UnitedHealth Group's Kunjorn Chambundabongse and Pathfinder's Todd Wyder share lessons learned from their collaboration on applying the lean startup approach to a large innovation portfolio. Topics include: * How a lean innovation approach provides a more efficient way to determine which ideas merit further development and to rapidly bring the right ones to product/market fit. * How business model analysis, rapid cycles of hypothesis testing using minimal experiments and feedback from real customers can help you decide when to pivot, when to persevere, and when to allocate your innovation budget to other ideas. * How to manage an innovation portfolio to maximize returns The biggest challenges they faced and how they attacked them * Changing Culture and Mindset * What's Next.

1. Lean Innovation at UnitedHealth Group
Presented by Chicago Lean Startup and
Pathfinder Software

2. A little about
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3. Fortune 17
Workforce: 150,000
28,000 Physicians, Nurses, and Clinical
Practitioners
12,000 Technologists
Manages $150B+ in health care spend annually
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4. 250,000+ Plan Sponsors
85 Million Consumers
780,000 Care Providers
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5. OUR HEALTH BENEFITS BUSINESS OUR HEALTH SERVICES BUSINESS
“Health in Numbers” “Good for the System”
Helping People Live Healthier Lives
UnitedHealthcare Community & State
UnitedHealthcare Employer & Individual
UnitedHealthcare Medicare & Retirement
UnitedHealthcare Military & Veterans
UnitedHealthcare International
Making the Health Care System Work
Better for Everyone
OptumInsight
OptumHealth
OptumRx
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6. What if we used [insert technology] and
added [insert core asset] and gave it to
[insert market] so that they could [insert
something cool]?
INNOVATION MAD LIBS
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7. What if we used smartphones and added
our Rx data and gave it to consumers so
that they could track their medications?
NEW IDEA
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8. OMG!!
$$ $$
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9. What if we used fancy charts and graphs
and added claims data and gave it to
consumers so that they could manage
medical expenses easier?
NEW IDEA
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10. OMG!!
$$ $$
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11. from to
idea profit
BUSINESSPLAN
FINANCIALMODEL
PRODUCTMANAGEMENT
WATERFALLENGINEERING
THE TRADITIONAL PATH
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12. GO FOR LAUNCH!!
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13. BUT THEN
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14. Customer Adoption
Product Features
Design
Marketing
Partners
Sales
Cost Structure
Funding Support
Priorities
Revenue Streams
Time
UNCERTAINTY
GREMLINS = UNCERTAINTY
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15. No business plan survives first
contact with customers
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16. Innovation at Big Companies:
Types
Sustaining (easier)
Breakthrough/Disruptive (really hard)
Driven by core strengths
Growth Strategy Precedent (M&A, Build)
Established R&D, IP Models
Disruptive innovation combative with Core
No “one model”
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17. Innovation Antibodies:
Heavy governance
Functional Silos
Not Invented Here
Liability, Brand Risk
Protecting the Core
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18. Lean Startup to create startups
Portfolio Management
Entrepreneur-Centric Approach
Experiments and Learning
Phases and Milestones
Changing Culture
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19. Portfolio Management
Sourcing
Filtering
Measuring
throughput
potential
performance
Staged-Risk Funding
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20. INNOVATION PORTFOLIO
ideas
problemvalidation
problemsolutionfit
10customers
100customers
1,000customers
scale
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21. Entrepreneur Centric
Founder Teams
Entrepreneurs In Residence (EIRs)
Low-Cost Dev, Lean UX/Design
VC-Like Board
Coaching, Mentorship
Co-Located Teams
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22. Experiments and Learning
Customer Development
Getting Used to Failure
Designing Experiments
MVPs
Interpreting Results
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23. Phases and Milestones
Problem - Market Fit
Problem - Solution Fit
Product - Market Fit
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24. HIGH LEVEL STAGES
Goals
Methods
Outcomes
Validate the Customer
Validate the Problem
Interviews
Field Research
Secondary Research
Establish Patterns
Market Size, Sales Model
Early Adopter Archetype
Problem Importance
Validate the Solution
Minimum Viable Product (MVP)
Cohort Analysis
A/B Testing
Customer Acquisition Testing
Paying Customers
Distribution Models
Revenue Models
Validate the Business
Sales/Marketing Funnel
Customer Acquisition Optimization
Customer Acquisition Costs
Lifetime Value
Churn
Pricing
Cost Structures
Validated Business Model
Position for Scale/Growth
Stages Problem-Market Fit Problem-Solution Fit Product-Market Fit
Funding
Strategy
Leverage Op-Ex Cap-Ex Cap-Ex Follow On
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25. Changing Culture
Getting Used to Failure
Recognizing and Managing Uncertainty
Resourcing
Comfortable Being Uncomfortable
Be Bold and Pioneering
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26. GARAGE PROGRAM
tools
Facilities Resources Mentorship Process Tools Metrics
Idea
Entrepreneur
Idea
IdeaIdea
Idea
Internal Idea Sources:
• Idea capture systems
• Innovation Groups
• Business Segments
EIR Sources:
• Dedicated Entrepreneurs In
Residence (EIRs)
• Segments can provide (but must
dedicate full-time or provide
sabbatical)
Entrepreneur
Entrepreneur
UHG’s Garage is a service focused on identifying, nurturing and accelerating the commercial viability
of innovative internal business ideas. The Garage manages a small, discreet portfolio of seed-stage
business ideas through a disciplined, entrepreneur-centric process designed to rapidly de-risk ideas
in the market, and provide paths for commercialization, follow-on and exit.
Garage Mission:
• Build and sustain a culture of experimentation that
enables the growth and scale of new health
businesses, products and services
• Reduce the cost of innovation
• Increase innovation portfolio throughput through
staged-risk funding, rapid iterative development
• Diversify portfolio through option value
• Off-grid space
• Collaborative
culture
• Casual
environment
• EIRs
• Developers,
Designers
• Data/Analytics
Experts
• Clinical
• Regulatory,
Legal
• Program
Management
• Advisors,
Mentors,
Coaches
• UHG Leaders
and SMEs
• External SMEs
• Learning-
Driven
Process
• Lean Startup
• Customer
Development
• Staged-Risk
Funding
• Business
Model
Validation
• Highly
Adaptive Agile
Development
• Lean UX
• Infrastructure
• Continuous
Deployment
• Innovation
Accounting
• Cohort Analysis
• A/B Testing
• Validation of
business model
assumptions
• Financial analysis
EIRs are matched to Ideas based on domain
knowledge, passion and entrepreneurial talent
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27. Some Results
60 pipeline candidates
12 “projects” started
373 Customer Interviews Conducted
7 closed in Phase 1 < 3 months
25% move to Phase 2
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28. MVPs
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29. 30

30. 31

31. Key Learnings
Create air cover
Align to top strategic risks
Bring Legal in
Regular coaching!
Ask for forgiveness, not permission
Start “lean”, experiment and iterate
Measure everything
Find the right people
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32. THANK YOU
Kunjorn Chambundabongse (KC)
kunjornchambundabongse
kunjorn
Todd Wyder
Pathfinder Software
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