Category Archives: Current in Entrepreneurship

How to Pick Your Lead Product

You need to use metrics, not emotion, to decide.

I have worked in and around the biotech industry for 18 years. The last 6, I have focused on consulting projects for startups and smaller companies.

Given my background on Wall Street and the strategy work that I have done at some of the bigger companies. Almost every startup that hires me asks for the same thing. At least as a piece of the project. Whether they know they are asking for it or not.

Help us figure out which of our ideas should be our lead product.

Biotech is a specific industry. There are very high costs associated with developing every single product. Millions and millions of dollars. Often, fundraising will only support the development of one product to start. And investors are hesitant to fund a company that hasn’t picked a “lead horse.”

Most founders and entrepreneurs start a company with a bunch of ideas. But the founder or founders usually has one pet project. A favorite. An idea that he believes can change the world. But he can’t explain why on paper.

Often, it has a personal connection for him. The team disagrees on which product should receive most of the focus. But each one of them is basing the decision on what their “gut” tells them. And that’s where I come in.

Products in your industry may vary. But the concepts are the same. You need to understand the parameters around each product. And the value that each one brings. When you use the same metrics and compare them side-by-side. It allows for a non-emotional way to determine your path forward.

Here are some of the calculations that you need to do.

How many?

You need to come up with a realistic assessment of how many units you will sell. And not just this year. But for the next several years. Sometimes this involves figuring out how big a market could be that doesn’t yet exist. Other times, its about determining what is a realistic piece of an existing pie.

In my industry, it all revolves around prescription data. Looking at the prescriptions for all the other products that treat the same thing. Is the market growing? Is it declining? Why? Who else could launch in the same space, and when.

Take all the data you have right now. It could be very granular, it could be back-of-the-envelope. And figure out what the market units will be going forward. Not based on what you want the product to do. But what is likely.

How much?

There might not be anything out there like what you have. Or, you might be building a better mousetrap. Find out what everything costs. How much people are paying for it. And come up with a realistic price for your product. Will that price go up after launch? Will it come down? What typically happens in your market?

My industry also has gross-to-net pricing, due to complicated supply chains. But yours may not.

But your pricing analysis needs to be layered on top of your cost of goods. How much does it cost to make your product? Will it cost more or less as you scale? Your price should not dip below this — at least not for very long.

When can you launch?

Be realistic. Investors (especially venture capitalists) could think you don’t have a good handle on your business. If your timelines are too optimistic. With investors, its always better to “underpromise and overdeliver.”

I have seen so many startup founders underestimate launch timelines. This can have devastating effects on a business. Especially one that is not flush with cash. Take some time with this one.

What’s the upfront investment?

This is a big one in biotech because it can be millions of dollars. So the product needs to cover its own costs after a certain period of time.

Make sure you have planned out exactly how much you’ll need for a product to launch. Marketing, sales, research and development. Will you need to hire more people? If your product nets $1M of revenues in the first year but costs $2M to launch, you need to know that in advance and plan for it.

Put It All Together

I use a Net Present Value (NPV) analysis. It puts all this information together and gives the current “value” of the product. Other people or industries might use an Internal Rate of Return (IRR). I won’t go into detail about NPV, but the Harvard Business Review published a concise summary about it here. There is also an NPV function in Excel.

Bottom line, an NPV tells you the value of each product today. How much value each one could bring to the company. So when you compare them side-by-side. You are looking at one number for each product. And it is usually pretty clear which one stands out as the biggest opportunity.

Compare Them All And Make A Decision

It isn’t romantic or exciting to make a decision this way. I have received a lot of pushback about the results from Founders. They want their baby to be the best one on paper. But it isn’t always the case. Sometimes the Founder still picks his favorite as the lead product. But is able to tweak some things in the plan. To make it more workable, more profitable, more valuable.

Sometimes, the cold hard facts (plus a push from potential investors) are enough to sway the path. No matter what the outcome. You company will be on a much better path to success with this analysis.

Startups and entrepreneurship already come with a fair amount of drama. Emotions run high. There is a lot at stake. Try to take some of the drama out of this big, important decision. Use metrics, not emotion. Your company will be all the better for it.

 

How To Measure Success At Different Stages Of A Startup

Building a startup is a bit like building a relationship.

When something feels really difficult — you’re trying to make it work, but you just can’t — it’s a sign something is wrong.In a relationship, this usually means the person isn’t right for you. In a startup, any number of things could be keeping you from success. It’s tough, I know. It took our team almost two years to figure out product-market fit. We spent so much time testing, over and over again, but nothing was working.

Yet once the right fit falls into place, what you thought was hard suddenly becomes easy. 

There are still bumps in the road, but as your momentum builds, you begin to see the light at the end of the tunnel — success.

Unfortunately, that never lasts for too long. In fact, as you grow, you have to continuously redefine success if you want to keep developing and scaling your business.

This is how to think about achievement as your startup grows:

An early-stage startup finds success when product-market fit happens.

