Monday, 8 December 2014

Week 8 (8.12 - 14.12): The Lean Startup - How can our ideas become successful companies?

I know that each one of you guys is super busy. 
I'll try to keep it brief and interesting for you.

Ideas

Ideas are everywhere. I guess all of you had a lot of them during your studies. You still think of something new. From time to time, there comes an idea that really sticks to you. You cannot stop thinking about it. You know that you are passionate about it and could commit yourself to it. You start to wonder: What if it's an idea that could bring the change? What if I could find customers for that product/service?

Knowledge

In my opinion we all (me included) lack knowledge about how to turn ideas into products that have a high potential on the market. We often possess skills to produce (as I do, being a developer) but do not know, how to make it matter in terms of building a business around the product.

I trully believe that this is a very imporant knowledge that could, and should be teached. How to turn ideas into successful products is a knowledge that could be gathered, shared and taught. Fortunatelly some people do that already.

Startups

Several institutions in Poland and abroad brought a new fashion - fashion for being an entrepreneur. You could almost say that it is trendy to work on your own business. I think that this trend is not a bad thing. By examining in detail, what brought an idea to successful products gives us an insight of factors that are critical for proper execution. Create a trend, take a look on several startups and you have a fair amount of data to analyse and reason from.

The Lean Startup

I invite you to view a brief (7m) introductional video  on "The Lean Startup". Book and methodology of Eric Ries that deconstructs business building process into steps that can be taken to achieve success.

Questions

Here are couple of questions from me:
  1. Do you remember your last business idea that was important for you? 
  2. Did you try to execute it?
    1. If you did - why? How did it go?
    2. If you didn't - why? 
  3. What makes a good product in your opinion?
  4. What do you think about the lean startup approach?
  5. Would you be afraid to talk openly and publicly about your next idea for the business?

But wait, there is more!

If you are interested in that subject I invite you to take a part in a course at Stanford University about "How to Start a Startup?". Course is lead by Paul Graham, CEO of Y Combinator - one of the most successful incubators in the world. Link to the first video:


I'm deeply interested in this subject because I'm just in the middle of founding my own incubator (foundation) that brings programmers (hackers), web designers (hipsters) and marketers (hustlers) togheter. 

23 comments:

  1. 1. Do you remember your last business idea that was important for you? 
    A few years ago I came to the point when I decided to start a small business on my own and still work full-time. When you are in that mindset, everywhere you look gives you ideas for new opportunities. I came to the conclusion that it does not have to be an innovation that changes the world. A small business that generates money would suffice :) It was just enough to choose the industry which was raising and where there was enough place for many players. That is why we (my partner and I) chose to import of goods from China.

    2. Did you try to execute it?
    We gave it a try and even imported a few things from China. However, formalities and lots of work around that slowed things down. I have changed my job in the mean time and my free time was greatly reduced. That's why our business went stale but it is still waiting for the next jump :)

    3. What makes a good product in your opinion?
    As I have stated before, I think it is not about totally innovative product that has never been seen before and will change the world. It is about the implementation and hard work. The most important thing about a good product is to fulfill be needs of the customer with it. That is the most important thing. The rest is about the quality, marketing and customer service.

    4. What do you think about the lean startup approach?
    I agree with the lean startup approach that the startup is boring. The main key to the success is perseverance and implementation. Additionally, the right mindset is critical. You have be the willing to fail often at the beginning and learn from that. This might seem easy but it turns out that startups are not for most of the people.

    5. Would you be afraid to talk openly and publicly about your next idea for the business?
    No, when you start your business everything will be revealed eventually. If the strongest point of your idea is only the fact that is it first in the market, you will probably fail. There are big players with almost unlimited cash and, especially for IT startups, everything can be cloned in the blink of an eye. Good business is about the implementation, customer base and hard work.

