Problematize Your World

Cool is not The Future

A recent pair of articles on The Verge and FastCompany have me thinking about problems. They’re ostensibly about Google’s next step in the long process of marketing Glass to a wider consumer audience, bringing it from the fringes of the Explorer Program, to the “Geek Sheek,” status that Google has been aiming for, and often missing, since they released a promo video as far back as early 2012 (oddly the promo’s opening shot features a MacBook…). While there’s been much back and forth about privacy concerns and “Glassholism,” with restaurants around Google HQ banning the devices, and explorers reporting unexpectedly fierce reactions to the devices, the controversy is probably mostly good for Google. But these recent pieces had me really wondering about something we’ve talked a lot about here at Startupyard recently.

What Problem Does Google Glass Solve?

google-glass-leonardo

That may seem like a stupid question, but I think the answer is revealing of why, after decades of this same concept floating around in the tech world, one of the biggest tech companies in the world, with its endless resources and bottomless R&D budget, is having anything resembling problems marketing a device that can only be described as incredibly cool. Apple sold the iPhone literally before they were finished making it work. Their first presentation of the product was with a prototype that was not actually fully functional.

And it is cool right? A computer that you can wear on your eye? Imagine all the cool stuff you can do. A million ideas spring to mind instantly. Don’t they? There’s just one problem with that, that I see. Google Glass doesn’t solve any problems. What does it do that tells you: this thing is going to add something to your life, the way you do things, that will make your life better, easier, more fun, or more productive.

Ok, why is that important? Well, simply put, Google is positioning Glass as the “next step,” in a tech evolution that has taken us from typewriters to smartphones in 70 some-odd years. But what is often forgotten is that, every single step of the way, each major leap in that evolution has been based primarily on solving a problem (or a range of problems), without creating more problems than doing so was worth. This kind of approach is in the DNA of Google as a company, from the search algorithm, to Gmail, to their mapping efforts- all of their most successful ventures have been in problem solving. And it’s often in areas where they aren’t actively solving problems that they run into real trouble: Google+ springs to mind.

Innovation is Problem Solving

Let’s take that step by step. The modern tech industry has its predecessors in 3 slightly different fields. One is the computer, the second is the television, and the last is the typewriter. Essentially, the consumer computer industry was born in the 1970s when it was slowly realized that the processing power of a computer could be combined with the familiar input mechanism of typing, to allow for programming interfaces that were based on symbolic logic systems that people would be comfortable with almost right away. The television or CRT monitor was the ideal medium for displaying that information (replacing heat-activated printer rolls and punch-cards). The modern computer was slowly assembled out of components that people were familiar with: a typewriter, a TV, and a processor. As obviously as these concepts are to us today, they were not so 50 years ago.

Virtually every major advance in consumer computer technology has been based on the act of solving problems that existed with this initial paradigm. Magnetic tapes and punchcards were slow, so floppy disks and hard drives were developed. Keyboard based manipulation was sluggish, so joysticks and later mouses were introduced. DOS was intimidating to consumers, and the learning curve made a whole class of software products unattractive to potential customers, and so window-based operating systems were developed. MP3 players replaced CDs because of their carrying capacities. Later, the concepts already familiar to consumers from the computer and software industries were combined with the mobile phone to solve another major problem: people wanted to access the internet from anywhere; smartphones were born out of a problem that needed to be solved. They were cool, but cool just gets you in the door. It doesn’t make you essential.

When Steve Jobs introduced the Macintosh in 1984, it was the cool factor that got him the most press, but it took years for the concept to catch on. It was so cool and new, that people had a hard time understanding what problems the concept actually solved. It was too advanced for its own time, lacking the power and memory, as well as the screen real-estate, to do all the cool things one could imagine doing with it.  As iconic as it is, the Macintosh in its original form was a massive flop, and it lead to Jobs’ unceremonious firing not long after. And in some senses, the Macintosh concept was never fully vindicated. Even today, there are no products in the market quite like it, unless you consider the modern notebook computer to be its spiritual successor, in which case, it was only about 15 years ahead of its time.

Can An Idea Be Too Far Ahead of its Time?

"Ok Glass, Intimidate."

“Ok Glass, Intimidate.”

The problems that the Macintosh solved were ultimately, and for many years, not solved in ways that made the sacrifices made in its design worth making. And many of those sacrifices are familiar when we talk about Glass. The screen was too small, making it unattractive to business and gaming clients (spreadsheets and typing then being a huge reason to own a computer, along with gaming), and the processor was underpowered for the applications it was running, making it slow. It was small but heavy, and depended on a large power source and clunky peripherals, meaning that even though it seemed like something you could take with you (I remember our first Macintosh had a carrying sleeve), it was hell to actually transport.

Glass occupies a similar dark spot. It is clunky and obtrusive, and It only seems to be mobile, but its battery and processing power don’t support the potential it offers. The focus on cosmetic changes from Google belie these issue, and what it actually offers are things that people are much more comfortable doing in other ways. You can’t read on it or watch a film, you can’t talk to someone with it and have them see you, you can’t use it to send emails (it’s difficult to input complex text), and you can’t comfortably view a map on it unless it’s of a very small area. The potentially revolutionary advantages for a product like Glass are still years from bearing any fruit: a voice activated AI that can use what you’re viewing to help you in your daily life is still years away from being practical, and the advantages of actually having it perched on your forehead seem dubious even if it did work. All the things you can do with it are cool, but none of them solve a problem. And as more than one user has found out, the presence of Glass makes people uncomfortable in a way that smartphones and even bluetooth headsets never did. Having Glass on your face creates more problems than it can solve.

