Innovative entrepreneurship - Noorderlingen

Innovative Entrepreneurship

Noorderlingen workshop - February 4th 2015

Leon PalsChairman Startup Foundation

Founder of several of its initiatives

@leonpals leon@startupfoundation.co

Startup FoundationAn independent not for profit [or for impact] organisation,

driving innovation by supporting startups

Who are you?Name & expertise

Problem?

“A startup is a temporary organisation searching for a repeatable and

scalable business model”- Steve Blank

EffectuationA framework for entrepreneurial thinking

Causal thinking=

Managerial thinking =

Choosing the best means to achieve a goal

Effectual thinking=

Entrepreneurial thinking =

Imagining new ends with a given set of means

Effectuation principles

To get you started on the right track

12

Bird in handWho are you and what do you have?

14

Affordable lossWhat can you afford to lose?

LemonadeEmbrace surprises

LemonadeEmbrace surprises

And always bring salt & tequila

19

Crazy quiltForm partnerships to cover your weaknesses

21

Pilot in the planeFocus on what you can control

Pilot in the planeControl vs. predict

Because the future is madeControl vs. predict

Let’s do a small gameWe love games.

“If I can predict the future, I can control it”

- ?

“If I can predict the future, I can control it”

- Any experienced manager

“If I can control the future, I don’t need to predict it”

- ?

“If I can control the future, I don’t need to predict it”

- Any experienced entrepreneur

“Great Scott!”- ?

“Great Scott!”- You

Innovative entrepreneurship

Or Effectuation, Customer Development, Lean Startup and dozens of canvasses.

Startup ≠ small version of big company

Startup ≠ small version of big company

Startups are temporary organisations in search of a repeatable and scalable business model

Startup ≠ small version of big company

Startups are temporary organisations in search of a repeatable and scalable business model

search = innovative

Startup ≠ small version of big company

Startups are temporary organisations in search of a repeatable and scalable business model

search = innovative = uncertain

Companies execute

Which is what they are good at

They have managers that predict, operate and plan using something called the Waterfall method

WebvanThe tale of a Startup that wanted to be a Company

$1.200.000.000

$1.200.000.000Nothing left, except

Nine out of ten fail

Nine out of ten failBecause they try to be a company:

Plan, Build & Launch

Time

Waterfall

Time

Risk Waterfall

Time

Risk

Agile

Waterfall

Startups don’t fail because of product development

Most of us know what we can build

Startups fail because of a lack of customers

Just because you build it, that does not mean they will come

By Steve Blank

Customer development

Customer development

Customer Discovery

Customer Validation

Customer Creation

Company Building

Pivot

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

Pivot

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

Execute

Pivot

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

ExecuteLearn

Pivot

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

ExecuteLearn Confirm

Pivot

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

ExecuteLearn Confirm AARRR

Pivot

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

ExecuteLearn Confirm CEO hired

Pivot

AARRR

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

ExecuteLearn Confirm CEO hired

Entrepreneurs start to think about leaving

Pivot

AARRR

Lean Startup =Customer development combined with Agile product development

Search

Customer Discovery

Customer Validation

Learn Confirm

Pivot

LearnLearning is mostly done by talking to potential customers.

But can also be achieved through observation and customer feedback

Search

Customer Discovery

Customer Validation

Learn Confirm

Pivot

ConfirmConfirmation can be achieved through several kinds of tests, depending on what you want to confirm.

Customer Discovery

Customer Validation

Customer Creation

Company Building

Pivot

Build

Measure

Learn

Lean Startup Process Build Measure Learn Loop

Ideas

ProductData

Validated learningDecreases uncertainty

Validated learningDecreases uncertainty

Minimises risk

Validated learningDecreases uncertainty

Minimises risk Increases chances of success

Seriously thoughYou do not launch a startup, you steer it to success.

It is okay to start like this

Time for a challenge

Challenge Who knows?

W O R K S H O P I N T R A C T O

Challenge Who knows?

Illustrations by Esther Gons @wilg

Illustrations by Esther Gons @wilg

Customer Conversations

Learn Confirm

Why would you have Customer Conversations?

87

What would you like to be more sure of?

TopicsGenerate topics

Customer DevelopmentGa het gesprek aan

W O R K S H O P I N T R A C T O

Dear mom,

Don’t you think I’m great?

Love, Your son

It’s not just your momPeople want to be helpful, more than being honest.

How can we get facts?

How can we get facts?- Talk about their life, not your concept

How can we get facts?- Talk about their life, not your concept - Ask about specifics,

How can we get facts?- Talk about their life, not your concept - Ask about specifics, from the past

How can we get facts?Anything future related is worthless as we cannot predict the future with certainty.

