PayPal founder Peter Thiel offers 12 useful tips for entrepreneurs based on his own experience in startups and investing. Aptly called ‘From Zero to One,’ his 210-page book makes for a quick and useful read, with lots of case profiles gathered along his Silicon Valley journey.
He describes his book as an “exercise in thinking,” and not a manual for starting up. “Every time we create something new, we go from 0 to 1. The act of creation is singular, as is the moment of creation,” he begins. He charts two kinds of progress: linear (eg. globalisation) and non-linear (technology jumps).
“A startup is the largest group of people you can convince of a plan to build a different future,” Thiel defines. A startup sits at the sweet spot between a lone genius and a large bureaucratic organisation – size allows it to execute on ideas and smallness helps with agility.
Thiel sets the context for startups by describing lessons learned from the booms and busts of the DotCom era and cleantech. Be bold, plan well, focus on sales as much as products, blend small steps with big vision, and become so good in your field that you have a sustainable monopolistic lead over the competition. Create long-term value for customers – but also extract value for your firm. Don’t just focus on the rules of the game – change the very board on which you are playing. These are expanded upon in the book’s 14 chapters. (See also other Top 10 Books for Entrepreneurs from 2013 and 2012.)
1. Breakthrough innovation or incremental improvement: where do you want to play
Aspiring entrepreneurs should study growth cycles of industries they pick. Online software products can scale exponentially fast and on the global map, while many service sectors scale linearly (eg. consulting, yoga training). Some sectors are in decline (print newspapers), others have relatively short lifespans (restaurants, nightclubs) or are dependent on consumer whims (movie industry, gaming). Some sectors will thrive and endure if they ride long-term trends in tech, demography and environment (eg. rise of digital products like smartphones especially among youth; global warming). Regulation affects the activities and scope of sectors such as biotech, but not as much in software.
“Numbers alone won’t tell you the answer, instead you must think critically about the qualitative nature of your business,” Thiel advises. This helps think of business opportunities a decade or more into the future. Do you want to be in a scaleable industry, or do you want to be in a linear sector with many competitors?
2. Build valuable proprietary technology
“Proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage,” says Thiel; otherwise it will give only short-term incremental advantage. Google search, Paypal’s online payment, Amazon’s inventory size and Apple’s design are good examples here.
3. Think big
Lean and agile approaches to entrepreneurship are a methodology, not a goal – they can take you to a local maximum and not the global maximum, says Thiel. Having a big vision and plan helps deal with industry positioning. For example, Facebook turned down the $1 billion acquisition offer from Yahoo because Mark Zuckerberg could really see where his company could go, and Yahoo did not. Steve Jobs developed a long term vision for Apple with a pipeline of products for years to come.
4. Start small and leverage network effects
Networks unleash powerful viral effects. But success requires starting with small networks and then scaling them. “An entrepreneur can’t benefit from macro-level insight unless his own plans begin at the micro-scale,” advises Thiel.
Facebook began as a network for Harvard students, then all students and eventually anyone in the world. Don’t start with technology which works only at scale, it should grow with scale. Ideally, the potential for scale should be in the original design itself, eg. Twitter.
Amazon began with only books, added similar products like CDs, and then scaled all the way. PayPal began with Palm Pilot users and eBay PowerSellers, and then kickstarted a virtuous cycle by paying early customers to sign up and get referral fees.
5. Understand the Power Law of venture capital
Many startups launch and scale thanks to angel and venture capital. But many investors choose a “spray and pray” approach with diverse portfolios instead of realising that exponentially growing companies need extra attention and resources. Thiel’s Founders Fund focuses on only five to seven companies that can become multi-billion dollar firms. After all, venture-backed firms created 11% of all jobs in the U.S., with revenues accounting for 21% of its GDP; the dozen largest tech firms are all venture-backed, Thiel says.
6. Identify secrets – and go after them
Thiel identifies two kinds of secrets: secrets of nature, and secrets about people. “The best entrepreneur knows this: every great business is built on a secret that’s hidden from the outside world,” he says. This calls for steady investment in innovation. HP had a good decade of innovation in the 1990s, but has now lost steam.
7. Foundations: strike the balance between ownership, possession and control
“As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation,” Thiel explains. There should be clarity and formal documentation on ownership (equity, vesting), possession (operational authority) and control (board of directors). The trick is in finding the right balance in pay (cash, perks, equity) as well as size and composition of the board of directors.
