, as we endeavor to invest wisely
The problem with this approach to product development to help members and other audiences achieve their most
is that it is completely driven by untested assumptions. critical desired outcomes. We cannot afford to pursue the
Notice that nowhere in this story does the organization wrong things, because that has a double impact on our
articulate its assumptions or attempt to prove (or ability to achieve our missions and serve our members:
disprove) them by reaching out to its members. it wastes our limited resources while, at the same time,
preventing us from focusing on initiatives that would
It’s tempting to make decisions based on anecdotal really matter for our members and our organizations.
evidence, without doing a thorough analysis to understand
if the program being considered actually solves a problem Is there a process that can help associations achieve our
that members and other audiences think is worth solving. missions, stay in business, find problems worth solving, and
But the plural of anecdote is not data. Without data, make a real and meaningful difference for our members,
we are vulnerable to selection bias, in which we ignore achieving the sustainable, dynamic impact we seek?
evidence that contradicts our hypotheses, leading us to
invest resources in what amounts to an educated guess. Your authors would argue that there is: lean startup
Association development cycles tend to be slow, which methodology, as most fully developed and articulated
means we’ve often invested significant resources before by Eric Ries in his 2011 book The Lean Startup. This
we start getting feedback from the market. That in turn whitepaper will introduce lean startup methodology and
makes it difficult for us to kill initiatives that don’t work describe its key elements, review some of the unique
out as anticipated. challenges associations face and advantages we enjoy in
applying this methodology, share stories of associations
who are using lean startup effectively to innovate, and help
association executives think through how to get started
applying these concepts in your own organizations.

What is Lean Startup Methodology?
Eric Ries, a Silicon Valley entrepreneur, is one of the Ries engaged in a rigorous, iterative process of
originators of lean startup methodology. In his words: hypothesis formation, testing, learning, and revision
that eventually produced a fully formed approach: lean
“
startup methodology. His methodology has since been
Throughout my career, I kept successfully adopted by both other Silicon Valley startups
having the experience of working and major corporations like GE and Intuit.
incredibly hard on products
that ultimately failed in the “But wait!” you’re thinking. “Startup? Associations aren’t
marketplace. At first, because startups!”
of my background, I viewed
According to Steve Blank, author of The Four Steps to the
these as technical problems that
Epiphany and The Startup Owner’s Manual, a startup is “an
required technical solutions: better
organization formed to search for a repeatable and scalable
architecture, a better engineering business model.”4 In Blank’s view, a startup is not a
process, better discipline, focus, smaller version of a company. Companies execute a known
or product vision. These supposed business plan, while startups are still trying to define that
fixes led to still more failure. 1
” plan. The lean startup method thus focuses on allowing an
organization to be agile and nimble enough to navigate
As Ries moved from engineering and product the different possibilities until it arrives upon a sustainable
development into launching his own company (IMVU, business model.
an online 3D chat community), he studied a wide variety
of approaches from a plethora of industries to “find ways “Fair enough,” you might say. “But wouldn’t that make an
to eliminate the tremendous waste I saw all around me: association more like a company than a startup?”
startups that built products nobody wanted….”2
That might be the case, if we were operating in a world
Ries began with the lean manufacturing movement of the of sustainable competitive advantage. But, according
1970s. The term lean comes from the notion of removing to Rita Gunther McGrath, professor of management
waste (fat) from processes. Many associations are familiar at the Columbia Business School, we’re not. The era of
with the concept of lean six-sigma, which focuses on sustainable competitive advantage is over. We’re now
achieving greater efficiency through process improvements operating in a world of transient competitive advantage.
designed to eliminate wasted effort and minimize defects.3 As McGrath observes, “Competitors and customers
have become too unpredictable, and industries too
Lean startup methodology takes this concept one step amorphous.”5 No one gets to stay on top forever anymore.
further. Ries realized that it does not matter if your
process is the leanest it can be if you produce a solution
that people do not need or want.
1. Eric Ries, The Lean Startup, p. 5

2. Eric Ries, The Lean Startup, p. 7
3. http://www.isixsigma.com/methodology/lean-methodology/ask-expert-integrating-lean-and-six-sigma/
4. http://steveblank.com/2010/01/25/whats-a-startup-first-principles/
5. https://hbr.org/2013/06/transient-advantage

What is Lean Startup Methodology?
Is your association’s advantage transient? McGrath advises We would argue that all organizations, tax-exempt and
you to ask yourself how many of the following statements for-profit, need to view themselves as startups, constantly
are true: seeking to find sustainable business models in an era when
that landscape shifts more frequently than at any point in
• I don’t buy my own company’s products or services. history. Indeed, some of the keys McGrath recommends,
• We’re investing at the same or higher levels and not like focusing on solutions to problems, creating a system
getting better margins or growth in return. that supports innovation, and building an experiment-
• Customers are finding cheaper or simpler solutions to learn-iterate loop, are intrinsic to lean startup.
be “good enough.”
• Competition is emerging from places we didn’t expect. At root, the lean startup method is a framework for
• Customers are no longer excited about what we have innovation that leads to the development or reinvention
to offer. of programs, products, and services. Like any framework,
• We’re not considered a top place to work by the people it does not just magically work. Organizations seeking
we’d like to hire. to adopt the lean startup method must invest time
• Some of our very best people are leaving. and resources learning how it works, applying it,
• Our stock is perpetually undervalued. and evaluating outcomes. As Steve Blank notes, the
methodology “favors experimentation over elaborate
While that last statement may not be applicable to your planning, customer feedback over intuition, and
association, she notes: “If you nodded in agreement with iterative design over traditional ‘big design up front’
four or more of these, that’s a clear warning that you may development.”7 As such, it’s ideally suited for resource-
be facing imminent erosion.”6 poor environments. (Sound like any associations
you know?) Properly employed, it will improve your
organizational effectiveness, help you invest your limited
resources wisely, and allow you to maximize your returns
on those investments.
6. https://hbr.org/2013/06/transient-advantage
7. https://hbr.org/2013/05/why-the-lean-start-up-changes-everything

Keys to the Lean Startup Method
The lean startup method is based on a few simple concepts: main idea for the product or service you plan to develop
or improve. In his doctoral dissertation, The Business Model
• The Business Model Canvas Ontology, Swiss business theorist, author, and consultant
• The Build-Measure-Learn Cycle Alexander Osterwalder describes a template composed
• The Minimum Viable Product (MVP) of nine basic building blocks that is much simpler than
• The Pivot creating a full-blown business plan. Osterwalder’s nine
We’ll examine each in more detail below. building blocks include:
• Customer Segments: Whom are you serving? What

The Business Model Canvas are they trying to accomplish?
• Customer Relationships: What type of relationship(s)
Once again quoting Blank, in the lean startup
do you need to build with each segment?
environment “rather than engaging in months of planning
• Value Proposition(s): What are you offering? Do
and research, entrepreneurs accept that all they have on
people care?
day one is a series of untested hypotheses—basically, good
• Key Partners: Whom do you rely on? Who relies on you?
guesses. So instead of writing an intricate business plan,
• Key Activities: What do you actually need to do?
founders summarize their hypotheses in a framework
• Key Resources: What assets do you have available to
called a business model canvas. Essentially, this is a
deploy?
diagram of how a company creates value for itself and its
• Channels: How are you going to reach people?
customers.”8
• Cost Structure: What factors influence your costs?
The first step in creating a business model canvas is to • Revenue Stream(s): What are people really willing to
record your hypotheses, the most important being your pay for? How much are they willing to pay?9
10
Designed
Designed for: for: Designed by:
Designed by: Date:
Date: Version:
Version:
The Business Model Canvas
Key Partners
Key Partners Key Activities
Key Activities Value
Value Propositions Customer
Customer Relationships Customer
Customer Segments
Propositions Relationships Segments
Key
Key Resources Channels
Channels
Resources
Cost Structure
Cost Structure Revenue Streams
Revenue Streams
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DesigneD by: Strategyzer AG

