Tag Archive for 'startup'

Interview with Chris Redlitz from KickLabs and Transmedia Capital (part 1)

Published on July 27, 2010 in Entrepreneurship, Finding Co-Founders and Investment. 0 Comments Tags: entrepreneur, incubator, startup, venture capital.

I recently sat down with Chris Redlitz from Transmedia Capital to talk about his new startup incubator KickLabs and founding teams from his perspective as an entrepreneur (AdAuction, Get Relevant, Aptimus, and On Village), executive (Skyrider, Feedster, Reebok), and now venture capitalist. We discussed what makes a founding team work, potential conflicts of interest between investors and entrepreneurs, and what KickLabs looks for in a company. Chris is also going to be a judge at the Lean Deck Clinic on August 2nd.

T: In your experience, is there a distinct advantage to having a founding team as opposed to being a sole entrepreneur?

C: Yeah, I think so. Especially in technology it’s good to have breadth so to speak. You can obviously take an idea and have it outsourced but from a development point of view, it’s good to be able to collaborate. Collaboration is really the most important thing when you’re doing something. I have an idea but I need to actually have some sort of way to vet that idea as it morphs along the way. Having someone that has a little bit more of a technology capability with someone that is more of a business or marketing person… it’s kind of the ideal situation if you can make that work.

T: So what do you think doesn’t make that work?

C: I don’t think it’s a showstopper if you don’t because there are resources to develop. I think it’s more just, the ability to vet, collaborate, you know, brainstorm. It’s tough to do by yourself. In the short time we’ve been doing this [KickLabs] and looking at companies over the last six months, we’re not seeing too many single people come in. Or if we do, they definitely had the desire to find a team to round out what they’re doing. It’s rare to find somebody that’s doing it by themselves.

T: What are, generally, the types of things they’re looking for?

C: It depends on what their core competency is. So it’s to be able to sort of leverage what they’re doing with a very complimentary core competency.

T: When you say “core competency”, are you talking primarily in terms of skills or roles or do you find that they’re very much the same thing in this context?

C: Yeah, as a founder, it’s less about title or role. It’s more about what my skills are to bring that idea to more of a real tangible product. If someone is a little more business-oriented and methodical about their approach and someone is a little more of an idea person that’s probably a good match, right? If you get too many people that are idea people, nothing ever gets done. So I think you really need to have that sort of very complimentary skill set.

T: So would you say that the primary qualities you look for in terms of finding people both for KickLabs and teams to invest in is complimentary skill sets or are there other qualities such personality types or shared vision that you think are also critical?

C: If you’re looking to accept a company [into KickLabs] or do an investment, what are we looking for? Is that your question, yes?

T: Yes.

C: Ok. It’s a little bit different here, because we’ve got an open environment. As opposed to looking at strictly a company to invest in from a business model point of view and an entrepreneur and stopping there, we have to take that a step further. Because now we want a personality that would fit in, not to sound trite, but people either they want to work in an open collaborative environment or they don’t, and they either add value or they don’t. It’s kind of binary in that sense.

It goes beyond the normal evaluation of doing investment because you have to “live” with the people, You made the chicken reference: [note: Chris and I discussed his interest in chicken farming before I turned on the recorder] every time you enter a new hen into the coop or to the flock, they have to all get along, and they go through this pecking order process until they figure out.

T: Who’s the alpha hen?

C: Who’s the alpha hen. It may not always be the same one as you enter new ones into the flock. So that’s kind of the same thing here. When I look at a company here, I look at the business opportunity, but it’s almost as important to look at the people or person. I’m very much into investing in the founders or founder primarily.

T: Do you think that’s more important than the idea?

C: No, not necessarily, but we’ve seen this over and over and over. Twitter is a great example, Evan Williams had a great success with Blogger right? Odeo was going nowhere and Twitter was a new idea that the same investors ponied up again for because they believed in him [Evan] and his team. Because frankly, Twitter, if I looked at it in a vacuum, it probably wouldn’t have made a lot of sense. But it came from those guys who had success and they believed in him so they invested in him and the rest is history

T: I’m curious as to why you differentiated. You said in a team that you’re looking solely to invest in you look more at the business case and less at the personality…

C: Uh, no, no, no. I look at the personality as how they would potentially fit into an environment, so I want to qualify that. If we look at just an investment, we’re certainly looking at the people and…

T: People within their own environment as opposed to…

C: Within their own environment, yeah. I don’t have to worry about them getting along with someone next to them and that whole sort of ecosystem. We’re building an ecosystem here at Kicklabs that, just as a standalone investment, we wouldn’t really consider.