8. Build a solid culture
“A startup is a team of people on a mission, and a good culture is just what that looks like on the inside,” says Thiel. In the long run, the balance between creativity and best practices should ensure that the startup innovates, reaps the benefits of innovation effectively and continues to innovate. A culture of excitement is what creates a company that endures – not just pay and perks.
Beyond professionalism, PayPal had such strong ties between its founders inside and outside the workplace that they supported each other’s ventures even after the company was sold. Among the ‘PayPal Mafia,’ Elon Musk founded SpaceX and Tesla Motors; Reid Hoffman founded LinkedIn; David Sacks founded Yammer; Steve Chen, Chad Hurley and Javed Karim founded YouTube; and Thiel himself went on to found Palantir.
9. Master marketing and sales
Many techies do not have a deep enough understanding of the dynamics and inter-connects of marketing, advertising, sales and distribution, which vary in B2C and B2B sectors. Some of these activities are about creating impressions and attachment among users, others are about cultivating long-term relationships. B2B sales are complex and require ‘rainmakers,’ whereas ‘megaphone’ strategies like TV ads may be better for B2C products. “Selling your company to the media is a necessary part of selling it to everyone else,” Thiel advises, this calls for a clear public relations strategy.
10. Create a powerful brand
Apple is a good example of successful branding via sleek design, branded stores, catchy ads and trademark keynotes and launches. But no technology company can be built on branding alone, cautions Thiel.
11. Think beyond ‘Dumb Data’ – use computers as tools
It has become very fashionable to talk about Big Data and analytics automation, but Thiel says computers should be seen as tools which complement rather than substitute human effort. PayPal overcame its challenges in dealing with payment fraud by creating a “man machine symbiosis” between algorithms and financial experts. Thiel’s current startup Palantir also uses a human-computer hybrid to blend digital intelligence tools with trained analysts. LinkedIn does not try to replace recruiters with technology, but gives them valuable profiling tools.
12. Understand the Founder’s Paradox
There are always raging debates about when it is good to have a company led by the original founder or to bring in a professional manager. Many founders, interestingly, do not neatly fall into the Bell Curve distribution of personality types – they may exhibit both extremes in themselves at different times, eg. charismatic as well as disagreeable, insider and outsider. Good examples here are Richard Branson, Steve Jobs and Sean Parker. Society should become accepting of the unusual traits of founders, but at the same founders should not expect hero worship. “The single greatest danger for a founder is to become so certain of his own myth that he loses his mind,” cautions Thiel.
Thiel distills these principles in action by applying them to the cleantech boom and bust, and the few surviving success stories. Companies must not neglect even one of the seven key questions about Technology, Timing, Monopoly, Team, Distribution, Durability and Secret.
Elon Musk’s Tesla has great products (even used by Mercedes), its timing to get government grants was perfect (during the cleantech boom and before the bust), it has monopoly in some segments (electric sports cars and luxury sedans), it has a crack team (like ‘Special Forces’ as compared to regular army), it controls its own distribution for better customer connect, its brand is durable, and the company has ‘secret’ insights such as fashion awareness of its customers (eg. Leonardo diCaprio).
“Winning is better than losing, but everybody loses when the war isn’t worth fighting,” Thiel adds, citing examples like the legendary clashes between Larry Ellison (Oracle) and Tom Siebel (Siebel Systems). “If you can’t beat a rival, it may be better to merge,” Thiel says, citing the Paypal merger with Elon Musk’s X.com.
“Beginnings are special. They are qualitatively different from all that comes afterward,” says Thiel. “Our task today is to find singular ways to create the new things that will make the future not just different but better – to go from 0 to 1 and not just 1 to n,” he concludes.
This is an edited version of a post originally posted at http://yourstory.com/, by Madanmohan Rao. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
How do you know whether your idea you have is worth your time and effort? Wouldn't you like to find out it as soon as possible?
Many people put their ideas on the back burner, uncertain if they have potential or daunted by the amount of money they'll need to get started. It doesn't have to be this hard.
There are four questions that will help you predict whether your startup idea will be succesfull or not.
1. HOW BIG IS THE PROBLEM?
Before doing anything else, figure out if you're solving a real problem and for who you are solving it for (the customer). If you have a sense of who your customers are based on previous interactions, go interview them. Set up a coffee meeting or a phone call to ask them a few questions and further understand how you can solve for their needs.
Conducting effective customer interviews takes practice and interpreting the qualitative data that they provide can be subjective. You can use the problem interview scoring technique to quantify results and make a faster decision based on the score. An interview score of 25 or higher indicates that you're onto something with the problem you want to solve.