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    1. I guess that trying the import business got you a lot of insight on how things work - fine experience! I'm doing the same thing - leading the foundation in our free time, I agregate people working on their side projects, apart from full time employment. It works out because it brings no stress (apart from work overload).
      All in all It's all about proper mindset.

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  2. Q1. Do you remember your last business idea that was important for you?
    Yes. I can remember the idea that is very important for me. It is involved with education. It comes to my mind every day.

    Q2. Did you try to execute it?
    No, I didn`t.

    Q3. If you did - why? How did it go?
    ---

    Q4. If you didn't - why?
    I work as a data analyst and my job gives me and my family a quite good financial security. Nevertheless, I hesitate with decision to give up my current work in order to start my own business but I`m not strong enough to do it and I am a little bit afraid too what happens if the business bomb.

    Q5. What makes a good product in your opinion?
    In my opinion the quality connected with competitive price of the product.

    Q6. What do you think about the lean startup approach?
    The lean startup idea based on 5 key points: entrepreneurs are everywhere, entrepreneurship is management (institution + product), validated learning (scientifically, learning by experiments), build-measure-learn with feedback loop, innovation accounting seems persuasively. What is more it works.

    Q7. Would you be afraid to talk openly and publicly about your next idea for the business?
    I am going to keep details of my business for myself in order somebody doesn`t take the idea.

    ReplyDelete
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    1. I guess that financial security is main reason why people are avoiding working on their ideas. I've seen that in many cases and acted acordingly, when I planned my foundation.

      I simply say that all of us have their full time jobs and we have a right tools to produce in our hands. That gives us stability and no financial dependency to no one. We all plan to switch to running the startups as the money will start to flow. You can minimize that risk by thinking of startups as a side projects.

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  3. 1. Do you remember your last business idea that was important for you?
    Yes I remember.:) It was on my last year of studies. I developed internet ranking platform for universities. After few month later I worked in company that realized that project.:) I learned that making research about new product is difficult task.

    2. If you didn't - why?
    I gathered lot of documents and prepare algorithm but unfortunately I didn't finally ask bank for money. It was expensive to lunch startup and I admit that I wasn't ready then. Maybe in the future.

    3. What makes a good product in your opinion?
    I would not tell more than that explained in second video. I think product should be simple with quality expected and have it niche.

    4. What do you think about the lean startup approach?
    This is standard for big corporations. I work shortly in one small company and I can't tell you what is like in SME. This is so called "boring stuff". You try to make proper KPIs measure them and adjust your processes to them. Then You design new KPI and so on... It's like continuously making test cases for your application.;)

    5. Would you be afraid to talk openly and publicly about your next idea for the business?
    I would positively answer for that question: Unfortunately yes. There are two reasons: first that my idea can be stolen and secondly I learnt that before you ask for money you need to have prototype. Till this time it's simply irresponsible to talk about project.

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    1. I think that business optimization is not so boring - it actually shows what it is going on, what works and what does not. It's like hypothesis in research. Very often you are completely misguided before you run proper tests.

      You can always sign NDA non-disclosure agreement and have your idea secured. That's a standard with investors.

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  4. Q1. Do you remember your last business ideat that was important for you?
    I used to be kickboxer and boxer. I wanted to became a coach when I finish my sport career and leave the national team of Poland. I was thinking about opening my club.

    Q2. Did you try to execute it?
    No I didn't. By the way of being a sportsman I finished studies (at the instigation of parents) and started good and interested work. This work was interested so much that finally I changed my planes.

    Q3. What makes a good product in your opinion?
    In my opinion good product shoud be base on innovative technology, be competitive on the market, there should by supply of it.

    Q4. What do you think about the lean startup approach?
    I think that this approach is not for me. I am not a leader. I feel good in big company as a specialist in my area.

    Q5. Would you be afraid to talk openly and publicly about your next idea for the business?
    If I had one I wouldn't say about it and try to do it on my own. But I think that will never happen ;)

    ReplyDelete
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    1. Your story is really interesting! You have achieved a lot in your life! I guess that opening your kickboxing club and leading it under your name would be a great idea.