Do you think this is a good idea?

Do you think this is a good idea?

How do you currently deal with this?

How do you currently deal with this?

When does this happen?

When does this happen?

Would you buy a product that would solve this?

Would you buy a product that would solve this?

Please show me how you do this?

Please show me how you do this?

Can you talk me through the last time that you experienced this?

Can you talk me through the last time that you experienced this?

How much would you pay for this?

How much would you pay for this?

How much does this currently cost you?

How much does this currently cost you?

How do we do this as casual as possible?

Scene of the customer

Start with softball [easy to handle] questions

How do you screw it up?

How do you screw it up?- Use a script or survey instead of topics

How do you screw it up?- Use a script or survey instead of topics - Talk about your business, instead of listening

How do you screw it up?- Use a script or survey instead of topics - Talk about your business, instead of listening - Try to sell, instead of learn

Learn Confirm

Good or bad conversation?

“That’s so cool. I love it!”

“That’s so cool. I love it!”

“There are a couple of people I can introduce you to, when you’re

ready.”

“There are a couple of people I can introduce you to, when you’re

ready.”

“What are the next steps?”

“What are the next steps?”

“Looks great, let me know when it launches.”

“Looks great, let me know when it launches.”

“Can I buy the prototype?”

“Can I buy the prototype?”

“When can you come back and talk to the rest of the team?”

“When can you come back and talk to the rest of the team?”

Commitments

Commitments- Time [next meeting, taking part in trial]

Commitments- Time [next meeting, taking part in trial] - Reputation risk [introduction to peers]

Commitments- Time [next meeting, taking part in trial] - Reputation risk [introduction to peers] - Cash [letter of intent, deposit, pre-order or sale]

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JFDI- Set topics - Do at least 5 to 10 Customer Conversations

Prototypes

Test Design

Learn Confirm

Minimum Viable Product

Minimum Viable

Product Test

Minimum effort towards validated

learning

Search

Customer Discovery

Customer Validation

Customer Creation

Company Building

ExecuteLearn Confirm CEO hired

Entrepreneurs start to think about leaving

Pivot

AARRR

Search

Customer Discovery

Customer Validation

Learn Confirm

Pivot

ConfirmConfirmation can be achieved through several kinds of tests, depending on what you want to confirm.

Test casesOptions are merely limited by your imagination

Video + Landingpage

75.000 signups

Wizard of Oz

Proved people would buy shoes online

Concierge

Created early customers

A test drives validated learning

But what do we need to learn?

You need to find your riskiest assumption, and a way to (in)validate it.

The riskiest assumption is the one that, if proven false,

will kill your business

How to design a test

How to design a test- Set your learning goal

How to design a test- Set your learning goal - Form a falsifiable hypothesis to test

How to design a test- Set your learning goal - Form a falsifiable hypothesis to test - Make it measurable

How to design a test- Set your learning goal - Form a falsifiable hypothesis to test - Make it measurable - Set a fail condition

How to design a test- Set your learning goal - Form a falsifiable hypothesis to test - Make it measurable - Set a fail condition - Set a time-box

Build

Measure

Learn

Lean Startup Process Build Measure Learn Loop

Ideas

ProductData

If you cannot fail, you cannot learn

About half your tests should fail

Accept failure as validated learning

Swallow your pride, become successful

JFDIDesign a test, conditions:

Must have a learning goal, based on a falsifiable hypothesis and measurable.

Also think about the time-box and fail conditions.

What have we learned?

Let’s get real

Ideas are generic

Jargon & BuzzwordsMake a Startup less actionable

Tests

Why get hands on?

Why get hands on?

"Entrepreneurship is something you learn best by doing it”

- Paul Graham

But most of all

It is realityThe red pill

“Put your ideas into practise, they will improve if you take note of what happens next”

- Leon Pals

“Put your ideas into practise, they will improve if you take note of what happens next”

So why do we see so many peers struggling?

So why do we see so many peers struggling?

Fear

“The greatest barrier to success is the fear of failure”

Sven Goran Eriksson

What is Lean Startup?

“Do a little, see if it works”- Tendayi Viki

Theorising/debating/planning

Might make you sound smart, or not

Lessons learned

Gain credibility

You might create something

Red pill

Assumptions Meetings Theory

Your comfort zone

Blue pill

Validated learnings Running tests

Experience

Where the magic happens

Thank you. Any questions?

@LeonPals

Thank you. Any questions?