Andy Tsen Founder/CEO – EntMe

Startup Lessons Machine

Last weekend, I had the pleasure of attending the Lean Startup Machine weekend, as well as the Startup Lessons Learned conference on Monday. To give the uninitiated a bit of background, the Lean Startup is a startup methodology coined by Eric Ries, a successful serial entrepreneur who helped cofound IMVU. The basic theory is that every startup is built based on a vision. That vision, no matter how awesome will be based on some assumptions. Lean Startup is about applying the scientific method to each of the hypotheses to test and determine whether or not these assumptions are valid. Therefor what a Lean company will do is to spend as much time on customer research (cust dev) as actual development itself. Notable Lean Startup practitioners include Dropbox, Heroku, and even Groupon (All of which had cofounders or executives speak at the conference on Monday)

That said, here were some of the prevalent themes that I noticed over the weekend. Hopefully I can pass on the often painful lessons learned over the weekend over to you guys.

Cut the venom before you poison the body

The goal of the Lean Startup Machine weekend was like any other weekend startup hackathon: to create a viable startup in a fast-paced frenzied environment in 2.5 days. We each pitched our idea and then rallied around the ideas/and or people that we liked best. I'll spare you the details, but ultimately we were paired up with a team we thought meshed pretty well. Well, that is, except for one member. This member, whom we'll call Bob immediately stuck out like a sore thumb in the group. First of all, he was about twenty years older than us, which would be fine, if he didn't keep rubbing the fact that he was an "industry veteran" in our faces. We thought that it was going to be good to get advice from a vet, because he could potentially steer us away from the troubles we might encounter.

Boy were we wrong. Starting from day two, this individual incessantly disagreed with our ideas and brought negative energy upon the group. He was missing from the team table for significant portions of the time, and was unhappy with us because we didn't delegate any work for him. Lesson number one: if any team member is ever free and doesn't know what he's working on, then he's probably useless to you anyway.

Worse than being useless though, Bob  kept disagreeing with everything we put out there. A typical conversation might go like this:

Us: So our service allows customers to boost their self confidence through positive feedback from their peers

Bob: Well, we should probably focus on having experts rather than peers give feedback

Us: Yeah that's true but we should probably consider peers as well, as there would be easier integration and a faster MVP

Bob: The reason I signed on for this project was because I wanted experts to give feedback and if you aren't doing that then I don't see how we are different from X Y and Z sites out there.

Actually, it was really hard to get anything done with Bob talking because his negative energy really started rubbing off on us. We began questioning ourselves and the validity of our claims. Eventually, this individual had a MAJOR meltdown and walked out on the group during the period we needed help the most. At the end of the day we learned that one bad apple can slow down the productivity of the team. As a startup you don't have the money or time to waste on a team member that doesn't work well with the group. Get rid of them now, or pay for it later.

There needs to be a leader

There needs to be a clear leader for each group. In fact, most people are waiting to be lead, even if they don't say it. In a startup, your job is not to rule over other people, but instead to make decisions that other people won't and help people get their job done. When we didn't have a clear leader in LSM, each of us would propose an idea, and debate ad nauseum over it. The most important function of a leader of a group of talented individuals is that you can help the whole team avoid the problem of paralysis by analysis. This isn't a corporate job where you can just talk about your problems and have meetings all day. You are here to get stuff done. In order to do that, you have to have a leader with a good gut instinct, as well as the ability to make good decisions and inspire the team.

The night is darkest before the dawn

One of the surprising things that happened was that our team was actually able to score fourth place despite being the worst performing team on Saturday night (well over half-way into the competition!) Saturday night, we had basically scrapped our entire idea, and most of the group was thinking of leaving and joining other teams. The key is that they didn't leave, and we banded together and got our shit done. We were determined to show everyone that we would prove them wrong and create something of value.

We sat down and worked our asses off to get something out the door. From that experience I learned something very powerful. Something I heard from a Batman Movie once. At the lowest point in the curve, when all hope seems lost, you must refuse to give in. That's not to say that you shouldn't pivot (another buzz word coined by Lean Startup) or change ideas, but it IS to say that you should never abandon hope in yourself or your team.

The reasons that people often lose faith in their startup or idea is manifold. They might get stuck on a certain portion of a feature implementation. They might  begin thinking about the insurmountable odds. They might realize through customer feedback that their idea isn't as awesome or useful as they thought it was. None of these are reasons to give up. In fact, all three of the above mentioned points mark significant points in the startup lifecycle that, if overcome, will dramatically increase your chances of success. Take for example the last point, which is that your product isn't as cool as you thought it was. If you ask the customer the right questions, they will give you extremely useful information on what works, what doesn't, and what they would find useful. You can't put a value on  this kind of real, qualitative and quantitative data on your customer segment. The failure of one idea can seed the growth of a new, even more exciting project.

 

Customer Development is critical

The whole weekend was an extreme crash course on Customer Development, a subject I consider both an art and a science. The idea of Lean Startup is based upon the marriage or Agile programming and Customer Development methodology. The idea is that you have a set of hypothesis about your product that you want to validate. For example the one hypothesis for Facebook could be: "We believe that college students would like to keep in touch with each other online"

You would then validate that hypothesis by giving surveys, or walking potential users through a demo of the product, which can be orchestrated using a real product or mockups.Your goal is to devise a way to measure and (in)validate these hypotheses with the least amount of time, money, and effort possible.

This lesson is one of the easiest to learn, but hardest to practice. Think about it. You've just spent the past 3-6 months working on your startup "baby". To just throw your baby out their to the masses is almost sacrilegious. If theres one thing I've learned, it's that we entrepreneurs can rationally justify anything to ourselves if our idea is concerned. "Oh they just don't get it, it's too revolutionary", we'll pipe. "The reason they don't like it is because we released it too early", we'll complain. No. The reality is that if you interview 20 people and the majority of them don't get the idea or the usefulness of your product, then the market probably isn't ready for it yet.

By doing customer validation, you will be able to "increase the runway" of your startup. Instead of failing catastrophically on one big idea, you can successively test our a series of smaller ones until you find one that works.

Conclusion

LSM was a great experience, but I'd love to hear more feedback from you guys. Let me know what you think of Lean Startup and the current movement, and anything else that's on your mind!