Maximizing Bandwidth…

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I can’t believe how long it’s been since my last post.

I have had so many things going on that this blog – something I really care about – ended up getting neglected. With all the demands of starting a company – business, technical, financial, and social – less critical things have just started to slip. I really hate when this happens, but it has forced me to face up to something I never really wanted to consider before:

I have limited bandwidth.

The fact is, this is true for everyone – whether they want to admit it or not. There is a point where we all simply run out of the cycles we need to engage with the range people and events that are demanding our time and attention.

Of course, our competitive sides don’t really want to acknowledge these limits.

It’s easy to convince ourselves that we can keep doing more by simply working harder, longer, and smarter. Unfortunately, at a certain point, we cross some line where we stop actually “engaging” and simply start “interacting” – and there is a substantive difference between the two. I liken this to the way a tired parent interacts with a talkative toddler – answering their questions and displaying pro forma interest, while remaining mentally disengaged from the conversation taking place. It preserves the appearance of engagement, but eliminates the substance behind it.

It isn’t something that we do consciously – it’s just a coping mechanism that kicks in at some point. True engagement demands time. It’s something that requires thought and focus. It requires enough downtime to remain energized, and enough quiet time to let our sub-conscience help out with the inspiration and insight that important challenges require.

By contrast, “interacting” just requires us to do something reasonable and responsive – but not necessarily well considered or forward looking.

When we reach the limits of our internal resources, we start to become less effective – and both the important and less significant alike end up suffering. For anyone that is highly motivated and driven, this is an easy trap to fall in to. To avoid it, we need the discipline to say “No” to more of the things we know we really shouldn’t be taking on. We also need a level self awareness that lets us understand and operate effectively within our personal limits. This isn’t about slowing down or taking it easy. We absolutely need to keep pushing ourselves – but pushing to be accomplishing more instead of simply doing more.

It’s about optimizing our outcomes instead of overloading our activities.

I think this is as good a time as any for us to review and prune the things we have on our plate, and make some space for the right opportunities that will no doubt come our way in 2013…

Happy New Year Everyone!

Early Stage Insider: Defining Your MVP…

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On a recent Early Stage Insider post, I received a comment from J. D. Farmakidis asking my thoughts on the most effective way for a startup to channel the market research they do into defining their M.V.P. – the minimal viable product they need to develop to go to market. It’s a great question – one I’ve been asked before – and I felt the best way to answer it was with a new post.

So how do you go about defining your MVP?


The first thing to remember is that releasing a minimal viable product is NOT the same thing as releasing a minimally working product. In any product you release, quality still matters. If you put out junk, any feedback you get back will be marginally useful and won’t help you focus your efforts where they need to be. Avoid this at all costs.

The MVP you develop should distill the the core value to are looking to bring to market down to its most elemental form. At the same time, it still needs to address a real market need at a professional level of quality and usability, in a way that is distinct in some value-added way from existing market solutions.

This starts with getting a deep dive understanding of:

Needs->Workflows->Solutions

These represent the context of the existing market that any new product will need to operate in. From that, you should be able to enumerate the areas where existing solutions fall short as well as where they do well. Both are important. (A spreadsheet app like Numbers or Excel is a great way to capture and organize this detail into a working outline.)

With that as a guide, create an outline of what capabilities your product will need to include, those you are consciously deciding to omit, and some potential ways to integrate your product/service into existing market workflows. Socialize this with trusted people in your target market, and use that to further refine what you are looking to do. This process should give you a more refined and focused definition of what your MVP should include.

From this, you should be able to estimate how much time it will take to develop your MVP, and line that up against the amount of time you know you have left (given your available funding, resources, burn rate, etc.) to execute on it. These need to be honest time assessments – and even then you will almost always underestimate the time it will take to develop something. In all of this, you really need be thinking MINIMAL. Keep trying to identifying the basic elements of value that you should try to deliver vs. the minimal version of some grander vision you’d ultimately like to achieve. Don’t be afraid to prune anything you find isn’t a necessary part of your key value proposition. Both your potential customers and your competitors are always in motion, so minimizing time to market is very important.

