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How a 47-year-old company embraced Lean Startup

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Elaine Chen Innovation Consultant, Senior Lecturer, MIT Sloan School of Management
Old dog learns new tricks

Sketches of new apparel styles for the next clothing season. Racks of sample garments scattered throughout the building. High-end workstations running apparel CAD. Rolls of multicolored fabric in the sample department. These were some of the sights that greeted customer development team members from Gerber Technology as they walked through the headquarters of a major apparel company in the heart of New York City.

A 47-year-old company with a new idea

Gerber is a 47-year-old company with a wide range of products, including a suite of hardware and software for companies involved in apparel design, development, and manufacturing. One might ask, with all that Gerber knows about its tens of thousands of customers, what new insights could it possibly gain from yet another customer visit? The answer: A great deal.

Gerber's apparel CAD business, AccuMark, has been around since 1988. The team knows a lot about how its customers use AccuMark 2D CAD to create patterns for garments. What it didn't know as it was launching a new initiative involving 3-D CAD was how its customers would react to a new product based on that technology.

Rather than just working with flat patterns on the screen, designers and pattern makers would now be able to preview the garments as a 3-D model before ordering physical samples. This innovation had the potential to dramatically speed up the product development process for apparel companies, saving them a lot of time and money.

While other industries have long embraced 3-D CAD for product design, the apparel industry was slow to adopt. The question was, would Gerber's customers embrace 3-D, or would they be confused?

Beating the Innovator's Dilemma via Lean Startup

This was a classic Innovator's Dilemma situation, where a disruptive idea could threaten the success of an existing business and alienate existing customers. Gerber could have gotten stuck in this situation?but it didn't. Instead, it embraced the methodology.

With the help of Moves the Needle, a consulting company that brings to the enterprise, Gerber completely reframed how it thought about 3-D. Rather than focusing on the technology and feature set, the team asked three questions:

  • How does the apparel design and development process work today, and where are the key pain points?
  • Who are the key stakeholders who experience the most pain?
  • Will the proposed 3-D solution "treat" the pain?

Customer development

To answer these questions, the team went on a multiweek road show, interviewing customers in the field to build knowledge about their current workflows and pain points.

Through the research effort, the team refreshed its knowledge about how apparel design and development is handled today, and developed personas for key stakeholders.

It also found that not all customers were experiencing the same level of pain. The sweet spot for the new product was customers in the fast fashion segment. These customers had the greatest time-to-market pressure and could benefit the most from early adoption of 3-D CAD.

Mary McFadden, executive director of CAD product management, says, "With coaching from Moves the Needle, we were able to leverage methodologies to validate our assumptions. We discovered new insights into our customers' daily challenges and were able to refine our solution to better meet our customers' needs."

MVP iteration No. 1: The landing page test

It was now time to go to the next step: testing the minimum viable product (MVP) with customers who would gain the greatest benefit. This was where the Innovator's Dilemma once again loomed large.

According to Eric Ries, author of The Lean Startup, the MVP is "that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort." In the case of AccuMark 3D, it was not the polished, finished product customers had come to expect, but a scrappy engineering prototype without bells and whistles. How could the team test the waters to see if customers were receptive to the idea?

With guidance from Moves the Needle, the team came up with a faster and easier MVP to test before taking the prototype on the road: It could launch a landing page test. The team would put up a click-through landing page describing the proposed 3-D product, with a big call-to-action button encouraging customers to sign up for a webinar to learn more. If customers signed up, it would validate both their pain points and their receptiveness to the product.

The results started rolling in almost immediately after the test went live. People were signing up left and right. The elapsed time from starting to construct the landing page to having results to review was less than four hours. It passed the first test with flying colors, and the team was ready to go to the next step.

MVP iteration No. 2: The show and tell

It was now time to show the engineering prototype to customers to see what they thought about it. The team set two goals for the second road show:

  • Get feedback on the solution and explore how it could improve existing customer workflows
  • Sign up beta testers to further validate interest

The engineering prototype was fairly de-featured, but it was highly effective in facilitating the conversation between the team and customers. The team got instant feedback on functionality and what customers considered must-haves and nice-to-haves.

Also, in the very first meeting, the team learned that there were many more stakeholders than originally believed. Rather than just targeting existing end users, there were a few other user personas that needed to be accounted for. The team included those personas in its next visit and learned how those they would interact with the product. More important, the team scored a big success: It signed up a few customers for a beta trial on the spot.

Incorporating feedback into the development process

Between the landing page test, the show and tell, and the subsequent beta trials, the team collected deep insights about how customers worked and how their problems might be solved. The team adjusted the solution according to the findings, and released the first version of AccuMark 3D in early 2015. The team continued to test and iterate with customers as it built out the product to meet customer needs.

Get out of the building

Gerber is a great example of how a company with a huge installed base of existing customers can embrace a mentality to test and iterate an innovative initiative without getting stuck in the Innovator's Dilemma.

"To drive innovation, you need insight into your customer's needs and the ability to respond quickly," says Karsten Newbury, vice president and general manager of software at Gerber. "Applying Lean Startup principles, we are driving the rapid development and launch of new features of AccuMark 3D to continue our history of transforming processes to support our customers. Our team is quickly embracing this approach as we see the value it will drive for our customers."

The key is to set the right expectations with customers during customer development and MVP testing, and to manage innovative initiatives as separate programs that run in parallel to engineering development for existing products. By doing this, Gerber Technology was able to keep iterating until it arrived at product-market fit for its AccuMark 3D product just like a startup, while enjoying the scale and resources of an established business.

What about you? How would your company incorporate customer development and MVP testing principles into your new initiatives?

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