Cool is not Innovation

Stainless steel finish? Not Innovation.

Stainless steel finish? Not Innovation.

Innovation: assembly line production brings the automobile to the consumer for the first time.

Innovation: assembly line production brings the automobile to the consumer for the first time.

Why does this matter to us at Startupyard? Or to any startup? Simply, it illustrates a common problem. Google got very far down the road in creating a product that has yet to justify its own existence. A big company can afford to take a chance like that, but can you? Cool is not innovation, or at least, it is not innovation that works in the tech business. A lot of successful products are very cool; in fact, being cool is an important part of being successful, but being cool cannot make your product a success. What will make your product successful is the urgency it creates in the consumer to buy. If you don’t have that, you don’t have a product as much as a curiosity. And that urgency has to be based on the merits of the product you’ve created, and not on how it looks, or how cool it is- but what problems it actually solves. That’s it, it’s that simple.

Could you leverage the technology in Google Glass to create a killer app that *does* solve a problem that makes Glass worth wearing? Because recent 3rd party promo videos are mostly full of activities that most people either shouldn’t do (read emails while you ride a bike?) or wouldn’t want to (view advertisements in a store? Take notes in a meeting?). Granted, Google has just now opened development to 3rd parties, so thousands of people are about to have the opportunity to prove me wrong. That’s the approach you should have to your products: what would make a device like that worth having?

This isn’t actually a screed against Google either. They are bringing their game to a new level, and offering developers like you a new set of problems to sink your teeth into. They are betting big that they are building a world that you will want to work in. And while we’re not focusing on Glass development at SY, the same rules apply to any idea for a startup. The same basic questions have to be asked.

Convince Me I have One Problem, and Fix that Problem for Me

As our applications filter in during this final week, we’re looking for a number of things. Of course we want to see innovative, cool product ideas, but we are mostly looking for founder teams that are focused on solving problems. What does your product do, that makes the life of a customer easier, more profitable, more productive, safer, or more fun?

Problematize Your World

Credit: Flickr: ralphbijker

Credit: Flickr: ralphbijker

If I’m the customer you’re aiming to win, I will buy if you can convince me of one thing: your product will do one of those above things. Because no matter how cool it is, I don’t buy anything I don’t think I need. So look around you right now. What is inefficient about your life and daily activities? What sucks the most to do? What is hardest to get done, or to get other people to do? Could you leverage data in a simple, clean and straightforward way to solve it? That is the kernel of a great idea: turning an annoyance, an inefficiency, or a lack of something into a problem that needs solving.

And when it comes to a business plan, yours has to depend on the bulk of your customers being like me, and not like the rich idiots (or super geeks) that buy things just because they’re cool.

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Get Things Done and Stay Sane. The OKR way.

I’m not an organized person. But that doesn’t mean I can’t be an effective person.

Benjamin Franklin, creator of the modern day-planner or work diary (still called a “Franklin planner” in the US), as well as bifocals, the lightning rod, and the odometer (and a lot of other things), was an accomplished physicist, British postmaster to the Americas, an influential politician and revolutionary, a popular writer and successful publisher, a US Ambassador to France, the founder of America’s first Fire Department, and quite a lot else. He is often mistaken for having been a US President, owing to his enormous popularity. He was the 18th century’s own Elon Musk, in many ways, only more well-liked.

A guy so cool that his name is now slang for "money."

A guy so cool that his name is now slang for “money.”

But Franklin was also famously disorganized, claiming that most organizational systems took more cognitive effort to master than simply remembering things. This was precisely what led him to the realization that the most efficient model was just to write things down. If it was important enough to write down, he reasoned, the effort of doing so would pay off. If it didn’t seem worth writing, you could safely forget whatever it was.

Since Franklin popularized the idea of a work diary, thousands of gimmicks and tricks have been packaged into products and marketed to make us more efficient and productive. But the truth is that the same basic principles, as true in 1750 as they are today, still apply. Franklin’s system, though it has a new name, is still the best.

Obective: Profit.  Key Results: Underpants Collected.

Obective: Profit.
Key Results: Underpants Collected.

Objectives and Key Results

OKRs is an adaptable goal-setting and efficiency promoting system based on Objectives and Key Results. In a given period (a year, a quarter, a week, a day, etc), a given objective is defined, and “key results” of that objective are listed. So for example, your OKRs for this week might include: “Computer Maintenance” as an objective. And under the objective, you would list concrete and measurable key results of computer maintenance. For example, “Hard drive backed up,” “desktop organized,” “malware scan completed,” and “keyboard cleaned.”

The value of OKRs is not just in self-motivation and goal-setting, but also in finding efficiencies. What key results are harder to achieve than others? Why? At the end of the period for your OKR, you can check how you did by ticking off, or scoring, your key results to see what percentage you have completed. Some companies use a 0-1 scale in which the goal is to have an average score of 0.6-0.7.