The makers of Business Model Generation and Strategyzer strategyzer.com
8. https://hbr.org/2013/05/why-the-lean-start-up-changes-everything
9. http://www.slideshare.net/esaife/business-model-canvas-101
10. http://www.businessmodelgeneration.com/canvas/bmc

You can hear Osterwalder explain this process himself at go. Unfortunately, that type of secretive thinking is exactly
https://hbr.org/video/2363593484001/sketch-out-your- what leads to investing significant resources in creating a
hypothesis. product that sounded good in theory but no one wants in
reality.
Osterwalder’s template allows you to define your offering,
the delivery method, the target audience, the anticipated There is a way out of this dilemma, something Ries calls
revenue stream, the resources and activities needed to the Minimum Viable Product. “The MVP is that version
produce your offering, and the resulting relationship of the product that enables a full turn of the Build-
between your organization and your customers. Measure-Learn loop with a minimum amount of effort
Remember that, at this stage, everything is an educated and the least amount of development time.”12
guess. You don’t know; you’re making assumptions.
In other words, the MVP asks: What is the minimum
Or as Ries puts it, “In the modern economy, almost any version of the product you can build with the smallest
product that can be imagined can be built. The more investment of resources and effort that would still be real
pertinent questions are ‘Should this product be built?’ enough to let you start testing your assumptions? What
and ‘Can we build a sustainable business around this set you’re building with your MVP is a prototype.
of products and services?’ To answer those questions,
we need a method for systematically breaking down a This approach feels counterintuitive. It forces us to,
business plan into its component parts and testing each in the words of Lord Dark Helmet from Mel Brooks’
part empirically.”11 The Business Model Canvas helps 1987 sci-fi comedy Spaceballs, stop preparing to go and
you focus the design of your new offering and begin “just go.” Associations, worried about brand reputation,
articulating the assumptions that go into it, so you can are generally deeply uncomfortable with releasing
start testing and validating (or disproving) them. intentionally half-baked ideas to the membership, but
that is the most effective way to validate your initial
The Build–Measure-Learn Cycle assumptions. Only when the MVP prototype goes live
will you be able to see if the problem you’ve identified is
Build First: The MVP real, if your solution is viable, and if it’s worth investing
The best way to begin testing your assumptions is to the resources to actually build the full product.
launch a product. “Does our new program solve a real
problem that’s important to people in a way that’s useful You don’t create an MVP to produce revenue, increase
and makes sense to them?” There’s no better proof of retention, or improve your member value proposition. The
concept than seeing if people are willing to use and pay sole objective of an MVP is to verify that the assumptions
for your innovative new idea. you surfaced while creating your business model canvas are
close enough to correct that it’s worthwhile to invest some
Of course, launching a product can also be a terrifying of your limited resources in developing the idea further.
prospect. “What if it’s no good and nobody likes it?
Will that harm our brand?” It’s tempting to operate in
stealth mode until you’re really sure you have a perfect
product with a perfect marketing campaign all ready to
11. Ries, The Lean Startup, p. 55


It’s important to note that, as documented by Nathan Furr • “Wow” Test: This can test either a theoretical or virtual
and Jeff Dyer in The Innovator’s Method, there are at least prototype. In short, when people hear about or see your
four steps on the journey to producing a viable product: product, how enthusiastic are they?
• Ethnography Test: If you’ve ever done in-person
• Theoretical Prototype: This is an idea that’s developed usability testing, you’ve done an ethnography test. You
enough that you can describe it in detail to prospective observe your target audience in their normal business
customers. environment and see whether and how they use your
• Virtual Prototype: This answers the question, “If I had MVP. This is a great way to gather information about
to sell the product today, how could I fake it in a way feature sets, since people often use things in ways the
that feels realistic?” product designers never anticipated.
• Minimum Viable Product: This is a product that has • NPS Test: Many associations are using Net Promoter
the bare minimum feature set necessary to solve the Score to track member value propositions, but you can
problem you’re trying to address. use it to test your MVP too. Ask people, on a scale of
• Minimum Awesome Product: This is “something that 1-10, how likely they would be to recommend your
customers cannot resist, something that customers love, MVP. As in all NPS calculations, you’re looking for
something awesome.”13 your Promoters (scored 9 or 10) to outweigh your
Detractors (scored 0-6).
You can run all sorts of tests against these various • Payment Test: Do people pay for your MVP? Not
prototypes to gather information: “Might they pay?” or “Would they pay?” but do they
actually write you a check or give you a credit card
• Smoke Test: Create marketing pieces that include a number?14 (Information gathered from various sources,
call to action, which might be to ask people to sign up including Furr and Dyer’s The Innovator’s Method and
to get more information, reserve a spot, or even make Ries’s The Lean Startup.)
a deposit (refundable, of course, if there’s insufficient
interest to proceed). Regardless of which method you use (and there are others
• Cold-Call Test: Make a cold call (or cold email) in beyond those listed above), you need to test. Building
which you describe your theoretical prototype and ask an MVP is pointless if your organization is not ready to
people to provide feedback, and then see who and how measure performance.
many respond.
• Vote Test: Present potential customers with several
theoretical or virtual prototype options and ask them to
vote for which one(s) they would want to see realized.
• Proof Test: As in “proof of concept,” this is also a test
of your virtual prototype. Also known as a Wizard
of Oz Test or a Concierge Test, you provide a service
that looks slick and automated on the front end, while
on the back end, the work is still being done by hand,
which allows you to see if your intended audience uses
the service before you actually build it.
13. Furr and Dyer, The Innovator’s Method, pp. 121-130

14. Information gathered from various sources, including Furr and Dyer’s The Innovator’s Method and Ries’s The Lean Startup.

Measure Second The Scientific Method

“start
The Lean Startup asks people to
measuring their productivity
Ask Questions
differently. Because startups often

accidentally build something Do Background
Research
nobody wants, it doesn’t matter
much if they do it on time and on
Construct Think
budget. The goal of a startup is to Hypothesis Try Again
figure out the right thing to build—the
thing customers want and will pay Test with
for—as quickly as possible. In other an Experiment
words, the Lean Startup is a new

way of looking at the development Analyze Results
Draw Conclusion
of innovative new products that
emphasizes fast iteration and
customer insight…. 15
” Hypothessis is True Hypothessis is False
or Partially True
In the lean startup method, your business canvas model

Report Results
is your hypothesis. You’ve identified a problem that you
think is worth solving, and you have a hypothesis about
what might fix it. But a hypothesis alone is not enough: The NCARB case study on page 21 provides a good
you need to design experiments that will allow you to example. NCARB’s leaders were considering designing a
affirm your hypothesis or dismiss it. new feature for the organization’s website, but, following
the lean startup method, they decided to test if it was
This should sound familiar, because what we’re describing worth building before investing resources. The assumption
is the scientific method, as you learned it in middle school. they were testing was that they could bring more people
into NCARB’s certification path if there was an easy
As you can see from the illustration left, measurement is online way to see what that involved. They combined
an intrinsic part of the process of testing the validity of an A/B test (one group saw a clickable online button,
your conclusions. Entire books have been written about the other only saw a phone number to call) with a proof
what to measure (for example, Lean Analytics, which is test (the clickable button triggered a manual workflow
included in the Additional Resources section on page on the back end), and measured two things. One, what
26 and which we highly recommend), and there are percentage of the A group that saw the button actually
many good options depending on the exact nature of clicked on it? Two, how did the clickable button option
the problem you’re addressing and the MVP potential perform against the phone call option? You can read about
solution you’ve produced. The important point is to find the results below, but the point is that the key to designing
a few key measures that will either prove or disprove your a good measure is to focus on the assumptions behind
theory that you’ve found a problem worth solving and that what might make your idea a good product or service, not
your potential solution actually solves it. on the idea itself.
15. Ries, The Lean Startup, p.20