2. HOW MUCH WILL CUSTOMERS PAY FOR YOUR SOLUTION?
If you're not sure who your customers could be or have a few ideas you want to test quickly, start with a landing page experiment instead, then interview people once they sign up. Include a price point on your landing page and use Google Adwords to drive targeted visitors to your page.
Measure the number of visitors who convert and leave their emails based on the price you set. Aim to get a 10 percent to 15 percent conversion rate to proceed with your idea. Test different price points and determine the value of a customer even before building your business. You can use QuickMVP to set up this experiment in five minutes.
3. HOW MUCH DOES IT COST TO ACQUIRE EACH CUSTOMER?
After you've validated that people will pay you to solve their problem, figure out how much it costs to get more people to your product.
Paid Ads are a good technique to calculate Customer Acquisition Cost (CAC) early on since it gives you a representative customer sample and their conversion rate.
-> Customer acquisition cost = Total spent on ads/# of paid conversions on landing page
To build a sustainable business, the acquisition cost should be significantly less than what customers pay to use your service.
4. HOW BIG IS THE MARKET & HOW ACCESSIBLE IS IT?
Now that you've acquired a handful of customers, can you get 1,000? 10,000? Is the opportunity big enough?
Find out early. Many startups have shut down because they could not acquire enough customers.
To get an idea of your market size, look at the search volumes of relevant Google keywords. Find uncompetitive keywords with a high search volume to reach a large market at a low acquisition cost. If your keywords are popular but competitive, you're entering a saturated market and will have a harder time scaling.
Next time you have a great idea, jot it down and test it with these four questions. The sooner you test your ideas and get answers, the sooner you'll know which idea is worth pursuing. All it takes is a landing page and Google Adwords to get started.
This is an edited version of a post originally posted at http://www.iafrikan.com/ by Grace Ng who is a Co-Founder of Javelin, an enterprise software and services company for implementing Lean Startup. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
Most entrepreneurs just use customer interviews for data, but there are easy ways to turn these potential customers into paying clients.
The lean startup methodology took what they taught in MBA classes and turned it upside down, completely changing the way most of us thought about entrepreneurship. No longer was starting a business about projections and management titles. Instead, it changed into experiments and data.
While customer interviews are a big part of finding your value proposition, they also can be a perfect time to build leads. Just because you're still looking to find insights doesn't mean you should stop selling. With a little preparation, you can discover insights about your business model and score a sale. Here are some ways to do both.
Step 1: Once you identify their problem, dig deeper
It's essential that when you start interviewing customers, you don't have any loaded questions. You want the people you're interviewing to be completely open with you. Swaying or selling them too early will ruin the advice you need for your business. Often you can tell you're getting good data if your customers start getting emotional about the problem.
When you hear this, they've given you a path to future business. Once you identify the problem that's causing them stress, dig into the problem deeper. Start by asking what's been the cause of the problem, and ask them how much they are spending to fix the issue right now. Go into how much time they are spending trying to solve the problem. After a few minutes, they'll start spouting off valuable information.
This not only gives you information but also opens up your customers' minds about how important the problem is. No one typically takes the time to ask the questions you're asking, so many customers don't think of finding a solution. When you open up customers' minds about how big the obstacle is, they'll become more interested in what you're doing.
Step 2: Pitch a solution, even if you don't have one
After customers've found the problem, this is where most entrepreneurs stop their interview. Happy with the data they gathered, they thank the person for his or her time and walk away.
When you do this, you miss a perfect opportunity to generate business. Here your customer is with a huge problem, and you're going to walk away? No. Instead, pitch a solution, even if it's off the top of your head. When I tell people this, they usually ask, "Why would I pitch a solution that I haven't built?" The answer is because you want to find out exactly what needs to be built to make revenue.
Next time you're in this situation, pitch them a hypothesis you have that you think will work and see how they respond. If they don't like it, awesome--you shouldn't build that. If they do like it, now you can ask them if they'd be interested in your showing them a demo in the future. If they answered yes to liking your solution, they'll almost always be open to seeing a demo. Now you know your customer's problem, and know at least one solution a customer would be interested in buying.
Step 3: Track results and close sales
Don't stop interviewing customers once you have one who you've sold your solution to. Instead, keep conducting interviews until you get to about 100 quality ones. Then look back at the interviews and see which was the most successful solution you pitched. What were customers willing to pay for?
