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Posted on  by  from the site SKMurphy
One recurring question is “Why Can’t We Do More to Test “Customer Development” Theories.” Where Steve Blank identifies three kinds of markets–existing, resegmented, new–there are probably thousands, or at least fine gradations if his three. So your “lab equipment” is complex. I think in the same way that Heraclitus observed that “you cannot step into the same river twice” you cannot step into the same market twice. I think the more important thing Steve has done is to caution against three common failure modes of engineering driven companies as they approach the challenge of marketing and selling their product: Get out of the BatCave: don’t try and figure it out without talking to prospects and your current customers test and measure: don’t rely just on your intuition, form falsifiable hypotheses iterate frequently: update your plans based on results to date, don’t be guided by the “Little Engine That Could” and keep trying the same thing hoping for a different result. In that sense it’s a useful antidote to Emerson’s “Build a better mousetrap and the world will beat a path to your door” “Raise enough money and it won’t matter if the dogs don’t like your dogfood, our messaging will retrain them.” I always wonder what “Plan B” is if you decide the customer development model is not for your team. What are we comparing it against. Brant Cooper has identified “4 Anti-Lean Startup Archtypes” that might serve as candidates: Hire a super salesmen who can overcome all prospect objections. Develop a powerful enough product that will be so compelling you won’t need to go through customer discovery and customer validation. Spend enough money on advertising and PR to drown out the competition. Ignore any evidence to the contrary and persist in executing your vision. ...
Posted on  by  from the site SKMurphy
Steve Blank gave a thought provoking talk at the Startup Lesssons Learned Conference on “Customer Development 2.0: Why Accountants Don’t Run Startups” (slides here and related blog post “Why Accountants Don’t Run Startups” which is part of a category of blog posts on “Durant vs. Sloan“).  He also referenced Robert Shedd’s list of startup accelerators “Help for Startups! – A semi-complete list of startup accelerator programs” and noted that many of them were now offering entrepreneurial education: “most startup accelerators have great coaching but minimal methodology.” Blank then noted the disconnect between what entrepreneurs need to know for an early stage firm and the skills they need for a mature business. The skills needed to run an early stage startup which is still looking to settle on a first product in a target market with a viable business model:  hypothesis testing, business model testing, customer development, agile development, metrics, venture finance, and hands on leadership. What business schools offer are the skills needed by a mature business:  managerial finance, managing groups and teams, financial accounting, modeling for optimization, and global value chain strategy. Steve predicted that E-Schools for entrepreneurs would emerge, the counterpart of B-Schools for managers in established firms, and asked the attendees to help build them:  “E-School–Let’s Help Build It.” I think that there may not be good reasons why things are the way that they are, but there are strong reasons. There have been a number of critiques of the VC funding (and seed funding) process which are relevant to the  E-School concept: Adeo Ressi’s “The Canarie is Dead” which led him to start both TheFunded and the Founders Institute Mike Maples “Super Angel Model” Right Side Capital’s Philosophy and Target Coming in the second half of 2010. 100-200 seed investments per year. Investment decisions in 2-weeks A number of organizations have also identified and attempted to address this issue. Earlier efforts have tended to focus on providing office space, small business management skills, and introductions to potential funding sources. Blank’s E-School model, with it’s customer development, focus represents a welcome innovation. Here is a representative set of older and  emerging E-Schools: Founders Institute Courses Force For The Future Post Incubator Education Venture Hacks: Bible & Angel List University programs like Babson, Clark Kauffman Foundation’s FastTrac older:  Garage Ventures Revenue Bootcamp 2009 & “Art of the Start (2006)“ older: National Business Incubator Association older: Service Core of Retired Executives (SCORE) Part of the challenge with a new methodology is that funded firms are very risk averse to adopting a new methodology  once they have raised venture financing. For the most part funding convinces them of the correctness of their plan and, given that they were able to raise a round, their default strategy is more fund raising instead of focusing on customer revenue if they hit a speed bump. I think it may be difficult to trigger much of a change, at least initially, in venture backed firms. There is probably an opportunity for Angel education (and aggregation) in that requiring customer development techniques will act as a multiplier on most investments (or at least  in many markets). This seems to be what the Venture Hacks Angel List and Floodgate are already executing. In his talk Blank was clear that early stage firms need a different dashboard than the standard revenue pipeline, balance sheet, and income statement. Providing instrumentation and operational guidance for what board level review should look like in an early stage firm that’s been Angel funded might be a good insertion point for an E-School methodology. Why Angels? They are investing their own money and don’t have recourse to management fees from Limited Partners  for compensation, so they are more likely to adopt techniques that increase the chance of success and wring more value out of their seed investment. E-Schools probably stand the best chance of disrupting the VC ecosystem “from the bottom” and that would be the Angels and seed funds. One measure of success would be to specify a “lessons learned” format to substitute for the “demo day” that incubators run to help startups generate follow on investment. ...