Beware of Vanity Metrics

Vanity metrics are a hot topic in the lean startup In Lean Analytics, authors Alistair Croll and Benjamin
community. What are they? Vanity metrics don’t help you Yoskovitz advise determining the business model your
validate or invalidate your assumptions or learn where idea is based on as a way to start. They identify the
you might need to make corrections; they merely make following options:
you feel good. A common example of a vanity metric is
volume: number of likes, number of followers, number of • Transactional: Are you looking to sell something? Then
downloads, etc. But are those metrics actually useful? you should measure shopping cart conversion (not
number of visits), cart size, and abandonment.
Take conference attendance. Associations commonly • Collaborative: Are you trying to get people to vote,
measure the success of annual meetings by number create content, converse, comment, or rate? Then you
of attendees. But is that really a good measure? What should measure the ratio of lurkers versus creators and
assumption does it test? Attendance numbers don’t tell the ratio of good versus bad content (and define what
you what those attendees were trying to accomplish by you mean by that).
participating or whether they achieved their desired • SaaS (Software as a Service): Are you trying to design
outcomes. They may have come to learn about a topic, a system that will increase someone’s productivity?
to network, to do business, because they wanted to hear Then you should measure conversions from trial to
a particular speaker or meet a particular person, because paying customer and churn or attrition.
they were intrigued by the host city, or for myriad other • Media: Are you running a marketing or ad campaign?
reasons. Measuring how many people attended doesn’t tell Then you should measure click-through rates, time on
you anything about whether those goals were met. page, pages per visit, and, ultimately, conversions (did
people buy?).
Likewise, if you were to launch a mobile application for • Game: Have you created a game for your audiences?
your association, it’s likely you would immediately begin Then you should measure data like time spent in the
reporting on downloads. This is a clear vanity metric, app and in-app purchases (if that’s an option). Anyone
as downloads don’t tell you whether the app is solving who’s played Candy Crush knows how this works.
a problem your members think is worth solving. Think • App: Have you created an app? Use is hard to measure
about how many apps you download because they’re free without a control (like in the NCARB example), but
and you want to try them, but you never use them again. you should also measure things like ratings and reviews,
uninstalls, and whether users are keeping up to date
A better way of testing the success of your mobile app with the latest version.
would be to measure the number of members who use the
app versus your website to perform particular functions or Croll and Yoskovitz have also identified something they
take advantage of particular services. Do they prefer one call “The One Metric That Matters.” You can and probably
platform to the other? Do different cohorts of members should measure many things, but there is one metric
use one versus the other? Can you isolate particular that will have the biggest impact on your learning. As
features that incline people to use one versus the other? you might suspect, that one metric is different for every
Can you then make adjustments to move you closer project in every organization, but Croll and Yoskovitz
toward your goals? advise you to think about what business you’re actually
in, what stage of growth you’re at, and who your audience
really is as a way to help you identify it.

They also offer some suggestions for what makes for a But failure does not have to be permanent, particularly if
good metric: you can fail fast and learn from it. One of the least painful
ways to accomplish that is by soliciting as much feedback
• It’s a rate or ratio. New users per day is better than total as possible as early as possible. If you learn quickly, and
users. before investing significant resources, that some of your
• It allows for comparison over time. Percentage of assumptions are wrong, it is much easier to change
change from last week is better than overall percentage. direction and adapt your initial solution or perhaps even
• It’s simple. People can’t remember or use metrics that to solve a different problem all together.
are too complicated.
• It makes your predictions more accurate, which means One of the biggest benefits of lean startup methodology
you have to track what happens over time. is that the MVP prototyping process allows you learn if
• It allows you to change your behavior based on the your assumptions are right early in the journey to creating
results you see. That is, it allows you to learn and then a new product. One of the reasons this method has
act on what you learn.16 become so popular so quickly, and that so many startups
and established companies are using it to find sustainable
Learn: The Pivot and profitable business models, is that it shows you,
definitively, if you are on the right or wrong track before
“creative
The more money, time, and
energy that has been
you’ve invested such significant resources that you risk
damage to the overall organization.
sunk into an idea, the harder
”
As we’ve discussed, when an association has an idea for a
it is to pivot. 17
new product or service, three main assumptions need to
be tested:
Nobody likes to fail. And there is nothing worse than a
permanent failure. The corporate world has seen many:
• The target audience: Have you identified and
Crystal Pepsi, Thirsty Dog bottled water for pets, the
segmented them correctly? How well do you know
Gerber’s Singles line of adult food. This is another
them and the outcomes they’re trying to achieve?
reason why operating in stealth mode until you have a
• The problem: Have you identified something that is
fully finished product that is marketed as ready for mass
actually a problem worth solving for that audience?
consumption is dangerous: you can find yourself in the
• The solution: Does your solution fix the problem in a
unenviable position of spending far too many resources on
way that’s useable and convenient for your audience, at
an idea based on unverified assumptions.
a price they’re willing to pay?
16. http://leananalyticsbook.com/one-metric-that-matters/

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Any one of these could be problematic. You might have Lean startup allows you to check your assumptions
the right target audience, but what you perceive as a quickly and with the minimum investment of resources.
problem is not actually a problem to them. Or you’ve But it only works if you sincerely try to be proven wrong.
correctly identified a problem worth solving, but your As we described in the introduction, that skeptical,
solution doesn’t work. Or you have a great solution, but it’s humble mindset is necessary to combat selection bias, the
to a different problem or suitable for a different audience. urge to acknowledge only the evidence that confirms one’s
beliefs and ignore that which disproves them. We’ve all
What if you test your assumptions and discover that one seen organizations throw good money after bad because
or more of them is, in fact, incorrect? It’s time to bring ego got involved, because people became personally
that learning and information back to your project team invested in being right. Lean startup can be a powerful
and regroup, rethink, rebuild, and reevaluate. In other tonic to that all-too-human impulse.
words, it’s time to pivot. A pivot, as defined by Eric Ries,
is “a structured course correction designed to test a new Ries identifies many possible pivots, of which the
fundamental hypothesis about the product, strategy, and following seem most applicable to associations:
engine of growth.”18
• Zoom In: in which one feature becomes the entire
Referring back to the scientific method model, you’ve product.
just disproved your original hypothesis. The pivot is the • Zoom Out: the reverse, in which the whole product
process of returning to test another hypothesis. becomes a feature of a new product.
• Customer Segment: in which you’ve identified a real
Consider Groupon, an online group discount tool that solution to a real problem for a different audience than
started as a platform for mobilizing groups of people you originally thought.
toward action for various social causes. Or YouTube, a • Customer Need: in which you’ve chosen a problem
company that began as a site for sharing videos for online that’s not important enough to merit solving but that
dating but, when that failed to take off, switched to has illuminated other problems that might be.
sharing any kind of videos online. Or PayPal, originally • Business Architecture: in which you shift from high
launched to allow people to transfer money between Palm margin and low volume to low margin and high
Pilots (remember those?), before it was acquired by eBay volume, or vice versa (though the latter option is not
and began running the majority of online transactions.19 available to all associations, as some serve communities
that are too niche to be high volume).
These successful companies all got their initial • Technology: in which you deliver the same program,
assumptions wrong. They picked the wrong problems. product, or service through a new (and generally vastly
Their target audiences did not need or want their improved) technological platform.20
proposed solutions. But they all learned from that
feedback, adapted, found problems worth solving, and
came out with new solutions to those problems.