Being successful in the early days of your startup is about customers and revenue. You’re always looking at the metrics, trying to improve results.

Once you find product-market fit, the gears start turning a little smoother. You understand profitability, you understand your business model, and you finally know who your customers are.

Until that point, you need a team that thrives on uncertainty and relishes the opportunity to try new things and iterate.

One of the things we tried in the early days of ThirdLove, one that’s continued all the way to this day, is our Try Before You Buy program. A woman can order a bra, and if she doesn’t like it, she can send it back within 30 days. It sounds great, but when we started this program, the company was 15 people. Total.

So, boxes of bras would come back to us, and we had to determine if they had been worn — and needed to be donated — or if they were being returned new and could be added back to our inventory.

It was all hands on deck.

Every person on the team (even engineering) helped sort the bras. Opening boxes, filling out forms, checking it on the computer — it was all done by hand. That’s obviously not scalable, but it’s the type of thing that has to happen when you’re figuring out the basics of your business.

In the early stages, success is completely uncertain and unpredictable.

You have to keep people motivated, even when they’re knee-deep in returned product. You need the mentality of, “We know we’re going to figure this out. We just have to keep working on it, taking baby steps, and making progress.”

There are ways to communicate that attitude to your team, like celebrating little victories in major ways. I can still remember when we were featured in the magazine InStyle. It felt like a huge success — and for a 15-person startup, it was.

As your company grows, success shifts to connecting your brand strategy with your customers.

After finding product-market fit, you finally have time to focus on scaling.

As you do, success becomes more about larger, strategic initiatives. You begin to view success in terms of, “How do people talk about the company? What does the brand mean to them? What is our image?”

You can find these answers in many different ways. For instance, I was recently at an event where the bartender recognized ThirdLove from my name tag — and as it turned out, she’s a customer. I ended up spending 15 minutes talking to her about all the different bras she’d bought and how she felt about them. To me, that’s success at a late-stage startup.

But being successful goes beyond your customers.

The way you motivate your team and inform them of your strategy also changes as you grow. Your job becomes more about making sure everyone is on the same page and aligned with the company’s goals.

Tactically, there are more company update meetings and weekly emails that need to go out. Functional leaders have to communicate with the entire company about what they’re working on and how daily tasks fit into larger goals. The distribution of information becomes vastly more important as you scale.

Just remember, almost everything you’re doing today will likely change within one year. So you always have to adjust how you’re motivating your team and defining success. Because you can’t simply set it, forget it, and achieve it.

By Heidi Zak, Entrepreneur’s Handbook

Those Courageous Souls, the Entrepreneurs.

Now no one disputes that all economic systems reflect the intrinsic self-concern of human beings. But only capitalism creates a group of people, known as entrepreneurs, who have no choice but to concern themselves with the needs and desires of others. These others are their customers.

Few economists, however, actually study the behavior of these entrepreneurs, the creative leaders of capitalist businesses. If they did, they would discover that entrepreneurs by the very nature of what they do must shun greed.

First and foremost, responding to others is the very opposite of greed.

Second, greed, in the economic sphere, is normally expressed as the immediate consumption of goods and services. I grab what I can without regard for others. But entrepreneurs must begin by saving, which is defined as forgoing consumption to achieve long-term goals. Often it takes months, sometimes many years to bring a new product or service to market.

Furthermore, entrepreneurs must collaborate with others, building teams to achieve their aims. In designing their goods and services, they must — once again — focus not on their own needs but on the needs of others. This, too, is the opposite of greed.

So, what entrepreneurs do when they seek profit is far more than self-interest. Rather, profit is a measure of how well a company has served others. Under capitalism, a business prospers only if customers voluntarily trade for its output.

And it’s only by improving its service to others that a business can thrive and grow. If the entrepreneur pursues his own interests first and his customers’ interests second, his business will fail. And sooner or later an altruistic entrepreneur will surpass him. 

Capitalism at its essence, then, is a competition of giving. Of course, self-interest is involved. But the genius of capitalism, and only capitalism, is that it channels self-interest into altruism. Entrepreneurs can only help themselves by helping others.

All those who have started a business, and made great sacrifices to do so, know the drama of that first day: does the world want what I have to give? Whether it’s an immigrant opening a beauty salon or Steve Jobs selling an Apple Computer, success is far from guaranteed. In fact, it’s just the opposite.

Those courageous souls, the entrepreneurs who are the beating heart of capitalism, who bring us the endless material benefits we enjoy from ATM machines to life saving medicines — should be held up for admiration, not torn down.

Altruism is the very reason for capitalism’s existence and why it remains the hope of civilization.

I’m George Gilder for Prager University.

The Difference Between Innovators and Entrepreneurs

I just received a thank-you note from a student who attended a fireside chat I held at the ranch. Something I said seemed to inspire her:  “I always thought you needed to be innovative, original to be an entrepreneur. Now I have a different perception. Entrepreneurs are the ones that make things happen. (That) takes focus, diligence, discipline, flexibility and perseverance. They can take an innovative idea and make it impactful. … successful entrepreneurs are also ones who take challenges in stride, adapt and adjust plans to accommodate whatever problems do come up.”