If your product is in a technical area, development should be built around an agile process, composed of short sprints that result in usable functionality. You want to be getting market feedback on various capabilities as soon as it comes out, so develop a good relationship with some people in the market that will be willing to test and comment on these early builds. Use their feedback in defining the goals of your next sprint. Keep in mind that if you can’t find anyone willing to do this with you, its possible that the opportunity you are looking to address might not be as significant as you think it is. If so, it may require more thought before moving ahead.

In addition to giving you incremental feedback, this “early engagement” process can also help you figure out when your MVP is finally ready. When the people you are working with begin to integrate your sprint releases into their daily workflows, you are probably there.

Package it up and make a release!

Keep in mind that defining an MVP isn’t a formal process – it is an organic mix of assumptions, validations, and feedback – all refined through iteration with the market. You won’t get everything right, but that’s OK. The goal is to deliver an initial product that provides some core values that are compelling enough for people to be willing to overlook any areas where it falls short. It can get better from there, guided then by real world usage and feedback.

The harsh reality is that no matter how much thought and planning goes in at this stage, you’ll never be sure that you’re building something viable until you have enough people in the market using it. And to do that, you need to ship. Don’t be sloppy, but don’t over think. Your strategy should be to research intelligently, ship quickly, learn incrementally, and iterate often.

This can’t be done in a vacuum. You can’t approach this as an intellectual exercise – it isn’t about servicing a market in the abstract. To be effective, you need to become a part of the market – and engagement and understanding need to be the cornerstones of everything you do.

I’m sure many of you have gone through this process at some point. Please feel free to share your own experiences around developing new products, and any lessons you think might apply.

My thanks again to J. D. Farmakidis for motivating this post. Hopefully this did a reasonable job of answering your question! If not, let me know…

Early Stage Insider: Taking Advice…

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Starting up a new company can be daunting, and is tough to do alone.

As the euphoria around the initial ‘big idea’ starts to transition into a more sober assessment of what needs to be done to actually execute on it, you will probably start reaching out to key people in your network for validation and advice. This is a critical phase in launching a business, challenging you to fully think through the premise of your venture and the details of what you’ll need to do to make it happen. If not approached with the right mindset, a lot of the value you’re looking to get from it will be lost.

Probably the single most important thing you can do when approaching this step is to avoid selection bias when seeking advice – picking the people that you think are most likely to say good things about what you are doing. You want to talk to people that will give you honest, constructive advice. This isn’t about getting told how great your idea is -even if it is. It’s about understanding where your weaknesses are, and what you can do to address them. Maybe the team you’re putting together isn’t right. Maybe some of your assumptions about market size are off. Maybe the technology you’re using isn’t ideal. Whatever it is, talking to people that can identify these things right up front is critical.

The closer you can get to doing the right things in the right order, the sooner you’ll be able to get your first minimally viable product into the market. The longer it takes to find the gaps in your planning, the harder it will be to deal with the issues that arise. Boosting your chances of success is more important than boosting your ego, so talk to the people that can really make a difference.

Now assuming that you are talking with the right circle of people, the next thing to remember is how to listen to what they are saying critically. Understand what biases they have (everyone has them), and factor that in. Try to validate any important points they make with other people you talk to, and don’t be afraid to get back to them later with follow-up questions if something doesn’t make sense or isn’t clear. Remember that things are constantly changing, and the approaches that worked great for them may not work as well for you. Of course, you should always respect the time and effort they are putting in to help you and truly consider their advice. But when it comes time to set your course, you should still be willing to go your own path if you think that’s the better choice.

