Conventional wisdom holds that most big companies are not capable of innovating. They’re too fat and bureaucratic, too resistant to change, good at creating operational efficiency but unwilling to assume risk. The big fish exceptions that embrace change, such as Google, Apple, Amazon, and Samsung, have innovation coded into their very DNA. For the rest, though, innovation is seen as a characteristic of startups and not established companies.
But 25-year-old business school dropout Trevor Owens aims to change that. His New York-based company, Lean Startup Machine, is today releasing an online tool called Javelin to help product teams turn unproven ideas into actionable experiments. It can be used to design new products or perfect existing ones. Users identify underlying product assumptions, then define, run, and track experiments.
“It’s a decision-making tool,” Owens says. “It helps you figure out who your early adopters are and what your minimum viable products should be.”
Javelin, which costs $2,050 for a three-month pilot with two weeks of intensive training thrown in, grew out of the “lean startup” methodology, created and popularized by Eric Ries, Entrepreneur-in-residence at Harvard Business School, who expounded upon it on his popular blog and in his bestselling book.
Lean Startup is a method to employ rapid experimentation to develop products the market really wants. Through collection of data and experimentation it seeks to answer the most important question of all: should a product even be built. Owens began providing workshops on the topic through his company, Lean Startup Machine, in July 2010, after becoming acquainted with Ries’s theories. One problem, though. He didn’t tell Ries what he was up to. After the company was up and running Owens reached out to his unsuspecting mentor, asking him to Skype in for an event, and Ries reminded him that he owned the trademark to Lean Startup. Eventually they worked out a deal and Ries has what Owens calls a “decent slice of equity” plus sits on the company’s board.
I’ve known Owens for a few years. I met him after he founded tech@nyu, a club at New York University, when he convinced me to become an advisor. As I’ve told several people, “One day we’ll all be working for Trevor.” Part hustler, part startup evangelist, Owens created his first business in high school, building websites for local businesses. As a college student he borrowed $10,000 from friends and family to start a business importing scooters from China. It failed, something his mother never lets him forget, although it does provide fodder for a good case study.
Owens attended Iowa State University and joined its nationally ranked wrestling team – his dream was to make it to the Olympics – but an injury drove him from the sport. After that he put all his energies into his education and was ranked first in his business school class at Iowa State. He transferred to NYU Stern School of Business but left to start Lean Startup Machine.
Owen’s brainchild was one of 11 companies out of 1,700 applicants (an acceptance rate of 0.6%) chosen for TechStars, a New York-based accelerator program that provides seed funding, mentorship, and office space to promising startups. To date, the company, which is on track to generate $2 million in revenue this year, has given 114 workshops in 40 cities on six continents, including New York, San Francisco, Singapore, Sao Paolo, Sydney, London, Tokyo, and Beijing, and trained employees from News Corp., Salesforce.com, Intuit, Wharton School of Business and the White House.
In a testimonial, Daniel Loreto, Sr., a former engineer at Google who now works at Twitter, said, “Lean Startup Machine’s training is about getting outside the bubble. A lot of what happens at Google is about grinding out the technology to make it a little better. You can see a product like Google Wave would have benefited a lot from more user engagement and feedback before it launched.”
The Javelin app is itself a product of the lean startup methodology. It began as a minimum viable product, a free online tool that more than 10,000 people downloaded. Because Owens was shooting for 20,000 he viewed this as a failure, which convinced him to shift away from consumers and focus on the enterprise market.
Last fall Owens unveiled a landing page, and within a few hours 50 people signed up for it, offering to pay $25 a month. The important aspect of the experiment was that these 50 people were willing to enter their credit card numbers. In essence, Owens was charging for vaporware, following up with email that offered them the right to join a beta when it was available.
“We capped it at 50 so as to limit the risk of making people mad,” Owens says. “While it’s a small group the key was to prove they would pay.”
The reason Owens charged for the pilot was to filter out all the noise. He wanted to avoid being confused by feedback from people who didn’t express a strong need for the product. In fact, he even raised the price to $100, leaving only the most engaged and enthusiastic customers. As the Javelin app took shape Owens and his crew ran other experiments, for instance, looking at different user interfaces. The feedback they received showed them they would be better off focusing on existing product development within enterprise organizations instead of new products, since there are many more of those.
“Our training business is our marketing funnel,” Owens says. “Our workshops get people excited about the process and after that they’re excited about Javelin. We’re leveraging the success we’re having.”