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A proven need for agility

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  • William Pietri
    There s an interesting post about company failure rates based on one venture capitalist s personal data:
    Message 1 of 11 , Nov 30, 2007
      There's an interesting post about company failure rates based on one
      venture capitalist's personal data:

      http://www.techcrunch.com/2007/11/30/vcs-whats-your-failure-rate/

      The bit that's especially interesting to us:

      Of the 26 companies that I consider realized or effectively realized
      in my personal track record, 17 of them made complete
      transformations or partial transformations of their businesses
      between the time we invested and the time we sold. That means there
      a 2/3 chance you’ll have to significantly reinvent your business
      between the time you take a venture capital investment and when you
      exit your business.

      That's a hell of a need for agility.

      It's more dramatic than that, though. Getting VC money means you have
      already built your original business plan and then gone through
      extensive probing from very smart people. I've never heard of anybody
      who didn't change their some plan in response to that.

      On top of that, there's another demand for agility. Knowing you need to
      change is one thing, but knowing *which way* to turn is harder. A good
      agile team can put out lots of little features to see which ones get
      user uptake. Then they can respond quickly to the successes to see which
      ones reward further effort.


      And for those who think this doesn't matter because they're not doing a
      startup: a startup may be your next competitor.

      When Google entered the market, people thought search engines were over,
      a reasonably stable business. Now Google is worth more than Walmart, is
      energetically changing the advertising business, and is starting to
      shake up mobile telephony. They could well have a skunk-works team
      cooking up something in your industry, and if not, somebody else surely is.

      William

      --
      William Pietri - william@... - +1-415-643-1024
      Agile consulting, coaching, and development: http://www.scissor.com/
      Instant video gratification: http://www.sidereel.com/
    • Chris Wheeler
      ... Interesting, William. Over the years my perception is that there is not a clear consensus about what part an agile team plays in this type of change. I ve
      Message 2 of 11 , Dec 1, 2007
        On Nov 30, 2007 1:44 PM, William Pietri <william@...> wrote:

        >
        > There's an interesting post about company failure rates based on one
        > venture capitalist's personal data:
        >
        > http://www.techcrunch.com/2007/11/30/vcs-whats-your-failure-rate/
        >
        > That's a hell of a need for agility.
        >

        Interesting, William. Over the years my perception is that there is not a
        clear consensus about what part an agile team plays in this type of change.
        I've heard it said that agile is strictly a 'deliver what the business
        wants, and let the business figure out what it wants' methodology and I've
        heard it said that agile 'should steer the business, and tell it where it
        needs to go'.

        So, while I get what this article is saying, I'm not sure that there is
        clear thought on what the role of an Agile team (with a capital A) is in
        steering business decisions. Having been on agile teams and being the
        business side of things, I think that Agile teams can have bigger influence
        than they do, and I also think that they have less of an effect than they
        perceive that they are having.

        What do others think?
        Chris.


        [Non-text portions of this message have been removed]
      • Ryan Cooper
        I think delivering software in an agile manner enables the business to get feedback faster and make more relevant decisions. That is, agile development doesn t
        Message 3 of 11 , Dec 2, 2007
          I think delivering software in an agile manner enables the business to get
          feedback faster and make more relevant decisions. That is, agile development
          doesn't steer the business, but it is a useful tool that allows the business
          to steer itself more effectively.

          When driving at night, headlights don't steer the car, but they sure help
          the driver steer effectively (that is, stay on the road). ;)

          Cheers,
          Ryan

          On Dec 1, 2007 8:28 PM, Chris Wheeler <christopher.wheeler@...> wrote:

          > On Nov 30, 2007 1:44 PM, William Pietri <william@...> wrote:
          >
          > >
          > > There's an interesting post about company failure rates based on one
          > > venture capitalist's personal data:
          > >
          > > http://www.techcrunch.com/2007/11/30/vcs-whats-your-failure-rate/
          > >
          > > That's a hell of a need for agility.
          > >
          >
          > Interesting, William. Over the years my perception is that there is not a
          > clear consensus about what part an agile team plays in this type of
          > change.
          > I've heard it said that agile is strictly a 'deliver what the business
          > wants, and let the business figure out what it wants' methodology and I've
          > heard it said that agile 'should steer the business, and tell it where it
          > needs to go'.
          >
          > So, while I get what this article is saying, I'm not sure that there is
          > clear thought on what the role of an Agile team (with a capital A) is in
          > steering business decisions. Having been on agile teams and being the
          > business side of things, I think that Agile teams can have bigger
          > influence
          > than they do, and I also think that they have less of an effect than they
          > perceive that they are having.
          >
          > What do others think?
          > Chris.
          >
          >
          > [Non-text portions of this message have been removed]
          >
          >
          >
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          [Non-text portions of this message have been removed]
        • Steven Gordon
          ... While agile software development does not steer the business, it provides more than just greater visibility. It also enables the business to react more
          Message 4 of 11 , Dec 2, 2007
            On Dec 2, 2007 10:52 AM, Ryan Cooper <ryan.p.cooper@...> wrote:
            >
            > I think delivering software in an agile manner enables the business to get
            > feedback faster and make more relevant decisions. That is, agile
            > development
            > doesn't steer the business, but it is a useful tool that allows the
            > business
            > to steer itself more effectively.
            >
            > When driving at night, headlights don't steer the car, but they sure help
            > the driver steer effectively (that is, stay on the road). ;)
            >
            > Cheers,
            > Ryan
            >

