Nyriad: An Agile Startup Done Right
I have recently spent a few days in the company of Nyriad, a New Zealand IT company specialisng in GPU software. I wish to make a point of a few observations of the company because they are an example of both a startup company that uses agile project management, two terms much maligned and subject to justified cynicism, and does it right. Because I have seen so many colleagues burned by companies and organisations which profess such values and do not do it right, I hope the following observations will be useful for future organisations.
A Shared Vision with the Right People in the Right Place
Like many other successful IT companies, this story begins with a bunch of young guys in a small town hacking in garage with an older mentor. As smart people they could thrash about a range of ideas which eventually coalesced around a perceived gap in the IT world - in their case, the failure to harness the power of GPUs in a much more optimal manner. Recognising the issue and redirecting intellectual energies towards solving this problem becomes the mission of the orgnisation, a shared reason for existence, a representation of what we do (in contrast "vision" statements, where the company wants to be in the future, are actually more fluid and contested).
Everyone in the company must be clear of mission of the company and share in that mission and its values. People who do not agree with the mission and do not cooperate with others to fulfil the mission are not suited for the organisation. This is even independent of technical or other competencies. Dedicated and cooperative people can learn the skills required. People who are are antithetical or indifferent to the organisation's mission statement, even skilled people, will be a hazard and must be removed. You succeed as a group.
Part of that success is picking where to start. A location that has a well-established market with large and powerful related organisations may not be the best choice, although it certainly would be superior to one that lacks the physical and social infrastructure or for that matter a sufficiently educated workforce for the tasks at hand. Selecting a good location is similar to selecting the right staff, and selecting the right product ("product, place, price" as the marketing people say). If you find a country with an intelligent legal system, small town with good infrastructure next to a university that produces graduates in your chosen field but with minimal local employment opportunities in that field, all of a sudden you'll be the best team in the region.
Finances and Strategic Alliances
Except for some volunteer organisations (most prevalently, political and religious groups), a startup must have sufficient funds to ensure continuing interest and loyalty of staff who, unsurprisingly, have to live as well. Because they typically are producing new goods they do not have an established market. Therefore it is absolutely necessary that such organisations have a good source of venture capital and/or public grants to fulfil their mission. It must also be said that it is extremely rare for a startup to be an operational company; projects are certainly the norm. As a result, and as an application of an agile approach, employees are in effect creating their own job before a definite product exists. Microrenumeration based on completion of piecemeal tasks is an appropriate model in these circumstances.
Some startups are quite happy to engage in the development of an awesome product and then be acquired by a (much) larger company. Others are determined to remain in development, move to production, and completely change an industry (or at least part of it). Either way strategic alliances with the larger partners are essential. A startup almost certainly is not going to have the financial and other resources to compete with established organisations. If a startup openly treats the bigger, established players as antagonistic competitors they will almost certainly be crushed. Strategic alliances instead provide opportunities for the startup to develop advantageous relationships for the startup and the opportunity for the larger group to gain access to the new technology that the startup is developing.
The most important strategic alliance however is with the staff. Without staff there is no development, and without development there can be no product, and that my friends is vapourware. Startups tend not have a limited supply of funds and if one is based around a relatively young and enthusiastic workforce the pay rates are going to be less than than they are for older workers with a deep level of implicit knowledge in established organisations. The alternative is conditions - ensuring that the employers nurture their staff, provide flexibility in their hours that suit the worker, provide an intellectually stimulating and safe workplace, and provide equipment and infrastructure that is above and beyond the worker's needs. If a worker does leave the organisation they should do so on good terms and have good reason to speak well of their former employer - and the longer they will be in the workforce the more important this will be.
Project-Based and Operational-Based Organisations
Organisations can be evaluated according to the degree that their work is project-based and operation-based. To quote from the PRINCE2 manual: "A project is an organisation created to deliver one or more products according to an agreed business case. A project introduces change, is temporary, cross-functional, unique and uncertain." Nearly all startups are heavily orientated towards projects. Over time, as their project moves from development to product, from where short-term milestones are replaced by long-standing contracts, the organisation will increasingly move from being project-focussed to operationally-focussed. Work becomes a relatively well-known delivery of stable products and quality consistency becomes an increasingly important focus over disruptive innovation.
For the agile startup, a procedure and standards focus can be a dangerously heavily overheard with premature standardisation and contingencies can lead to a situation where time and effort is spent on preparing for events which never occur. However, from the outset an organisation must have a transparent, documented, and inclusive decision-making process. Without this decisions will ad-hoc, inconsistent, and actually create more administrative overhead. Starting lean is sensible, but recognition that as an organisation grows, and a product develops, consistency becomes increasingly important. The typical challenge for a startup is often perceived as the transition from development to product; an equal challenge is organisational, from being almost entirely project-based to having a sufficient level of operations and quality assurance.
The field of agile startups is littered with the bodies of crushed dreams and exploited employees. Almost invariably due the flaws of managers who have misunderstood the meaning of words. They misinterpret the word 'agile' to mean that they don't need a governance structure or can change it at a whim, whereas in reality an agile project is a heavily itertative process and highly structured. Such people are also under the misapprehension that a startup is a 'get rich quick' scheme, whereas in reality it is about developing the deeply considered selection for an innovative product that, by chance, the major players have missed. Over the years I have seen a number of startups fail, not because they didn't have a good idea, or good staff, a good work environment, or even good money - but rather because they didn't fulfil all of these requirements simultaneously. As an intuitively conservative person in such matters, I can say quietly that Nyriad is one of the very few organisations that I am confident will succeed.