Meet Adiquit: Your Clinically Proven Quit-Smoking Pocket Therapist

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Adiquit, a member of StartupYard Batch 9, has a singular mission. To help smokers quit, and stay cigarette free. Unlike most apps or quit-smoking programs that smokers may have experienced, AdiQuit is unique in that it is the product of a team of industry leading tobacco addiction researchers and clinical therapists.

Together they’ve pooled their combined experience into a smoking cessation app and online platform that acts as an interactive therapist for smokers. The Adiquit app, which will premiere in Czechia in September 2018, will guide smokers through the quitting process, with constant communication between the app and the smoker, based on clinically proven smoking cessation techniques.

I sat down with Adiquit Co-Founder, psychotherapist and addiction scientist Roman Gabrhelik to talk about the team of academics behind the project, about addiction, and about their program. Here’s what we talked about:

Adiquit, StartupYard

 

Hi Roman, first tell us a bit about the team, and how you ended up founding AdiQuit together.

Today we’re 3 co-founders, but the whole thing started many years ago- not as a startup. Daniel Novak and I were trying to get funding for an academic research project. We were planning to evaluate the efficacy of smoking cessation programs with our Norwegian partner Håvar. Adam Kulhanek joined us about 2 years ago.

Anyway, we were until recently a really typical “academic team.” We wrote lots of grant proposals, and secured just enough funding to allow us to keep the therapeutic program for smoking cessation running.

 

We have written many grant proposals to get enough funding that would allow us to develop the smoking cessation therapeutic program further. A couple of months ago we got sick and tired of writing grant applications over and over again, and were offered to take part in the Laborator Nadace Vodafone.

They connected us with you guys and we joined Batch 9 at StartupYard. Daniel, Adam and I are the founders, and we have a team of 9, focused on creating a smart assistant to help smokers quit for good, using our depth of experience and clinical research, along with data we can only get from daily interaction with our users via our app and online platform.

Your team is mainly academic in background. How has it been transitioning into a technology startup, for better or worse?

Yes, it is a different world. The academic background, I guess, is something that makes us different from some of the projects in SY, though not all. This may be our advantage to some degree that we somehow are sticking out. Many startups have to learn their market first, whereas we come with a base of knowledge about smoking cessation therapy.

At the same time many things are new to us and we must learn quickly along the way. For example: how to talk about the product and make it attractive to users, how to do financial projections, how to convince someone to support us, etc.

The stakeholders involved in a venture backed tech company are very different in mentality and experience. That is a challenge for us, because research and learning alone can’t justify our activities as in academia. On the other hand it’s a welcome change, because it forces us to prioritize getting a solution to our customers and getting results quickly.

In an academic project, you take much more time to analyze and think about the data. Here we are learning to make assumptions more quickly, and move in the direction where we gain traction, not necessarily always where we imagined ourselves.

There are seemingly thousands of smoking and tobacco use reduction methods and programs. What makes AdiQuit unique among all of them? Where do most of these systems fail?

Smoking Cessation is a Multi-Billion Dollar Industry

Tobacco dependence is one of the strongest and most pervasive addictions. Most people know this, and it’s evident just walking down the street in any city. It is a major public health issue, with enormous costs to society and the economy. So of course there are many competing solutions to that problem, coming from many angles, such as self-help books, support groups, nicotine replacement, and even hypnosis.

What makes AdiQuit special is our ability to truly personalize treatment; to go beyond a motivational or organizational tool (as many apps and books are), and work to modify a smoker’s actual behavior on a daily basis. AdiQuit has the knowledge of a clinically experienced therapist, but with 24/7 availability, and is focused on preventing relapses in smoking.

Just as a therapist would be able to observe a patient and intervene when they spot behaviors or triggers that will cause the patient to relapse, AdiQuit can do this by maintaining constant communication with the user. In future, we can extend AdiQuit’s reach to smart devices that track user’s physical symptoms, so that we can predict and thus prevent triggers from even happening, using clinically proven diversion techniques.