Posted on  by  from the site SKMurphy
Vivek Wadhwa wrote a great post recently called “Ditch the Biz Plan and Buy a Lottery Ticket” which oddly enough contains a number of good pointers on bootstrapping. His opening paragraph explains the title (emphasis added) Hardly a day goes by when I don’t have a rookie entrepreneur ask for advice on raising money from VCs. They usually have a fancy-looking business plan with detailed spreadsheets showing how their company will be worth billions by capturing just 1% of a market. All they need is some financing, and they’ll take the world by storm. My advice is always the same: ditch the business plan, and buy a lottery ticket. Your odds are better, and you’ll suffer less stress. He goes on to acknowledge that there isn’t a single recipe for bootstrapping, but offers some useful pointers, here were my top five: Share your ideas with those who have done it before. This is where events like the Bootstrappers Breakfast® meetings or the Lean Startup Circle Meetups give you a chance to compare notes with other entrepreneurs. Focus on the areas where you have the most risk, typically these will be customer and market issues not technology. Start small Sell what you have. If you can start by consulting and add software or other technology to your offering this will allow you to get into immediate contact with prospects. The Aardvark team has been public about the fact that most of their offering was implemented “Wizard of Oz” style by the man behind the curtain and was not software but manually generated e-mail and IM messages designed to mimic final system operation in a working prototype.  Your product may admit of the same approach. Focus on revenue and profitability from the start. If someone is not only willing to pay but actually writes a check or runs a credit card you will learn more about what features are needed than any amount of discussion of what a prospect would like. Remember the importance of cash flow. Vivek’s context was that you had to live through the short run to make it to the long run. Chasing large deals, “elephant hunting” exclusively may mean that you will starve to death. Appreciate squirrels and rabbits, you can still add them to the elephant stew and you are less likely to go broke waiting for a few big deals to close. Also, small deals give you references and testimonials that make the medium and larger deals more likely. Learn to sell. Selling in the early market is much more of a conversation that focuses on the prospect’s perception of their problem and any constraints on a solution.  One common myth is that introverts are poor at selling. Shy people may be poor at selling but shy is not the same as introverted. Introverts are normally more willing to listen than extroverts and in the early market you “sell with your ears.” In fact, introverts may very well be more effective than an extrovert who cannot shut up and let the customer explain their perspective on their needs–I write this as an extrovert who has managed to talk my way out of opportunities from time to time when I should have asked a few more questions and listened more carefully. Another trap the technical folks can fall into when selling is to believe that you are “bringing fire to the savages.” You see the benefits of your offering very clearly, but you assume that your prospects are lost or clueless unless they adopt your approach. Most of the time there is a working status quo that you have to significantly outperform to foster adoption, and very few new technologies are fully form fit and function compatible. On mindset you can adopt to guard against technical arrogance is appreciative inquiry, which assumes that there are a lot of things are that are good about the current situation and you should understand and appreciate them before suggesting any changes.  Focus on clearly understanding the customer’s perception of the problem and the constraints that any improved solution must respect, some of these will be technical, many will be cultural. I have blogged about Appreciative Inquiry and related ethnographic methods in: “I Don’t Understand, We Won the Argument, Why  Didn’t We Win the Sale?“ “Early Customer Conversations: Use Appreciative Inquiry and Amplify Positive Deviance“ ...
