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Yield Technologies' Andy Hamilton on the Lean Startup Model's Many Virtues

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Yield Technologies' Andy Hamilton on the Lean Startup Model's Many Virtues

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Andy Hamilton and his company, Yield Technologies, didn't create the "lean startup model" philosophy. (That distiction belongs to one Eric Ries.) But, as it turns out, Hamilton, Yield, and RentSocial, a social networking site that helps customers find "the best apartments to rent" that's part of Yield, all follow that philosophy. It's a simple -- though sometimes difficult to fathom -- approach to business that dictates you create a minimally viable product, get it to market and see what your audience wants from it to follow their lead. It can leave some companies feeling vulnerable, exposed and unprepared for what its audience wants, but that's seldom the case. 

To convince you of that, and to walk you through how one company has adhered to it for nearly half a decade, I gave Hamilton a call. He's the chief technology officer and senior vice president at Yield Technologies, so, yeah: He practices what he preaches. And maybe you'll decide to convert and go lean. 

What is the "lean model?"

Andy Hamilton: Eric Ries made it extremely popular. He authored a book, The Lean Startup, taking a lot of concepts and ideas from lean manufacturing and really applying it to product development and he is now a very highly regarded consultant, especially in the technology space for how companies, especially startups operate and basically work to very quickly iterate on products. It's just changing the approach to just getting something out there as quickly as possible and get feedback from consumers and you make your decisions on future features based on getting that feedback. So it's just the core of a lean startup, to have the ability to focus on a minimally viable product and get that out into the market and get feedback, measure feedback, learn and then continue to build again.

So, create and then iterate.

Andy Hamilton: Correct. It's really to come up with a hypothesis that you want to test. Obviously that's what we're all doing when we develop products in this industry. My goal is to test that solution: build, measure, learn. Get through that loop as quickly as you can and deliver something to your customers and then let their feedback, how they use their product, help you decide what you do next.

Do you have examples of ways you might have handled previous loops differently?

Andy Hamilton: Sure, yeah. The first was our latest product. We launched it in April. We very much followed the lean methodology with RentSocial. It's a new product that we consider a startup within our company. We have a very small team and what we do is we had a hypothesis and we thought that renters were looking for a different way to rent. That they wanted a platform where they could see reviews on one site and also have the ability to interact with properties and their residents. That was our hypothesis. What we did was some initial research, and then our goal was to build a minimal viable product, which is what we delivered in April. We built about eight percent of the features that we wanted to put into it, which is very painful for our developer, but we knew our goal was to get it to market and then let the consumers decide what we should be doing next. We've been iterating ever since we launched. We are watching how people are using our site and make sure we don't focus on features that we as developers think are cool but instead think about features that consumers are going to see value in. You want to make a sticky product that consumers are coming back to or people are staying on for a length of time.

Do you find that most people have a reluctance to adopting this kind of philosophy maybe because they feel like nobody should see what they're working on until it's complete?

Andy Hamilton: Oh, without a doubt. I have fallen into that trap and most managers have fallen into that trap. And probably most management executives fall into that trap of "we know what's best -- you need to get in as many features as possible because the last thing you want to do is deliver a product that's missing features and customers will complain." The lean approach goes against that. It goes against building everything up front and trying to deploy one massive set of features to just getting something out as quick as possible.

You probably don't necessarily know exactly what your customers want and more importantly your customers don't necessarily know what they want. But if you give them some ideas and some directions to go, then you can get great feedback which helps you decide what to build next.

Do you think this philosophy could apply to all startups? Or are there some sectors where it doesn't make sense to deploy it?

Andy Hamilton: I think it could apply to the service industry as well as any type of product development, whether it's HR or consulting. It's the idea of not trying to do too much at once. Keep your ideas small with the idea that you can have time to iterate. But also a big part of lean that I think applies to any business, not just technology, is being able to know when you're working on something and it's not actually working and be able to maybe change directions. It doesn't need to be a complete 180 on what you're doing. You have to be able to be honest with yourself when something isn't working the way you want it to work or it's not being received -- your hypothesis may be failing -- and you have to go in another direction. I think there's value to that in any industry.

David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.

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