For any smoker out there who has quit before, you will know exactly what this means. Imagine that your smartphone could tell you, before you even got a chance to smoke, that you were in danger of relapsing, and give you the tools to stop it ever happening.

As we say, quitting smoking is not that hard, which is why many smokers have quit many times, for months or even years. What is hard is actually never to smoke again. Smoke one cigarrete, and many smokers feel that they have already failed to quit. Many approaches to quitting focus on the stopping part, but the “holding on” part is where most quitters fail. For that you need a constant support mechanism, that stops “just one cigarette,” from causing a complete relapse.

In a bit more detail, what will a smoker’s experience be with using AdiQuit, from the first day of using the app, to whenever they have successfully quit?

The smoker can view AdiQuit as a therapist in their pocket, a quitting mate, or an ally that guides her/him through the most difficult period of time without cigarettes.

AdiQuit and the smoker are in dialogue-like contact on a daily basis, throughout the day. In the first phase, the AdiQuit helps the smoker to get ready for his/her first day without a cigarette. From the first day of not smoking AdiQuit makes constant checks and provides all kinds of information and skills in the right time and settings.

Your personal therapist knows that you are most tempted in the morning after a coffee, or after lunch, or maybe in the hour after you leave work, or when you are waiting for the bus. Having already gathered this data from the user during the pre-quitting process, AdiQuit now has the knowledge about you to know when you are vulnerable, and help you in that moment.

Smoking is ritualistic. When Europeans first encountered tobacco in use by Native Americans, it was a ritualistic herb said to contain special powers. Since then, it has maintained this ritualistic place in the lives of those who smoke it. Smokers who quit can feel a sense of loss, as if losing a friend, because the ritual of smoking is a big part of their self-identity.

The good thing about this is that once we understand how smoking fits into someone’s life, we can begin to separate it out and eliminate it. A person’s identity can be changed, just a little at a time, until they are free from cigarettes.

The consumer facing app that AdiQuit will sell on app stores will be quite expensive – up to €100 or more. What is the reasoning behind this approach?

Great question. I think it will be easy for some to say that we are being greedy, charging so much for a way to quit smoking.

However, there’s a deeper motivation here, and it has to do with user psychology. In order to really work as intended, AdiQuit needs to be taken very seriously by its users. They must interact with the app, they must be consistent, and responsive when the app tells them to do something or read something.

We know from our experience as practicing psychologists and researchers that if a person takes a decision in which they invest a significant amount of money, they are much more likely to value and to try and gain from that investment. If your pen costs €1, you may lose it within a day, and not be disturbed. But if your pen costs €100 euros, you’re going to be much more careful with it, and probably you won’t lose it.

The same logic applies to quitting. The truth is that therapeutic treatments and other literature can also be equally or even more expensive. In private practice, a patient would pay me much more to help them through the quitting process. However the act of paying is part of the therapy in this case: it is a sign of commitment, and it is a kind of barrier between those who are not serious enough, and those who are truly motivated to quit.

There will also be an enterprise version of the app that can be used by large organizations as a health benefit to their employees. In this case, employees may not invest money directly in the program, but again, there will be strong reward mechanisms for continuing to do the treatment and sticking with the whole process. That may also include monetary motivation, either as cash or as gift cards, coupons, and other cash-like rewards.

This topic remains an open question for our team. We will evolve according to experience of what ends up working best for our users. The object is to successful help as many people as we can to quit smoking permanently. How we balance that with our business model will be something we have to learn over the coming months.

Smoking rates are falling in Western countries. How do you plan to grow the business into the future? WIll you focus on new markets with more smokers, or transition to treating other types of addiction?

It is a great thing if we run out of opportunities to help smokers quit. We will have won!

This is why we actually started this – to help people quit smoking, which has literally no health benefits to smokers. Unfortunately we are far from having no smokers to use AdiQuit. And if we are overly successful in helping people quit, there are way too many addictions and health problems we can focus on instead.

Our mid-term vision also includes alcohol abuse treatment. The truth is that human beings are prone to addictions, and this fact is not going to change just because of cultural shifts. One or another drug or addictive behavior has cycles of popularity or widespread acceptance, and then may recede, only to rise again later on somewhere else. We see this also with smoking: the West may be smoking less, but Southeast Asia, the Middle East, and Africa are smoking more.

