Wealthfront: A Successful Lean Startup
Dr Timothy Mansfield
Published on 2 November 2017
Founded in 2009, Wealthfront is a lean startup that lets regular investors have access to highly skilled investment managers. The company currently manages over 200 million US dollars in investments. Additionally, the business successfully meets all the complex regulations required to operate in this domain.
According to this case study, the company has achieved great success using lean startup techniques as well as agile development practices. They identified five key components as necessary for their success.
Ideal Culture and Management
Wealthfront strongly supports a culture of quality. By hiring skilled workers, enforcing automated testing, and other practices, the management has a very high standard for their product. The company encourages employees to continuously learn and improve the development process.
Test Driven Development
Wealthfront uses an Agile method called Test Driven Development (TDD). As the name implies, testing is what drives development. Developers start by writing tests and only then write the product code that passes the tests. Testing occurs across domains and by multiple people to make sure everything integrates properly. TDD in this way occurs during the build-measure-learn cycle of product development done at Wealthfront.
By continuously integrating well-tested components, developers can make quick changes if something goes wrong. Additionally, the business can start to see whether a new part of the product is useful right away. By learning quickly how a change is working, the lean process used at Wealthfront makes sure the product is the best possible version.
At Wealthfront, the "immune system" detects problems and ineffective features quickly due to constant monitoring. Automated systems are regularly checking for new issues. The business thus ensures they have a very reliable product. The build-measure-learn cycle is an important part of this immune system, making sure developments are appropriate.
Like other lean startups, Wealthfront engages in continuous deployment of thoroughly tested features. By getting new changes out to users as quickly as possible, Wealthfront receives lots of feedback on how to improve. This essential feedback lets them adapt quickly to changing requirements.
Wealthfront has succeeded as a lean startup by effectively managing these components of the process. They built upon the core principles of lean startups to create a technique that worked for them.