            While agile software development does not steer the business, it
            provides more than just greater visibility. It also enables the
            business to react more quickly to what it can now see.

            Steve
          • Dave Rooney
            ... High beams! ( Main beams to those not from the Colonies) :) Dave Rooney Mayford Technologies http://www.mayford.ca
            Message 5 of 11 , Dec 2, 2007
              Steven Gordon wrote:
              > On Dec 2, 2007 10:52 AM, Ryan Cooper <ryan.p.cooper@...> wrote:
              >
              >> I think delivering software in an agile manner enables the business to get
              >> feedback faster and make more relevant decisions. That is, agile
              >> development
              >> doesn't steer the business, but it is a useful tool that allows the
              >> business
              >> to steer itself more effectively.
              >>
              >> When driving at night, headlights don't steer the car, but they sure help
              >> the driver steer effectively (that is, stay on the road). ;)
              >>
              >>
              >
              > While agile software development does not steer the business, it
              > provides more than just greater visibility. It also enables the
              > business to react more quickly to what it can now see.
              >

              High beams! ("Main beams" to those not from the Colonies) :)

              Dave Rooney
              Mayford Technologies
              http://www.mayford.ca
            • Simon Jones
              From the few brief flirtations I ve had with them, and from acquaintances who work in this field I ve always thought that VC s (particularly for start ups) are
              Message 6 of 11 , Dec 3, 2007
                From the few brief flirtations I've had with them, and from
                acquaintances who work in this field I've always thought that VC's
                (particularly for start ups) are really investing in individuals
                (assuming a reasonably sound idea).

                Perhaps, if there's truth in that, then this would increase the
                contribution an Agile team might make?

                However as I understand it it very much like publishing, music, films
                etc... they make a relatively large and wide set of investments which
                hopefully are scaleable and hope that one or two of them come off,
                big time thus far outweighing the moeny lost on the vast majority of
                the others.

                In which case then perhaps the value of an Agile team is somewhat
                diminished.

                I personally think (and its very much a personal perspective) that
                the real value of agile is /not/ in startups etc at all. Its at its
                most valuable in larger 'brand' organisations who need to maintain
                their position by constantly staying one step ahead.


                Simon
                --- In extremeprogramming@yahoogroups.com, "Chris Wheeler"
                <christopher.wheeler@...> wrote:
                >
                > On Nov 30, 2007 1:44 PM, William Pietri <william@...> wrote:
                >
                > >
                > > There's an interesting post about company failure rates based on
                one
                > > venture capitalist's personal data:
                > >
                > > http://www.techcrunch.com/2007/11/30/vcs-whats-your-failure-rate/
                > >
                > > That's a hell of a need for agility.
                > >
                >
                > Interesting, William. Over the years my perception is that there is
                not a
                > clear consensus about what part an agile team plays in this type of
                change.
                > I've heard it said that agile is strictly a 'deliver what the
                business
                > wants, and let the business figure out what it wants' methodology
                and I've
                > heard it said that agile 'should steer the business, and tell it
                where it
                > needs to go'.
                >
                > So, while I get what this article is saying, I'm not sure that
                there is
                > clear thought on what the role of an Agile team (with a capital A)
                is in
                > steering business decisions. Having been on agile teams and being
                the
                > business side of things, I think that Agile teams can have bigger
                influence
                > than they do, and I also think that they have less of an effect
                than they
                > perceive that they are having.
                >
                > What do others think?
                > Chris.
                >
                >
                > [Non-text portions of this message have been removed]
                >
              • William Pietri
                ... I think it depends on the people and the relationships involved. The deliver what the business wants approach is a useful model to create a clear
                Message 7 of 11 , Dec 5, 2007
                  Chris Wheeler wrote:
                  >
                  > Interesting, William. Over the years my perception is that there is not a
                  > clear consensus about what part an agile team plays in this type of change.
                  > I've heard it said that agile is strictly a 'deliver what the business
                  > wants, and let the business figure out what it wants' methodology and I've
                  > heard it said that agile 'should steer the business, and tell it where it
                  > needs to go'.
                  >
                  > So, while I get what this article is saying, I'm not sure that there is
                  > clear thought on what the role of an Agile team (with a capital A) is in
                  > steering business decisions. Having been on agile teams and being the
                  > business side of things, I think that Agile teams can have bigger influence
                  > than they do, and I also think that they have less of an effect than they
                  > perceive that they are having.
                  >
                  > What do others think?