Over the last decade I’ve watched hundreds of my engineering students as well as ~1,500 of the country’s best scientists in the National Science Foundation Innovation Corps, cycle through the latest trends in startups:

  • social media
  • new materials
  • big data
  • medical devices
  • diagnostics
  • digital health
  • therapeutics
  • drones
  • robotics
  • bitcoin
  • machine learning
  • etc.

Some of these world-class innovators get recruited by large companies like professional athletes, with paychecks to match. Others join startups to strike out on their own.

What I’ve noticed is that it’s rare that the smartest technical innovator is the most successful entrepreneur.

Being a domain expert in a technology field rarely makes you competent in commerce. Building a company takes very different skills than building a neural net in Python or decentralized blockchain apps in Ethereum.

Nothing makes me happier than to see my students getting great grades (and as they can tell you, I make them work very hard for them). But I remind them that customers don’t ask for your transcript. Until we start giving grades for resiliency, curiosity, agility, resourcefulness, pattern recognition, tenacity, and having a passion for products and customers great grades and successful entrepreneurs have at best a zero correlation (and anecdotal evidence suggests that the correlation may actually be negative.)

Most great technology startups — Oracle, Microsoft, Apple, Amazon, Tesla — were built by a team led by an entrepreneur.

It doesn’t mean that if you have technical skills you can’t build a successful company. It does mean that success in building a company that scales depends on finding product/market fit, enough customers, enough financing, enough great employees, distribution channels, etc. These are entrepreneurial skills you need to rapidly acquire or find a co-founder who already has them.

Lessons Learned

  • Entrepreneurship is a calling, not a job.
  • A calling is something you feel you need to follow, it gives you direction and purpose but no guarantee of a paycheck.
  • It’s what allows you to create a missionary zeal to recruit others, get customers to buy into a vision and gets VC’s to finance a set of slides.
  • It’s what makes you get up and do it again when customers say no, when investors laugh at your idea or when your rocket fails to make it to space.

Go to the profile of Steve Blank  by Steve Blank  in  

You Tube – https://www.youtube.com/watch?v=peX6wNbZrgQ

The First Twelve Months

So, you’re thinking of doing a startup? You’ve got an amazing idea, you’ve done your research, you’ve talked to friends, and you’ve found the passion. What’s next? Well, regardless of how successful you and your startup will be 12 months from now, one thing is for sure, it will be a great learning experience. This reminds me of what my manager at Google once said to me:

“Every time someone tells me it was a great learning experience, I had lost time or money.”

This post contains a few lessons I learned in the first year of launching my startup, and I hope that by reading and understanding these lessons, I can save you time, or money, or hopefully both.

People

Companies are people. The best people, together, make a great company. The most important decision you’ll make is finding a great co-founder. Until you have one, you don’t have a company. Finding a great co-founder is like finding a best-friend who is very different from you. To find one, you can’t go around asking people to be your best-friend; you’ll need time to pass and experiences to go through together to meet someone like that. Right before I left my job to start Employ, my manager told me:

“Find someone who is not you…and someone who can do what you can’t do.”

Simple, but effective. I met with over thirty potential co-founders and was very lucky and found a great partner in this adventure and have never looked back. We bring different skills to the table, agree on a million things, and also disagree with each other but with utmost respect, always coming to a conclusion that is based on reason and fact. I have a 100 potential ideas that I can work on in the future, I’ll do 101 with my co-founder Amsul.

Beyond your co-founder, your first 10 employees will define who you’ll be as a company. One lesson we learned very early is that it’s hard to hire good people, but it’s even harder to fire bad ones. To do this, make sure you never hire someone who is not all-in; don’t hire any part-timers, people who don’t have full conviction in the mission and are in it for the wrong reason (money, equity, title, etc.). But we all make mistakes, not just as founders, but also as employees when we choose the wrong role or company. If you find yourself with a team member who isn’t the right fit for your company, part ways immediately. Another important lesson from one of my previous managers:

“My biggest mistake is that I didn’t let go of people early and fast enough.”

It is the right thing to do for everyone. But, when you do take this decision, do it with empathy and help them find not only their next role, but the right next role for them.

Second, make sure you’re diverse from day 1. You have no brand, no pedigree, how can you prioritize diversity over execution? This is why it will be hard, very hard. As a new company with depleting resources, your goal is to hire the best-skilled person who can do the job, but now you also need to keep diversity in mind. The truth is, there is a very high chance you will end up with a bunch of men who all look the same. My challenge to you is to try your best to not end up like that, find people with different perspectives, different experiences, and even hiring smart people who can be trained quickly to take on the challenges, that’s the goal. Even if you don’t achieve full diversity in the first 10 hires, with this goal in mind, you will by the time you reach the first 100. If you don’t have this top of your mind, it will be close to impossible later and you will pay for it.