Posted on  by  from the site SKMurphy
“There was a long silence on the other end, a silence peculiar to conference calls when an entire group stops to think.” Clay Shirky in “The Collapse of Complex Business Models” “Ignorance is always ready to admire itself. Procure yourself critical friends.” Nicolas Boileau-Despreaux “Whenever you see a spike in self-employment in this kind of economy, you know that is involuntary entrepreneurship,” Jared Bernstein “Defying Forecasts, Job Losses Mount for 22nd Month” (September, 2003) cited by Chris Anderson in “The New New Economy: More Startups, Fewer Giants, Infinite Opportunity” (May 2009) “Hasten slowly, and without losing heart, Put your work twenty times upon the anvil.” Nicolas Boileau-Despreaux “Companies aren’t generally structured to access, absorb or utilize customer insights since they are organized by product, not by customer.” Ranjay Gulati in “Seeing Customers as Partners in Innovation” Full quote:  “Being customer-driven doesn’t mean asking customers what they want and then giving it to them. It’s about building a deep awareness of how the customer uses your product. Companies aren’t generally structured to access, absorb or utilize customer insights since they are organized by product, not by customer.” hat tip to Mac Fowler “Look for an enterprise problem so bad that people will pay you to solve it and let you keep the software“. Bill Paseman “There are really two killer apps for the next era of IT tech: collaboration and correlation” James Watters in April 11 tweet “Honor is like an island, rugged and without a beach; once we have left it, we can never return.” Nicolas Boileau-Despreaux quoted in “Honesty in Negotiations“ “We are like machines made up of redundant components, many of which are defective right from the start.” Leonid Gavrilov & Natalia Gavrilova in “Why We Fall Apart” (IEEE Spectrum article The quest to understand and control aging has led us, two biologists, to draw inspiration from what might seem an unlikely source: reliability engineering. The engineering approach to understanding aging is based on ideas, methods, and models borrowed from reliability theory. Developed in the late 1950s to describe the failure and aging of complex electrical and electronic equipment, reliability theory has been greatly improved over the past several decades. It allows researchers to predict how a system with a specified architecture and level of reliability of its constituent parts will fail over time. The theory is so general in scope that it can be applied to understanding aging in living organisms as well. In the ways that we age and die, we are not so different from the machines we build. The difference, we have found, is minimized if we think of ourselves in this unflattering way: we are like machines made up of redundant components, many of which are defective right from the start. “Startups explore novel practices in chaotic environments, winnowing them into emergent practices for complex environments.” Sean Murphy inspired by Steve Blank’s  “startups are the search to find order in chaos” and influenced by Dave Snowden’s Cynefin framework “It is better to ask some of the questions than know all of the answers” James Thurber from ‘The Scotty Who Knew Too Much” in  “Fables for our Time” “The best money during the nascent years of a business is patient for growth but impatient for profit.” Clayton Christensen in “The Innovator’s Solution” “The test of a vocation is the love of the drudgery it involves.” Logan Pearsall Smith “That knowledge which stops at what it does not know, is the highest knowledge.” Chuang Tzu “Startups are new businesses–not development projects—that need to discover a sustainable business model.” William Pietri in “Responsible Technical Debt:  Not an Oxymoron” full quote: Startups are about learning.  For this to make sense, you have to understand two things: Startups—even software startups—are businesses, not software development projects. The point of a startup isn’t to create a software product; it’s to discover a sustainable business model. In a startup, software development isn’t an art for its own sake; what makes sense from a pure engineering perspective may not make sense more broadly. That’s true for any business really, but it’s especially true for a startup. That’s because the main goal of a startup is to discover a valuable business. Discovery requires experimentation, and the amount you can learn is a function of the cost of your experiments. “Pricing is the moment of truth—all of marketing comes to focus in the pricing decision.” Raymond Corey ...
Books, Quotes, skmurphy
Posted on  by  from the site SKMurphy
Results as of April 28 from a recent Bootstrappers Breakfast poll recommend Vistaprint and Overnight Prints printers.  Staples, iPrint.com, and uprinting.com also have recommendations. If you would like to take the poll, visit http://www.bootstrappersbreakfast.com/blog/2010/04/16/business-card-prin... ...