The goal of seeking advice at this point isn’t to put together a plan based on pieces and parts of what everyone has told you. It’s to put together the best version of your plan that you can – a plan challenged, iterated, and refined by this process. Don’t worry about hurting anyone’s feelings if you decide to forgo the advice they offered. If you’ve been talking with the right folks, that won’t matter to them – they’ve been where you are and will understand.

In the end, success will be a combination of a great idea, great timing, excellent execution, and – of course – a little luck.

Do whatever it takes to maximize all of them.

If you have any experiences – good or bad – with taking business advice, please share them in the comments.

Let’s Grab A Coffee!…

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For those that only use a feed reader to access The Digital Edge, things have changed a bit on the site. I’ve done a complete refresh to make it more friendly to mobile devices – and hopefully make it a bit easier to get around and find things on. It’s a work in progress, and I’d welcome your feedback and suggestions on how to make it better.

There is one change in particular that I’d like to point out.

In the process of doing this refresh, I’ve added something that I’ve wanted on the site for quite a while – a direct way for readers of the site to schedule time with me to exchange ideas, discuss technology, or tap into my experiences with the tech startup scene in NYC.


I would love to connect with the readers of this blog face-to-face, and would be happy to grab a coffee and talk at any coffee shop around the city. And for those of you who aren’t in the city (which probably applies to most of you), we can still connect via Skype for a virtual chat. Either way, just reach out to me and we’ll get something scheduled. I’ve set up a TUNGLE.ME account to make my calendar available online, but you can also just email me to set something up.

My goal with this is to connect directly with as many of you as possible, and to open up the lines of communication with everyone that takes the time to read this blog. I get so much out of sharing on this blog, and look forward to connecting in-person.

Please don’t hesitate to get in touch!

Some Thoughts On Launching A Startup…

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I have had the good fortune to work with some incredible folks over the past 25 years, and to have had the chance to develop products that I was (and still am) really passionate about. To share some of these experiences in the startup space, I have been working on a web video series looking at best practices and emerging trends in early stage company development. This is an incredibly dynamic area, and there should be no shortage of topics to cover.

While I won’t have the first video out until this summer, here are five brief observations on starting up a business that I would like to share now:

  1. Get Focused Quickly: It is very easy for great ideas to get totally lost in the process of translating them into actual products. The best way to minimize the risk of that happening is to clearly define the central value you want to deliver to your target audience as early in the design process as possible. Once your zero in on that, you can start to discard any product elements or features that do not directly enhance that central value.

    The goal at this early stage is to develop what is often referred to as a Minimal Viable Product (MVP) – the most basic, essential expression of your product that can be used by a potential client. This is fundamental to getting a rapid product iteration cycle started. The faster you can align your efforts with the needs of the market, the better your odds of success.

    A great example of this kind of focused minimalism in a product can be found in a recently released iOS-based Task Manager called CLEAR (iTunes link). You can get a quick look at it here:


    If this video doesn’t show up just refresh the page.

    It does one thing really well without a lot of bells and whistles – even ‘reasonable’ ones – getting in the way. There are definitely some take-aways from this.

  2. Build Something People Want: I’m sure everyone went ‘Well Duh! Of Course.’ when they read this, but it is amazing how many times this doesn’t actually happen.The fact that YOU would want to use your product and believe in it passionately doesn’t mean you can build a viable business around it. 

     
    Instinct and experience do play important roles in starting and running a business, but can only get you so far. They can sometimes blind you to new things going on or narrow your perspective of evolving markets. One way to guard against that is to be in a constant dialog with your key users to understand how they perceive your product and the benefits its delivers. If someone is willing to take a chance on using a product from a startup, they are definitely invested in what you are doing. 

    Listen to them. You don’t have to do everything they say, but you need to listen and understand what they are looking for.

