I really should update my blog more often — but, until I do….
1) If you’re in the Los Angeles area, come by the next LeanLA meetup and see Jason Calacanis interview Eric Ries. All attendees also get a copy of the The Lean Startup. You should RSVP ASAP.
2) I wrote an article that kind people at Harvard Business Review blog deemed fit enough to publish. My takeaway — it doesn’t really matter where your “vision” comes from (divine inspiration or customer feedback) — but you probably should check it against reality. Henry Ford’s steadfast adherence vision to his vision served him well initially, when he found “Product-Market Fit” with the Model T, but when the markets changed, his vision no longer resembled reality. Read the whole thing on HBR. (Thanks to Brant Cooper, Eric Ries, Ben Yoskovitz, Sean Murphy & Steve Cheney for reading drafts and giving me their thoughts. Much appreciated.)
My buddy, Dave Binetti of Votizen came down this last Monday to present on False Prophets at LeanLA.com’s last meetup (a meetup I co-organize). In his talk, about the subject of False Negatives and False Positives came up.
In the context of startups, a False Negative means that while your startup is not getting any traction or love with the market, investors and talent and doesn’t appear to be inching close to Product-Market Fit —– there is a high probability that it is actually a really, really super-duper idea and you could exit for $100m in 3 years. You don’t want to give up because you, in your heart of hearts, know this — even though no one else believes it. The fear of the False Negative is giving up too early and letting a good idea die or worse yet, seeing someone else take it and blow it up in a big way. IMO this is a very legitimate fear.
In contrast, a False Positive is a lot like the living dead, a zombie (Dave’s analogy) or even better yet, Malcom Crowe of The Sixth Sense*.
Cole Sear: I see dead startups. Malcolm Crowe: On TechCrunch?
[Cole shakes his head no] Malcolm Crowe: At Coupa Cafe?
[Cole nods] Malcolm Crowe: Dead startups like, in books about startups? In textbooks? Cole Sear: Operating like regular startups. They don’t see each other. They only see what they want to see. They don’t know they’re dead. Malcolm Crowe: How often do you see them? Cole Sear: All the time. They’re everywhere.
Remember, neither Malcolm Crowe nor the audience know Malcolm is actually dead until the end of the movie. And that is the danger of the False Positive; the high probability that your idea really doesn’t have any merit but you limp along and persevere because you a) ignore or eschew relevant negative feedback b) listen to false prophets that look and feel like progress but are anything but —- all the while, hoping for a positive Black Swan to stumble over. And then when your money runs out, it all comes back to you, in a scary montage, about how you had ignored all the creepy signs of being dead.
Every startup founder has to ask oneself is: How do I avoid them? Which is more likely? The probability of a False Positive or that of a False Negative? They’re both real fears — but which is materially worse?
As always, there are no easy answers to questions like these.
However, you might guess that I (and Dave btw) think that the False Positive is orders of magnitude more likely, more insidious and more evil — and that one reason why Customer Development and Lean Startups make sense to me.
*Thanks to Robin Ahn for suggesting this analogy. Brilliant.
The value is outrageous. Essentially, $6,000. worth of startup goodies for a measly $99. (I know that some of you out there spend more than that on gourmet coffee at places like Epicenter Cafe, Blue Bottle, Intelligentsia in a week. (I know I do.) Go check it out.
This is even better. If you buy The Lean Startup Bundle and then write a blog post about why your startup is “Lean” you could +$130,000 worth of investment, schwag and mentoring.
► $70,000 from “500 Startups” (Full disclosure: I am a mentor there.)
One $50,000 investment, access to the 500 Startups incubator program and two $10,000 seed investments from the fine folks at 500 Startups.
► $50,000 & incubation from Band of Angels and Pivotal Labs
A $50,000 investment from BoA and office space, agile and lean development advice, a Pivotal Inception (two day deep dive on product planning) and help hiring from Pivotal Labs.
► $10,000 of testing services from uTest
$10,000 in functional, usability and/or load testing for your web or mobile apps.
► $8 000 Recurring Billing Services
Two 12 month plans with Chargify that will allow you to automate billing and payments for up to 200 users plus advice on subscription services from the industry experts behind Chargify
► $10 000 in hosting
Six months of cloud-based hosting for your application up to $10k in resources plus an architectural consultation from EngineYard’s crack team of engineers.
► $1,000 Twilio Voice & SMS Credit
$1k in credit from Twilio for the best usage of SMS in your business.
►Eric’s choice
Winner could come to sllconf 2011 as Eric’s guest,and join us at the VIP Speaker’s Dinner
► The AppSumo + BizSpark Avalanche
This gigantic bundle includes:
* Fast-tracked BizSpark membership
* Microsoft Xbox and a Kinect (Worth entering just for the Xbox/Kinect combo alone, IMO) * $250 credit towards AppSumo
* 5 appsumo SXSW bundles
* 1 year membership to AppSumo Action Videos
* $300 in voice and/or SMS services from Twilio
* $300 credit on 99designs
* $1,000 credit on Heroku
* 1 Mixergy.com lean launch guide
* 1 year of Dropbox
* Free year of server monitoring from CloudSpace
* 500 stickers by stickermule.com
► Time with our mentors
The ten best posts will get matched to the Lean Startup mentors. They will provide personalized feedback on your business and help the winners any way they can. There are some world-class and well-known talents in this group. (Yep, I am one of those mentors but probably not considered world-class nor well-known.)