Once you've looked at the data and you have enough customers to make it worthwhile, contact those customers. Schedule a demo in the future and build your minimum viable product in the meantime. While the product is being built, schedule more interviews. Next, build some quick mockups and start showing them around. This could also be a great time to raise early capital if you need to. Most entrepreneurs think you need a finished product to raise capital. False.
Investors will tell you that it's much better to have 10 customers lined up and no product than it is to have a finished product with no buyers. Most companies don't fail because they never get a product off the ground. They fail because they can't get sales.
This is an edited version of a post originally posted at http://www.inc.com/ by AJ Agrawal who is an entrepreneur, writer, and speaker. He is the CEO and co-founder of Alumnify Inc. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
Alberto Savoia defines pretotyping as “building the right product before you invest in building your product right.” His book “Pretotype It” lists a set of seven techniques for pretotyping. Additionally, this post highlights other five ones that should be included.
Seven Basic Pretotyping Techniques:
Additional five techniques:
Take a look at Savoia's new technique: The One Night Stand. Primarily aimed at retail innovation it says you can create “a complete service experience without the infrastructure required by a permanent solution. Here are some details from the “Pretotyping Cheat Sheet” by Leonardo Zangrando (firstname.lastname@example.org):
Three situations where this is most appropriate:
This is an edited version of a post originally posted at http://www.skmurphy.com, by Sean Murphy who has worked in a variety of roles: software engineer, engineering manager, project manager, business development, product marketing and customer support. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
Startups often represent excitement in the small business world, because of their ability to innovate with great new ideas. Some even grow into giants that become household names and many have created products and services that make our lives easier.
Despite a major bump in the road with the recent recession, startups have still grown by 49 percent since 1982. And in their first year, new startups create an average of three million jobs.
Obviously, these small businesses serve an important function in our economy. Take a look at the infographic below and find out more about the world of startups, from the best places to launch them to their survival rates and more!
This is an edited version of a post originally posted at The Payroll Blog, by Stefan Schumacher is the editor of The Payroll Blog. He has 10 years of experience as a journalist, including as a producer for syndicated radio, a newspaper reporter and editor, and a trade magazine writer and editor. You can connect with Stefan on Google Plus. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
Start-up ecosystems around the world are scaling new heights. Startups raising millions of dollars and numbers are growing. Here are 9 things to consider before raising funds for a start-up:
1. Never have more than 3 founders
Too many cooks spoil the broth. Having 2-3 founders is an ideal choice. In case you need more experts, you can always hire them. In rare cases more than 3 founders stick together; if the number is more, ultimately, it boils down to 2 or 3. Having one founder is also a bad option. Having different perspectives and divided risks is always a favourable position to be in.
2. Analyse the market; the idea may be good, but the market may not be ready
It is primarily important to interpret the existing market scenario in terms of your idea. Broadcasting your idea at the right time is where most of the startups fail. Therefore, first analyse the market and then take a call. If needed keep patience and wait for the market to develop according to your perspective.
3. Pick the right mentors
Having the right mentors to guide you and help you manage risk is a blessing in disguise. Even though there are no hard-and-fast rules of choosing a mentor, make sure that your frequency and belief matches. A mentor should believe in your idea and ambition, as a result, making your journey easy and a learning experience.
4. Maintain your accounts
A list of expenses of the previous and the upcoming months should always be maintained. This helps you keep track of where the money is going and how much money will be needed. As a result, while going to an investor, you can always show them the accounts and logistically present the amount of funds required.
5. Ensure financial stability in your personal life
Giving up an existing job to start a venture is quite a challenging task. Knowing well that the risk may or may not bear fruit, it is of utmost importance to ensure that all the debts are cleared. Also, make sure that the medical insurance, family savings and credit cards are in place. Alongside, keep a minimum runway of 9-12 months. Once all the basic things are taken care of, it will become easier for the risk taker to concentrate on his venture.
6. Family money
Keeping personal reputation at stake is riskier. Considering that most startups fail, ideally, family money should not be more that 5-10% of the total investment.
7. Consider funds as a bonus
Planning a startup on the basis of bootstrapping is considered to be an ideal one. This helps you concentrate on your business completely rather than hunting for an investor. Also, this will help you control the company completely without any pressure from outside investors.
8. Go to 3-4 investors see what they are asking for
Meeting an investor can be a learning experience. Listen to all the questions he asks for after you give your presentation and make a note. Remember, those are the areas the investor is not comfortable with. The more you meet investors, the more you will be able to understand the loop holes in your venture.
