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I am (predictably) in the Steve Blank/Eric Ries fan club, as it would seem is everyone else in the technology start-up community right now. This being the case, I was delighted to be referred to Running Lean which in my opinion is the best of all material distilled into an actionable execution plan that you can use daily. I would commend this to you as a very valuable resource, but the purpose of today’s post is not to spruik the book, but rather point out a trap that I have seen some people fall into.
Much like foreign languages, it is easy to speak the lean start-up words, without actually understanding them. This week I was talking to an entrepreneur in the ‘Validation’ phase and when I asked what he hoped to learn this week he explained that he was testing whether his solution would work reliably…(whoops) This is not what ‘Validation’ is about, but rather the next phase, ‘Efficiency’. In ‘Validation’ you should be testing hypotheses specific to solutions you are providing to problems identified during the ‘Discovery’ phase.
It is very tempting to focus on whether you can get something working in the way that you intended, but actually, you should be testing whether the intended solution actually solves the problem for the target market! For example:
Problem: It takes too long to flip between social media sites to keep up with all updates.
Solution: ‘BootSweet’ – A hosted app that shows a user all their social streams in a single dashboard.
Assuming these are both confirmed in the ‘Discovery’ phase, Validation would look like this:
A GOOD hypothesis to test: Users will be happy to authenticate to all social media accounts through ‘Bootsweet’.
A BAD hypothesis to test: We can keep social streams updated real-time with a 20sec latency
It may seem obvious looking at the above, but try this exercise:
1) Create weekly learning goals, with the engineering effort optimized by [Amount of learning]/[Engineering hours]
2) Examine the learning goals and make sure that they are focused on Problem/Solution validation, not functionality/performance of your app.
I would love to hear your thoughts on the Lean Running book – It has proven to be a useful resource for me.
As the pace of life continues to accelerate, one thing we must do is remember to connect meaningfully with people that matter to us. Be it friends, family or professional contacts, there is nothing like going to a show, game or performance together to reconnect and strengthen your relationship.
I have to admit that I am guilty of being sufficiently busy that I deprioritise finding events as a way to reconnect, but mainly because it is just too much of a pain in the backside. I am posting today because I have been introduced to a service that takes this pain away and on one site I can find a tonne of events.
www.eventfinder.com.au makes this a process a dream and when I need to connect with someone professionally that I haven’t seen in a while I will be using this great service to create a high value, engaging experience that we both get value from while building our relationship.
Check out any of the specific links for your city
Go on, go invite someone to go see Eddie Izzard for a laugh
A coined term that has been bashed to death like a Lady Gaga tune on pop-radio – “Fail fast” is one of the more controversial terms out there – Setting that aside, some of the best non-technical entrepreneurs I have met are former sales people, because “Failing fast” is drummed into professional sales people very early on.
In the world of complex sales we choose to speak about it more in terms of “Lose quickly” – The death knell for a salesperson is the deal that lasts 9 months and costs $500k to bid for, only to result in a loss. The very best sales people know how to qualify hard and to withdraw from deals that are a low percentage win. As a former Sales Director my ultimate responsibility was as steward of company resources – When seeking to secure engineering and other resources to form a bid team the sales people would need to justify to myself and other managers that their deal was both winnable and worth winning. In a complex sales process, every milestone requiring additional resources requires (or should require) a formal review.
This discipline is perfectly analogous to the start-up world, where as entrepreneurs we need to get as much data as we can to figure out what is not working and cease that behaviour before it burns through scarce resources. The thing that many of us are missing is the ‘review board’ that test you on the BS factor, the same way a management team tests sales guys seeking more resources.
Using a structured framework for testing your business model, such as Steve Blank’s customer development oriented business model canvas is a great start. To close the loop you also need dispassionate advisors that can hold you to account and remove the rose colored glasses for a clear perspective on your position.
1) A structured customer development framework (Business model canvas)
2) An advisory board
3) An ability to get feedback and be reviewed by your advisors as and when appropriate (Not just at monthly board meetings)
It was some time in 1994 and I was an intern at Hewlett-Packard when I had a thought – Wouldn’t it be great if I could somehow synch a folder I had on my work machine with somewhere on the internet that I could access from anywhere… My mind was racing; this would be HUGE! From legitimate hosted backup for small businesses to the person who just wants to keep their tennis club minutes that they typed up on the work computer, this would be HUGE!
But then the pesky analytical mind kicked in – Telco’s were perfectly positioned to nail this offering – They owned the pipes and have huge data centres that they could leverage…. I thought my idea was silly because it was obvious that I would get crushed by the big guys….
Fast forward 17 years (where the hell did that time go) and you have Box.net and Dropbox.com with highly successful businesses based on the same core idea… My learning in this (which has been repeated several times since, demonstrating I am a slow learner), is that you shouldn’t overthink some things. Just have the tenacity and courage to believe you can outexecute the big guys and go build something brilliant as fast as you can.
The most likely scenario is that the big guys won’t try to out build you, rather, they will buy you. Peter Thiel who famously sold his ‘doomed’ startup Paypal top Ebay echoes my sentiments in this interview – If he had known all about the payments market landscape he would never have attempted Paypal…
Sometimes ignorance truly is bliss.
– Focus on why you will succeed, not how you can fail. Smart people will always figure out a tonne of ways to fail, which is a killer.
– If you are passionate about something you will inevitably out-execute – No-one at a large corporation will be as personally invested as you
I had a wonderful surprise this week – I received a followup to an email I sent 10 months ago to a highly promising young sales professional that I gave some advice to that has resulted in a gold class outcome. The story goes that she had recently joined a multi-national software firm and was part of an emerging business unit that was still figuring out key process and best practices. My advice to her as a brand new employee? “Make sure you are outspoken and get involved in as much as you can. ”
This might sound a little scary to a person that just joined an industry titan, working alongside some of the smartest people on the planet, but not to my former colleague. She took the bull by the horns and despite residing in a subsidiary, very distant from HQ, she got involved in conference calls and made suggestions for how things might be done better.
As a result of her insight and forthright approach, she was noticed by a senior manager who promptly seconded her to HQ for a couple of weeks to help redesign some key sales processes. In doing so she has managed to extend herself outside the subsidiary domain and is doubtless now on the fast track to promotion.
The lesson? Think before you speak, pick your topics, but be outspoken where you can shine.
I am in Sydney again and am pleased to say that I find the opportunity for leaping out of an unfulfilling corporate role has never been better. One of the reasons that so many people are pouring into start-ups on the West Coast of the USA is that there are communities and resources available to make that transition easier. Recently it was announced that a new co-working space called ‘Fishburners’ is opening to house entrepreneurs building product businesses.
I am excited about this development for a number of reasons, but primarily because the motivation of the founder Peter Davison is not for profit and solely directed toward growing the start-up culture in Australia. Peter is an entrepreneur and investor himself, who has spent some years in Silicon valley, bringing a real understanding of what it takes to create an environment for success.
So what does Fishburners offer?
– An opportunity to work alongside people that ‘get it’. It is a lonely road starting out and there is nothing more valuable than having sounding boards and supportive peers that you can chew the fat with.
– A low cost way to get some space – For $250pm you can get a desk. Working from home is fine, but as you build your team you will need space and this is an incredibly low-cost way to get space that can grow with you.
For intending entrepreneurs:
– Starting out is hard. You are going to make mistakes. Joining a co-working space like Fishburner is a great way to start with a low cash-burn and get advice from people that have faced the challenges you are about to.
So congrats to Peter and best of luck to the initial cohort of residents. One more vital piece of infrastructure that will build the entrepreneurial spirit has arrived.