    With that said, numbers also matter. You need to think seriously about collecting metrics – both to validate your instinct and feedback as well as to better allocate your time and resources. When you designed your product, it was done with certain assumptions about what was important and how it would be used. Based on that, you should to determine what metrics could be helpful in understanding how successful that design was – both positive and negative – and then find ways to measure them. Most importantly, you need to be able to assess the numbers you do get back without applying a confirmation bias to the way you look at them. Don’t let your ego stop you from making the corrections you need to make to get the product right. The faster you can get alignment with the market, the better your chances of being successful. (I think I said that already…)

  3. Measure Everything In Terms Of Time: A science fiction movie came out recently called “In Time.”

     

    The premise of the movie was that everyone had a built-in countdown timer that ticked off the minutes they had left in their lives. In this society, time was currency. When people worked, they were paid their salary in extra ‘time’ – longer to live. When they bought things they paid for it with the ‘time’ they had left to live. When they ran out of time, they died.

    And that is a pretty good summary of life in a startup.

    Everything you do costs time. Every feature you decide to add. Every client you work with. Every iteration and refinement cycle you go through. Whatever money you take in – either VC or self funded – simply buys you time to do what you need to do get the product ‘right’. And you should figure that you won’t it right get it right the first few times. The math is simple – the more complex you make something, the more time it will take to do, the more time it will take to iterate on it, and the more iterations you’ll need before you get it right.

    And time will always be in short supply, so think before you do, and then do what you do in the most efficient way you can think of.  It’s about learning enough quickly enough to live another day.

  4. Don’t Do It For The Money: If getting rich is your goal, you’d have better odds just working hard to move up the traditional corporate ladder. Start a company because you are passionate about creating something new and committed to making it real. The culture that develops at your company will be a manifestation of this motivation.

     
    If you don’t have a core belief in the importance what you are doing and the positive ways people will want to connect with it, neither will the team you assemble to build it. Without that, it will be hard to convince clients and investors to take a chance on working with you. It will be hard to keep everyone focused and committed during the tough patches that every startup eventually faces. And it will be hard to make the difficult decisions that will need to be made in the course of growing a company.

    You simply can’t fake passion and there is no substitute for having it. You need to start a business for the right reason – and getting rich isn’t it.

  5. Be Willing To Ignore Advice: When you start a company, you will get no shortage of advice. There are a lot of very smart, successful entrepreneurs that have done things in certain ways that have worked exceptionally well for them, and they will likely tell you about some specific things you really need be doing if you want to be successful.

    Welcome their advice, but don’t feel obliged to take it.

    What worked in the past won’t necessarily work moving forward. What applies to one industry might not be true of another. Processes and methods that help one company to thrive can stifle another. Approaches that work well in one business culture can fail miserably in a different one.

    Every startup is trying to develop something different, and will need to address their own unique set of challenges. When it comes to advice, its up to you to sift through it all to find the lessons that may have value for your business, and to discard everything else. Don’t worry about offending anyone. The people that will probably end up offering you the best advice will also be the ones that will understand why you might not end up taking it.

     

I’m sure there are a diverse range of opinions on some of the things I’ve written here – these are simply thoughts and extrapolations based on my own experiences and perspectives. I have been strongly influenced by lean methodologies and concepts like continuous delivery, so rapid learning based iteration is foundational to how I approach  this space.  I welcome any feedback or comments you may have, and look forward to exploring these things – and many more – in a lot more detail in the future.

Potential Isn’t Standardized…

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My son recently took the PSAT exam, the first of the many standardized tests he will need to take as part of the acceptance process we have in place for admission to colleges and universities. He is still a sophomore, so this was really just a practice run for process that will kick in to high gear for him next year. There is a whole industry that has built up around taking these exams, with preparatory schools, private coaches and tutors offering students the ‘skills’ they need to score well on these exams.

Performing well on these tests is – in large part – a mater of practice and repetition. The questions have known formats on specific foundational material, with clear strategies on the best ways to approach selecting answers and optimizing guesses. The goal of all of this preparation is to avoid surprises and be able to instinctively play back the most appropriate approach for every type of question on an exam.