19. http://mashable.com/2011/07/08/startups-change-direction/
20. Ries, The Lean Startup, pp. 172-176

When pivoting, it’s important to remember to change Abandoning a vision due to contrary evidence can be
only one variable at a time so that you can properly painful, but associations cannot afford the wasted resources
measure the effects of that change and learn something that result from avoiding early customer feedback due to
you can use in your next round of tests. Data is your ally fear of negative reactions. Indeed, as Furr and Dyer point
in this process, as long as you’ve developed metrics that out in The Innovator’s Method:
will unequivocally show whether your hypothesis is true.
Listen, learn, make adjustments to your solution, and “Pivoting is a powerful and
measure again to see if you’re getting closer to the right liberating idea. It’s liberating to
solution to the right problem for the right audience. The
recognize that no human being
key is to keep returning to your measures, the ones you
can guess correctly when you
created to help you cut through your biases.
face uncertainty, and that part of
the process is making changes to
adjust to these inevitable errors.”21
21. Furr and Dyer, The Innovator’s Method, p. 172

What’s Different for Associations?
Challenges Relatedly, brand plays a very different role in associations

than in startups. Throwing ideas at the wall and seeing
Despite some similarities that make this model intriguing, what sticks is intrinsic to the startup brand but less so
associations are not, in fact, startups. That’s probably for associations. Startups are expected to fail frequently.
mostly clearly seen in the role boards of directors and Associations can get so paralyzed by the fear of doing
other volunteer leaders play in decision making. In the the wrong thing that we do nothing at all. We fear the
earliest stages, a startup is the result of the singular vision criticism we might experience if we release something
of its founders. Even once they’ve secured their first round that’s less than perfect, so we delay acting until success is
of venture capital funding, the VCs who now own part of assured, which means we are tempted to delay indefinitely.
the company are a very different type of “investors” than
an association’s board. Association boards not only provide What about those other volunteer leaders? That’s another
strategic and fiscal oversight and help develop contingency challenge for associations: our decisions often involve a
plans (like VCs), they are members and customers of the lot of stakeholders. Startups make final decisions with a
associations they oversee, which means they tend to have relatively small group of insiders, usually just the founders
a personal stake in decisions that are made. Whatever and board members (of which there may be only a
they choose affects them directly, which makes it harder handful). Associations are more collaborative, inviting
for them to be objective and separate “what I like and more voices to contribute ideas and suggestions and often
what benefits me” from “what is good for the entire field, running them through multiple groups and levels, which
profession, or industry.” might include volunteer task forces, volunteer committees,
staff teams, the senior staff, the CEO, the executive
Because association board members also tend to serve committee, or the full board of directors, before making
short terms, there is a “not on my watch” temptation. final choices. Our decision-making environment is far
That is, everyone adheres to the gospel of “failure that you more complex than that of the average startup.
learn from is a good thing” and “fail fast,” only not when
I’m on the board. The association needs to experiment, Like startups, we can also fall prey to the HIPO, the
fail, and learn under someone else’s leadership. With terms Highest Income Person’s Opinion. Associations have
that are often only one to three years, it can be hard for a special twist on this, though. In a startup, the HIPO
associations to cycle fast enough to get through to an is often the founder (although there the “I” usually
MVP, learn, pivot, and release the next MVP before the stands for Impact more than Income, at least initially).
people who initially approved the project have termed In associations, the HIPO is sometimes the chief staff
off the board, which means when the MVP eventually executive, but often the HIPO is a volunteer leader who is
becomes the Minimum Awesome Product, the people prominent in the field, profession, or industry. When the
who approved the project are no longer around to share CEO of the largest company in your industry (and largest
in the success. In other words, associations tend to be payer of dues to your association) is on your board, it can
risk averse (not a shocking statement, we know), in be hard not to give her opinion significantly more weight.
part because no one wants to look like the volunteer
leader who failed, even if that “failure” is in reality only a
temporary setback.

What’s Different for Associations?
Another critical difference is that association programs, Moreover, most associations, even the “big” ones, are
products, and services are not like startup products and actually small in the grand scheme of things. AARP,
services, which are often consumer-focused and simple in generally acknowledged as the largest association in U.S.
concept. It’s one thing to throw up a Facebook page and (by revenue), reported $1.3 billion on its latest filed IRS
buy some Google and social media ads to see if people are Form 990, and in our research it was the only association
interested in booking party-bus style road trips planned we could find with revenues regularly over $1 billion.
by someone who’s been a rock-n-roll tour manager.22 It’s By contrast, Uber is projecting $10 billion in revenue in
quite another to try to come up with a Minimum Viable 2015.23 Rent the Runway, relatively small in the startup
Certification Program. A former roadie can easily hire world, has already raised well over $100 million.24 A
out a bus and catering while he’s gauging demand. But $100 million revenue association is considered a very large
a certification program requires a serious, well-planned association. Of the tens of thousands of associations in
curriculum that leads to a rigorous, psychometrically the United States, the vast majority are what we would
valid exam and is only as valuable as potential employers consider small, with fewer than 10 staff. Measured against
(your customers’ customers) think it is. It’s a substantially the standard of the for-profit world, that’s tiny. Turning
different undertaking. an aircraft carrier is much more difficult than turning a
tugboat. Associations’ relatively small size should make us
Advantages more agile and able to quickly and easily change direction.
We’re not trying to retool manufacturing processes or
Associations also have certain advantages when it comes retrain thousands of staff members.
to adopting a lean startup mindset. The biggest one is
something we usually see as a disadvantage: perpetually Associations also have a unique culture. Although tax-
tight resources. And by that we don’t just mean money. exempt organizations need to earn revenue to stay in
Associations are also perpetually tight on staff and business, associations aren’t motivated solely by profit and
volunteer time and mental and physical capacity to the bottom line. We are, when at our best, purpose-driven,
take on additional projects. We never get a “B round” of mission-driven organizations whose primary focus is to
funding, where all the sudden everyone’s making a big build relationships with members and other stakeholders
salary and reaping stock dividends and we can double or that help them achieve their most critical professional
triple headcount as fast as we can hire qualified people. outcomes and solve their most pressing professional
Startups don’t stay startups forever. They eventually either problems. We are, ideally, customer oriented in ways
succeed big or go out of business. Associations, on the that for-profit organizations can’t touch, because the
other hand, are perpetually lean, and because of that we’re relationships we build are authentic strategic partnerships,
never faced with the temptation to get lazy. We can never not transactions driven by selling consumer goods. We
afford to waste time, money, attention, or brain cycles on know our members and their operating environments
pursing the wrong thing. more intimately than just tracking their purchasing
patterns, and we’re invested in their ultimate success, not
just in moving a certain number of units.
22. https://www.facebook.com/RocknRoadTrips
23. http://www.businessinsider.com/uber-revenue-projection-in-2015-2014-11
24. http://fortune.com/2014/12/19/rent-the-runway-raises-60-million/