9. When a startup does not work, it is good to accept it
The bitter truth is that approximately 80-90% of start-ups fail. It is good to make your call and move on if things don’t fall into place. Of course, this should be the last resort but as a risk taker, remember that at times you need to let things go.
This is an edited version of a post originally posted at yourstory.com, by Richa Maheshwari (reporter from Yourstory.com). You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
It is very typical to measure mature of startups ecosystems in terms of new startups, growing startups, investors, investments, exits, etc. and it makes sense as cities use these statistics in the best possible way to communicate their economic growth at high level and to attract other relevant people, investors, big companies, more entrepreneurs and other stakeholders.
These indicators are however the result of many smaller activities present in a startup ecosystem that contribute to these higher level results - as any startup ecosystem is the sum of multiple variables of an unbalanced equation inherent to the interactions of the startup ecosystem itself.
So, as you can figure out, you need much information to talk about matureness of startups ecosystems. But most of all, you need a good understanding and analysis of your startup ecosystem at different levels and mapping it usually is a good starting point to set up new strategies and achieve a better economic development.
But the thing is that properly mapping a startup ecosystem is more than just to create a good map to show who is who in your city or region. It is crucial to work at different levels and in more detail:
We truly believe everyone should work on this model, as it makes the investments to growth and innovation truly visible and measurable - as only the things that can be measured can be improved. And the faster the feedback loop, the faster things can be improved.
Actually we are working with this model with few key cities like Helsinki at ecosystem level and even more broadly with independent organizations and we are clearly seeing that it is possible to build a vibrant startup ecosystem in a city in three to five years, what is half or less, compared to known average.
Future entrepreneurs and current startups deserve this new scenario that we at Startup Commons are creating and we encourage others to contribute and develop innovation, better, faster and with less resources.
In his new book, Biz Stone, the Co-founder of Twitter, discusses the power of creativity and how to harness it through stories from his remarkable life and career. Stone is known as the creative, effervescent, funny, charming, positive, optimistic, altruistic and yet remarkably savvy Co-founder of Twitter. His book Things a Little Bird Told Me: Confessions of the Creative Mind spans 224 pages and 18 chapters, and covers the pivotal and personal stories from his life along with lessons earned and learned the hard way.
Born in Boston in 1974, Biz Stone’s first startup was Xanga. He was recruited by Google in the early 2000s, and connected with Blogger founder Evan Williams; the pair later left to work on their own startup Odeo. Twitter was founded in 2007 after a hackathon when the original videocasting product did not pan out as materialised. Twitter’s dizzying global success led to Stone being recognised by ‘Time’ Magazine as one of the most influential persons in the world. His other books include Who Let the Blogs Out? A Hyperconnected Peek at the World of Weblogs.
“Creativity is what makes us unique, inspired and fulfilled. This book is about how to tap into the creativity in and around us all,” Stone begins.
Here areTop 20 Takeaways from his book, offering insights into creativity, ethics and global vision.
1. Create opportunities, don’t wait for them
“Opportunity is manufactured,” says Stone. Don’t wait for circumstances to align your stars, go ahead and make the opportunity yourself. He used this principle even in school days to create a lacrosse team since he was not good in other sports; he also landed his first job as a book cover designer by submitting a cover to the art director even though he was just interning as a delivery boy.
2. Start with an idea
Don’t dig into specifics first, start off with an idea. “If you take an idea and just hold it in your head, you unconsciously start to do things that advance you toward that goal,” says Stone. “Have confidence in your ideas before they even exist,” he advises. Sometimes even a sense of desperation that you will eventually get an idea will keep you going.
3. Invest emotionally in your idea
“If you don’t love what you are building, if you’re not an avid user yourself, then you will most likely fail even if you are doing everything else right,” says Stone. His startup Odeo did not go too far because he was not into audio podcasts himself, and therefore missed out on important features such as sound quality. Twitter, on the other hand, brought Stone much more joy and excitement. If you are not engaged, you cannot go on, there will be no gravity.
4. Creativity has infinite approaches
One thing Stone learnt as a book cover designer is that there are infinite approaches to frame, understand and solve a problem. If one of your creative ideas does not work or does not find acceptance, let go and move on to another one. Don’t take rejection personally. “Creativity is a renewable resource. Challenge yourself every day. Be as creative as you like, as often as you want, because you can never run out. Experience and creativity drive us to make unexpected offbeat connections. It is these non-linear steps that often lead to the greatest work,” explains Stone. He drew on this principle while working at Google – full of PhDs while Stone himself was a college dropout; he advocated a focus on the human aspects of tools and not just technical.