While running a startup, you’ll be making a ton of decisions every day, and each of your decisions has a massive impact on not only your company and the product, but most importantly your people. A bad decision today can easily result in good people losing their jobs down the road. It is on you to make sure you are doing your very best to make the right decision, don’t take this lightly. To do this, I highly recommend you to spend more time thinking deep and hard about every decision, and once you’ve made it, act on it quickly. High velocity pivots and decisions are important to execute on in a startup, but the wrong and ill-advised ones will be fatal.

Hence, take care of your people. Your people are the company; without them, there is no product, there are no customers, there is no company. Spend time with them regularly to get to know them, to understand their concerns, hear their ideas, and make sure they have your ear. Without them, without them at their 100%, your startup is guaranteed to fail.

Product

After the team, the product is the most important part of your company. We all have ideas, cool features that we want to implement using the latest tech, I would highly suggest you avoid getting distracted by this. Instead of creating a Swiss Army knife, create a really sharp blade with a good grip. The core product and experience is the most important, the rest is just fluff. Once you’ve perfected the core product and experience, the remaining bells and whistles will be easy to add. To get the core experience as close to perfect as possible, conduct a beta or customer surveys as soon as possible. This is the best way to continuously find out what customers need vs. want, what they love vs. don’t care about, and what needs to be fixed vs. patched later. Constant communication with your true customers will define your priorities and allow you to filter out the noise.

Second, out of all of your employees, the most critical are your product and engineering teams. Make sure to hire the best and motivate them with the right reward. This isn’t always money or equity, many times it can actually be the right problem for them to solve and the right mission. Convince and motivate the best people you can find to solve the hardest problems, these are the challenges that excite people the most. Related to this point, never, ever, outsource your product development. Outsourcing core product to a third-party will always result in one step forward and two steps back. Your product is your child, no one will take better care of it and be genuinely passionate about its success than yourself, do not outsource its care and development.

Also, don’t let stresses and issues related to regulatory and paperwork distract you from the product. Issues like how will I register the business? How will I get a work permit? Do we need to get a lawyer and get a trademark? These are all important questions, but not for your first 12 months. Your first twelve months need to be focused entirely on the product and the core experience.

Lastly, customers are the signal, competition is the noise. This is a very important principle in your first year as a founder, later on in the life of a company I am sure it will be different. But in the beginning, focus your product on your customers and solving a problem for them and listening to them; do not worry about what the competition is doing, how they are copying your features, how they are taking market share, etc. None of that matters if you can’t please the customers that are in your court. Remain laser-focused on your share of the market and improving the experience in that share. Don’t worry about the size of the pie and who’s eating from it, focus on your slice and make sure it’s damn tasty.

Customers

Once you have a product or an MVP, you’ll need customers. As a new startup, one of the most important lessons we learned is that not all customers are true customers. Similar to how not all of your friends are best-friends, most are just acquaintances, same goes for customers. The real and true customers are those who give something up for your product and services; either they pay you for your services, or they replace an existing solution with your product, these are the true customer that you need to be focused on. Everyone else is just an acquaintance and you can consider them as noise in your first year. These non-customers or fake customers will only distract and detract you from your core mission. Avoid them at all costs.

Once you’ve identified your true customers, you’ll need to sell your product to them and make them believers. With most products and services, excluding some hardware startups I would say, you’ll need to sell the future, not the present. Our strategy for selling our product is this: provide the steak first, then the knife, and finally the fork. Especially in software startups, you never have a complete product, there are always additional and pending features to be added. But as long as you have an amazing core experience, the steak in this case, get it on the customer’s plate so they can start eating it while promising them a knife in the near future. Then, a few months later, provide them the knife and promise them a fork coming very soon. Finally, provide them the fork as promised. This strategy allowed us to have a constant dialogue with our customers and in real-time identify and analyze their most important needs.

Finally, be careful when hugging big trees. Meaning, it’s easy to get excited about a big customer who wants to buy your product, but it can also drain your resources and focus too much of your limited time and horsepower towards one client’s needs vs. the broader market. In your first 12 months, be very selective and focused in acquiring a handful of customers in a single geography to really identify the problems faced by the market as a whole and nailing down the core experience and solution. Once you’ve figured that out, expanding and scaling will come easy.

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Complete Lean Entrepreneurship Guide

New Lean Entrepreneurship Chart

After a couple of years in the making, the badly needed Lean Entrepreneurship Guide has been published. It will be introduced at the upcoming entrepreneurship organization conference, the USASBE, in St. Petersburg, FL January 23-26. A six-page, laminated chart, the guide summarizes all 15 methods of evidenced-based, lean startup planning. It features the Steve Blank Lean Launch Pad method, but also has two engineering school methods, a complete glossary, a detailed lean course outline, and an explanation of the customer development process.