CASE STUDY
American Speech-Language-Hearing
Association (ASHA): Pivoting From Lean Process
Improvement to Lean Startup
“aThere are a ton of things we could do that would be reasonable things to do,
smaller group of things we should do, and an even smaller group of things
we will do. If leaders can’t see that, you’re wasting your limited resources.
Arlene Pietranton, Ph.D., CAE, CEO
”
One of the big questions we ran into in our research Office of Business Excellence, Digital Communications,
was the difference between lean six-sigma process and Information Systems. In addition to eliciting new
improvement and lean startup methodology. It is project ideas, the Office of Business Excellence sends
confusing because they do have some common out questions via an all-staff survey to gather ideas
foundations and practices, such as the test-measure-learn- about processes that are ripe for improvement. As
iterate loop, valuing experimentation, and eliminating Sonnenschein said: “ASHA strives to provide the best
waste. But they are not identical, as ASHA’s experiences possible experience for our members. Because of that, we
demonstrate. are constantly looking for measurable ways to improve the
core things we do for them every day. The key question we
ASHA has embraced lean principles for many years. ask ourselves is: what improvements would most benefit
In 2007, ASHA worked with Leslie Stein (Full Circle our members?”
Inspiration/Agile Coaching Institute) to train staff in
process improvement and formal project management After a project has been approved, the business excellence
methodology on the way to forming an in-house Office team applies their expertise to help the project owners
of Business Excellence. The ongoing goal of this group create a full business plan and manage the project through
is to provide a disciplined approach to project portfolio to completion. One of keys Pietranton highlighted
management, support best practices in project management, was that, when projects are funded, they are funded to
and foster an environment for ongoing process completion, even if that crosses more than one budget
improvement throughout the national office at ASHA. cycle. In 2014, 34 projects were submitted and ten were
funded.
The Office of Business Excellence, under the direction of
Mary Sonnenschein, encourages a staff-wide focus on new ASHA has used this process to dramatically simplify its
and innovative project ideas, through an annual process renewal processes, to improve renewal accuracy, to make
where, according to CEO Arlene Pietranton, Ph.D., its certification process more transparent and easier to
CAE, “everyone is encouraged to have good ideas. After understand for new applicants, to speed up processing
all, if you don’t generate a lot of ideas, you’ll never find time on both renewals and the critically important
the really good ones, so our teams have to be free to push verification of professional certification status for its
the envelope.” Each year, every team is invited to submit 182,000 members, to improve member communications
projects for consideration. The actual form is intentionally by making more complete and effective use of a
simple, to encourage wide participation, and each project centralized editorial calendar, and to bring more of its
goes through a review process involving a facilitation processes into alignment with the LEED green status its
team made of ASHA’s executive staff and staff from the physical plant enjoys.

CASE STUDY
American Speech-Language-Hearing Association (ASHA):
Pivoting From Lean Process Improvement to Lean Startup
ASHA is now at the beginning stages of taking its lean

approach beyond process improvement into innovation,
About ASHA
such as testing co-locating two of its large annual
educational meetings for the first time. As Pietranton
The American Speech-Language-
noted, “We’re willing to accept the possibility of failure,
Hearing Association (ASHA) is the national
particularly if we’re trying something with the goal
professional, scientific, and credentialing
of learning from it and improving. We’ve asked our
association for 182,000 members and
attendees to be open to the idea of co-location, and
affiliates who are audiologists; speech-
we’re intentionally soliciting their feedback. We’ve also
language pathologists; speech, language,
selected more objective measures of success. We’ve been
and hearing scientists; audiology and
transparent about the fact that this is a pilot, which
speech-language pathology support
means we’ll continue it, pivot, or end it, depending on
personnel; and students. Audiologists
the results.”
specialize in preventing and assessing
hearing and balance disorders as well
One key thing that ASHA has learned through this
as providing audiologic treatment,
journey is that the story we tell ourselves about change
including hearing aids. Speech-language
management may not be accurate. “People don’t hate
pathologists identify, assess, and treat
change inherently,” Pietranton said. “Most people like
speech and language problems, including
change if it’s proposed and managed properly, which
swallowing disorders.
includes being thoughtful, open, clear, and transparent
about what the opportunity is and why it’s being explored.
No one enjoys being changed. But people are enthusiastic
about participating in a change process when they’re
engaged as contributors to that process.”

CASE STUDY
Institute of Electrical and Electronics
Engineers (IEEE): The Power of the Pilot
“Walking in to a meeting in and saying, ‘We want a large budget to build
a huge product that will last forever’ is perceived as too risky for many
associations. We’ve discovered we have much more success starting with,
‘We’d like to launch a pilot.’
Karen Hawkins, Senior Director of Product Design
”
Working in an association the size of IEEE (430,000 The IEEE team visited India multiple times to meet with
members, $412 million budget, and well over 1,000 staff ) and learn from potential customers on both sides: the
has its advantages, namely significant resources, but it can engineers who would receive training and the companies
at times be difficult to marshal and deploy those resources that needed to hire well-trained engineers. While in
at the speed required by today’s evolving markets and India, they conducted a smoke test of a Minimum Viable
emerging competitors, particularly for-profit competitors. Product. “It wasn’t even a prototype. It was just a crude
product definition. What we quickly learned was that
In response to these changes in its operating environment, there was an immediate need for this type of training, and
IEEE decided to speed up its product development it was going to take us far too long to build something
process. “About three years ago, we separated product from scratch. So we pivoted to looking for partners,”
development from product management, to allow our Hawkins said.
teams to focus their resources more effectively, and started
experimenting with lean principles,” said Senior Director As soon as IEEE found a suitable partner, it ran a limited
of Product Design Karen Hawkins. test. “We conducted a targeted soft launch of courses on
only two topics at sites in or near Bangalore, recruiting
That’s been particularly effective with IEEE’s Blended students and faculty to take the courses and tests and
Learning project. “Technical education of engineers in offer their feedback,” said Hawkins. At the same time,
India is a major focus of our industry right now,” said IEEE began reviewing content internally and working
Hawkins. So IEEE’s product ideation team, made up with a Learning Management System vendor to put
of staff and volunteers, gathered as much information together a virtual platform. According to Hawkins, “After
as possible about this topic, using both primary and our successful proof of concept in a targeted area and
secondary research and quantitative and qualitative means, with limited topics, we conducted our official launch in
which they brought to an in-person meeting. “We had January 2015, and by March we were one-third of the
literally hundreds of post-its with data points that we way to our sales goal for the year. Of course, our ultimate
stuck to the wall. We went through rounds of clustering measure of success is: Does the training improve students’
them until the groupings made sense. Once we did that, employment outcomes by helping them acquire the skills
we spotted a ‘blue ocean’ gap: Indian companies want to companies need? We’ve received anecdotal feedback from
hire engineers with certain skills at certain levels, and employers that these skills are beneficial, but only time
Indian colleges, particularly in the second and third tiers, will tell if the training makes enough of a difference to
weren’t graduating engineers with those skills,” described influence hiring decisions.”
Hawkins. This represented a clear opportunity for IEEE
to fill the gap.

CASE STUDY
Institute of Electrical and Electronics Engineers (IEEE):
The Power of the Pilot
When asked about lessons learned, Hawkins identified

both cultural change and process change. “Because IEEE About IEEE
is operating in a matrix environment, it can be hard for
more traditionally structured teams to understand what IEEE is the world’s largest professional
we’re trying to accomplish and the change management association dedicated to advancing
process we use to get there. We’ve had to modify some technological innovation and excellence
of our marketing processes to be more adaptable and for the benefit of humanity. IEEE and its
responsive. And, as always, we have to beware of falling members inspire a global community
in love with our own ideas. But the great thing about lean through IEEE’s highly cited publications,
startup methodology is that setting goals and measuring conferences, technology standards, and
against them are baked in, which removes the personal professional and educational activities.
element from those sorts of decisions.”
Hawkins also offered the following advice to other

associations considering the lean startup path: “Don’t
be afraid to acquire expertise, whether that’s hiring
dedicated staff, finding a partner to work with, or selecting
a consultant. That allows you to move quickly and
persuade your colleagues of the value of this model by
demonstrated success.”