      I guess that starting a business (in a startup way) is not about leadership. I think that consistency and having a clear vision is more valuable.

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  5. It's a very interesting topic and videos!

    1. Do you remember your last business idea that was important for you?
    Yes, I do. Like most of my ideas, it was brilliant.

    2. Did you try to execute it?
    I’m currently trying to execute it, so it’s hard to tell how it went, but it’s going ok.

    3. What makes a good product in your opinion?
    I think the most important things for most products are quality and design. No matter if it’s software or household appliances, consumers should feel that the product they bought is well thought through and well crafted. It’s also very rewarding when people appreciate your product.

    4. What do you think about the lean startup approach?
    I think it’s an interesting approach which can probably work for some products and ideas. I think I can picture situations in which releasing a minimum viable product would be a good idea, but definitely I can think of more scenarios in which it wouldn’t work.

    5. Would you be afraid to talk openly and publicly about your next idea for the business?
    It depends on your idea and the stage of development. If you think that you have a revolutionary idea and you’re in early stages of development, then probably caution is advised, as someone can make the same thing faster and better. If you’re making something derivative, there’s probably no harm in talking about it openly.

    ReplyDelete
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    1. 5. Yea like investors :) Although as I read through discussions on that topic, the meritum is that people are too busy working on their own ideas or not working at all to steal your idea.

      It seems that you really value quality of the products. What I've learned and seen people are doing with the MVPs are trying to release a bad quality product because of short time frames to check if it's worth to go in a proposed direction.

      I guess it would not work for medical equipment ;)

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    2. That's exactly why I split those ideas into two categories - revolutionary and derivative. Being cautious doesn't mean you shouldn't try to reach investors :)

      I understand this approach, it probably works very well for things like social networking sites which can be easily updated for all users without any effort on their side. Probably doesn't work well with most of non-software product. Medical equipment is a great example!

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    ReplyDelete
  7. Do you remember your last business idea that was important for you?

    Yes I working on it right now

    Did you try to execute it?
    Yes

    If you did - why? How did it go?

    We still working on it

    What makes a good product in your opinion?

    I think that product should be of good quality, innovative and be required

    What do you think about the lean startup approach?

    I think that this is good idea and can help many people to start their own businesses

    Would you be afraid to talk openly and publicly about your next idea for the business?

    Yes that why my answerers are so short:)

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    1. Sounds very mysterious Krzysztof!
      I wish you good luck on your execution. I guess that you're on a good way to make something that people need :)

      Delete
  8. Do you remember your last business idea that was important for you?
    A:/> I'm working on it right now. Soon we are going to release it (JXcore)

    Did you try to execute it?
    A:/> Yes

    If you did - why? How did it go?
    A:/> We did it because we needed it/ believed on it. We didn't reach to the final point yet.

    What makes a good product in your opinion?
    A:/> A product that successfully answers the needs of it's target audience.

    What do you think about the lean startup approach?
    A:/> We use this approach.

    Would you be afraid to talk openly and publicly about your next idea for the business?
    A:/> I think the answer depends to the line of business.

    ReplyDelete
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    1. You have a really nice landing page for your product. It's clear and I understood what's going on even without node js knowledge. Keep rocking!

      You are right about that it depends on the line of business - also it depends to who are you talking openly to (for example investors, corporate that can execute your idea in two weeks with their possibilities).

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  10. 1. Do you remember your last business idea that was important for you?

    There were a couple but I didn't really spend much time on elaborating on them, was too busy and focused on studying, working and private things. Maybe that comes from the fact that I didn’t really intend to open my own business but rather find a more stable and steady form of financial security. That changed a little bit, since now that I am a researcher I need to come up with my own ideas that should appeal to others but it’s still too early to talk about anything big.