The evidenced-based, idea validation way of planning is the most important change to entrepreneurship education in fifty years. It comes out of Silicon Valley where their new internet platform required a different way to do startup than a traditional business plan. It has evolved over a decade with various refinements and adaptions. Absorption of some ten books is now required to grasp the meaning of lean startup. This guide is the first real summary of all methods and the strategies. Students, aspiring entrepreneurs, and government entities can use the guide to train the one method that guarantees success or failure before scaling or risking large sums of capital.

It’s purpose is to answer two questions. Not “can this product be built”, but “should this product be built” and “can we build a sustainable business around this product or service”? To answer these questions the user engages in a customer development process using a one-page diagram called the business model canvas (BMC). Its nine component sections force a thorough analysis of the idea by diving deep into the mind and persona of the end-user or target buyer. The nine BMC sections are value proposition, customer segments, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure. A key to the process is the relationship between the first two components, the value proposition and its customer segments. Get this “product-market fit” right, and the remainder canvas sections become easier to complete.

Entrepreneurs know before spending precious capital and before making the decision to scale or hire employees whether their idea for concept is a “go” or a “no go”. You can imagine how meaningful this insight can be. Under the obsolete traditional business plan, a planner might spend a year and a half doing secondary research, arriving at assumptions based on guesses. Under lean the same planner reaches facts based on customer inputs and establishes a market demand ahead of time.

Why is this change so important? Never has there been a greater need to empower adult workers. Our entire employment structure is undergoing a fundamental change. Anything that can be repeated is being automated. For example, most cars today are manufactured by robots. At the same time the Gig Economy has transformed employees from salaried to independent contractors. Intuit predicts that by 2020 40% of American workers will be independent contractors. And, the ability of computers to learn and think using large-scale data (called “deep learning”) has taken artificial intelligence to new levels. As the “machines” learn to think they are actually replacing white-collar as well as blue-collar workers.

What is so great about lean entrepreneurship is workforce centers, economic development bodies in addition to academic institutions can now successfully teach entrepreneurship. Studies confirm it can be taught and learn and now effectively thanks to evidenced-based and customer validation planning. This new guide contains all the ways of doing its process. In addition to detailed actions, it contains every known resource, the history of “lean”, various options for analytical canvases, ways to increase opportunity recognition, the principles of effectuation (decision-making factors expert entrepreneurs used), and other important model discovery books. Most significantly, there is a detailed Understanding Lean Startup course that can be adapted for personal use.

The Lean Entrepreneurship Guide can help displaced employees start a business in a field they embrace, it can advance technology, improve existing procedures and products, and solve many problems. Moreover it can help society by raising standards of living, bring solutions to environmental concerns, and grow third world economies to stem unemployment. In short this publication is a game changer!

On Amazon at https://www.amazon.com/dp/1423242017.

 

Three Stories Every Entrepreneur Should Know.

What would you say your company does? It seems like a simple question that should have a simple answer, but that’s rarely the case.

Here’s something I’ve done over my 20+ years as an entrepreneur to keep everyone focused on the tasks at hand while also keeping an eye on the future.

Entrepreneurs usually blur the lines of what their startup is, what it will be, and what it should be. This is fine until you try to start planning around those stories. At that point, you need to be asking: What are the priorities today and how do we execute on those priorities without mortgaging the future? The reverse question is just as important: How much time do we spend working on those new things that aren’t generating revenue yet?

The Three Story Rule

Every startup should have three stories, loosely related to the three arcs most storytellers use in episodic storytelling. An easy way to think about it is a television series. When you watch an episode of a TV show, the writers are usually working on three storylines:

Story A: Story with an arc that begins and ends in this episode (or maybe a two-parter).

Story B: Story with a longer arc that lasts a few episodes or more. This current episode will advance the plot of Story B in smaller increments, and maybe drop a twist in here or there.

Story C: Story with a much longer arc, maybe out to the end of the season or the end of the series itself. This current episode might not advance Story C at all, or it may just drop a few hints. At the end of the season or the series, you’ll be able to look back and piece Story C together, but that won’t be easy or even possible in real time.

Now let’s take that story strategy and apply it to your startup, and I’ll use my most recent startup as an example.

Story A: Right Now

Story A is the what your company is doing today that is generating revenue, building market share, and adding value to the company. Story A is about this fiscal quarter, this fiscal year, and next fiscal year.

At Automated Insights, Story A was our story for the first few years while we were known as Statsheet, a company that aggregated sports statistics and turned them into visualizations and automated content. This is how we made our money — either using our own data to generate content or using data like Yahoo Fantasy Football to generate Fantasy Matchup Recaps.

While we were breaking new ground in the arena of sports stats, we were one player in a sea of players, and while automating content from sports stats gave us a competitive advantage, sports was still a highly commoditized and difficult marketplace.

Story B: What’s Next

Story B is what’s going to open up new markets using new technologies or new products. Story B is about what you could do if the stars aligned properly or if you raised enough money for a longer runway, because Story B usually comes with a lot more risk for a lot more reward.