CASE STUDY
NAFSA: Association of International Educators:
Combining Design Thinking and Lean Startup
“’That’s a good idea’ is not the same as ‘I’ll pay you for that idea.’”
Carol Hamilton, Senior Director, Program & Service Development
NAFSA’s journey to lean started with human-centered

design thinking, a specific decision-making methodology That’s been particularly valuable as NAFSA works on a
that guides participants to solutions through a focus on core competencies project. Many professional associations
goals rather than problems. It is often identified with offer core competencies documents for their members.
IDEO, one of the most prominent firms that practices “We had developed core competencies and were in the
this method: process of publishing them when we realized we hadn’t
answered the ‘So what?’ question,” said Hamilton. “We
Human-centered design is all about building a didn’t just want to release an interesting document that
deep empathy with the people you’re designing had no practical application. How could our members
for; generating tons of ideas; building a bunch of best use these to improve as professional educators and
prototypes; sharing what you’ve made with the advocates for students?”
people you’re designing for; and eventually putting
your innovative new solution out in the world.25 NAFSA staff met to “generate a ton of ideas,” as IDEO
recommends, and then refined those ideas into some “key
Construct a Build a 26
concepts.” They then hired an illustrator to create comic-
point of view representation
that is based on of one or more book style storyboards of those “key concepts” as their
Empathize user needs and Ideate of your ideas to Test MVP prototype to share with members. Each storyboard
insights show to others included a concept (one of a variety of learning topics or a
method for delivering that learning), an illustration, a brief
Learn about the Brainstorm and Return to your
audience for Define come up with Prototype original user description of the potential value proposition, the problem
whom you are creative solutions group and testing to be solved by that concept, the anticipated audience,
designing your ideas for and other key elements. Hamilton and a consultant then
feedback did a “walk and talk” through storyboards with individual
According to Carol Hamilton, Senior Director, Program members at NAFSA’s Annual Meeting, asking very
& Service Development, human-centered design thinking specific, detailed questions as they went.
intersects with lean startup methodology “around a shift
towards the small bet.” As an association of “people Hamilton explained, “One of the issues we knew we’d
person” members focused on educating young people, run into is that our members tend to be unwilling to
developing deep empathy and soliciting feedback were a criticize or say ‘That’s a bad idea,’ so we knew we’d have to
natural cultural fit. “What lean startup contributed was a create some forced choices, making participants rank the
focus on developing a Minimum Viable Product to allow concepts and get specific about whether they would pay
us to test our assumptions before we got so far down for each item and what they would be willing to pay.”
the development path we got stuck with something that
wouldn’t work,” said Hamilton.
25. http://www.designkit.org/human-centered-design
26. http://therightbraininitiative.org/2013/05/ideate-collaborate-design-thinking-is-so-very-right-brain-2/

CASE STUDY
NAFSA: Association of International Educators:
Combining Design Thinking and Lean Startup
In its first stage, NAFSA is creating a self-assessment Hamilton advised associations to involve as many
for members to measure where they are currently to stakeholders as possible throughout the entire process.
assist with their own career planning. The next stage “Make sure you’re creating opportunities for informal
will be to match members with “bite-sized” learning feedback as you go, and think about how to direct that
modules to address gaps. Those modules might come from feedback in constructive ways,” she said. “Ask ‘What
NAFSA’s existing professional development offerings, or would you change?’ and ‘May I test this concept on you?’
NAFSA might create new material or partner with other rather than ‘Am I allowed to do this?’ That keeps people
organizations around content. in the loop and allows them to share their input on key
concepts.” Most of all, Hamilton said, “This process
One of the key pivots that resulted from member MVP is fun. It encourages widespread participation, which
testing was around creating an online component for generates excitement. It also holds the promise of speed
executive training. “Creating an online community to to market. Associations have to be willing to challenge
support interaction between in-person meetings always our traditional barriers, including slow decision making,
sounds like a good idea, and our volunteer leaders were failing to allocate sufficient resources, and spreading
supportive because a hypothetical member might want to ourselves too thin. If we can be decisive, dedicate staff and
use it, but our MVP testing showed us that our real, actual volunteer efforts, and prioritize a few key initiatives, we
members viewed it as a ‘nice to have’ not an ‘I need this!’ can realize quick returns on our investments of time and
We simplified our initial solution based on their feedback, money.”
which will save both money and time. And we can always
add that later if demand develops,” Hamilton said.
About NAFSA
Hamilton definitely recommends combining human-
centered design thinking with lean startup methodology: NAFSA: Association of International
“Design thinking helps you identify interesting problems Educators is the world’s largest nonprofit
and come up with lots of creative potential solutions, association dedicated to international
which in turn gives you good ideas for MVPs.” education and exchange. NAFSA’s more
than 10,000 members, representing more
than 3,500 institutions in over 150 countries,
are administrators, advisors, instructors,
students, advocates, and volunteers
who are committed to the growth of
international education.

CASE STUDY
National Council of Architectural Registration
Boards (NCARB): Learning With Lean
“There’s no bigger waste than investing resources working on the wrong thing.”
Guillermo Ortiz de Zarate, Director, Information Systems
NCARB has been on a continuous journey toward lean startup methodology at the time, we could’ve created
lean over the last seven years, starting with “cutting a Minimum Viable Product to validate that the feature
the fat” from processes in 2007 and moving through was a real need, that customers were open to using it, and
agile development on its way to adopting lean startup that we were proposing the right solution.”
methodology. “Agile is a great first step, because it lets
you iterate and adapt quickly, but it doesn’t prevent you Contrast that with another recent project, a request to
from working on the wrong thing, in which case all your add a real-time contact feature to the NCARB website.
effort is wasted,” said Guillermo Ortiz de Zarate, Director, Using lean startup methodology, Ortiz de Zarate’s team
Information Systems. was able to perform a “Wizard of Oz” test, in which what
looks automated on the front end is actually still done by
The key, for Ortiz de Zarate, was “stumbling on” lean hand on the back end. “We split tested adding a clickable
startup methodology in 2013. After reading The Lean button to the site that, on the back end, just emails a staff
Startup by Eric Ries (one of this whitepaper’s key sources), person to call the member requesting contact. We were
he shared the book with his entire team and started looking able to validate that members actually wanted and would
for training events. The reason it was so appealing was, as use that feature before investing the resources to really
Ortiz de Zarate described, “it validated something I had build it,” shared Ortiz de Zarate. “Lean allows us to make
intuited about the need to start getting feedback about decisions about how we’re going to invest our limited
potential new programs, products, and services as quickly as resources more objectively and effectively. Lean reminds
possible with a formal, researched methodology.” us to validate need first, then work on making a slick,
pretty product.”
“One of the best things about information systems is
that it can be a source of continuous improvement for “In associations, we tend to worry that releasing a half-
organizations. But the danger lies in our tendency to get baked program will negatively impact the brand. I would
excited about a cool new idea or technology, implement it, argue that doing the same thing year after year without
and then ask if anyone wants it or will use it,” said Ortiz changing also negatively impacts your brand,” said Ortiz
de Zarate. de Zarate. “But it is important to identify the members
who are comfortable being early adopters. They’re the ones
That’s exactly what happened a few years ago, with a who are open to products that are still in beta, that don’t
request to build a new feature for NCARB’s online work perfectly yet. We have this big fear around promising
experience reporting system. As Ortiz de Zarate said, “We something we don’t deliver. But if only a small number of
spent six months working with a user interface consultant those early adopters sign up for something, it’s OK to tell
constructing a complex UI (user interface). We used agile them you have to cancel the project for lack of interest
development, so we were moving fast and showing lots and even to refund money they may have put down. If
of progress. We invested a lot of staff time and consulting a large number of people sign up for your MVP, that’s a
money and now, three years after deployment, less than strong signal that throwing resources at creating it will be
two percent of our customers use it. If we’d been using a good investment.”