                  I think it depends on the people and the relationships involved.

                  The "deliver what the business wants" approach is a useful model to
                  create a clear separation of powers where responsibilities are muddled.
                  That isn't just developers ceding power, either. It pushes everybody to
                  step up and take control.

                  I think once people have that down, the next stage is more open, more
                  flexible. With the chaos reduced, there's more room for advice and ideas
                  to flow. Then the team, by virtue of being close to the work, can do a
                  fair bit of steering.

                  I think that outcome is much easier to achieve in the startup context.
                  Early in a VC-funded tech startup, the development team is usually the
                  majority of the company. The company is very focused on optimizing the
                  upcoming products. And the company is small enough that everybody knows
                  each other by name.

                  All of those factors make it relatively easy for pretty much everybody
                  to contribute to the limit of their abilities, and to be rewarded
                  appropriately. Which, to my mind, is exactly the kind of atmosphere that
                  a lot of us are trying to create.

                  William






                  --
                  William Pietri - william@... - +1-415-643-1024
                  Agile consulting, coaching, and development: http://www.scissor.com/
                  A team room, in pictures: http://www.scissor.com/resources/teamroom/
                • William Pietri
                  ... The numbers are a little more kind than that. Some fail, some are perfectly adequate businesses, and some are big hits. Regardless, any one of those
                  Message 8 of 11 , Dec 5, 2007
                    Simon Jones wrote:
                    > However as I understand it it very much like publishing, music, films
                    > etc... they make a relatively large and wide set of investments which
                    > hopefully are scaleable and hope that one or two of them come off,
                    > big time thus far outweighing the moeny lost on the vast majority of
                    > the others.
                    >
                    > In which case then perhaps the value of an Agile team is somewhat
                    > diminished.
                    >

                    The numbers are a little more kind than that. Some fail, some are
                    perfectly adequate businesses, and some are big hits.

                    Regardless, any one of those startups could be the big hit, so you have
                    to act like all of them are. Thinking you can slack off because success
                    is unlikely pretty much guarantees failure.

                    > I personally think (and its very much a personal perspective) that
                    > the real value of agile is /not/ in startups etc at all. Its at its
                    > most valuable in larger 'brand' organisations who need to maintain
                    > their position by constantly staying one step ahead.
                    >

                    Hmmm... I guess I don't know what "real value" is exactly.

                    I think startups are more likely to be naturally agile, as their small
                    staffs and small bank accounts mean that they can't for long avoid
                    paying careful attention to reality. Large organizations with valuable
                    brands can coast for a long time on their assets, getting well stuck in
                    ruts.

                    So I think I'd agree that large organizations would find more value in
                    being very consciously agile, if only because their unconscious
                    approaches can waste a lot more value than your average startup ever could.

                    William


                    --
                    William Pietri - william@... - +1-415-643-1024
                    Agile consulting, coaching, and development: http://www.scissor.com/
                    A team room, in pictures: http://www.scissor.com/resources/teamroom/
                  • Simon Jones
                    ... films ... which ... off, ... of ... Granted.. however its the big hits that provide the disproportionate percentage of returns. From an investors pov,
                    Message 9 of 11 , Dec 5, 2007
                      --- In extremeprogramming@yahoogroups.com, William Pietri
                      <william@...> wrote:
                      >
                      > Simon Jones wrote:
                      > > However as I understand it it very much like publishing, music,
                      films
                      > > etc... they make a relatively large and wide set of investments
                      which
                      > > hopefully are scaleable and hope that one or two of them come
                      off,
                      > > big time thus far outweighing the moeny lost on the vast majority
                      of
                      > > the others.
                      > >
                      > > In which case then perhaps the value of an Agile team is somewhat
                      > > diminished.
                      > >
                      >
                      > The numbers are a little more kind than that. Some fail, some are
                      > perfectly adequate businesses, and some are big hits.
                      >

                      Granted.. however its the big hits that provide the disproportionate
                      percentage of returns.

                      From an investors pov, venture is about getting the big hits not
                      finding 'adequate' businesses. You don't get big returns from
                      adequate and without the big hits you risk losses given that the
                      majority of businesses fail.

                      > Regardless, any one of those startups could be the big hit, so you
                      have
                      > to act like all of them are. Thinking you can slack off because
                      success
                      > is unlikely pretty much guarantees failure.
                      >

                      Don't recall suggesting anyone slack off, just that its speculative
                      investment.

