Spotify the unproject culture

(+ failure story how to burn 1 billion)

Consultant
www.crisp.se

Passion for Projects keyote,

May 21, 2013

Henrik Kniberg

Father

henrik.kniberg@crisp.se
@HenrikKniberg

Agile & Lean coach

Author

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Henrik Kniberg

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Purpose of this presentation

Show that projects arent the only way to get stuff done

Henrik Kniberg

Success = ?

Henrik Kniberg

01:32

What is a successful project?

Scope

nah....

Budget

Henrik Kniberg

Schedule

What is a successful project?

Project A

Project B

Scope

Budget

Scope

Scope

Schedule

Customer

Users

Development team

Henrik Kniberg

Project C

Budget

Schedule

Customer
Happy
stakeholders!
Users

Development team

Budget

Schedule

Customer

Users

Development team

Happy
stakeholders!

Measuring success

Happy
stakeholders

Proxy
metrics
Do they
come back
more often?

Measure the stuff

that really matters!

Happy
development
team

Happy
users

Surveys
Do they
stay longer?

Henrik Kniberg

Do they listen to
more music?

Do they share
more music?

A unique & expensive

experiment

Henrik Kniberg

01:32

Experiment: Build the same product twice, in different ways

Project 1

Project 2

Mission

Improve society

Reduce maintenance cost

Requirements

Unclear

Clear

Delivery

Agile (= Iterative/incremental)

Big bang

User involvement Continuous

None

Teams influence
over technology
choices

High

None

Tech platform

Java
(programming language)

Siebel
(CRM system)

Hypothesis: second version will be cheaper (and better).

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PUST polisens utredningsstd

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Project 1: PUST Java

Nationwide
release

pilot releases

2010

2011

Rebuild the whole

thing using Oracle
Siebel

Oracle says Siebel

will be cheaper and
better

Oracle says Siebel

will be cheaper and
better

No time for that.

Build the whole thing in
one go, and release
nationwide when done.

Henrik Kniberg

Huh? We just spent 100 Mkr

building a working product.
Shouldnt we keep improving on
that?

But it wont work! PUST

is UX critical, and its not
a CRM system!

Well then lets build a

small pilot version, to see
if that is true

Project 2: Pust Siebel

A train wreck in slow motion

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Project 2: Pust Siebel

2012

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Nationwide
release

2013

@#?

Result of experiment build the same product twice:

PUST Java

PUST Siebel

Mission

Improve society

Lower cost

Delivery

Iterative

Big bang

Teams influence
over technology
choices

High

None

Tech platform

Java
(programming language)

Siebel
(CRM system)

RESULT

PUST Java

PUST Siebel

Cost

100 Mkr

200 Mkr
+ estimated damage 10 Bkr

Measured impact

2-8x faster processing time

for simple crime investigations

Police blocked several hours

per day. Error rate increased.

Requirements
User involvement

Stakeholder
response

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Unclear

Continuous

Mostly positive

Clear
None

Outrage

Lessons learned
Nationwide
release

Pust Siebel

Pust Java
2010

Nationwide
release

2011

2012

Focus on solving user needs, not cost

Deliver iteratively & incrementally
Involve real users

Beware of standard platforms
Theyre not as standard as you think
Listen to your tech people more than to the
external vendor trying to sell stuff to you

Henrik Kniberg

2013

What makes a project

succeed?

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01:32

15,000 person-years of experience

Communication
User involvement
Small steps
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Do projects help us
succeed?

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01:32

A bucket of
people, time, and money

Project = ?

X-mas

Temporary

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Not a routine
operation

Defined Beginning and

End in time
People who dont
normally work
together

What do people REALLY mean when they say project

This?

Or this?
Something we
are working
on

Temporary

Not a routine
operation

Henrik Kniberg

Defined Beginning and

End in time

People who dont

normally work
together

All products start with a Great Idea!

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Big Bang = Big Risk

Cumulative
RISK Value
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Big Projects usually fail. Regardless of process.