CASE STUDY
National Council of Architectural Registration Boards (NCARB):
Learning With Lean
NCARB continues to expand its use of lean startup

methodology on an ongoing basis. At a recent senior staff About NCARB
retreat, NCARB’s CEO Michael Armstrong identified
four ideas for new products and services that he thought The National Council of Architectural
were worth pursuing. Armstrong is committed to the lean Registration Boards is a nonprofit
startup approach, which means NCARB will start with corporation comprising the legally
Business Canvases, MVPs, and good metrics and will look constituted architectural registration boards
for learning opportunities and chances to pivot in the of the 50 states, the District of Columbia,
coming year. Guam, the Northern Mariana Islands,
Puerto Rico, and the U.S. Virgin Islands as
If you want to get started, “start small,” Ortiz de Zarate its members. NCARB’s mission is to work
advised. “Think about your current circle of influence, and together as a council of member boards to
pick one small test where you don’t have to go through safeguard the health, safety, and welfare
a multistep approval process and convince your senior of the public, and to assist member boards
leadership team to try something that’s new to them. in carrying out their duties. NCARB develops
Demonstrate success in something small that’s completely and recommends standards to be required
under your control, which makes it much easier to of applicants for architectural registration;
convince people to try it again on something larger or develops and recommends standards
more complex.” regulating the practice of architecture;
provides a certification process and
architect registration requirements to
member boards; and represents the
interests of member boards before public
and private agencies.

Conclusion: Getting Started With Lean
After learning about the lean startup method and seeing Next, you need to launch the Build–Measure–Learn cycle,
how some associations are using it, our hope is that you’re which is the engine of the entire process. It involves the
inspired to try it in your own association. Where should creative process of ideation around an audience, a problem,
you begin? and a solution; building your MVP; and identifying and
developing the appropriate metrics to allow you to test
First, educate yourself about the lean startup method. your hypotheses.
This whitepaper is a good introduction, but we strongly
encourage you to check out the many resources we share It’s also important to identify the appropriate audience for
in the Resources section on page 26, particularly Eric your MVP. This is actually a sub-segment of your target
Ries’s The Lean Startup, Nathan Furr and Jeff Dyer’s The audience. Although you’re seeking to find a problem worth
Innovator’s Method, and Alistair Croll and Ben Yoskovitz’s solving and the appropriate solution for a particular group,
Lean Analytics. You can also get formal training in lean not every member of that group will appreciate being
startup methodology from a variety of sources: invited into a beta test of a product that may be incomplete,
buggy, temporary, or otherwise not quite up to your
• The Lean Startup Machine: association’s usual standards. But some of them will love the
https://www.leanstartupmachine.com opportunity to get early access to something that’s still in
• LaunchPad: https://www.launchpadcentral.com/ development and to be able to offer their own thoughts and
• Excella Consulting: http://www.excella.com opinions on how it works (or doesn’t) and what’s missing—
• LitheSpeed Consulting: http://lithespeed.com in other words, to co-create the program with you. You
need to know who from your target audience falls into
You can also learn about the methodology though finding which category. A smoke test is a great way to find those
lean startup groups in your area via MeetUp.com. These people. Remember that, in a smoke test, all you create is
meetings, where people with similar interests can get some marketing materials with a call to action to get more
together to share their experiences and learn from each information about something you haven’t even built yet. The
other, are usually free. people who answer that call are excellent prospects to co-
develop the new product with you, to serve on an advisory
Once you’re ready to get going, pick a small project group, or to act as beta testers.
that is entirely under your control. Association decision Relatedly, one of the keys to success in the Build–
making processes can be complex and convoluted. When Measure–Learn cycle is continuous learning about your
you’re trying to experiment with a new way of doing audiences. You should be doing this anyway, for a whole
things, it’s much easier to do so if you don’t have to host of reasons, but continuous learning about your
convince four other layers of stakeholders to approve it. audiences will speed the cycle of identifying worthy and
Nothing persuades as well as success, and if you’re able significant problems, figuring out the appropriate target
to demonstrate the success of the lean startup method audiences, crafting MVP solutions, knowing how to test
quickly in your own areas of responsibility, authority, and your assumptions in ways that will facilitate genuine
influence, you will have an easier time convincing your learning, and pivoting creatively and at the appropriate
colleagues, senior leadership, and volunteer leaders to try it time. Developing authentic, deep, ongoing relationships
with larger initiatives. with your members and other stakeholders will increase
the flow of feedback you get and your ability to hear
what people are and aren’t saying, so that you can use
that knowledge to improve the offering, delivering a new
version in the shortest possible time.

Conclusion: Getting Started With Lean
You also need to get creative about building your MVP. Speaking of metrics, you must invest sufficient time to
Remember that the goal is to invest the least amount of understand what you need to measure. Think about what
resources necessary to begin testing your assumptions. metrics will allow you to be clear about the assumptions
Wizard of Oz tests can be a great way to do this. Wizard you’re testing, test one assumption at a time, and learn
of Oz or Concierge tests involve creating a process that from what results. Unfortunately, there is no magic
looks slick and automated on the front end but is still “measure this” formula. In the Measure Second section
done by hand on the back end. Guillermo recounted how and the accompanying association case studies, we’ve
NCARB conducted a Wizard of Oz test on a new feature shared a variety of approaches to The One Metric That
on its website in the accompanying case study. In 1998, Matters. Eric Ries offers three additional metric tips.
a year into her first association job as director of member Good metrics are:
services and technology for a scholarly society, Elizabeth
conducted a Wizard of Oz test for online joining and • Actionable: that is, they demonstrate cause and effect
renewal, allowing members to fill out an online form so you can take action based on what you learn.
that was then processed by hand by her team, to see if it • Accessible: that is, you share data in formats that
would be worthwhile investing in the technology to have people can understand, remember, and use.
a genuine online join and renewal process. It was, and by • Auditable: that is, you can prove that your data is
the early 2000s the association was earning $1.5 million reliable.28
per year in online business, one-third of its total annual
revenue at the time. The critical point is that you must measure, measure,
measure and allow what you learn to direct you to what to
You will also need to remove barriers to action. Furr and work on next.
Dyer identify this as one of the key lean startup leadership
skills in The Innovator’s Method. Lean startup leaders Rather than viewing programs, products, and services
need to give people the time and tools to experiment as static offerings, associations would do well to see
and remove organizational barriers. As they describe it: themselves as constantly evolving, building, measuring,
“For employees at companies that have ossified around and learning every day, as we seek to develop Minimum
execution, experimenting feels risky, unnatural, even Awesome Products that address the key outcomes our
against the (unwritten) rules.”27 Does that sound like members and other stakeholders wish to achieve. Lean
any associations you know? One of the biggest barriers in startup methodology is one way to help achieve that.
associations is our unfortunate tendency to say “no” first.
We’d encourage you to challenge new initiatives by instead
saying, “Build, measure, learn, and show me your metrics!”
27. Furr and Dyer, The Innovator’s Method, pg. 61

28. Ries, The Lean Startup, pp. 143-147

Questions for Reflection
• Has your association experimented with lean six-sigma process improvement or agile development? How did that go?
What have you learned from those experiences?
• How did you do on the “transient advantage” test on page 4? Is your association at risk of disruption?
• What aspects of lean startup methodology are most appealing to you?
• What are some metrics that might matter in your association?
• Are you currently tracking vanity metrics for any of your programs, products, or services? Can you think of more
meaningful metrics you could replace them with?
• Have you ever pivoted on an audience, a problem, or a solution? What happened as a result?
• What are some of the unique advantages your association or team might employ in using lean startup methodology?
• Where do you think your association or team might experience problems using lean startup? What could you do to
remove those barriers?
• Who are the eager beta testers, advisory group members, collaborators, or co-creators among your members? If you
don’t know, how could you locate them?
• Have you ever built a new program, product, or service that disappointed your expectations? After learning about lean
startup methodology, have you gained some insight into what might have gone wrong?
• Does anyone ever ask “Where’s the evidence that this is a problem worth solving?” when your association is planning to
launch a new initiative?
• Does your organization regularly create business plans for new initiatives? What would happen if you replaced those
with the Business Canvas?
• What methods do you currently use to discover and understand your members’ or customers’ pain points? How are you
getting beyond your current services and finding new opportunities for serving your audiences?
• Is your team able to let go of an idea if your assumptions are proven wrong? If you struggle with that, what would make
it easier?
• What’s one project that’s entirely under your control where you might be able to start experimenting with lean startup
methodology?