T: But you still have to worry about the co-founders getting along with each other?

C: Yes and that doesn’t always work. I’ve been in a few that haven’t worked for me.

T: What are some of the warning signs of that?

C: Sometimes there aren’t any. I don’t want to get too personal, but I’ve been in situations where I never saw it coming and all of a sudden… 180º on how this person acted. Never saw it coming, and I think part of it is that as things change, whether it’s stress, success, failure… in this particular case, there was a tremendous amount of success early on and this person wasn’t able to handle it. It’s almost like you shouldn’t read your own press clippings, and if you do, then it creates issues.

So I don’t think you’d ever see it coming. It is a marriage and you kind of have to treat it like that. I mean, I actually lived with this person for a while. When you start a company, it is truly living with someone, spending more time with that person than you would with your family and no matter how well you know that person, when they say a lot of times “don’t take money and do business with your friends” there’s a lot of truth to that too, so.

T: So, speaking of marriages, one of the things I’ve talked about with a lot of people is “how you date your co-founders?” So, what would be your ideal first date when vetting somebody to join a company? How would you sort of determine if they have the right qualities, the right skill to fit in with what you were doing?

C: I was going to say go play golf with them, but that’s not necessarily the right answer.

T: It might be.

C: I like to get out of a business environment, understand that person more. So, I was half joking about the golf. I do a lot of networking on the bike… I just did a bike ride with a bunch of guys that are in and around social media on Friday. We went up in the mountains of Mt. Tam. So I think it really is like dating. I think that you have to know someone beyond business because you spend so much time with them.

I think it’s really important to understand peoples’ expectations because you’ve got to stay really aligned and you may not always agree with how the business is going or you may have to… the favorite term today is pivoting, changing business models or “morphing things”.

You have to be aligned in sort of macro vision of what you want to do, but also when you take money the founders have to stay aligned. It’s really important because if not, that can really fracture a business really quickly.

To be continued next week where we discuss how VC and entrepreneur aims can diverge…

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Hope is the Enemy – Startup Advice from a Monk

Published on June 15, 2010 in Entrepreneurship, Strategy and lean startup. 2 Comments Tags: Buddhist wisdom, Entrepreneurship, startup.

I was recently reading a book by a Vietnamese Buddhist monk (Yes…I really do read books by Vietnamese Buddhist monks. No, I’m not Buddhist.) when I came across this section that struck me:

When I think deeply about the nature of hope, I see something tragic. Since we cling to our hope in the future, we do not focus our energies and capabilities on the present moment. We use hope to believe something better will happen in the future…Hope becomes a kind of obstacle. – Thich Nhat Hanh

Granted, I’m pretty sure he wasn’t talking about starting a business and this is out of context. None-the-less, I think some “live in the moment” lessons can be applied to this thing we call the startup.

Abandon Hope All Ye Who Start Things Up

Despite the title (I like provocative titles. You should have seen what I was planning to call this post.), I’m not suggesting permanently abandoning all sense of hope and replacing it with a black béret, a cigarette, and a wistful look of ennui. Hope (and faith) in our entrepreneurial vision is what gets us started on our path to build a new company. It’s also what gets us through some of the rough patches.

But as entrepreneurs searching for a business model, hope can be our enemy. It can tell us “it might get better tomorrow” when our metrics are plummeting. It can tell us every month that next month will be the one where we turn the corner. Hope is always for something just beyond our present reach.

Your Business Exists in the Present

Your business exists in the present tense, not the future. Although we plan for hockey stick growth, startups have to act daily to incrementally pull ourselves up with our bootstraps. This requires a phenomenal amount of focus and dedication on getting things done day by day. Our startup might not last until the end of the week, let alone years and years. If we spend all of our time planning for the future, nothing will get done today.

Moreover, we have to look realistically at the data that is coming in and not shy away from it while thinking blissfully about a tomorrow that may never come. We need to talk to our customers every day and sift through all that qualitative and quantitative data to find out how to provide value to our customers. If we get too wrapped up in the future, we might not realize that reality is telling us to pivot.

If we spend too much time dreaming, we might not realize that our customers have a different dream.