So for example, if you completed 3 out of 4 key results for an OKR, but missed one result, you would have a .75, or 75%. That tells you that your goal was pretty reasonable, and you got a lot of work done toward the goal. If you got only .25, meaning only 1 key result, then perhaps your goals are too lofty, or perhaps you are too inefficient. This can be a reflective exercise. 

Tried and True

While the modern popularity of the OKR system stems from its use at Intel and later at Google, where employees can all view the quarterly and yearly OKRs of other employees, and teams, the Objective and Key Results system dates all the way back to Ben Franklin. He popularized the practice in a series of publications that were widely read in business.

OKRs require us to define a certain objective. In the sample from Ben Franklin’s own planner seen here, it was in the form of a guiding question: “what good shall I do this day?” At the end of the day, he would ask himself what good he had done. Doing something good was his objective, and he would write the key results underneath, then tally them later in the day to see how he had progressed. The system has not been changed much in 250+ years.

 

Why OKRs Will Keep You Sane

 

Let’s be honest. There’s not much that is less motivating than having to always define your level of success according to someone else’s rules. A boss or an organization have always had and will always need expectations. But a strict or exclusive focus on filling those expectations, to the exclusion of other concerns, makes for a lot of workplace stress. And it also leads to the fundamentals of good business practices being ignored. Things like worker safety, innovation and creativity, and relaxation- things that matter to people when it comes to their jobs- even if it doesn’t matter to their superiors.

How often have you ignored certain parts of your work that you find important, in order to devote more time to something else? How often have you “stolen a moment,” to get something done at work, because you know, even if your boss doesn’t, that it will be better in the long run if you get it done now? Or how often have your boss’s responsibilities become yours, simply because your boss has put pressure on you to improve his or her results? This kind of thing is avoidable using OKRs.

Improve Communication and Cooperation

Often times, we put a lot of pressure on ourselves to fix things that are outside of our areas of responsibility, and end up failing even in our basic duties as a result. Sometimes that pressure also comes from outside.

OKRs can help you to understand and to share responsibilities, and to work more responsibly, and more accountably, as part of the group. For example, my OKRs for this week include key results of two blog posts on two different topics, and a draft of two more for next week. Because we share OKRs as a team, I can see that Cedric, my boss, needs a certain number of views on the blog this week, and that supports his goal of getting applications to our accelerator (the due date for applications is nye).

I can see what his goal is, this week and every previous week, and I can see if he’s gotten close to matching the goal. In turn, I also know that when Cedric gives me feedback, he is concerned with his OKRs, and he also understands mine. He does not make me directly responsible for the number of page views we have- he doesn’t “blame” me, if we don’t get them. But he changes his approach to me in order to improve his own results, and in turn, we both benefit. If we get more views than his goal calls for, then he has the opportunity to congratulate me for my good work, and to use that experience to encourage me to continue. But if we don’t get as many views as he wants, he can take a look at what I’m doing, and ask me to make improvements in specific ways. This system helps him to avoid making unreasonable or irrelevant requests like “improve our traffic” (how?), and helps him to make reasonable ones: “do more of this kind of post,” or “talk less about this subject.” OKRs make him think about how to support me in my work, and help me to understand how my work is affecting his results, and the team’s success, in a real way.

Whatever you say.

Whatever you say.

The boss who does OKRs and sticks to the system will avoid putting too much unreasonable pressure on subordinates, and an employee using OKRs will have an accessible reference that tells them when and how they are underperforming, and when they are doing well.

Measure Results, not “Performance”

OKRs are not an evaluative tool, even if they look like one. First off, while team members look at their own OKRs and the OKRs of others, the focus is on the OKRs themselves, and not the work that goes into them. What this means is that members of a team, as well as superiors, can look at a person’s OKRs and get a feeling of how someone is performing, without involving their own personal judgements about how a person works. If the results are themselves measurable and concrete, and they are sufficiently relevant to the goal, then a person’s performance need never be in question directly. How a person does their job is left to them, where it should be. If a person has objectives that the team agrees with, and key results that match those objectives very well, then you shouldn’t care how they achieve those results, should you?

Does it matter that someone spends 15 minutes an hour outside smoking, or talks on the phone, or listens to music, or comes in at noon instead of at 9, if their objectives are good, and their results are consistent? If a person is getting all of their work done in 2 hours, perhaps their work isn’t satisfyingly challenging for them. Perhaps their goals are too modest, and they could set higher ones. Or perhaps not. Perhaps that person needs a lot of time to think, or likes to work quickly and steadily, and couldn’t handle more time in the office. Often we simply don’t understand what makes other people effective at what they do. But we don’t really have to understand, as long as we can see the results of their work.

Improve your Goals

Gorilla marketing?

Gorilla marketing?

Mostly when we talk about “measuring performance,” the idea of measuring someone’s output or their job performance goes hand-in-hand with increasing that output or pushing that job performance to higher levels. You made 50 units today, tomorrow you want to make more than 50. There is no end to that cycle.