Posted on  by  from the site SKMurphy
Overview The Startup Lessons Learned Conference (#sllconf) was Friday April 23rd, 2010.  This post is an effort to capture  press coverage and blog commentary on the conference that will be of use to entrepreneurs.  I will update it periodically through the end of May 2010 as I become aware of new blog posts. Please feel free to contact me and suggest a post you have found useful. The conference was streamed live to more than 60 locations by Justin.tv, their video archive is at  http://www.justin.tv/startuplessonslearned/all If you missed the conference and are planning to watch the videos I would encourage you to read this blog post first:  “Tips for Getting the Most Out of the Startup Lessons Learned Conference (SLLConf)” 9AM Welcome and Opening by Eric Ries,  Startup Lessons Learned Blog video http://www.justin.tv/startuplessonslearned/b/262656024 slides http://www.slideshare.net/startuplessonslearned/2010-04-23-startup-lesso... Sarah Allen “Lean Startup Keynote“ 9:30AM To Agility, and Beyond by Kent Beck, Three Rivers Institute video http://www.justin.tv/startuplessonslearned/b/262656520 slides http://www.slideshare.net/KentBeck/to-agility-and-beyond Kent Beck “The Learn/Measure/Build Cycle“ William Pietri “Responsible Technical Debt: Not An Oxymoron“ Steve Freeman “Not a Charter for Hackers“ Sarah Allen “Beyond Agile Development” and “Finding the Itchy Spot“ 10:20AM Continuous Deployment Case Study: WiredReach by Ash Maurya, WiredReach video http://www.justin.tv/startuplessonslearned/b/262656299 slides not yet 10:40AM Agile Development Case Study: Grockit by Farb Nivi, Grockit video http://www.justin.tv/startuplessonslearned/b/262658135 slides (not yet) http://twitter.com/farbood/status/12829836776 11AM Case Study: But Does It Scale? by James Birchler, Brett G. Durrett, and Tim Fitz, IMVU video http://www.justin.tv/startuplessonslearned/b/262659233 slides not yet 11:30AM Panel “But What About Design?” moderator:  Dave McClure, 500 Hats; Panelists: Andrew Chen, Futuristic Play Siqi Chen, Zynga Laura Klein, Users Know Rashmi Sinha, SlideShare video http://www.justin.tv/startuplessonslearned/b/262665259 1:15PM “Conversation: Getting to Plan B” with Eric Ries and Randy Komisar, KPCB video not yet Silicon Valley Entrepreneur interview on “Getting to Plan B“ Books discussed:  “Monk and the Riddle” and “Getting to Plan B“ 2PM Minimum Viable Product Case Study: Aardvark by Damon Horowitz and Max Ventilla of Aardvark/Google video http://www.justin.tv/startuplessonslearned/b/262666394 WSJ: “Why Startups Must Pay Attention to What’s Behind the Curtain“ Aardvark “Anatomy of a Large Scale Social Search Engine“ 2:20PM Pivot Case Study: Flowtown by Ethan Bloch and Dan Martell of Flowtown video http://www.justin.tv/startuplessonslearned/b/262667025 slides not yet 2:40PM Pivot Case Study: KISSMetrics by Hiten Shah, KISSMetrics video http://www.justin.tv/startuplessonslearned/b/262668427 slide http://www.slideshare.net/hnshah/kissmetrics-case-study-about-pivots 3:30PM Customer Development 2.0: Why Accountants Don’t Run Startups by Steve Blank video http://www.justin.tv/startuplessonslearned/b/262670582 slides http://www.slideshare.net/sblank/why-accountants-dont-run-startups-sllc Sarah Allen “Startups Search for a Business Model“ 4:15PM Is Customer Development Marketing? Food on the Table Case Study by Manuel Rosso, Food on the Table video http://www.justin.tv/startuplessonslearned/b/262671499 slides http://www.slideshare.net/startuplessonslearned/food-on-the-table-case-s... Paul Trebilco “Startup Lesson #1“ 4:35PM Customer Development Case Study: Dropbox by Drew Houston, Dropbox video http://www.justin.tv/startuplessonslearned/b/262672510 slides http://www.slideshare.net/gueste94e4c/dropbox-startup-lessons-learned-38... PPT http://dl.dropbox.com/u/2/Dropbox%20-%20Startup%20Lessons%20Learned.ppt 4:55PM Customer Development Case Study: PBWorks by David Weekly, PBworks video http://www.justin.tv/startuplessonslearned/b/262673321 slides not yet 5:15PM Customer Development Panel: But Who Should Actually Get Out of the Building? moderator Sean Ellis, 12in6; Panelists: Cindy Alvarez, KISSMetrics David Binetti, Votizen Brant Cooper, Market By Numbers Matt Johnson, Grockit video http://www.justin.tv/startuplessonslearned/b/262674992 Summaries & Overviews That Apply to More Than One Talk or Session Startup Lessons Learned Conference Notes – Fri, April 23, 2010 by Troy Angrignon, (@troyangrignon), Ali Sohani (@alisohani), Grishma Govani (@strangeloops), Sarah Allen (@ultrasaurus), Kevin Donaldson et. al. Kevin Donaldson “Summary of Startup Lessons Learned Conference“ Mathew Mahoney “Twitter Recap of Startup Lessons Learned Conference“ NYT: “The Rise of the Fleet Footed Startup“ Nathan Artz “Tricks Learned from Startups Lessons Learned Conference“ ...