Walk the Line

There is a very fine line between a business model pivot and giving up too soon. The one can feel like the other. It’s important for us to walk the fine line between planning for the future and paying mindful attention to the present.

A good pivot doesn’t mean giving up on your dreams and goals, it just means you are going to achieve them in a slightly different way. Perhaps you’ll solve the same problem, but with a different product. Perhaps you’ll solve a different problem, but for the same customer.

Perhaps, even in business, there is some wisdom in listening to Buddha and living in the present.

Cheers,
Tristan

P.S.: The book is “Peace is Every Step” by Thich Nhat Hanh.
P.P.S.: I’m still not Buddhist.

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No Titles Please – We’re a Startup

Published on May 28, 2010 in Entrepreneurship and Finding Co-Founders. 0 Comments Tags: CEO, co-founder, co-founder dating, startup, startup titles.

I had to laugh out loud when I read this at jacquesmattheij.com:

At some point in the thread he writes: “We are working on that now. It might give us more breathing air but still will keep us with a CEO (him) that I cannot trust professionaly.”

I practically fell off my chair when I read that. A three letter title in a two man company ? What does that make him ? CTO ?

…and then he continues:

Titles are for insecure people that need to have their egos re-inforced or they are for people that have reached a stage in the life of their startup where it starts to make sense to divide the work in to fixed roles, where you have well defined territories and people as a rule will avoid crossing over in to each others territories.

I could not agree more. That’s why we only have one title at startupSQUARE: Co-founder. The Co-founder is responsible for whatever needs to be done, including dealing with the bank, ordering staples, and getting the coffee.

What Title Will I Have?

If you’re on a first date with your co-founder and he/she starts talking about what C-level title they’ll be getting, you should run screaming from the room.

Sure, we have some roles. I do most of the customer development and couldn’t hope to touch the database structure without breaking half the site. None-the-less, we all have to shoulder the burden because we’re always short on manpower. That’s what startup life is. Always short on time, money, and people.

If your co-founder isn’t willing to clean the toilet, find someone else.

Tech Guys

And for a tech guy corollary: If code breaks in a startup, it’s broken and whoever is on hand has to fix it. There is no “fault.” Blame is unimportant, solutions to problems are critical.

If you only have two to four guys programming, everybody better know everyone else’s code because eventually, someone is going to go on vacation or quit. At that point, all the code is “your” code.

I’ve broken “my code” and broken Manuel and Marcel’s code as well do to my own misunderstandings. I’m always heartened when we’re able to look together for solutions and not degenerate into a blame fest.

Again, if your co-founder starts talking about how he/she isn’t willing to deal with an issue because it’s “someone else’s problem”…not a good sign. Find someone who is willing to do what it takes.

There’s another word for people who need a snazzy job title and a narrowly defined set of responsibilities: EMPLOYEE

Cheers,
Tristan

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Clever Hans and Photoshop Iteration

Published on March 30, 2010 in Customer Development and Entrepreneurship. 0 Comments Tags: entrepreneur, iterate, lean startup, Minimum Viable Product, MVP, startup.

It’s been over two weeks since we released a bare bones alpha of our site and started letting people in one at a time. Since then we’ve been through approximately:

10 iterations of our “view idea” page
6 iterations of “browse ideas” page and 3 of “browse people” page
10 “profile” pages
8 of our “p-home” page (this is the page you see when you log in)
3 “search result” versions
and a whopping 14 basic template revisions

That’s a total of 51 revisions in 18 days, almost all of which are iterations based on feedback from users without writing a single line of code.

Photoshop Development

We’d been very slow to engage in real customer development. Despite getting a number of signups to our alpha, we made some early choices in platform which slowed our development down to some degree and made it difficult to get to our minimum viable product (MVP). To compensate for that, we searched for ways to get customer feedback without actually having a product.

As an interim fix, we created a number of photoshop mockups detailing exactly what information would be shown on what screen with REAL text (none of that “Lorem ipsum dolor sit” stuff). The mockups were heavily layered such that we could demo the “prototype” via screen sharing and demonstrate mouseovers, ajax calls, and other effects by showing/hiding a single group layer. (For those not photoshop savvy, this just means we could show on screen actions with one click.)