    2. Did you try to execute it?

    As explained above, no.

    a. If you did - why? How did it go?

    ---

    b. If you didn't - why?

    Had other priorities.

    3. What makes a good product in your opinion?

    A good product is one that fulfills the needs of the customers, bring them joy and relief. When coming up with ideas, they might look good to you but won’t sell simply because there is no need for such a product. Sometimes you have to create a need and a product to fulfill it.

    4. What do you think about the lean start-up approach?

    It sounds interesting, especially for organizations, however I don’t really have much experience to compare so I won’t elaborate on it.

    5. Would you be afraid to talk openly and publicly about your next idea for the business?

    If the idea was indeed worthy of the effort then I certainly would do it.

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    1. I wish you luck on your research. I think of working on my research in same terms as working on ideas. I use the do it, test it, imrove it approach. Mostly i test my research using feedback from my prof. Anyway I really like prototyping stuff (like publication articles) and running those through some iterations. That way you do not waste time if you take a wrong turn on the way.

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  11. 1. Do you remember your last business idea that was important for you?

    I'm not really a "business idea" kind of person. It takes optimism bordering on delusion to make it work ;)

    2. Did you try to execute it?

    No, I haven't had the chance to create a startup yet. I would probably be too risk averse to try and execute anything like that.

    3. What makes a good product in your opinion?

    I like products that reliably do what they're meant to do. This usually means the product must be well established on the market, because the more people use it, the better the chances that all issues have been resolved. I was surprised when the video mentioned releasing unfinished "minimum viable products" to customers - who wants to be an unpaid beta tester?
    I especially like products with thoughtful enhancements, it shows that someone took the time to think about the design, even if most people won't care or even notice.

    4. What do you think about the lean startup approach?

    It sounds good in theory, but who knows how successful it really is? The video may just be selling the book. One thing I'm skeptical about is the claim that this approach works in "any sector or industry".

    5. Would you be afraid to talk openly and publicly about your next idea for the business?

    I agree with Wojciech here. I would even say that it's quite funny when someone thinks their business ideas are so great that they have to keep them secret:
    1. Chances are, someone already thought of that (whatever it may be).
    2. Ideas are cheap, their execution is the real challenge.

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    1. If my solution could solve math homeworks or write scientific essays but it would be buggy (throw exceptions 85%) but provide a good solution, I would still find users that would like to use it. If it really fulfills the need - people will buy it. Think about games released and sold in beta and alpha versions. People still buy it because there is a need for them (see DayZ, Life is feudal and so on). It's the same with other products - especially web applications.

      When it goes about successfulnes there is already enough data to measure it somehow. YCombinator has already released heaps of companies after incubation. It looks like, the approach is good and quite logical actually! I do agree that it does not work in every scenario - medical equipment for example.

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    2. OK, you're right, I used to sign up for a free beta release of a game myself. But I can only see myself doing that, if I have high expectations for the finished product (specifically, because I know the company and their past products).
      Otherwise, an unknown company (a startup) and a buggy product is something I would avoid.
      The video even suggested to ignore the feedback from customers and instead to “run experiments” on them! I think, if it works, it's only because the users don't know what they're getting into and believe they will be getting a reasonably good product, not a substandard one. This can only work for so long - unless you're a die hard early adopter :)

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    3. I wouldn't avoid the solution if it would be a really usefull tool, that could for example save my time :) Even if it would be buggy - if it solves my problem and there is no other solution, I'm prepared to pay the price.

      One of the startups I'm participating in is based simply on being a mediator for tailors. Tailors in Poland have problem - their services are cheap, they do not have a lot of customers. I'm willing to bring to them new kind of orders, that can be much more expensive. My buggy MVP will be just a shop. If the problem really exists for the tailors and their services, that are offered by my solution are needed - customers will find themselfs. Then I will optimize the conversion by analysis of customer feedback and their actions - what to offer to make money faster ;)
      Thanks for the comment!

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