While OKRs also aim to improve your job performance, they rely on internal motivations to do so. Instead of your performance according to some specific goalpost having to increase every quarter, week, or day, instead your performance is a free-floating point, and your goals change in order to give you something to work towards. My goal over the past two months has been two posts a week, and for a lot of reasons, I’ve struggled to meet it. So my goal next week can’t be three posts. But if it weren’t a struggle, then my new goal could be more ambitious.

In the OKR system, you are not succeeding if your score increases, and you are not failing if your score decreases. It’s not about winners and losers, leaders and laggers. It’s not about meeting goals, but about setting the right goals. 

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New StartupYard Partner Deloitte Describes Five Mistakes Startups Usually Make

We’re very happy to announce that Deloitte has joined StartupYard as a new partner to offer our 2014 teams individual management consulting and finance, tax and legal advisory through a wide range of their services. The expertise of a global leader with an individual confidential advisor approach.

The Following is a Guest Post from Stefan Surina and Jiri Sauer at Deloitte.

Over the past two years my colleagues and I have spent a reasonable amount of time meeting and mentoring startup companies. The support of young entrepreneurs is, after all, the main purpose of the Business Clinic run by Deloitte in the Czech Republic. Team composition, ideas, business models and passion levels vary project to project. There are though, a few common mistakes (in corporate jargon “development opportunities”) most “startuppers” should pay closer attention to. We would like to share few ideas with you on how to avoid them.

Know Your Customer

Photocredit: Fotoffigrafie, Flickr

Photocredit: Fotoffigrafie, Flickr

You would be surprised how many times we do not get an answer to such a simple question. You may happen to have unique technical solutions or a brilliant business idea. However, did you do market research? Do you believe there are customers willing to pay for your product or service? How do you plan to approach them and are you able to do it? What about the competitors- how are they perceived in the market and how good are they are at what they are doing? Any startup company needs to have a solid business plan and know what it hopes to achieve; otherwise it is inevitably doomed to fail.

Do It Yourself

“Either gain momentum or fail quickly.”

Photo Credit: Dan Zen, Flickr

Photo Credit: Dan Zen, Flickr

There are lots of companies willing to do all the heavy lifting for you. You may purchase specialized market research, all sorts of professional services, a full squad of sales representatives, etc. Trust me, no one will ever take better care of your company and your project than you do. You are the best advocate and the best spokesperson for your idea, your project, and your firm. The passion and determination you radiate for your business partners and customers will make the difference you’re looking for. Stop hesitating, start doing whatever it takes to get your company up and running. The great advantage of the DYI approach remains in saving you loads of money. Plus you get hands-on experience with the market you’re trying to reach.  A Chinese proverb says “The best time to plant a tree was 20 years ago. The second best time is now.” It is natural to consider all your options, and you do not want to take the wrong decision. On the other hand, you’ll never know who’s working on the same idea and could be entering your market the very next day. Do not be afraid to start as soon as you have your idea semi-polished. Either gain momentum or fail quickly. You do not want to end up flogging a dead horse, do you?

Keep It Simple

“If you cannot describe in few words what you are doing are you sure you are doing it right?”

Photo Credit:  Hey Paul Studios

Photo Credit: Hey Paul Studios

International companies put complex decision making processes in place, changes take months, even years. Each company had to grow to such stage over time. It is the usual toll for success. Right after this status is reached the company gets challenged by its competition and new market entrants. Do you still remember Nokia being the world’s biggest cell phone producer? Keep all your processes as straight as possible, do not inflate your organizational structure, do not get carried away by possible opportunities rather than the current challenges, do not spend unreasonable amounts of time and money on worldwide patent protection when you even do not know if there is anything worth protecting, do not fantasize about IPO when you have just opened the shop, etc. If you cannot describe in few words what you are doing are you sure you are doing it right?

Avoid Tunnel Vision

Photo Credit: Michael Caven, Flickr

Photo Credit: Michael Caven, Flickr

If you want to make a business in today’s environment, you need to focus on all its aspects. We have seen many companies completely neglect any sort of financial planning. We’ve met with teams having no clue what legal regulations need to be followed. We’ve amazed that some startups were already considering the exit strategy even though they have not sold any sort of product or service yet. Do not get obsessed with one thing and one thing only. Take into account all options and requirements. Nonetheless, do not forget to do it now, do it yourself and keep at it.

In case you are interested in more business insights and more information about Business Clinic, and what Deloitte and TechSquare can do for you please reach us through the comments below, or by email.

 -Stefan Surina and Jiri Sauer 
Email: jsauer@deloittece.com
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Where Are you Dumping All your Beautiful Thoughts?

If you’re anything like me, you probably have a journal or two sitting around somewhere, with your name scrawled on the inside cover, and one or two hopeful entries, followed by an embarrassing, plaintive emptiness. If you’re good at documenting and privately reflecting on your own thoughts as a life habit, then I applaud you. I’m not good at it. In fact, I often resort to looking up my old notes on Facebook, or private messages and emails I’ve sent, to try and capture thoughts I once had, that are now gone.

Dear diary, I have been at the accelerator for 3 months. I am beginning to recognize in the natives, a gentle beauty.

Dear diary, I have been at the accelerator for 3 months. I am beginning to recognize in the natives, a gentle beauty.