Alpha Hordes

We then took those photoshop mockups and put them in front of real users as often as possible (trying for twice a day) mostly via screen share and let the users look/play with them. In doing so, we got a ton of great feedback that led to so many revisions, but have certain difficulties:

Mockups are not clickable and must be controlled by the presenter

This has turned out to be a bit of a blessing in disguise. Our initial supposition was that not having a working prototype would reduce the quality of feedback. Instead, we’ve found that when the user can’t control the action directly, they’re forced to talk to us in order to get the mouse to move, scroll down, and click on things. This helps encourage the user to speak out loud. This includes exclamations such as “This page is overwhelming”, “I have no idea what this button is supposed to do”, and “I’m lost.” All of which is useful information for knowing what’s wrong with our site.

The feedback is confusing

As Dr. House says, people lie and they sometimes don’t know it. They’ll say they want more information. Then when you give it to them, they’ll want less information. Then you’ll revert to the original and they’ll say “perfect!” I write down every idea a user has, but I’m trying to listen more for what they’re talking about rather than what they’re saying. If they’re talking about the “post idea” button, it means they’re seeing the button. That’s good if you want them to post an idea and bad if the intended Call-to-Action is elsewhere.

Risk of asking leading questions

As I’ve written before, I have the habit of asking leading questions about items I think should be in the foreground, thus bringing them to the user’s focus. That leads to me feeling perfectly satisfied that the user is talking about the items I think they should be looking at, when they wouldn’t have even noticed them if I hadn’t brought it up.

Screen shares have been helpful here since people seem to ramble on and on when talking on the phone. Awkward silence just encourages them more. Even when they stop, all you have to do is ask “What are you thinking now?” and they’ll keep talking. The lack of physical presence also eliminates the possibility that the user looks to your body language for the “right” answer to a question. (See Clever Hans for a great example of this.)

Live Demos

We’ve also done a number of live demos which present a different type of information.

Body language and eye motion of the user is available

An obvious advantage of the live demo is that we can directly observe where on the screen the user is looking and in what order. This is perfect to observe the “F” pattern and if your intended focal point is accurate. It’s also great to see user body language and if they’re getting uncomfortable or frustrated it’s quickly evident in their seating posture or how they’re holding the mouse.

Users can “click” on things

Even though the photoshop images are not clickable, you can give the users the mouse and watch where they move it. If they’re getting into it, they’ll click on the image a couple times before remembering that it won’t work and then you’ll get the added bonus of seeing what the gut reaction of the person is.

No Substitute

Although I’m very happy with the results and think our designs have improved tremendously, this is no replacement for real development. It could easily be argued that the time spent on photoshop could have been better spent on writing code. Fortunately, as I have two partners who are far more technically savvy than I am, they’ve been able to develop the site in parallel while I focus on the user interface. This may have slowed us down in the short run, but it’s saved us a dozen coding iterations and allowed us to build up a more robust back end.

Even as a solo developer I think this approach has some benefits, particularly if your site will depend more heavily on user experience than any particular feature. My only qualm is that I cannot interview enough people to have a statistically relevant sample size and therefore need to take it to the next level in order to tie our results to actionable metrics. So this week and next, we’ll be putting our new knowledge on-line and seeing if our new user experience drives the behavior that we want.

Cheers,
Tristan

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How to Sell Me (Not), I Dare You to Try

Published on March 16, 2010 in Entrepreneurship and Sales. 1 Comment Tags: consulting, Customer Development, Entrepreneurship, sales pitch, startup.

“Thanks for the meeting, no I don’t want to hire you to consult for my company.”

Having to sit through an increasing number of sales pitches from startup consultants these days, I thought I’d summarize the points that worked in selling me and what just turned me off. At the very least, next time someone tries to pitch me, maybe I’ll just send them a link to this blog before the meeting. At best, I’ll formalize some points to improve on my own sales pitch.

Tip #1: Don’t assume.

I understand that I’m a bit of an idiot. I’m new to this. I didn’t go to Harvard. I don’t have a million dollars. Your fine Italian shoes clearly indicate your business superiority. I am destined to fail without your advice.

Still… please ask me what my situation is before telling me how to correct it. If you’re telling me that my pitch needs improvement, I’d appreciate if you’d listen to my pitch first. If you’re telling me I don’t have the right target market, please make sure you know what my target is first. If you’re telling me I need my teeth whitened, please ask me if I live in LA first.

What I’ve learned: Ask more questions, keep your mouth shut, verify pain points before selling.

Tip #2: Don’t tell me to conserve costs.