And this is really unfortunate…

Finding solutions to the most challenging problems we have will require people that can think creatively, identify previously unseen relationships, and suggest and tear down new models of innovation in a continuous cycle of refinement. We don’t need a generation of graduates who can play back solutions from the past note-for-note. We need people that can improvise on the past, seeing our present world through a different lens, and creating new and astonishing things to take us places we’ve never been before. We need people that are passionate about the course they want to pursue in their lives, and are looking for an opportunity to accomplish something meaningful.

And that has little correlation to being a well trained test taker.

In fairness, most Universities do consider a broader range of criteria in selecting candidates for admission beyond standardized test scores. That said, these “other factors” are now being prepped for in similar ways to the more structured testing models. Many parents are starting to build their children’s “college resumes” while they are still in grade school, making sure their kids are involved in those socially responsible projects and extra-curricular activities they think will help them stand-out on their applications. They bring in coaches for help with writing the necessary essays and handling any interviews as the application process kicks off – in addition to standardized test preparation. All of this is being done to create the most effective packaging of an applicant, regardless of their underlying interests, motivations, or abilities. Everything becomes subservient to just getting that acceptance letter.

With all of that in mind, it is unfortunate that colleges place so much emphasis on these types of screening methods for determining admissions. I simply don’t believe that the current approach can really identify those applicants with highest potential for success – the ones that can most benefit from the opportunities top tier universities can provide.

But with everyone trying to game the system to get a leg up, I not sure that there is any easy fix here. Perhaps the process needs to be less predictable, forcing applications to navigate off script and show how well they can think on their feet. Or maybe it needs to take place over a longer period of time, allowing continuous engagement with students throughout their high school years. This could help Universities see past any well-constructed artifices and really get to know the students that would like to go there.

While I am not optimistic that things will change any time soon, I think it would benefit us to start a discussion around this topic as part of the current national debate we are having about the future of our educational system. We need to find better ways to identify and nurture those individuals with the real potential to impact the fields they are passionate about.

If admission to our advanced educational institutions simply becomes a ticket to making a lot of money, we will end up squandering the true potential of a whole generation.

The Innovators Vs. The Regulators…

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In any ecosystem, there is a natural resistance to change. From simple familiarity to structural interdependencies, many elements converge to support the existence of the status quo. That doesn’t mean that the status quo is ideal or even good – simply that the cost of changing out of that state is more expensive in some aggregate way than the cost of remaining there.

This ‘cost of change’ creates a form of static friction in the system, allowing it to continue in it’s current state even when pressure for change exists. But like at the fault lines that define the boundaries between the continental plates of our planet, this pressure for change will continue to build up until it reaches a level that can no longer be resisted. When that point arrives, the built up pressure gets released in a single, significant shift (an ‘earthquake’ event) that ushers in change – producing a period of instability as the system searches for a new state of equilibrium. This is an unavoidable process in any dynamic, living environment – be it economies, technologies, political systems, or even cultures.

And for those that need to go through these shifts, it can be very scary and painful.

I’ve been thinking about all of this in the context of two key forces that exist in most ecosystems – regulation and innovation. Regulation is typically put in place to ‘raise the cost’ of the system moving in certain directions. Innovation, by contrast, attempts to ‘lower the cost’ of the system in moving in certain directions. While both of them try to influence what the system should look like in a future state, they are fundamentally different in nature and intent.

Regulation can take two forms – proscriptions and mandates. Regulatory proscriptions artificially raise the cost of certain actions through the implementation of penalties. For example, fines can be imposed, businesses licenses revoked, taxes levied, or even people locked up if they try to do certain things that are no longer ‘allowed’. Regulatory mandates can impose similar penalties if certain specific actions are NOT taken, forcing activity to take place that would otherwise not happen on it’s own. Sometime, regulatory mandates will eschew penalties to take the form of incentives – rewarding certain actions by artificially lowering the cost of the system moving in a particular direction.