I’m not writing to tell you that you should be a better person and write your precious, heartbreaking insights in a journal, just like Kevin Costner in Dances with Wolves. Of course you should, but I can’t make you do it. I can’t make myself do it.

But Mindmapping is different, and you should give it a try. This post is going to be about the why and the how of mindmapping. So let’s get started, shall we?

Step 1: Brain Dump

Cedric calls mindmapping “a braindump.” I rather like that analogy, so I’ll use it here. It’s a messy, minimally organized process into which you can just spit out all the flotsam of your thoughts and ideas. It can show you what you’re thinking about, help you to start prioritizing your objectives, and remind you, as you reach for higher levels of organization, what you were thinking about at the beginning. It can be a benchmark of the evolution of your idea from “idea,” to “actual workable plan/strategy/concept.”

And contrary to what many people think, even and often especially the smartest among us, an idea is just an idea, and usually not very valuable, until it’s been through a couple of processes like this one. Mindmapping helps you to challenge yourself and your ideas to define themselves in ways that aren’t conveniently hazy, but are also not overly strict or structured.

It can start by simply writing down, with no structure attached, any and all thoughts or elements attached to the goal. This is the brain dump. You could write down dates, people’s names, places, quotes- whatever you think is relevant. This is a map of your brain, so whatever comes into your head can be written down. This is not the stage where you need to be picky about what it all means, nor what’s really relevant.

Step 2:  Contextualize and Problematize

Photo: Doug Belshaw, Flickr

Photo: Doug Belshaw, Flickr

I have a friend who’s been about to write a screenplay for the last 8 years. He has the perfect idea, he says. But when he tries to put it on paper, it doesn’t seem to work.

And here’s why that is: because he has never contextualized and problematized his idea. What does it mean to contextualize and problematize? This is the step in the creative process that forces you to take all those gooey bits of information floating around in your head, and make them stick together in some sort of a cohesive fashion. It is creating a context for your ideas: to see how they all fit together, and to possibly see what’s missing. It’s the part of the process where you address how your ideas may be stronger or weaker, depending on other factors.

Once you have all this crap written down and out of your head, you’re ready to start working. The next step is to connect these bits of information to each other in some way. You could use clouds, lists, trees of information. It doesn’t matter: whatever fits your thinking will work. You can re-draw the mindmap with a little more organization to “make it pretty,” if that’s something that pleases you.

Challenge Yourself

Context means the bigger picture- and the bigger picture involves the negatives along with the positives. What’s wrong with your idea? What issues do you face in implementing it? Problematize as many elements of your mindmap as you can, and challenge all the elements that you think are necessary to make the project work. If you need something to happen, find reasons why it might not. If you need something not to happen, look for reasons that it could.

This is the stage of the process where you may discover a project is too big to do in the time you’ve given yourself to complete it. Or to find out you don’t know enough to do the work, or that your idea for a product is already essentially being done by somebody else. This is the part of the process where your “beautiful thoughts,” the picture perfect dream you have for your ideas, are mired in the messy realities that you don’t normally make yourself face.  It’s a reality check. 

Photo: smemon Flickr

Photo: smemon Flickr

This stage of the process is the least fun. It doesn’t feel productive because it is energy spent challenging the assumptions that you are using to tell yourself that your idea will work. But as we know, many or even most ideas never do actually work out. You can find this out here, and get a realistic idea of the challenges you face while doing so. 

Step 3: Analyze

This is a reflective step. Using the information you’ve gathered so far, make some educated guesses about how likely your goals are to be realizable, given the current circumstances. How likely are circumstances to change? Do you even want to keep working on this project? If so, what reasons can you give for others to invest time and money in it?

A typical analysis tool for a business or a product is called a SWOT analysis. It forces consideration of 4 interconnected factors: Strengths, Weaknesses, Opportunities, and Threats. It looks something like this:

In this step, you can gather all that you’ve learned, and diagram it according to the positive and negative, the internal, and the external. This could be called the honesty phase. A frank assessment of the situation and the options.

We are human beings: we naturally oscilate between an extreme focus on our strengths, when we are selling them (to ourselves or to others), and on our weaknesses, when something isn’t working. We do the same with opportunities and threats. But we rarely if ever consider our strengths directly against our weaknesses- even if doing so can provide invaluable insights. So adopt a process that makes you consider these things together.

Step 4: Synthesize

We wrote a while back about how the groundwork you do at the beginning, from day one on your odyssey towards profitability, should start with your pitch. Mindmapping is part of that same iterative process, and the fruits of a good mindmap are fodder for a great pitch. What you know now about your market, your product, your customers, and your own abilities, will translate into a persuasive argument for your viability (if you’ve decided you are viable).

If you’ve dumped out all your valuable ideas, contextualized and problematized them, and analyzed them honestly, assessing your options, you’ll be able to answer most questions a potential investor or a client asks of you, even before the question is asked. You’ll be aware, and more importantly unafraid, of the challenges you face.

Wishful thinking and hubris are the enemies of a persuasive pitch, and a viable product idea, and mindmapping can keep you honest, keep you thinking, and keep you solving problems, instead of ignoring them. 

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What does it take to Launch a Start-up: A Genius, or a Businessman?