Ok… that’s actually really good advice for startups. It’s great advice. But seriously… if you tell me I shouldn’t waste money hiring an attorney to go over tax issues and then tell me I should hire you for $250 an hour to work on my corporate culture, I’m probably not going to hire you.

I have hard problems. Don’t sell me on soft, fuzzy solutions I’m not convinced I have. Perhaps I’m radically mistaken, but unless my corporate culture can fix my tax issues, I’m probably going to hire an attorney before I hire you. Instead, demonstrate some value by telling me how to hire a $100 CPA instead of a $1000 attorney to fix my tax issues and then we’ll talk about your services.

What I’ve learned: Umm… don’t undermine yourself? At least not in the same sentence.

Tip #3: If you can’t shut up, ask questions.

I’ve just said/done something stupid. You’ve caught me in the act. You know how to fix it. Congrats, don’t tell me. Show me. Ask me questions to guide me to the realization that I need help in this area. “Have you tried ______?” “How many customers have you validated that hypothesis with?” “What could you do to get customer feedback earlier in your development?”

You’ll avoid me getting defensive and you’ll impress me with your keen interpersonal skills.

What I’ve learned: Socrates was a bad ass.

Tip #4: I might not be an idiot.

As I mentioned before, I’m a bit of an idiot. But I also might not be

I might be asking you what participating preferred stock is because I don’t know. I also might want to see if you can explain it without being patronizing. I might be changing the topic to see if you bring me back on point. I might be asking you to setup a meeting with an outrageously well placed VC contact to see if you’ll be honest and suggest an alternative within my reach. I might even be picking up the tab to see if you’ll even offer.

As I said twice now, I still might be a bit of an idiot. But if you don’t treat me like one, I’m less likely to assume you suffer from the same defect.

What I’ve learned: I’m a bit manipulative. And again, don’t make assumptions. They’re usually wrong.

Tip #5: Read a book.

Lastly, go read some Dale Carnegie. He’s the king of the soft sell. If you’ve read it and you think it’s all about smiling, remembering names, and learning to lie well enough to stroke some ego then you probably didn’t read it carefully enough. If you can name the ancient Chinese philosopher that Carnegie references (and I think most of the book draws from) then you’re hired. (btw: the answer is here.)

What I’ve learned: I’m a philosophy geek.

Conclusion

There you have it. Now you know how to sell me. I dare you to try.

Cheers,
Tristan

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How to Practice Shutting Up (Customer Development Practice)

Published on March 9, 2010 in Customer Development and Entrepreneurship. 0 Comments Tags: consulting, Customer Development, Entrepreneurship, lean startup, sales pitch, startup.

I’ve discovered a great new method of growing bigger ears. Ready? Wait for it… go listen to sales pitches from startup consultants.

If you’re an entrepreneur, then you probably don’t like being bossed around and you might think your own opinion is pretty damn good. If you didn’t, you probably wouldn’t be starting your own company. (I’ll admit it, I have both of those flaws to varying degrees.)

Given those two features, you may or may not have a tough time (like me) really shutting up and listening to your customers. It’s always tempting to interject your own opinion, and even if you think you’re just asking a clarifying question, you’re probably adding some spin to it to try to nudge your customer’s responses the way you want…the way you expect…the way you know your customers ought to be thinking.

But if you do that, you’re not getting real customer feedback. Instead, you’re just stroking your own ego and validating an opinion rather than validating a hypothesis.

Throw Me the Pitch

If you’re in the middle of starting a company (like me), you’re also probably in the middle of being pitched by a startup consultant, lawyer, accountant, and maybe even a holistic acupuncturist with discounts for hungry entrepreneurs.

You might find this a bit annoying, especially if you didn’t realize you were doing everything wrong and this consultant was going to fix all of your problems for $250 or more an hour. C’est la vie. Make the best of it. Instead of getting frustrated, I suggest taking the opportunity to shut up.

By keeping your mouth shut and a smile on your face you might be able to gain a few advantages:

You might actually be doing something wrong and the consultant might have a good point.
The consultant might stop telling you what to do and start asking questions to clarify your situation and your pain points. (In which case you may have found yourself a genuinely useful consultant.)
You’ll practice listening.