A few years into Statsheet, when we went to raise our Series A round, we pitched using our proprietary automated content engine on all kinds of data, generating machine-written stories in finance, marketing, weather, fitness, you name it. We changed our name to Automated Insights and pivoted completely with a $5 million raise.

That pivot came with a ton of risk. We had friends (and potential acquirers) in sports and we would now be making sports just a part of our story. In return, we would be one of the first players in the nascent Natural Language Generation (NLG) market, a pre-cursor to the “AI” market.

It was not a coincidence that the acronym for our new company name was also AI.

Story C: The Billion-Dollar Story

Story C usually involves a seismic change that disrupts existing markets, and as you can imagine, it’s a million times more difficult to pull off.

Uber and Lyft are on Story C. They’re no longer known as a better taxi or for solving a specific problem. They’re about creating a market in which a large portion of people can no longer live without them. In most urban areas, ride hailing services are now a necessity, as the ability they offer to do more things cheaply has made a major impact on lifestyle. There’s just no going back.

Story C was actually where my vision split from my former startup. I was focused more on real-time, plain-word insights generated from a mesh of private and public data, i.e. Alexa, Google Assistant, and Siri. The company was turning towards more of a B2B approach, first as a SaaS NLG tool, and then as a business intelligence tool.

No one was wrong here, but the latter was the direction the company took. So now I’m working on a new Story A at a new startup. And I’ve got Stories B and C in my purview.

So which story do you tell? Well, it depends on who you’re talking to.

For the press, for customers, and for potential employees, stick to Story A — if these folks aren’t jazzed about Story A, then you’re not spending enough time on Story A.

In fact, you should consider Story B and Story C to be intellectual property. It’s not the kind of thing you want to go too deeply into without an NDA or some protection in place.

For your board, your investors, and your employees, focus on Story A, of course, but also keep them aware of Story B and drop hints about Story C. Story B is where you’re headed next. It might be what you raise your next round on, or it may be your next big pivot. Story C is best kept in the distance until you’ve crushed Story A and made significant progress on Story B. It’s a goal, mainly, and you should just be making sure you’re not closing doors to it as you move forward.

Once you get your stories straight, then it’s just about execution. But come back to them often, every quarter or even every sprint, and make sure everyone is still on the same page.

Article from Medium Daily Digest by Joe Procopio.

Ultimate Lean Startup, New Summary Chart.

No More Doubt or Problems Understanding Lean Entrepreneurship

Ever since Silicon Valley (Steve Blank, Alexander Osterwalder, Eric Ries, Bill Aulet and others) gave us the evidence-based or lean startup as a more certain validation method to build a new startup, folks have had trouble understanding the concept.  Well, no more.  Two new publications have taken care of any gaps:

1. The Growth Hackers Ultimate Definition re-printed below and

2. The new Lean Entrepreneurship Chart, a summary of all 15 methods.

The latter will be published this month after introduction at the annual USASBE Conference in St. Petersburg, FL 23-26 January.  USASBE is the largest organization of entrepreneurship education hosting over 540 scholars and instructors.

By the end of February it will be available on Amazon.com under lean entrepreneurship chart or author page Clinton E. Day: https://www.amazon.com/Clinton-E.- Day/e/B017UZNIBK%3Fref= dbs_a_mng_rwt_scns_share

 

Growth Hackers ultimate definition (by CEO, Co-Founder Jonathan Aufray):

If you are in the startup world, I am pretty sure you’ve heard about lean startup. This is a common method used by startups but it’s often misunderstood by entrepreneurs. This is why, today, I want to give you the ‘ultimate’ lean startup definition. I’ve already given you the growth hacking definition and the inbound marketing definition: now, it’s the turn to lean startup to be defined.

If a business owner wishes to create successful company and product, their key task is reducing different risks. Entrepreneurship is definitely a risky business and as such, one of the primary missions of the entrepreneurs is to systematically and gradually get rid of the risks. The key in this is that whenever developing a product, entrepreneurs focus on the largest risks first.

As what’s mentioned before, the largest risk is the newly founded companies are rarely the manufacture of the solution or product. With today’s times of cheap manufacture, entrepreneurs can be very fast to make a product with enough effort, money, and time.

The biggest risk for the entrepreneurs is that they will create a product that nobody likes to purchase. When entrepreneurs are just starting, they only have a hunch regarding the problem that potential clients face, a suitable solution as well as even the logical customer segment.

Since they’re only the hunches of entrepreneurs, creating a solution very quickly, and choosing the customer segment or the entire business model very early can lead to failure. A solid strategy, good plan, and implementation of marketing plans seem like the right strategy at first because these are the things that big companies have. However, applying such traditional tools to the newly created companies do not make sense because the latter face uncertainty.

The bigger the uncertainties are, the more difficult it is in predicting the future. That is the reason why planning can be exact when it is based on a stable, long history of the startup in a relatively stable surrounding that does not apply to newly created or established companies.