The Standish Group has categorically stated with
much convictionbacked by intense research
that the secret to project success is to strongly
recommend and enforce limits on size and
complexity.
These two factors trump all other factors.

< $1 million

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> $1 million

Project model invites Big Bang thinking

Big Bang

Temporary

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Not a routine
operation

Defined Beginning and

End in time

People who dont

normally work
together

Project

Agile = Iterative + Incremental

Dont try to get it all right
from the beginning

cost

RISK

Henrik Kniberg

Dont build it all at once

value

cost
value

Not like this....

Like this!

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Slice the elephant!

Region
stergtland,
Uppsala, etc

1.0
Crime types
(weapon,
drunk driving,
shoplifting, etc)

1.1

1.3

1.4

1.2
1.5

PUST Java
Integrations

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Project model doesnt fit well for IT product development

Big Bang approach

Deliver
Do Stuff

Project
Agile approach
Do Stuff

Deliver

Do Stuff

Deliver

Deliver

Deliver
Do Stuff

Deliver

Do Stuff

Do Stuff

Do Stuff

Project = ?
A project is a temporary, non-routine operation.
Product development teams are long-lived,
and they deliver routinely.

Projects have a fixed end.
Product development is continuous
Henrik Kniberg

Temporary

Not a routine
operation

Defined Beginning and

End in time

People who dont

normally work
together

Improving the Value Curve

RISK
Big Bang

Big increments

Value

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Effort

Small increments

Highest value first

Maximize Value, not Output

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Project Model vs Agile Model

Project Model

PUST Siebel

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Agile Model

PUST Java

What is Spotify?

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01:32

Play Everywhere!

Like a magical music player in which

youve bought every song in the world!

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Revolutionizing the music industry

Popular product that spreads virally
Happy employees
Stable revenue model

User growth
30M

24 million
active users

20M

6 million
Paying
subscribers

10M

2006

2007

2008

2009

2010

2011

2012

Employee growth
1300+ employees
30+ countries

1000

750

500

250

2006
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2007

2008

2009

2010

2011

2012

2013

400 people in tech

Stockholm
250
Gothenburg
30

San Francisco
10

New York
100

37

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How Spotify works

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01:32

The Spotify unproject

2008

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Timeline

2013

> 60 squads

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Autonomous Squad

Cross-functional, co-located, self-organizing team

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42

Squads are grouped into Tribes

Tribe

Tribe

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Tribe

Tribe

Tribe

Tribe

Each Tribe is a lightweight matrix focused on delivery

Vertical = Delivery.
Horizontal = knowledge sharing & personal development
Tribe
Tribe

Chapter

Chapter

Chapter

Guild Chapter

Reality is messy

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Community > Structure

Face-2-face communication

How do we align 60+

mini-startups?

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Alignment & Autonomy

Alignment
Do what
I say!

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False
d

ichot
omy

Autonomy

Do
whatever

Alignment enables Autonomy

We need to
cross the river

High
Alignment

Build a
bridge!

Authoritative
organization
Conformist
culture

Micromanaging
organization

Low
Alignment

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Indifferent
culture

Low Autonomy

Aligned Autonomy!

We need to
cross the river

Figure out how!

Innovative
organization
Collaborative
culture

Entrepreneurial
organization
Chaotic
culture

High Autonomy

Hope someone is
working on the
river problem

Leaders job:
Explain what problem needs to be solved.
And Why.

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Aligned Autonomy

- be autonomous, but dont suboptimize

- Spotifys mission > Squads mission

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Fastest learner wins!

Delivery frequency = Speed of learning

Stakeholders, Users

Feedback,
Requests,
Data

Demos,
Releases

Development team

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Release = Drama!

Release must be REALLY easy!

Release!
Req

Releasing is
hard

Code

Test

Release
seldom
Release = Routine

Releasing is
easy
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Release
often

Decoupling to enable
frequent releases

Client App squad

!#?