I Still Want Bigger Ears

Listening requires patience and both are like muscles that require exercise to develop. All too often, I feel pressure to never shut up, never allow a gap in the conversation, and sell, sell, sell. Particularly here in Silicon Valley, if you can’t get someone excited about your startup in two sentences and blather on about it for at least 30 minutes without coming up for air, there’s a sense that you’re done for. “You’re not passionate enough.” “You’re not a good salesman.” “You’ll never get investment.”

Maybe all that’s true. I can’t say for certain and I’d certainly agree that the gift of the gab is a great skill that I also need a lot of practice with. Still, while I want to improve my sales pitch, I also want to make sure I am simultaneously developing a fascistic ability to shut up and listen to my customers. Especially when they disagree with me, my product, my unspoken assumptions, and my ego.

I want to be able to listen to a 2 hours diatribe of how much of an idiot I am, continue smiling, neatly summarize the points made, repeat those points back to make sure I understood them, say thank you, and learn from the experience. Until then, I’m going to keep practicing my listening as often as I practice my sales pitch.

Cheers,
Tristan

P.S.: Are you an entrepreneur? Got you help us by taking a quick survey?

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Impending Doom and Early Releases

Published on March 2, 2010 in Customer Development and Entrepreneurship. 0 Comments Tags: alpha testing, Customer Development, Entrepreneurship, lean startup, startup.

This week we’ll be letting a few users into our early release of startupSQUARE.com and we’re rather embarrassed about it. It’s buggy, it’s ugly, and it probably just won’t work. But we’re going to throw it out there anyway for a few select people who can mock us about it to our face so we can get early feedback.

Improvement via Trauma

One of the things we’d like to achieve with this early alpha release is a bit of trauma.

We know what’s wrong with it already and we’re motivated to improve, but we’ll be a lot more motivated after the brutal feedback we’re about to receive. Not only is embarrassment a (good?) motivator, but we hope to receive a list of things that we absolutely must fix before our users would consider using it a second time.

If we’re lucky, this list will be the same list of must haves that we’ve already generated internally. If so, we know we’re on the right track. If not, we’ve made a serious error and getting that feedback now might save us some heartbreak.

Tiny Tiny Dancer

Also, important, we’re still learning and that means taking tiny steps.

Although we’ve got a lot of experience between us, and even run some companies before, this is a brand new ball game and we need the practice. We could go for the gusto and try to run right out of the gate, but we’d likely just fall flat and never be able to recover.

By taking small steps, we know we’ll fall a few times, but they’ll be falls we can live with, recover from, and learn to avoid.

Back to Work

That said. This is a brief post because…well…I’ve got work to do. Have fun with your own startup and get it out there!

Cheers,
Tristan

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I Need Bigger Ears (Customer Development Mistakes)

Published on February 23, 2010 in Customer Development and Entrepreneurship. 4 Comments Tags: Customer Development, Entrepreneurship, lean startup, startup.

I realized today that I have been taking the axiom of “talk to customers” far too literally. While the quality of my feedback has been reasonably good and I’ve gotten a number of good ideas, there’s a big difference between talking to customers and listening to customers. I’ve been having far to much of a two way dialog and not letting my product speak for itself.

Screen-shot Demo

I got a call today from Performable.com which is developing a new A/B testing tool. I signed up for their beta test a few weeks ago and they gave me a call to ask if I would be willing to walk through a demo with them. Within a minute, they had a screen share up and were showing me a live demo. Although I had no control, it was definitely not a walk through in the traditional sense. it wasn’t a guided tour so much as an exploration. They showed me a screen and started peppering me with questions. Some of my favorites:

What do you think this page does?
What do you think will happen if you click this button?
What do you think this wording means?

Within a few minutes they had me dictating every thought running to my head and quantifying exactly what I needed from an A/B test tool. At no point did they resort to telling me what the page was supposed to do. In truth, I don’t really even know if the product worked or if I was just looking at static pages.

That’s exactly the sort of feedback I need.

Big Ears

Getting back to work I decided to immediately get some customers and ask them about my Photoshop mock-up of a user’s profile page. This is the mock-up that I thought was “good enough” and that both my partners, a professional designer, and two customers had already looked over. At least for version 0.1, I thought my customer development was done.

I was wrong.

One of the very first things that the customer asked was, “How do I contact this person?” After spending more time on this than I’d care to admit and four sets of eyes staring at this page multiple times, we had forgotten the most basic functionality of all! There was no space for a contact / connect button. Doh!