Posted on  by  from the site SKMurphy
I cam across an interesting conference going on today that seems related to tomorrow’s Startup Lessons Learned Conference: the Lean Software & Systems Conference with a hashtag #lssc10. It looks like this is the second year and last year it was held in Miami in 2009. It’s managed by the Lean Software and Systems Consortium. Don Reinertsen gave the keynote on “The Easy Road to FLOW Goes through a Town named LEAN.” He is co-author (with Preston Smith) of “Developing Products in Half the Time” and “Managing the Design Factory: The Product Developers Toolkit” and more recently “The Principles of Product Development Flow: Second Generation Lean Product Development.” I last blogged about him in 2008 “Don Reinertsen: Priorities Are The Last Refuge of the Inumerate.” I will track blog posts for this conference through the end of May, it looks like it may be addressing many of the same lean software development principles that the SLLConf folks are trying to implement in their startups. http://www.limitedwipsociety.org/2010/04/25/brickell-key-awards-recogniz... http://agileconsulting.blogspot.com/2010/04/my-take-away-from-lean-softw... http://agilemanagement.net/index.php/site/thoughts_on_lssc10/ http://www.lostechies.com/blogs/derickbailey/archive/2010/04/26/lean-sof... http://alissonvale.com/englishblog/post/Making-the-Work-Visible.aspx http://influencecorp.com/2010/04/mantra4lssc1/ ...
Events, skmurphy
Posted on  by  from the site SKMurphy
I blogged about the “Startup Lessons Learned Conference on April 23” about three weeks ago and now the  conference is tomorrow (April 23rd) in San Francisco. Whether you are planning to attend in person or at a remote streaming session (more than 60 locations are available see http://www.sllconf.com/streaming ) I think the best way to take advantage of the conference material would be to read two chapters from Steve Blank’s “Four Steps to the Epiphany” (cheaper at http://www.cafepress.com/kandsranch):  Chapter 3 on “Customer Discovery” and Chapter 4 on “Customer Validation. Ash Mauyra has also written three blog posts from his entrepreneurial perspective that I have found to be the best description, “from the inside out” of what customer development feels like. I would encourage you to read the following in advance: “Customer Development for My Web Startup Part 1“ “Customer Development for My Web Startup Part 2“ “Bootstrapping a Lean Startup“ Now, write down your current key hypotheses and identify which of these you are going to test in the next two to thirteen weeks. Come up with a rough plan of attack before you come to the conference or watch the video. Here are some key hypotheses you may want to test; Who is your target customer? What are some simple tests or questions that can identify them? What problem or need of theirs do you address. What are symptoms–from your target customer’s perspective not yours–that they will admit to about the problem or need? What’s the minimum feature set you need to address the target customer’s need. What is the customer’s perspective on the benefits that it will offer? How do these benefits compare to your target customer’s status quo and currently available alternatives? How will you differentiate your offering? How will they value your offering? How much can you charge? There are a number of good presentations planned for the day, see http://www.sllconf.com/program and review the description of the session against the hypotheses you want to test in the next three months. Schedule time now with your team and/or advisors to sit down for an hour or two sometime next week and revisit your hypotheses (maybe a talk has suggested a more important one you should address first) in light of what you hear at the conference. Update your plans accordingly. If you are attending the conference in person I will be there all day and would be happy to spend some time to review your key hypotheses and near term set of experiments to measure and assess them. Please bear in mind my experience has been startups selling to businesses so there may be other mentors with more appropriate experience if you are launching a media or consumer oriented offering:  I am certain any of the other mentors on site would be happy to review your plan of attack as well. If you are watching remotely please feel free to send me an e-mail outlining your key hypotheses and intended course of action for the next two to three months and we can schedule a short call to review them. If you are organizing a Lean Startup Circle event in May or June these might be some useful topics to address: What I Learned at the SLLConf and Changed Plans Accordingly What We have Learned about key hypotheses from experiments in the last Month You are also welcome to discuss these topics at a Bootstrappers Breakfast if one is available in your area. I hope this will help entrepreneurs get the most out of the SLLConf experience and accelerate their businesses. Please feel free to approach me at the conference, I always enjoy comparing notes with entrepreneurs. We are rolling out a new service for folks trying to make sense of the electronic design automation industry in partnership with a semantic technology firm: I will be using the conference to walk through key assumptions we are making about the offering to ensure I haven’t overlooked something. ...