If the entrepreneurs build products that nobody would want to purchase, this makes no difference if it is made on schedule as well as with planned resources. This statement indicates the fact that the basic task of entrepreneurs is learning which product to make at all and that’s the product for which customers are prepared to pay and in short possible time. As the solution to quick and complex changes in the environment, the new method of building a new company developed known as lean startup.

Lean startup is the new look on the development of innovative products, which emphasize fast iterations of product development that is based on the new insights to the wishes of customers and including big visions or high ambitions of the business team at the same time.

In today’s economy, the question “can it be built?” is not crucial anymore for the reason that nearly any product may be created since there are sufficient means of the production are available. More important questions in modern economy are whether a particular product must be built and whether it’s possible to build long-term sustainable business model around the products.

Manufacture capacities of the developed countries are bigger and more developed compared to the knowledge of what the market really wants. With the manufacturing capacities reaching the point where you can manufacture nearly anything you can think of, the question of whether you can make new services or products are not in the foreground anymore, yet instead whether this makes sense to build this and if it’s profitable.

For every lean startup, this is necessary that they let go as soon as possible of wrong assumptions that they can describe history exactly, even more exactly plan or predict the future and co-create this. What must come to the forefront is the realization that the entrepreneur’s assumptions or the business team regarding the market, the customers and their problems are very wrong and only through trying, discovering, and measuring patterns with scientific method can these be true.

The history of the successful startups in the modern times teaches everyone that by far the most essential factor for the business success of established and new companies is a desire for verifying assumptions in the market, testing, and learning based on the small failures and looking at the problem’s right combination that brings the final huge success.

Customers are what make the product into a success story. Without customers who are ready to purchase the products, it is not essential how innovative ideas are or how affordable the product is because the company will surely fail. With this, there’s an important realization that bigger uncertainties do not do only bring challenges and disadvantages to long-term business planning. Bigger uncertainties are also chances because innovation and uncertainty go hand in hand.

Without the first, there’s no opportunity for the second. The disruptive innovations may happen in an environment where final products, marketing, value offers, prices, and sales channels are at most informed guesswork, yet more like a complete unknown.

Now that you got a quick introduction, it’s time to give you the lean startup definition…Let’s define lean startup: lean startup offers a scientific approach to managing and creating startups and acquires the desired product to the hands of the customer faster. The method of lean startup teaches you how to drive the startup, when to turn, how to steer, and when to persevere and grow businesses with optimum acceleration. This is a principled approach to a new product development.

A lot of startups start with an idea for products that they think people like. Then, they spend months or years perfecting the product without showing the product even in very rudimentary form to the potential clients. Once they fail to reach broad uptake from the customers, it’s often due to the reason that they don’t speak to prospective clients as well as determined whether or not the product was exceptional. When the customers communicate ultimately, through their indifference, that they do not care about the idea, the startups fail.

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How WeWork Became the Most Valuable Startup in NYC.

Adam Neumann is the CEO of super-hot office rental company WeWork, the most valuable startup in New York City. This year WeWork ranked third on our Silicon Alley 100 list.

WeWork, which has raised $969 million in funding at a $10 billion valuation, is the 11th most valuable startup in the world.

But Neumann, who was born in Israel and moved to the US in 2001 after serving as a navy officer in the Israeli military, had an interesting venture before he launched WeWork.

“Before I started WeWork, I owned a baby clothing company based in Dumbo, Brooklyn,” he tells Business Insider. The company, called Krawlers, sold clothes with padded knees for crawling babies. “We were working in the same building as my co-founder Miguel McKelvey, a lead architect at a small firm. At the time, I was misguided and putting my energy into all the wrong places.”

McKelvey and Neumann saw that the building they both worked in was partially vacant, and they got the idea to open a coworking space for other entrepreneurs. After a lot of convincing of their landlord, McKelvey and Neumann opened the first floor of a startup called Green Desk in 2008 — an early incarnation of the company that would eventually become WeWork. The focus of the company was sustainable coworking spaces featuring recycled furniture and electricity that came from wind power.

Green Desk quickly took off. But Neumann and McKelvey eventually sold the business to their landlord Joshua Guttman. “Within a week we realized that being green should be a part of anything we do, but community is really the future of work,” Neumann told Business Insider. The two founders knew they had a good concept. They pocketed “a few million” from selling Green Desk, according to The Real Deal, and founded and launched WeWork.

WeWork in its current iteration opened its doors to New York City entrepreneurs in April 2011. Since then, the company has expanded to cities across the country, and recently opened its doors globally too. WeWork’s coworking spaces give entrepreneurs space to work, and come equipped with amenities like free beer, stocked fridges, and Foosball tables.

In total, WeWork has 54 coworking spaces in New York, Boston, Philadelphia, Washington DC, Miami, Chicago, Austin, Berkeley, San Francisco, Los Angeles, Portland, and Seattle, with additional international locations in London and Amsterdam, along with new locations in Tel Aviv and Herzliya in Israel.

wework Soho West
WeWork’s Soho West office
WeWork

WeWork’s 30,000 clients range from startups — Business Insider uses a WeWork space out in San Francisco — to big companies like Merck and American Express. Individuals can also buy packages starting at $45 and rent a desk for a day.