5. Learn to harness constraints for creativity
“Constraint inspires creativity,” says Stone, drawing on a number of examples, including his own. Steven Spielberg had a limited budget for the movie Jaws – so instead of creating an expensive replica, he decided to shoot from the ‘shark’s point of view’ – which turned out to be even scarier. Harrison Ford had the runs while shooting The Raiders of the Lost Ark – and instead of dueling a swordfighter in one scene, he just proposed a gunshot – which became an iconic moment in the film. Due to resource constraints, ARM came up with chips which were just not good enough for PCs – but ended up being perfect for cellphones. “Embrace your constraints. They are provocative. They are challenging. They wake you up. They make you more creative. They make you better,” says Stone. Detractors initially said Twitter’s 140 character limit was constraining – but that unleashed a new form of wit and creativity, and power for activists.
Tristan Kromer, as a Lean Startup Coach and advisor based in San Francisco, has a unique obsession: help product teams go faster. He has been doing this during the last five years working with product teams and innovation leaders to apply lean startup principles to teams and innovation ecosystems. Enjoy the interview we made him and discover his great entrepreneurial thinking and mindset.
Brief description about your background, experience, journey...
I've spent ten years in the music industry, five in IT security, and the last five years in startups. I spend about 50% of my time working with early stage startups and the other 50% professionally helping enterprises and accelerator programs develop their innovation ecosystems.
Imagine an entrepreneur with no experience but with a great idea and right attitude. Which would be your first three advices?
1) Your product idea is probably wrong. Focus on your vision instead. Find someone you really want to help. Someone in pain. That's your vision. Helping someone and solving a real problem.
2) Find team members with complementary skill sets who are able to challenge your perspective and add their own.
3) Go talk to customers.
How to find a good mentor for your startup?
Look for someone who doesn't give you their opinion but instead challenges you with questions that makes you think.
You are running different initiatives. Have you got any mentor? If so, who is he/she and why did you choose him/her?
My team is my mentor. The customer is my mentor. My friends are my mentors. I rely on other people to challenge my perspective. People like Sean Murphy, Spike Morelli, Laura Klein, Nick Noreña, Zac Halbert, Janice Fraser. People who are willing to question me or tell me I'm wrong.
There's a common buzzing in most of startups communities: Lean Startup vs Business Plan. What do you think about that?
The battle is over. The business plan lost. Some people just haven't noticed yet.
Which is the biggest barrier to implement Lean Startup in a company?
It varies by company. Some don't put together cross functional teams to get out of silo based, waterfall development. Some don't know how to evaluate early stage startups on the appropriate metrics such as iteration velocity or actionable metrics. Some simply don't know how to put together innovative teams. The scrappy people who break the rules and get angry when they see problems are often viewed as troublemakers and isolated. In Silicon Valley, we celebrate those people.
From accelerators perspective, What do you think about ...?
Accelerators shouldn't sit around playing hypothetical scenarios and critiquing business ideas. They should be sending entrepreneur's out into the world to figure out for themselves what's a good idea by getting data for real customers. The only thing that an accelerator might be able to do from an armchair is help identify which are the riskiest parts of the business that the entrepreneur can then investigate.
Startups should talk to customers. Accelerators should train startups to talk to customers. They shouldn't be in the room when that happens. They shouldn't be responsible to find the customers
In terms of Validated learning from customers.
What did you learn from music industry that you can apply now to startup scene?
The team dynamics are identical. It's a group of creative people with different skill sets who have to come together and play in harmony (and sometime disharmony when appropriate.) They are creating something new out of thin air.
Being able to understand who works well with who and how to get people to perform at their best is very challenging. I don't think I'll ever master it, but I'm getting a bit better.
Which was your biggest mistake launching a startup?
Not knowing how to code. I've since corrected that error. It's a basic literacy like reading an writing. Everyone needs to know at least the basics but preferably should be able to launch a basic prototype within 24 hours. There's so much great open source software out there that there is no excuse to not being able to cobble together an MVP.
Which is the most challenging project that you have now?
Recruiting and managing an all volunteer force for Lean Startup Circle. I haven't figured out how to scale that as an operation. We now have a very consistent group in San Francisco that shows up month to month to put on events but to get people showing up weekly or even daily to put in a few hours to build up the organization globally...that's a trick I haven't figured out yet.
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