Of course, customer development is an ongoing process and there is no “done”, but this was an embarrassing omission and spoke to something more fundamentally wrong in my customer interview technique. The big mistake was that I had previously performed more of a walk through, explaining each section to users and guiding them through. This time I said less, and listened more. I didn’t offer any leading questions until they stopped talking, and then I tried to say very little aside from, “What about this?” “What about this section?”

I won’t go into the rest of the embarrassing elements I missed, but the change in customer interview style was very rewarding. So kudos and thanks to the Performable.com team!

Cheers,
Tristan

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Someone Please Write a Blog Post about Minimum Viable Strategy

Published on January 26, 2010 in Customer Development, Entrepreneurship and Strategy. 2 Comments Tags: Customer Development, Entrepreneurship, lean startup, Minimum Viable Product, Minimum Viable Strategy, startup, Strategy.

Watching Dave McClure‘s presentation today, I started to think about how a lot of the lean startup and customer development folks talk about creating the Minimum Viable Product (MVP), Release Early / Release Often, Product / Market Fit, Pivoting, etc., etc., but there’s very little talk about choosing your market or your product strategically. (At least not that I’ve noticed, feel free to correct me.) I’d like to read that blog post.

A lot of the advice out there ultimately mitigates risks. Here is my horribly unfair summary:

Minimum Viable Product (MVP) – Spend less on creating your product, therefore you are risking less time and money on a bad product.
Release Early / Release Often – Learn in small increments, therefore you are risking less time and money on a bad product.
Product / Market Fit – Either change your product to fit the market or choose a different market for your product before you start spending money on marketing, therefore you are risking less time and money on a bad product.
Pivoting – If you have a bad product, change it to something else.

All of which is great advice which this summary does not do justice to. Still, I’d like to read about how to choose the product that needs iterating. Unfortunately, I can’t claim the knowledge to write that post in detail, but I think it should go something like this:

Before you start executing on plan A, think of plans B-D

Come to think of it, that’s a really short blog post… maybe it should just be a tweet. Here are some other options:

90% of winning the battle is tactics, but winning the war takes strategy.
Stop. Think. Then act.
Just because you create a product in a weekend does not mean you should.

A lot of this is implied in Eric Ries‘ posts on pivoting. Pivoting is a great tactical maneuver that goes back centuries. Put simply, if no one likes your product, what is the smallest possible change that may enable a different use case / selling proposition? Much of the backing for this proposition comes from Eric’s philosophy which reduces the cost of developing a product so radically that to change a product or start a new one is insignificant and essentially zero. Perhaps for web 2.0 entrepreneurs this will work well. However, I don’t feel this is sufficient, especially not for brick and mortar folks. I believe a lot more thought should be put into determining tactical and strategic options before you write a single line of code. That additional thought is certainly not going to impact development costs, and may radically improve your ability to pivot later.

Shortcuts for my Poor Poor Brain

I take much of this from chess. Being far beneath the master level and unable to think out 12 different scenarios 12 moves in advance, I have to take a lot of thinking shortcuts to have any chance of winning. My favorite cheat is, “If I pursue this option, will I have more or less options on the following move?”

At the risk of alienating everyone who hates chess, here’s a chess example. Which side has the better position? White and black have the same number of pieces so that’s not relevant. In this highly unrealistic example (neither side could win if this was a real game) white has the better position. Without even knowing the basics of how the pieces move, you can guess that white has the better position because it’s knight is in the center of the board and it has a lot more options in terms of where it can go next. In terms of possibilities, white’s knight has eight possible moves whereas black’s knight has only two.

Don’t like chess? Ok, here’s a more down to earth example. Would you rather go to a restaurant with 8 items on the menu or just 2? If you happen to know that the restaurant with 2 items is the French Laundry and the other one was a shady looking diner, then yes…you should choose the French Laundry. However, in the absence of additional information, you should probably pick the one with more options. You’re more likely to find at least one thing on the menu you like, especially if you’re a vegetarian.

This basic principle applies to pretty much everything including martial arts, warfare, and yes…product development. If the product you are building has no tactical or strategic development options after you create the Minimum Viable Product, then it is not the right product to build.