Last week, our Director Cedric Maloux wrote about the trials and travails of hiring a CTO or a developer, for startups that have neither. Can a technology business thrive, even if it doesn’t revolve around a bona-fide technologist? Cedric is not exactly enthusiastic about the idea: “It depends,” he says.

Companies that started as purely technical projects, supported by little more than the geeky-obsessive interests of people who would only later be labeled “founders,” are legion of course.

Why Business Oriented Might be Bad

http://www.flickr.com/photos/thomashawk/7050489913/in/photostream/lightbox/

Extreme devotion to your ideals can produce amazing results in time.

Larry Page and Sergey Brin saw the genesis of Google as fodder for a research project, which they co-authored, replete with fascinatingly unprescient commentaries as “We have designed Google to be scalable in the near term to a goal of 100 million web pages,” and “we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.” and absurdly understated ones like “We are optimistic … that there is a bright future for search.”

Their technical-single mindedness, and academic backgrounds, even led them to conclude, as a result of their research into the structure of their proposed search engine (Google was then more a mathematical design concept than a business), would be best served by remaining an academic project- implying that it was too fraught with ethical complications to become a real business.

Ethical complications or no, however, Google did become a business. A rather enormous and complicated, and profit motivated business. But would it have risen above the fold of a market then defined by get-rich-quick, morally flexible business approaches that were driven almost exclusively by profit incentive, rather than product and concept integrity?

It’s not an unfamiliar trajectory for a number of highly successful web projects that grew up, and became truly influential, following the tech bubble of the late 1990s.

Mark Zuckerberg, had he been anything but what he was, which can safely be described as not business oriented, would have viewed the potential market for social networking in 2003 with a jaundiced eye. The market was dominated by Myspace, an offshoot of a firm with an ignominious reputation for developing malware and spam delivery mechanisms centered around internet pornography sites, and had been built in a matter of weeks to explicitly ape the most popular features of Friendster, a less cynical, but perhaps less aggressive competitor. Myspace was then by some measures the most popular website in the United States (this was at a time in which the US still dominated international web traffic volume). It’s hardly a surprise that few were even considering taking on Myspace in its own market. Of course, Zuckerburg’s potential business partners had their own questionable judgement to consider.

Just as Brin and Page viewed search as fundamentally broken by the prevailing advertiser model, Zuckerberg clearly saw the social networking world as fundamentally broken for most of the same reasons.  And yet his competitive nature drove him to enter the fray as an alternative that was based upon delivering desired results, with no eye to short-term profitability. This in a time in which an investor would have seen MySpace’s market dominance as a strong disincentive to enter the fray. Indeed, even when Peter Thiel did sign on as a Facebook investor, he had to wait 5 years for the company to reach profitability. It had been dominant in its market for several years before it ever became cash flow positive. That’s not a bet most investors would make, and with good reason.

Why Business Oriented Might be Good

Technical co-founders can get a little... carried away.

Technical co-founders can get a little… carried away.

The startup landscape of 2014 takes lessons from these successes, but should also pay equal attention to the drawbacks inherent in the approach that, while it worked in the long run for Brin, Page, and Zuckerberg, has sunk or failed to fuel the growth of thousands of would-be titans. For every Amazon, a company that manages, even if barely, to keep its revenues just above its costs as it continues to expand, there is a Pets.com, a company that loses more money, the faster it grows.

I caught up with Damian Brhel this week, from Brand Embassy, a startup that entered StartupYard in 2011. When asked if a business-oriented approach is an asset, even to a fledgling startup, his answer was an enthusiastic yes (lightly edited):

Can a non-technical background be an asset for a founder of a tech company?

Damien: Sure, absolutely! Most startups fail because of sales, because they simply does not understand it. Maybe you can have awesome product, but if you don’t know how to market it, you’re gonna fail. However both have to be balanced – I can not imagine a tech company without a co-founder who has tech insight. I’ve seen a few and they have no idea how to develop, or how much it will cost, and that cause huge inefficiency.  Plus, it’s not just product + sales, it’s also many other ordinary things such HR, formal bureaucracy, operations, finance management, intellectual property, law, etc – these are areas where many startups are not aware (and many tech guys don’t know them at all).

While it’s a popular trope to imagine that a technical wizard will accomplish the Zuckerbergian feat of creating a product that will somehow justify its own existence through sheer quality, mass appeal, or perfect timing, allowing the technical genius never to have to dirty his hands with business concerns, the realities of launching most products preclude that from ever being a reality.

In fact, the landscape of the technology business over the last 30 years suggests just the opposite: that the true titans had most of their greatest accomplishments thanks to brave and insightful business strategies, and thanks less to their technical accomplishments. It’s was the great triumph of Microsoft to license DOS to IBM, but they didn’t write DOS themselves. And it was the great accomplishment of Apple to push a consumer facing operating system in the 1980s, but the genesis of that idea came from the Xerox PARC, a technology that had been around for nearly a decade, with Xerox failing to grasp its potential.

A survey of the Forbes top 100, selecting only for purely tech companies, bears out the notion that the biggest tech companies are built on strong business credentials. Samsung, though it’s been around in some form since the 1930s, didn’t become a true technology company until it was consolidated by its Chairman Lee Kun-hee in 1987, an MBA from George Washington University. The story is much the same for Apple, Siemens, IBM, and others.