Feature squads

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Self-service model
Infrastructure squads

Client App squads

Enable &
support
IOS

Android

Feature squads

Enable &
support

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Desktop
Enable & support

Web

Release trains & Feature toggles

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Failure Recovery is more important

than Failure Avoidance
Failure Avoidance

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Failure Recovery

Limited Blast Radius via decoupled architecture

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Limited Blast Radius via gradual rollout

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Trust > Control

100% control = 0% motion
If everythings under control,
youre going too slow!
- Mario Andretti

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How Spotify builds

products

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01:32

Our product philosophy

1: We create innovative products while managing risk by prototyping
early and cheaply.

2: We dont launch on date, we launch on quality.

3: We ensure that our products go from being great at launch to
becoming amazing, by relentlessly tweaking after launch.

Henrik Kniberg

Idea/Problem
Radio you
can save!

Backlog Developing Released

Impact
achieved

Narrative & Metrics

& Prototypes
Build MVP

Minimum Viable Product

Tweak

Deploy

to X% of users

Impact A/B stats

Analyze data

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Think It

Build It

Ship it

5% shipped
Prototypes

Narrative

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MVP

1% shipped

Tweak it

100% shipped

100% predictability = 0% innovation

Focus on

Innovation

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Focus on

Predictability

You already have innovators!

Hackathon
Just unleash them.
every few
months

Lab Day
last Friday
every month
20% time

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Hack days
Hack weeks
10%

Company-wide hackweek
One whole week.
Everyone at Spotify
Build whatever you want.
With whoever you want
In however way you want.
Demo & party on Friday!

Henrik Kniberg

Projects at Spotify

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01:32

A Spotify project is...

....a focused and coordinated effort of severals squads for several months

We are organized to minimize the need for projects.

But sometimes a project is unavoidable.

We arent very good at doing big projects
- but we will keep experimenting and learning!

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Some things weve

learned about how to do
projects

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01:32

Find the balance

Chaos

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Agile

Bureaucracy

Culture

Daily sync

- resolve dependencies

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All involved squads

What do you need from another squad right now?
What is your progress since yesterday that affects the other squads?
What do you plan to do today that will affect the other squads?

Weekly demo

- evaluate the integrated product

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Triggers tight integration and collaboration

Gives a sense of progress
Triggers decisions & reprioritization

Visual management
& Light-weight adaptive planning

Plans are useless.

Planning is essential.

Focus on impact!
Not dates or deliverables.

Eisenhower

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Retrospectives during and after the project

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Leadership needed
(...but how?)
Leadership is an activity, not a role.

> Appointed leadership

Emergent leadership

Experiments:
- RM (road manager)
- Leadership duo/trio
(tech + product + design)

Henrik Kniberg

What about project managers?

We do value (most) PM skills.
But were not sure we need a PM role.

Debate
in prog
ress

Project managers are change agents.

They make project goals their own and use
their skills and expertise to inspire a sense
of shared purpose
We call this Road Manager.
... work well under pressure and are
comfortable with change and
complexity in dynamic environments

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... resolving complex,

interdependent activities into
sub-tasks that are documented,
monitored, and controlled

... can shift readily between big

picture and small-but-crucial
details
We try to build this
competence into each squad
We coach squads to do this themselves,
in a just-in-time decentralized way.
Sometimes they need support though.

Wrapup

Henrik Kniberg

01:32

Ask the right question

How can we run
big projects

How can we
minimize the need
for big projects?

How can we minimize

the size of projects?
(and how do we run
projects when we
cant avoid it)

Henrik Kniberg

Take-away points
Projects arent the only way to get things done
The standard project model is a tool
Like any tool, it is suitable for some situations but not all.
It is often unsuitable for IT product development
Success = happy stakeholders. Not time/budget/scope.
Minimize the size, deliver iteratively & incrementally
Focus on solving real user needs,
and involve them continuously
Experiment!
You can always improve. So keep trying new ways.

Henrik Kniberg