IMVU: “But Does It Scale?” from Startup Lessons Learned Conference
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IMVU, an online community using 3D avatars, experienced growth and challenges while applying lean startup principles. Despite initial success, they faced declining revenue due to increased technical debt and disconnected product teams. The company implemented new strategies to align goals and improve product ownership, ultimately leading to sustained growth.
IMVU: “But Does It Scale?” from Startup Lessons Learned Conference
- 1. An online community where members use 3D avatars to meet new people, chat, create and have fun with their friends
- 2. Video of this presentation from the April 23, 2010 Startup Lessons Learned conference is available at http://bit.ly/bBpUcm 1
- 3. But Does it Scale? The Evolution of Lean at IMVU Brett G. Durrett, James Birchler, Timothy Fitz IMVU, Inc. 2
- 4. Introduction • Assumption audience is quite familiar with Lessons Learned blog • IMVU sometimes referred to as the original Lean Startup • Talking about how we now work and the learning that lead us here 3
- 5. Quick Background • Customer Development & Lean principles lead company to tremendous growth • Fast development – everybody focused on getting new things into customers hands • No “golden gut” - customer metrics beat grand product vision • Inspirational environment – everybody empowered to make product decisions 4
- 6. Success! IMVU Revenue by Quarter (in millions) $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 5
- 7. Scaling Our Success • Product Owners for R&D, productizing, monetizing and keeping things running – Smaller, independent versions of company • Same successful philosophy and practices – Ship fast (but 2 month cycles feel slow) – Anybody can make product decisions – Customer-facing over infrastructure 6
- 8. Not So Much IMVU Revenue by Quarter (in millions) $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 7
- 9. Not So Much • Revenue dropped even though we were the using exact same philosophy and practices that delivered success • Product becoming “bucket of bolts” – Features abandoned because development teams disbanded / moved to new projects • Emphasis on customer-facing changes leads to increased technical debt 8
- 10. Scaling This Success: Plan B • 7 “customer experience” product groups – acquisition, discovery, connection, etc. • Persistent feature ownership • Each group has key business metric – Conversion, retention, # chats, etc. – Combined metrics ultimately drive revenue 9
- 11. Again, Not So Much IMVU Revenue by Quarter (in millions) $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 10
- 12. Again, Not So Much • Revenue flat • Product still a “bucket of bolts” • Technical debt continues to pile up – Build infrastructure hindering development – Can’t iterate on IM client • Lack of progress leading to morale issues 11
- 13. Key Failures • Didn’t align everybody for success – Competing metrics = adversarial owners – Authority disconnected from responsibility • 7 product teams = too small to be effective – No desire to apply limited team to tech debt • Focus on immediate customer feedback prevented “big bet” improvements – Bias favors features over infrastructure 12
- 14. Scaling This Success: Plan C • Align organization for success • Strengthen product ownership – Support it with effective project management • Allow “big bets”, not just optimizations • Don’t lose the things that make us great! 13
- 15. Getting Aligned • Officers determine business strategy – Shared (repeatedly) with all employees • All employees have same incentive plan – 2009 targets for profitability and revenue • Authority consistent with responsibility – Drive accountability – Required difficult changes to culture 14
- 16. Stronger Product Ownership • VP Product clear mandate – Determines long-term product strategy – Aligns product owners to company strategy • Three product teams: product, monetization, keeping things running • Product Owners determine all product changes 15
- 17. Project Management • Needed visibility into: – Where we spend development resources – Better ROI assessment when planning (the “I”) – What others are doing (transparency) • Resource Allocation – Product decides % of resources to each area – Engineering determines actual people • Variation of scrum, 2-3 week sprints 16
- 18. Scrum at IMVU – How it Works • Product Owner, QA, Tech Lead pre-plan • Full team reviews detailed project planning • 3 engineers agree on task duration • Template tasks for all projects, esp. “Technical Review of Code Once Shipped”, which leads to work added to “Engineering Project Follow-up” lane • Engineers hand off code to Product Owner/QA with a feature demonstration 17
- 19. Seeing the Big Picture • Passion for customer validation great • Obsession for immediate validation can distract you • Easy to lose sight of: – Product opportunities requiring a big bet – Increasing technical debt – Infrastructure needs 18
- 20. Customer vs. Infrastructure • Customer facing features prioritized over infrastructure critical to early success • When it compromises ability to rapidly iterate a key strength is lost 19
- 21. How Do You Know? “We are hiring smart people that can’t make changes to our code” 20
- 22. Payback of Technical Debt • Dedicated technical investment projects • Some systems get a technical debt “tax” applied only when product changes • Tech Leads can add project requirement 21
- 23. Build Infrastructure Overhead • Effective development systems require ongoing investment to scale – Impacts speed and morale • IMVU spending 20% of engineering on maintenance of the tests and process – Even with premium we find it has high ROI • Pain follows a square wave pattern as we scale the organization 22
- 24. Example: New IM Client • Not previously possible – 1-year design and development – Substantial non-customer-facing infrastructure • Big win for customers and technical debt – Solved key issue confusing customers – Rate of development greatly accelerated • Iterated with customer validation! 23
- 25. Example: Hack Week • Originally few requirements – Anybody can develop anything – Have to demo it at end of week (live) • New requirements – anything, but ship it or kill it – Each person allowed 1 project at a time – Product adopts it, keep building it or kill it – Limit customer exposure until adoption – Engineers need business data to make decisions! • Results – Much higher rate of projects getting to customers – Many engineers choose to work on existing product plan! 24
- 26. Key Cultural Values We Kept • Customer metrics validate our decisions • Value everybody’s ability to contribute to product direction – Great ideas can come from anywhere • Culture of accepting failures so long as you learn (and improve) 25
- 27. But Does it Scale? (Yes) IMVU Revenue by Quarter (in millions) $8 $7 $6 $5 $4 $3 $2 $1 $0 Qtr Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 26
- 28. Oh Yeah… Interested in getting more experience? We’re hiring! http://www.imvu.com/jobs/ 27