I’m afraid despite our efforts, it will be generations before smoking ceases to be a public health crisis.

You joined StartupYard after taking part in the Vodafone Foundation startup program. How has the experience met up with your expectations? What have been the biggest challenges for your team so far?

It is like a ride on a roller coaster. I guess we are in the middle of it. It is full of adrenalin, the speed is tremendous, and it`s hard to predict if the next curve is going left or right (e.g., from where and when new opportunities occur). But speaking on behalf of the team: we enjoy it very much. Even though it is quite demanding.

If there is a smoker reading this, would there be one thing you’d want them to know? How and when can people get their hands on AdiQuit and start using it?

Yes, there are actually two things:

1) Every day of not smoking matters – we want to help smokers to quit but even taking a break from smoking for some time (even weeks) makes the smoker experience something new. For us the important message to smokers is that accidents often happen, but the trip can still be finished.

2) You are not alone if you are ready to quit smoking – AdiQuit is here to provide help and support. We can do this together.

The official release of AdiQuit for ordinary smokers is planned for September 2018. Those interested can go to the website now, and sign up to become our first users.

 

Also Check out AdiQuit in the Press: 

Hospodarske Noviny

Ceske Televize

Lidovky.cz

Tyden.cz

 

Chris Cowles, Blocknify, Startupyard

Meet Blocknify: E-Signatures Without the Cloud

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Blocknify, one of the 6 Batch 9 startups at StartupYard, actually began life at StartupYard, long before now CEO and Co-founder Chris Cowles came onboard. It was originally the brainchild of StartupYard alum Dite Gashi, and a team of developers from Budgetbakers he worked with at the KB Hackathon, cohosted by StartupYard last year.

Though the initial pitch for Blocknify was not much more than a QR code connected with the Ethereum blockchain to verify the authenticity of contracts, the idea clicked, and StartupYard along with Decissio started looking for a real Founder/CEO for the project. We found him this year, and since he arrived, he’s made Blocknify his own. I sat down this week with Chris Cowles to talk about Blocknify, and how he came from working for Amazon in Seattle, to running his own company in Prague.

Hi Chris, you joined StartupYard after meeting one of our alumni, Decissio. How did you end up taking charge of Blocknify?

That’s a classic Prague story! It started before I came here actually. StartupYard investor Philip Staehlin sort of came up with the idea when he was having issues signing sensitive documents with a big group of people.
A bank VP told Philip stories of how he had signed confidential documents in the past. They used to take the multiple copies of the contract and tape them up to the windows of a conference room. That way, they could compare the multiple copies and ensure that they were identical and there were no differences, just based on the line-endings and paragraph sizes.

Obviously that’s crazy in this technological age, but it still happens. Anyway, Phillip shared that idea with Dite Gashi, who is a StartupYard Alum (Decissio), and Dite worked on it with a few friends from BudgetBakers (another SY alum), at a KB hackathon organized by StartupYard. The idea the team came up with to verify contracts was to attach QR codes, and allow people to basically scan the contract with a smartphone and confirm there haven’t been any changes. It would use the Ethereum blockchain to make it transparent and also secure, because none of the data in the contract needed to be shared in order to verify that a new copy is authentic.

Chris, Dite, and the Blocknify team

The team did really well at the KB hackathon, but they were all working on other projects, so the idea didn’t really have an owner. Since Startupyard was interested in the idea, you guys encouraged Dite to find someone (eventually me), to take it over and become CEO for the project. I had just moved here from Seattle, and was looking to get into blockchain development somehow. I found the project by chance on LinkedIn. I actually read Dite’s interview on this very blog, which convinced me I had to check out the project and StartupYard. It just clicked for me.

A few months later here I was, attending startupyard as CEO of Blocknify. We have a development team in Kosovo thanks to Dite, and we’ve simplified and clarified the original idea to something really amazing. I’m excited to talk about it.