WeWork has its its critics. It recently settled a dispute over its custodial services. And though WeWork became profitable as of this summer, some skeptics believe its financials may not support its valuation, suggesting it could be part of a new technology bubble. And there are basic concerns about the sustainability of its business model. WeWork, of course, is an alternative to real estate companies for freelancers and companies. And the real estate business can be risky.

One argument against WeWork goes something like this: Lots of startups make up WeWork’s client base, so if there’s a downturn in the market, and it becomes difficult for startups to raise funding, WeWork might have trouble staying profitable — its clients wouldn’t be able to pay the rent.

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So You Want To Be An Entrepreneur?

Only 10% of working Americans are entrepreneurs. It’s a surprisingly small number considering the amount of money self-help gurus make selling the myth of entrepreneurial elitism.

There is an ideology popular among business gurus that proclaims everyone who doesn’t work for themselves is a wage slave in need of entrepreneurial redemption. Many claim entrepreneurs are the “American Dream”, and unless you are self-made and in charge, you are nothing but a cog in someone else’s vastly more important wheel.

Reality is significantly different than this ideological myth. Self-employment isn’t always an option, it could very well make you miserable, broke and in a worse spot than you were when you were working. Relationships can become strained, your sense of self-worth can be reduced to nothing, and simply trying to pay your bills can be an enormous challenge.

If you ignore the falsehoods and stereotypes perpetuated by our culture and accept the fact that most people who choose this form of employment fail on a regular basis— being an entrepreneur quickly loses its sex appeal. In many cases, keeping your job, and investing your money wisely, provides a far greater chance of achieving financial freedom than risking it all on a hunch.

As children, we learn how to investigate the world around us. We learn simple deductive reasoning, the “five w’s” and the “1 H”. Many adults forget these early lessons and act on impulse or emotion rather than reason.

When it comes to changing your career, whether you are switching jobs or contemplating a radical change such as self-employment — the first question you have to honestly ask yourself is why.

Why do you want to try your hand at entrepreneurship? Are you out of work and desperate? Do you think you have an idea that nobody else has? Do you hate your cubicle at work? Are you worried about getting laid off? Do you feel like you aren’t getting the pay you deserve and think you can make more money on your own?

There is no right or wrong answer — you simply have to be completely honest with yourself. Typically people seek freedom or money. If you’ve been working for any length of time, being honest with yourself may be more difficult than you think. If it is money you seek its important to recognize that you likely will never find it — and if you do — it will likely take a long time.

I started my first business at 18. I was on my own at a young age and had nothing but a half-empty apartment. The jobs I was qualified for at the time were in glorified sweatshops full of miserable people. The reason I became an entrepreneur was survival. My resume didn’t match my skill set because of my circumstances. I couldn’t afford to go to school to become a Doctor or a Lawyer — I needed to survive — which was almost impossible earning minimum wage.

The question of where is an essential one. You can be an entrepreneur anywhere but that doesn’t mean all business ideas will work anywhere. Just like with real estate, many businesses are all about location.

I lived in one of the largest cities in North America in the 90s. The city was littered with “dot com” startups that no longer exist. I tried to get funding from Venture Capital a number of times without success. Eventually, I ended up pitching my idea to an incubator. I had written a business plan to create a mobile computer repair service, which was unheard of at the time. They liked the idea — but they didn’t think it was a good long-term bet, they invited me to join another project because they thought that computers would eventually fix themselves and my idea would be obsolete. As a teenager, I was able to pitch to a board of directors like my survival depended on it (because it did). I never ended up funding the business — but it was a minor speedbump in a city of millions. Thankfully, I turned down the offer to join one of their incubated companies, none of them made it past the dot-com crash let alone into the 21st century— ironically “Geek Squad” did.

The question of when was never an issue for me because I started so young. My apartment was wallpapered with post-it notes full of ideas. As disturbing as this was to my friends — I didn’t own a computer. I was forced to use the library system at a time when the internet was gaining traction and “normal people” were paying monthly for it. I was young, and I had nothing but a few boxes worth of belonging. It would have been a different story if I was mid-30s with a family and bills to pay.

When you work a job, you sometimes feel like a prisoner. The same can be said of being an entrepreneur. No matter what your situation is, you will have partners, customers, and suppliers that are essential to your livelihood. Being self-employed affords you some additional freedoms that other forms don’t, but it certainly does not free you from all obligations — no matter how much money you have.

When you have nothing you have nothing to lose.

When you work a job, you sometimes feel like a prisoner. The same can be said of being an entrepreneur. No matter what your situation is, you will have partners, customers, and suppliers that are essential to your livelihood. Being self-employed affords you some additional freedoms that other forms don’t, but it certainly does not free you from all obligations — no matter how much money you have.

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