Exceptions in most areas are very common: Dell, Cisco Systems, Google, and Oracle were all started by prototypical computer geeks, but a common thread emerges: most of these tech-founder companies experienced their initial growth in specialized markets, and expanded into new verticals later on, while the largest companies entered the market in several verticles, more or less at once.

And the biggest growth occurs when a team is being led by someone who can make business decisions that reach beyond the level of product, and deal with the company’s place in the market- whether that CEO is a founder or not.

No One Road to Success

 

Also no explanation for this man's success.

Also no explanation for this man’s career.

Perhaps the singular key to success among these purely technical teams was excellence, combined with adaptability. As Jobs found out in the 1980s, and Zuckerberg may yet discover, the key to survival is to adapt, and making wise business decisions, inasmuch as they may compromise the vision that a singular founder has for his products and his company, is vital for continued growth.

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Startup Killer – CAC, LTV & Other Metrics that will make (or break) you

David Skok, General Partner at Matrix Partners, presented some great data about Costs of Customer Acquisition and how to create trust to better sell to your audience. A highly recommended read!

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Three Pitching Disasters – and How to Avoid Them

smaller_MG_1115The following is a guest-post by Startupyard Mentor, Jeanne Trojan. Jeanne trains and mentors startup teams personally at SY. She has lived in the Czech Republic for nearly 20 years. She is a noted expert on the local market, and a 2013 TEDx presenter with “Rejecting Normal: Four Changes for an Exceptional Life” 
 

Three Pitching Disasters – and How to Avoid Them

 Jeanne Trojan : Startupyard Mentor,  Presentation and Pitch Trainer

Because of my work and my involvement in the startup community, I’ve seen a lot of pitches. I’m always happy when I see a pitch that achieves what it should – making potential investors and clients interested enough to learn more about the project. But, unfortunately, most of the pitches I see don’t even get close to that goal. There are even some that I would call disasters.
Although I think there is a lot to learn from looking at the successes, there is plenty of information about how to pitch successfully. I’d like to tell you about some of the disasters I’ve seen and give you some ways you can avoid the same fate. My point is not to embarrass anyone (of course, the teams, accelerators and events are deliberately anonymous), but to show you what can go wrong if you’re not properly prepared.

1. Um… I don’t know’

Photo Credit: Brian Moore, Flikr

Photo Credit: Brian Moore, Flikr

Picture this. Demo Day. It’s the end of the accelerator program and it’s time to show the audience and jury the projects that have made it through. The venue is full of potential investors, clients and members of the startup community. During the accelerator program, a lot of time was spent with mentors of every kind. Before Demo Day, the pitch was refined by a pitch coach and members of the accelerator team. The founder has just finished delivering the pitch and it’s time for the jury Q&A.

Jury member: ‘How much does your product cost? I didn’t notice anything about price in your pitch.’ 

Founder: (After a long, uncomfortable pause and a glance at the other team members) ‘We don’t exactly know yet.’

I’m stunned. Is it a joke? No. The founder really doesn’t know what he’s going to charge for the product. He acts as if the question never occurred to him. All of that time, mentoring and coaching and no one brought up the topic of price? No one thought it was something important to discuss? Unfortunately, this incident isn’t the only time I’ve seen a founder embarrassed to realize that they don’t have some basic information about their project.

Lesson: In my opinion, one of the advantages of going through an accelerator program is access to experienced mentors. The result should be that the founder has talked about many different aspects of their business with experienced professionals. It’s a shame that this doesn’t always happen. But, the founder needs to be proactive enough to realize that just because it’s not brought up in the mentor sessions doesn’t mean that they don’t need to think about it and come up with a decision.
There is some basic information that you need to include in your pitch – the problem being solved, your target market, a clear explanation of your solution, your competitive advantage, the team and how you’re going to make money (just to name a few). Make sure you’re getting help making these decisions. If you’re not in an accelerator, you’ll need to do your own research and seek out people who can help you.

After you’ve created your pitch, sit down with your team and brainstorm every possible question potential investors/clients could ask you – from the obvious to the off-the-wall.  Make sure you can clearly answer these questions.  You might even find that some of the topics should actually be a part of the pitch so go back and include them. The time spent in these question drills will pay off in the confidence you’ll have when it’s time to pitch.

2. It’s Not Funny

Photo Credit: Pulguita, Flikr.

Photo Credit: Pulguita, Flikr.

For some reason – maybe it’s the relaxed atmosphere or the perceived ‘laid back’ attitude of being in a startup – some founders choose to start their pitches with something ‘funny’. Examples that I’ve seen include dumping a bunch of paper out of a big box, wearing a ‘funny’ hat, telling ‘funny’ stories or asking the audience a ‘raise your hands if…’ question. When I look at the jury’s faces, they usually just seem embarrassed for the speaker. This is not the impression you want to leave with potential investors.