Minimum Viable Strategy

Manuel and I first got together with another colleague, Florian Leibert, to create an IT security product which we tentatively called LOK (Leibert, Offenberg, Kromer) which we all thought was a cool idea, but probably unwise to build. Without going too far into details, it was a replacement product for PKI which would allow a cheap, easy to use cryptography platform based on P2P trust networks. In non-geek talk, it was a thing that replaced an expensive thing with a cheap thing. Among many other problems with the concept, the biggest one was probably that if it didn’t work, there was no direction which we could pivot to.

Could we pivot the product to a different market? Unlikely, the product was meant for a very specific set of security conscious, technology literate enterprise customers. Could we pivot the feature set somehow? Perhaps, but it would essentially be like creating an entirely new product from scratch. Could the feature set be somehow reduced to be less risky? Not really, the product required a serious amount of infrastructure just to work in a basic use case. Was the product incredibly cool and do I still want to build it? Hell yes, but I’m not going to.

Manuel and I spent a lot of time shooting down well over a dozen ideas for one reason or another. But a lot of the times the reason turned out to be, “What if it doesn’t work? What are our options then? How many tries will we have to get it right?” Eventually, we settled on startupSQUARE.com because it has a number of interesting options that I won’t go into here. So I’m sticking with this one and I’m still asking, will someone please write about Minimum Viable Strategy?

Cheers,
Tristan

moz screenshot Someone Please Write a Blog Post about Minimum Viable Strategy

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Building a Future Through Entrepreneurship

Published on January 20, 2010 in Entrepreneurship. 4 Comments Tags: build, charity, Entrepreneurship, mentor, oakland, oakland tech, startup.

Today I watched a group of 9th grade students at Oakland Tech present their preliminary business plans to a panel of judges and was impressed by how much I can learn from those who are so much younger than I am. The showcase was part of the entrepreneur program created by BUILD whose mission statement reads:

Our mission is to provide real-world entrepreneurial experience that empowers youth from under-resourced communities to excel in education, lead in their communities, and succeed professionally.

It’s a great program that boasts a 70% graduation rate through the 4 year after school program and 100% of BUILD graduates go on to college. That’s even more impressive considering that the program deliberately picks the kids that most schools write off as being hopeless. Over the course of the program, the students prove beyond a doubt that they can succeed in life beyond what any statistical model would predict for them. That’s a skill I want to learn. The skill to exceed expectations.

Through the first two years of the program, students (keep in mind these are 14-15 year olds) do market research, create a financial model, write a business plan, and actually execute that business plan with up to $1000 of funding. They have to get the funding by pitching their ideas to VCs at the business plan competition. In short, the students become entrepreneurs and build a business.

I’ve been mentoring with BUILD since October and it has been a fantastic challenge so far. I can’t say I’m very good at it, but I hope to be. I have to stand in awe of anyone who starts a business and to watch someone twenty years younger than me do it is extremely humbling. It’s few business people that can get in front of a crowd of 200 people and acquit themselves with the poise that some of the students did. I certainly could not do it at that age.

The team I work with is called Next Level Creations and they are selling customized lanyards to hold keys, ID cards, cell phones etc. Within the one week since they started practicing their pitch, they have improved a hundred fold. Although the mentors (Tom, Kim and I) might try to help, and although their teacher (Sam) is phenomenal, I don’t think any of us can take credit for that improvement. It’s the students themselves taking charge of their own lives and deciding to succeed.

Their ability to continually learn with enthusiasm represents a daily victory that most of us cannot claim to match. Most days, my greatest success is getting my tie tied in under half an hour. (Admission: It took me 40 minutes to tie a bow tie last Friday.) So their success is a great inspiration to me professionally. I had intended to write a blog post about outsourcing and post it yesterday, but I’m glad that plan of action failed so I could write this simple message tonight:

I’d like to thank my students (Brenton, Ruby, Cleon, Jessica, Jazz, and Alex) for being mentors to me and giving me inspiration. I hope I’m not too old to learn to be as great of an entrepreneur as they will become.

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Tag Archive for 'startup'

Interview with Chris Redlitz from KickLabs and Transmedia Capital (part 1)

Hope is the Enemy – Startup Advice from a Monk

No Titles Please – We’re a Startup

Clever Hans and Photoshop Iteration

How to Sell Me (Not), I Dare You to Try

How to Practice Shutting Up (Customer Development Practice)

Impending Doom and Early Releases

I Need Bigger Ears (Customer Development Mistakes)

Someone Please Write a Blog Post about Minimum Viable Strategy

Building a Future Through Entrepreneurship

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