Henry Oakes founded his start-up on lean principles. Seven years down the track, with £30 million invested and 40-plus staff, he's still applying the same methods.
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Geonomics is a successful games industry business that has been surprising and delighting gamers for nearly a decade. Co-founder Henry Oakes tells us how his business has thrived by taking inspiration from a single book and why keeping it lean could be the way forward for your start-up too.
Tell us about Geonomics and your business journey over the last few years.
My brother James and I started Geonomics back in 2008, after I had a distinctly uninspiring experience buying a lottery ticket. I knew lottery and gaming could be made so much better for a digital age, and I like to think we’ve proven that at Geonomics – making map-based games that players really love.
Since we launched we’ve developed a suite of unique location-based games, attracted over £30 million of investment and kept learning as we grow.
You credit the lean approach with helping your business grow. Explain the principles.
The lean startup methodology is best defined as a constant ‘build, measure, learn’ loop. The method favours agility, working through failure, adapting to customer needs and constantly learning from experience. The idea of the lean startup itself was pioneered by Eric Ries in his 2011 book ‘The Lean Startup’, which kicked off a loyal following, initially in Silicon Valley.
"It lends itself well to disruptive businesses – they tend to be striving for continual improvements"
Ultimately it’s all about making sound business decisions based on evidence – whether that’s around website analytics, customer feedback or anything in-between. It’s like a scientific experiment – not being afraid to try new things and measuring the difference it makes, whether it’s positive or negative.
It requires maturity and acceptance and an appreciation of what you can learn from that experience and how it can help your company grow.
Why would you favour this over other approaches?
It’s the adherence to delivering exactly what your customer, or in Geonomics’ case the player, wants. We are obsessive about the impact our decisions have on our players, and it really pays off. The lean approach helps us focus our energy on doing the right stuff, not just any stuff, and that’s enabled us to create some really great, robust games.
However, I would urge anyone thinking of following this model to tailor it to their unique business model and company culture. Like anything, you shouldn’t follow any single methodology to the letter or close off to other ideas.
What aspects of business are most conducive to lean and why?
It’s widely known that initially the lean way grew in popularity with tech start-ups, but elements of lean can be applied to any aspect of any business gathering data. Right now that’s most businesses across all sectors from healthcare to ecommerce and adopted across different departments.
A lean approach can be applied within a marketing department. Think about an email marketing campaign – that will produce a lot of information from overall open rate to the most attractive or popular link in the email.
Different iterations of the same email campaign can be split-tested or compared to reveal what creative or incentive performed best. Even this basic level of data gathering can be used to inform strategic thinking.
It's important to focus on what works and to strip out the rest
But data can be qualitative, not just quantitative. It isn’t only important to marketing departments and has a place in HR, where employee feedback can be gathered and analysed to drive improvement. Similarly it can be used by complaints departments to create a better customer experience or make better products or services.
It can also be used as an effective influencing tool at board level – providing hard evidence to support C-level decisions or make a case. The lean methodology has almost limitless applications, as long as you use it in a flexible, agile way.
Can you see this working as you grow beyond a start-up – how far can it be taken?
Absolutely – again, agility is key. One of the beauties of the lean start-up approach is that you can take the parts that will benefit your business and discard the rest. I read a lot of business and leadership books taking away only the learning that I think is of relevance to me and my company
At Geonomics, we employ more than 40 people, have been running for more than seven years, and still use lean methodologies effectively.
The more levels there are to a company’s hierarchy, the more difficult it might become – but in principle there’s no reason that a multinational couldn’t implement a lean approach. If there’s buy-in from senior management and people are empowered to make quick, evidence-based decisions without having to get approval from multiple people, any business can benefit.
Do you think working in tech lends well to the method – is it transferrable across industries?
There are definitely advantages to working in a tech company when you adopt the lean method. For example, because our game is online, we get data about player behaviour almost as soon as any game changes go live. Once we have enough evidence to support an idea, it’s easy for our developers to create and implement a new feature or redesign an old one.
But boiling the lean start-up down to its core principles, the build, measure, learn loop system can benefit any company in any industry.
The method has not been without its critics. PayPal co-founder Peter Thiel reduces it all down to not much more than using customer surveys to inform decision making – a process that Thiel says won’t create anything of significant value. How would you respond to this based on your own experiences?
I hugely respect Peter Thiel, but I think he’s wrong. The lean approach he’s referring to isn’t the one I recognise; it’s one that’s been implemented half-heartedly. A decision backed by evidence is best when it’s been proved via multiple sources by many different customers to get a full picture of what’s going well and what isn’t.
Thiel’s right that customer surveys don’t give you the necessary information, but he’s wrong to blame the lean start-up method for it. He’s got his own approach (and a book all about it) and is entitled to go with what works for him.
You’re labelled 'disruptive' right now. Do you think lean has helped you achieve this?
It can’t be credited for generating the original idea for our games, but it definitely gave us a way of making that idea a reality. As a method, it lends itself well to disruptive businesses – they tend to be striving for continual improvements, and willing to take risks that might not pay off.
The lean way helps a business evolve beyond what would normally be deemed as mistakes and failings and helps entrepreneurs to use these experiences as stepping stones to really fantastic innovations. For us we hope to continue to be disruptive and use the lean approach get to a point where we feel like we’ve really made a big impact in what’s a very competitive and ever changing space.
What challenges still remain for you as a company?
We want to keep growing as a company, to keep developing brilliant new games and to have these games played worldwide by a delighted player base. I know we can get there with the ideas we have and the team we’ve got, it will just take time and commitment.
Since inception, one of our biggest challenges has been to define our place in the market – we’ve cut our teeth in the lottery or gambling space but taken and applied a lot of the learning and fun from the casual or social gaming market place. We’ve always felt a bit like a misfit, so much so, we actually think we’re better off in an emerging market that we’re calling the ‘gamebling’ space!
What advice would you give a company looking to adopt a lean model?
Give it time and focus – you can’t develop into a lean-driven company overnight. It requires buy-in from everyone, whether that’s senior management or a summer intern, and that takes time to embed. It might be frustrating at times, but I believe the potential gains are well worth the effort you’ll put into adopting lean.