Lesson: People often don’t understand the difference between a conference talk and a startup pitch. When you are delivering a pitch, the only people you’re addressing are potential investors/clients. These are serious people with serious questions. They want to be sure that you are someone credible enough to invest in. The underlying message in your pitch should be – this is an amazing investment that is going to make money for you. Let me tell you more about it. This is impossible to achieve if you lose the respect of your audience at the beginning of your pitch just because you were trying to be entertaining.

3. ‘Oh, well…whatever…’

Photo Credit: Makelessnoise, Flikr

Photo Credit: Makelessnoise, Flikr

This happened at a recent pitch contest for mobile applications and the stakes were pretty high.
One founder got up and his whole presence said, ‘I don’t really care about this’. He started by saying, ‘Yeah, so my name is … and… uh… you know, we made this uh… app and you know…’ This stunning introduction was followed by a description of the app with lots of ‘yeah, whatevers’ thrown in throughout the pitch.

I was on the jury and I’m afraid I wasn’t very kind in my feedback. This is not the time to act cool or like you really don’t care if you win or not. In this case, it was a real shame because the application was actually great, but the delivery of the pitch killed any chance of success in the competition.

Lesson: There is NO way that someone is going to invest if the founder isn’t excited about his own project. If you can’t express your enthusiasm, have someone else on your team who has this ability deliver the pitch instead.

In this case, the founder and I talked afterwards and his persona of ‘I don’t care’ was really just covering up his extreme nervousness. Don’t let this happen to you. We all deal with nerves differently, but the best way to take control of nervous energy is to practice until you know the pitch like you know your own name. I don’t mean you should memorize it – except for your first few sentences, don’t memorize. But, you should know your story and know where it’s leading and how it fits with each slide. It’s good to be nervous – it means you care – but the only way you can control your impression is to practice a lot.

Practice, Practice, Practice

*There are tons of resources on how to make a great pitch. Here are a few you should check out:

Dave McClure: VC Pitch Advice http://www.youtube.com/watch?v=0jSYuUGZzas

How to Pitch Your Startup in 3 Minutes http://mashable.com/2013/03/07/robert-scoble-perfect-startup-pitch/

How to Pitch Your Business http://ffvc.com/resources/pitch/

Startup Pitch: Essential Elements http://www.slideshare.net/jmtcz/startup-pitch-13008434

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Synot to Invest in Startupyard

We’re happy to announce that Synot, a corporate holding that encompasses a huge range of businesses in Central Europe, will become an investor in our upcoming accelerator class.

Most denizens of Prague, or other central European cities and towns will be familiar with Synot. Synot Holding spans 11 companies with 700 employees in the Czech Republic alone, which include concerns in real-estate, high-end automobile sales, cloud computing, and gaming, Synot operates a range of fixed-odds betting services with which many consumers are familiar.

Synot began supporting startups 4 years ago, starting with MADFINGER Games (producer of award-winning games ShadowGun and Dead Trigger) and Flow Studio (a selected developer for Leap Motion), in a move designed to diversify the company’s activities and offerings. Today, these company offer a range of popular games, mostly on mobile platforms iOS and Android. Shadowgun, Madfinger’s most popular title to date, was called by IGN’s Justin Davis “one of the best-looking mobile games ever created.”

Over the last few years, Synot has showed a strong commitment towards the growing startups ecosystem in our region and we are delighted that they have chosen StartupYard as their preferred partner, helping us to support ambitious seed projects.

 

StartupYard Partners with IBM to Offer Cutting-Edge Analytics Technologies to its 2014 Startups

Opportunities for new StartupYard projects just keep coming in!

We are happy to announce a new partnership with IBMn in which the renowned global technology company will share its enterprise level analytics with startups in the accelerator.

Most startups today have global visions that require a scalable approach. That is where an enterprise class  “big data” platform comes into play. It will allow startups to address the full spectrum of big data business challenges. Leveraging data with IBM’s powerful platform will help small companies realize their potential for successful and innovative B2B solutions.

As part of the partnership, IBM will provide training sessions and technical consultations for Startupyard teams, helping ensure a running start for young companies adopting these enterprise level technologies, including:

  • An enterprise-ready, Apache Hadoop-based solution for managing and analyzing massive volumes of structured and unstructured data (IBM InfoSphere BigInsights)
  • Discovery and navigation software that provides real-time access and fusion of big data with rich and varied data from enterprise applications for greater insight and ROI (InfoSphere Data Explorer)
  • An advanced search and analytics platform that enables better decision making from your enterprise content regardless of the source or format (IBM Content Analytics)

The partnership will ensure Startupyard startups a chance to grow globally following acceleration, through the IBM Global Entrepreneur Program.

So get your analytics ideas rolling!

Apply to StartupYard before January 31st, 2014.

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engaging users

9 Things you Really Should Not Do When Applying for a Startup Accelerator

Are you an ambitious, aggressive entrepreneur with a good idea? Great. An accelerator may be the right way to go. Are you a shy, somewhat cautious programmer with a good idea? Also great. Maybe an accelerator is the right move.

Accelerators see a lot of different kinds of teams, and there’s no rule about which kinds of people will be successful once they enter an accelerator. But before we meet those teams, we have relatively few opportunities to decide who we want to work with. That’s where you come in.

Make it easier for us to pick you (and harder for us to put your name at the bottom of the pile, by not doing any of the following 9 things.

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