The whole premise for creating regulations is a belief that we can understand enough about a desired future state to formulate an optimal plan to get there. Because of this, the broader or more far reaching a regulation is, the harder it will be to get right. The more complex an ecosystem is, the harder it will be to change or influence predictably.

What makes innovation different from regulation is that the innovator, unlike the regulator, doesn’t get to impose their view of the ‘best future’ path on the system they operate in. Instead, they need to offer something new and compelling enough that it can lure people away from the status quo. They constantly need to compete with other visions of the future – other potential options that are being offered. This forces them to continuously adapt and improve what they offer, or to drop out of the ‘selection process’.

In an innovation driven system, bad ideas don’t last long. The costs and the benefits of every path tend to be exposed early, and choices made at one point can constantly be reassesed against new alternatives being offered and adjustments made. Nothing is ‘locked in’, lending an efficiency to the process that biases it to positive outcomes.

Regulation, on the other hand, doesn’t provide anywhere near the same clarity. Since regulations aren’t about choices, their benefits can only be measured against the hypothetical end state they were implemented to avoid (‘Millions would have lost their jobs if we hadn’t done XYZ…”). There isn’t an actual alternative path their effectiveness can be measured against, allowing regulators justify them against theoretical extrapolations of past conditions that normally assume nothing else in the system would have changed to provide a different, better outcome. The only time a regulation typically gets challenged is when the damage it does – the only real measurable cost of a regulation – clearly outweighs the perceived benefits of keeping it in place. This biases regulation to negative outcomes.

My point here isn’t that all regulation is bad and all innovation is good – just that it is easier to identify and correct bad innovations than it is to identify and correct bad regulations. Innovations need to prove they are better before being adopted, and are constantly challenged by new ideas moving forward. Once passed, regulations are not normally challenged, and usually need to reach a point where they are demonstrably bad before being thrown out.

This means that regulations tend to create a status quo that is highly resistant to change, making the inevitable dislocations extremely painful when they finally arrive. Innovations tend to reduce the strength of the status quo, allowing change to happen on a more continual, ‘just in time’ basis.

Both have their place, but I strongly believe we need to be looking to innovation as the defining component of our path to a better future.

The Right Focus…

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FOCUS…

It’s one of the things that can give small startups an edge when they compete against bigger companies. And while focus on an aggregate corporate level is definitely an important piece of this, the real ‘force multiplier’ I’m thinking about here is the focus that takes place on an individual level.

Startups tend to be driven by survival. They don’t take their own existence for granted. Every individual in a startup recognizes that they play a role in their company’s ultimate success (or failure). More importantly, they also understand where in the company they need to focus their abilities – the specific things they need to concentrate their efforts on – to help make the overall mission a success.

In contrast, large organizations simply take their existence as a given. The company is perceived to exist independent and decoupled from the day to day actions of its employees. Most people there don’t feel any direct connection between their own personal efforts and the success of the overall business. They operate in a complex ecosystem where success or failure is hard to associate with any specific cause and effect – much less with the actions of any specific individuals.

Lacking any meaningful link to the overall well being of their organization, most people – on both the individual and group level – begin to focus more on their own parochial success within the larger organizational structure. Engagement is no longer around what is best for the company in the context of the overall market and opportunity. It is now around what is best for me as an individual in the context of the overall company.

Unfortunately, this is a completely rational way for people to act given that type of environment. Motivated people feel the need to compete and win. Absent a way to realize that in the market, it is only logical for this competitive need to transfer inward to their peers within the company.

This is why strong political climates seem to exist at most large companies. Walls get put up, allies and competitors begin forming, and compromises start to abound. Organizational maps end looking more geopolitical than operational, and decision making starts to take that in to account. Ultimately, their size advantages end up getting erased by in-fighting and inefficiencies, creating huge distractions to everyone simply trying to get the job done.

And it ends up getting reflected in what they are able to produce.

This is also why so many small companies seem able to out innovate and out execute much larger competitors. Its focus that gives them that power.