Posted on  by  from the site SKMurphy
We are working with a semantic technology firm to develop a new portal that will track EDA related blog posts and other content announced via an RSS,  Atom, or other feed protocol . Our goal is to provide a richer level of aggregation and analysis than an RSS reader with 200 feeds offers today (see for example my list of 238 in my July 11, 2009 post “EDA Bloggers 2009“). This is not intended to compete with any advertising supported sites, it will be a subscription service that will allow you to keep track of new blogs (including micro-blogs like twitter) and new blog posts on an ongoing basis. If you are interested in tracking blog posts and new announcements in the design automation arena, I would like to schedule a short call to get your perspective and feedback on our plans.  You can use the contact form to reach me by phone or E-mail. ...
EDA, eda, skmurphy
Posted on  by  from the site SKMurphy
In Poker a Jack is as good or better than about 3/4  (OK 76.92%) of the cards in the deck, losing only to Queen, King, and Ace.  So a “Jack of all Trades” is good at many things. The full verse is “Jack of all trades, master of none, though ofttimes better than master of one.“ Scott Adams offered “Career Advice” in July of 2007: But if you want something extraordinary, you have two paths: Become the best at one specific thing. Become very good (top 25%) at two or more things. The first strategy is difficult to the point of near impossibility. Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try. The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. I think this second strategy is a better one if you want to be an  entrepreneur. It enables you to identify and take advantage of brokerage and translation opportunities: you can link folks who might not otherwise connect because of your ability to understand that even though they are working in different fields there is a mutually beneficial relationship possible. There is a risk that skills and know how that you use infrequently  can go stale or diminish in relative value depending upon how rapidly a particular field is advancing.  The half-life or perishability of a skill is normally a function of the rate of innovation and any demographic changes in domain: how quickly does new knowledge emerge and old masters retire. Soft skills like how to run a meeting or how to manage tend to decay more slowly because people don’t change as much as technology. Adams suggests this in his closing advice: At least one of the skills in your mixture should involve communication, either written or verbal. And it could be as simple as learning how to sell more effectively than 75% of the world. That’s one. Now add to that whatever your passion is, and you have two, because that’s the thing you’ll easily put enough energy into to reach the top 25%.  If you have an aptitude for a third skill, perhaps business or public speaking, develop that too. It sounds like generic advice, but you’d be hard pressed to find any successful person who didn’t have about three skills in the top 25%. One more risk being a “Jack” is that the knowledge in any one field does not enable you to differentiate yourself. So you need to consider how the various cards you have are going to combine in a useful way that is also differentiating. There may also be a “meta” domain that you are actually mastering by exploring a variety of its facets. E.g. if two fields are going to interact more strongly over time (think biology and computing) then knowledge of both fields is helpful. It’s also useful for fostering innovation in an arena you are new to if you can transplant working methods and technologies that are established in a field you another field into your new domain. This knowledge brokering can  also be the basis for your next startup. For an interesting perspective on this see Andrew Hargadon’s  “Firms as Knowledge Brokers.” ...
Idea Stage, skmurphy