Additional Resources
Athitakis, Mark. “The Value of Sharing Mistakes,” Associations Now blog. ( July 6, 2015).
http://associationsnow.com/2015/07/value-sharing-mistakes/.
Blank, Steve. The Four Steps to the Epiphany. (K&S Ranch, 2013).
Blank, Steve. “Why the Lean Start-Up Changes Everything,” Harvard Business Review. (May 2013).
https://hbr.org/2013/05/why-the-lean-start-up-changes-everything.
Blank, Steve and Bob Dorf. The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company.
(K&S Ranch, 2014).
Croll, Alistair and Benjamin Yoskovitz. Lean Analytics: Use Data to Build a Better Startup Faster. (O’Reilly Media, 2013).
Furr, Nathan and Jeff Dyer. The Innovator’s Method: Bringing the Lean Start-up to Your Organization.
(Harvard Business Review Press, 2014).
George, Mike, Jr. “Ask the Expert: Integrating Lean and Six Sigma,” iSixSigma website.
http://www.isixsigma.com/methodology/lean-methodology/ask-expert-integrating-lean-and-six-sigma/.
Gooding, Liam. Growth Pirate! A Beginner’s Guide to Achieving Data-Driven Growth in Your Startup (ebook).
http://growth.trak.io/pirate-metrics-ebook/.
Kelley, Braden. “Top 10 Reasons Not To Innovate,” Innovation Excellence Blog. (March 15, 2015).
http://www.innovationexcellence.com/blog/2015/03/15/top-10-reasons-not-to-innovate/.
The Lean Startup: The Movement That Is Transforming How New Products are Built and Launched (website).
http://theleanstartup.com/.
Maurya, Ash. Running Lean: Iterate from Plan A to a Plan That Works. (O’Reilly Media, 2012).
McClure, Dave. “Startup Metrics for Pirates,” Slideshare. (August 8, 2007).

http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version.
McGrath, Rita Gunther. “Transient Advantage,” Harvard Business Review. ( June 2013).
https://hbr.org/2013/06/transient-advantage.
Osterwalder, Alexander. “The Business Model Ontology: A Proposition in a Design Science Approach,” Ph.D.
dissertation, Universite de Lausanne. (2004).
http://www.hec.unil.ch/aosterwa/PhD/Osterwalder_PhD_BM_Ontology.pdf.

Additional Resources
Osterwalder, Alexander. “Video: Sketch Out Your Hypothesis,” Harvard Business Review website. (March 19, 2013).
https://hbr.org/video/2363593484001/sketch-out-your-hypothesis.
Ries, Eric. The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.
(Crown Business, 2011).
Saif, Emad. “The Business Model Canvas,” Slidshare. ( January 30, 2013).
http://www.slideshare.net/esaife/business-model-canvas-101.
Smith, Ernie. “Cardiology Group Forges Ties with DC-Based Startup Incubator,” Associations Now Blog.
(November 17, 2014). http://associationsnow.com/2014/11/cardiology-group-forges-ties-dc-based-startup-incubator/.
Strategyzer, The Business Model Canvas (website). http://www.businessmodelgeneration.com/canvas/bmc.
Steinberg, Jon. “The Risk of Doing Something Versus Nothing,” LinkedIn Pulse. (May 28, 2015).
https://www.linkedin.com/pulse/risk-doing-something-versus-nothing-jon-steinberg.
Thomas, Nicholas. “11 Startups That Found Success by Changing Direction,” Mashable. ( July 8, 2011).
http://mashable.com/2011/07/08/startups-change-direction/.

About Guillermo Ortiz de Zarate
Born and raised in Buenos Aires, Argentina, Guillermo With 25 years of experience in the Information
Ortiz de Zarate is the Director of Information Systems Technology field, Guillermo went from programmer, to
for the National Council of Architectural Registration project manager, to IT manager, to director in a short time
Boards (NCARB). and has led the implementation of technology solutions
in a multitude of industries, including healthcare, urban
While the IT manager for a regional office in development, civil engineering, international commerce,
Argentina, Guillermo was promoted and relocated to government, marketing, banking, and regulation.
the Washington, DC, headquarters of a multinational
organization in 1999. Guillermo joined NCARB in 2007, At NCARB, Guillermo has been an advocate of data
where he helped transform the Council from a paper- driven decision-making, developing a comprehensive data
oriented bureaucracy to an award-winning industry leader. warehouse and a data-science practice that helps publish
industry trends annually through the acclaimed NCARB
He was included in the InformationWeek 500 list of best By The Numbers publication.
technology innovators for the years 2011, 2012, and 2013
and was awarded the NCARB Presidential Medal for Guillermo holds a bachelor of science degree in
distinguished service in 2012. information technology and is a 2016 MBA candidate at
Johns Hopkins Carey School of Business.
About Elizabeth Weaver Engel

Elizabeth Weaver Engel, M.A., CAE, CEO and chief with a broad understanding of the association sphere.
strategist at Spark Consulting LLC, has more than 18 Throughout her career, she has excelled at increasing
years of experience in association management. Although membership, revenue, public presence, and member
her primary focus has been in membership, marketing, satisfaction while decreasing costs through a focus on the
and communications, her work has been wide-ranging, efficient and effective use of data, staff, and technology to
including corporate sponsorship and fundraising, serve organizational goals and constituents.
technology planning and implementation, social media
and internet strategy, budgeting, volunteer management, Prior to launching Spark, Elizabeth consulted in online
publications, and governance. campaigns and marketing and internet and social media
strategy for Beaconfire Consulting and in a wide range
Spark provides strategic membership and marketing of subject areas in association management in the not-
advice and assistance to associations that have the for-profit consulting practice at RSM McGladrey, Inc.
willingness and capacity at both the staff and board levels She has also served associations directly in a variety of
to ask themselves tough questions and take some risks positions, including director of member services and IT,
in service of reaching for big goals. Forget settling for director of marketing and sponsorship, vice president of
incremental growth by making minor changes to what marketing, and acting CEO.
you’re doing—we’re going to uncover and solve the root
problems that are holding your association back! Elizabeth is a certified association executive (CAE) and
holds a master’s degree in government and foreign affairs
Elizabeth combines a focus on asking the right questions from the University of Virginia.
and finding and implementing creative solutions


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O C T O B E R 2 0 1 5

Innovate the Lean Way: Applying Lean Startup

Introduction: An Innovation Parable

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1. Eric Ries, The Lean Startup, p. 5

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• Customer Segments: Whom are you serving? What

Propositions Relationships Segments

DesigneD by: Strategyzer AG

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11. Ries, The Lean Startup, p. 55

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13. Furr and Dyer, The Innovator’s Method, pp. 121-130

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Measure Second The Scientific Method

differently. Because startups often

words, the Lean Startup is a new

In the lean startup method, your business canvas model

15. Ries, The Lean Startup, p.20

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Beware of Vanity Metrics

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18. Ries, The Lean Startup, p. 149

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21. Furr and Dyer, The Innovator’s Method, p. 172

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Challenges Relatedly, brand plays a very different role in associations

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ASHA is now at the beginning stages of taking its lean

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When asked about lessons learned, Hawkins identified

Hawkins also offered the following advice to other

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NAFSA’s journey to lean started with human-centered

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NCARB continues to expand its use of lean startup

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27. Furr and Dyer, The Innovator’s Method, pg. 61

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• What aspects of lean startup methodology are most appealing to you?

• What are some metrics that might matter in your association?

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McClure, Dave. “Startup Metrics for Pirates,” Slideshare. (August 8, 2007).

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Strategyzer, The Business Model Canvas (website). http://www.businessmodelgeneration.com/canvas/bmc.

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About Elizabeth Weaver Engel

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