What I am attempting to get across to people interested in Lean Startup/Customer Development is two-fold:
1) Don’t miss the forest for the trees by mistaking the tactics currently popular now with the actual principles, as well as, perhaps more importantly, the concepts of “shu, ha, ri” applied to Lean Startups. Bear with me here – I promise you this isn’t bullshit hand-waving territory here.
In the phase of Shu, the person tries to abide by the rules. She tries to learn all the principles and informations by heart. But she can’t abide by all the rules while she is doing the practice. Her body(including her brain) starts to remember them bit by bit through repetitious practices. When the time comes she can internalize and abide by all the rules — when Shu is achieved, Shu phase is finished and she enters into Ha phase.
In the phase of Ha, she tries to break the (old) rules. She tries to self-reflect on herself and her knowledge, and come up with anti-theses such as exceptions of the rules in the real world. But she can’t break all the old rules while she is doing the practice. Her rules start to get more complete(or becomes more like “case-by-case”) as the rules encompass exceptions bit by bit. When the time comes she can break all the rules and see the both sides of every rule (maybe substituting with a set of her own rules) — when Ha is achieved, Ha phase is finished and she enters into Ri phase.
“Ha” is achieved when one tries to go out into the real-world and apply Lean Startups/Customer Development and quickly stumbles and falls. But one gets up and sees some success, often with shins bleeding. Or doesn’t see any success. Only failure. Often the data come back entirely and irritatingly, inconclusive. This is often very, very frustrating because what we talk about in the blogosphere doesn’t match neatly, if at all, with what actually happens in the chaotic real-life in your startup. Getting to Ha is accelerated by events like Lean Startup Machine.
In the phase of Ri, she tries to leave the rules. She tries to get free from all the rules, and get into the state of no distinction, or into a new dimension. But she can’t leave all the rules while she is doing the practice. Her body starts to forget them bit by bit through following natural laws and flows (or Tao). When the time comes she can leave all the rules – when Ri is achieved, Ri phase is finished and she enters into a new dimension of Shu.
At the end of Shu, what she sees is nothing but the rules — everything looks like the rules.
At the end of Ha, what she sees is nothing like the rules.
At the end of Ri, she doesn’t see but work with her mind.
Jason Evanish has a great post detailing what is effectively his Lean Startup journey from Shu to Ha and onto Ri. I have written previously about judo as a Lean Startup metaphor and this fits expands upon that. Contrary to popular belief, earning a black belt does NOT mean one is considered a expert judo player. Earning a black belt indicates one has learned the fundamentals and is now ready to unlearn to forget The Rules.
In judo, that means the difference between throwing someone technically perfectly in a sterile fashion and controlled environment.
The throw above, (morote seoi-nage for those of you keeping track at home) is a picture-perfect of the Platonic ideal of that throw. The throw is executed quickly, without hesitation or flaw.
In the heat of the moment, at the All-Japan judo championships it looks something like this.
Notice how this throw was much less smooth and less elegant, and even a bit jerky and almost off-beat. Not surprising considering the judo player being thrown didn’t want to be thrown. But an experienced judo competitor would tell you, for all of its faults relative to the Platonic ideal, it was no less beautiful because it won the match.
To be an effective judo player on the “real-world” of the tatami mat – one has to adapt specific judo techniques to one’s specific anthropometry – but this can only be done once one has mastered the rules of these techniques. Lean Startup and Customer Development are no different. One has to learn The Rules and specific tactics to really understand that there are no rules.
It is a bit after 9pm here in Boston and both the quantity and quality of validated learning that Lean Startup Machine (Boston) teams have generated is mind-blowing. I am simply in awe. Don’t want to spoil the punchline, but we have had two teams invalidate their startup idea, with pretty strong confidence, in about 1.5 days. Interestingly enough, one team ran into a company that has been at the same idea for 3 years (!) and has been limping along.
Think about the opportunity cost of 3 years. Think about not really knowing for 3 years whether or not your idea has legs —- and then some young punks from LSM Boston crush that idea by getting in front of the major stakeholders and doing a few targeted Customer Development interviews.
Those teams are actually buying future time. Incredible.
After reading the The Entrepreneur’s Guide to Customer Development, David Beyer of Y-Combinator backed Chart.io has done a quick interview with me wherein we get a bit into the epistemology of startups. I think the interview raises a few interesting points that I will explore further in a forthcoming blog post.
David: So, just to get started, what do you think in general terms about the role data plays in customer development?
Patrick: I think data is paramount – but I think we should understand about what we mean when we use the word “data”. Many people, especially those handicapped with a graduate level education, like myself, think that data is only interesting and can only be acted upon if it is “statistically significant”. In the context of early stage Customer Development, I believe this is well-intentioned, but ultimately, misguided.
We should be informed by data, but we shouldn’t let it walk us around on a leash. Evidence comes in a diversity of forms. It can be anecdotal, it can be in aggregate or it can be a trend line. If you take an open-minded approach to the types of evidence you’ll accept, and adjust for their biases/problems/problems accordingly, you’ll likely fare better in the chaos of startup-land than just simply jettisoning what you feel is low-quality data.
I should add, this is what my friend, psychologist and blogger, Seth Roberts calls “evidence snobbery”.
Seth defines evidence snobs as:
“An evidence snob is not someone who “want[s] evidence that something works.” An evidence snob is someone who disregards evidence — evidence that doesn’t reach a sufficient level of quality.