                      > > I personally think (and its very much a personal perspective)
                      that
                      > > the real value of agile is /not/ in startups etc at all. Its at
                      its
                      > > most valuable in larger 'brand' organisations who need to
                      maintain
                      > > their position by constantly staying one step ahead.
                      > >
                      >
                      > Hmmm... I guess I don't know what "real value" is exactly.
                      >

                      'most potential realised.' Startups are smaller, less scope for
                      drift, less to go wrong, more important to get early success (and
                      arguably quality is less of a factor when, in terms of the marketing
                      curve, you are probably servicing early adopters who are more
                      tolerant)

                      Agile is surely useful. But there are bigger gains to be had in
                      larger organisations.

                      I think its strange that there's a common perception that its the
                      other way around. I actually think Agile /helps/ operations scale.
                      I've heard many people disagree suggesting there's a kind of 'cap' on
                      the size at which agile is effective.

                      > I think startups are more likely to be naturally agile, as their
                      small
                      > staffs and small bank accounts mean that they can't for long avoid
                      > paying careful attention to reality. Large organizations with
                      valuable
                      > brands can coast for a long time on their assets, getting well
                      stuck in
                      > ruts.
                      >
                      > So I think I'd agree that large organizations would find more value
                      in
                      > being very consciously agile, if only because their unconscious
                      > approaches can waste a lot more value than your average startup
                      ever could.
                      >

                      Agreed.

                      > William
                      >
                      >
                      > --
                      > William Pietri - william@... - +1-415-643-1024
                      > Agile consulting, coaching, and development: http://www.scissor.com/
                      > A team room, in pictures: http://www.scissor.com/resources/teamroom/
                      >
                    • agilejedi
                      ... influence ... they ... less of an effect than they perceive they are having Please expound. Which perceptions are incorrect? Also, what is causing the
                      Message 10 of 11 , Dec 5, 2007
                        --- In extremeprogramming@yahoogroups.com, "Chris Wheeler"
                        <christopher.wheeler@...> wrote:

                        > Having been on agile teams and being the
                        > business side of things, I think that Agile teams can have bigger
                        influence
                        > than they do, and I also think that they have less of an effect than
                        they
                        > perceive that they are having.
                        >
                        >

                        "less of an effect than they perceive they are having"

                        Please expound. Which perceptions are incorrect?

                        Also, what is causing the effects that the Agile team assumes are the
                        result of their actions?

                        AJ
                      • William Pietri
                        ... You said this after mentioning the hit-driven nature of venture capital, and I thought you were looking at it from the perspective of an individual
                        Message 11 of 11 , Dec 5, 2007
                          Simon Jones wrote:
                          > From an investors pov, venture is about getting the big hits not
                          > finding 'adequate' businesses. You don't get big returns from
                          > adequate and without the big hits you risk losses given that the
                          > majority of businesses fail.
                          >
                          >
                          >> Regardless, any one of those startups could be the big hit,
                          >> so you have to act like all of them are. Thinking you can
                          >> slack off because success is unlikely pretty much guarantees
                          >> failure.
                          >>
                          >>
                          >
                          > Don't recall suggesting anyone slack off, just that its speculative
                          > investment.

                          Got it. The way I got the notion was from this sentence:

                          > In which case then perhaps the value of an Agile team is somewhat
                          > diminished.

                          You said this after mentioning the hit-driven nature of venture capital,
                          and I thought you were looking at it from the perspective of an
                          individual VC-funded startup, which only has a one-in-ten-ish chance of
                          being a big hit.

                          I thought you were suggesting that because a given startup was not
                          likely to be wildly successful, that somehow diminished the value of
                          doing things well. That's a common fallacy, unfortunately. It's like not
                          checking your lottery tickets because they're probably losers.

                          But if you're taking a portfolio view, then agility-focused practices
                          make at least as much sense for VC-funded companies as for larger
                          companies, and possibly more. VCs invest money in startups because they
                          can get a better return than investing in large companies. Startups
                          benefit more from agility because most of their value is new business
                          and innovation. That's rarely the case for large companies. Ergo, it
                          seems like ROI on agile practices would be higher.

                          Of course, agility isn't all we get from the techniques under the Agile
                          banner. For a large company, I think it can be more useful to focus on
                          benefits like cost reduction, risk reduction, and long-term
                          maintainability rather than agility as such.

                          Either way, I think both sorts of companies can benefit from Agile
                          methods. Although it's interesting, I'm not sure the question of who
                          benefits more is a useful one. It's not like there's a limited amount of
                          unit tests that we have to allocate one place or the other. Anybody can
                          learn to do this, and I think everybody should learn.

                          William

                          --
                          William Pietri - william@... - +1-415-643-1024
                          Agile consulting, coaching, and development: http://www.scissor.com/
                          Instant video gratification: http://www.sidereel.com/
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