Blocknify aims to allow professionals to safely and securely sign documents anywhere, without ever hosting them on cloud servers. How does this technology work, and why is it so different from competing solutons like DocuSign?

Contracts are inherently sensitive. Of course you might not worry too much if certain documents were intercepted or stored improperly, because usually a contract by itself isn’t very compromising (unless you are Donald Trump). However, for businesses as well as for individuals, the sum of all your contracts is kind of the blueprint to your business or your life. It’s a roadmap to your strategy that, if someone had access to all of it, they could gain a serious advantage over you.

As we know from recent experience, centralized databases are prone to theft and hacking. It is innevitable as long as the incentives are there to misuse that data.

Despite this known issue, Europe is not adapting quickly to e-signatures, with many corporations having policies against the use of any software for contracts. Of course it doesn’t help that the regulatory system in Europe is very complex, which is a big part of the challenge of driving adoption of e-signatures.

What is particularly good about Blocknify is that it gets past many of these barriers by not acting like a cloud service. We do not need to store contracts in any reconstructible way, and no part of anyone’s sensitive data needs to touch a server.

Yet we are still able to ensure for multiple parties in different places that the contracts they are signing are the same. That’s because when any user has the contract in front of them on their computer and signs it, that signature is irrevocably recorded in the Ethereum blockchain, and it is attached only to that exact version of the contract. Because we use a unique fingerprint of the document to apply signatures, if someone were to change the document in any way, the unique ID would be different therefore the signature would not match.

In essence what Blocknify allows companies and individuals to do is have the same level of security and verification as if all the signatories were sitting and signing the same exact piece of paper. No chance to hide anything or make unauthorized changes. All documents stay local, without touching the cloud, just like with paper.

Your solution uses the Ethereum blockchain. Many people aren’t deeply familiar with how that works, and what the advantages of distributed ledgers are. Why is Ethereum so important for your solution?

The most important thing to know about why we use the Ethereum blockchain is that in order for Blocknify to work, signatures must be totally immutable. There is just no reason to sign something if someone can modify or destroy the signature later. That’s like signing a contract and then not keeping a copy with the countersignatures. Ethereum is a distributed database of all those countersignatures that can’t be changed, only added to.

Startupyard, Blocknify

On Blocknify, once you sign something, it’s signed. That version of the document is signed, but no other version. The thing about databases in the traditional sense, like a cloud storage platform or an on-premise server, is that it is taking something inherently mutable and making it immutable using software. The problem is that the more functionalities and permissions you add on top of a database, the more possibilities there are for a security flaw, and thus for data to be corrupted or changed. A database can be built very secure, but it is mutable by nature.

Blockchain doesn’t have to be like that. Because it is distributed across many, many nodes, no attacker can change the history of transactions without the permission and agreement of a majority of the nodes. As long as there are many actors in the system, the vulnerabilities in any one particular node are minimized by the whole. Ethereum is designed to be very inflexible: it does not focus on speed and ease of use, but on absolute certainty that a change to it is legitimate. Then on top of that, we can build an application layer that is easy to use, like Blocknify.

The great thing about that is that as long as the Ethereum blockchain is used, the records it creates cannot be destroyed or altered. It is safe from disaster in a way. You can’t lose the records in a fire, like you could with paper. You can’t misplace them. If they are destroyed locally, you can still get them back.

So if you imagine a world where all contracts are smart contracts on blockchain, and some disaster happens like a Tsunami, and wipes out all the local databases of a particular company, then every one of their agreements and contracts could still be recovered from their counterparties, and would also still be in effect.

All that being said, as our customer, you don’t need to think about the blockchain or know how Ethereum even works. It is just a way of having a database that is fully transparent and safe in the way it stores and collects data. The way our technology works, we have no access to data from our customers, so no one else does either. Unlike any other e-signature service, there is no risk of a data breach with us because we don’t have any of your data.

This is not only secure in a way that cloud platforms aren’t, but it also makes auditing and verification of authenticity much easier. Because there is no centralized database that can be corrupted, there is also no way to fake, undo, or override previous changes. Anything signed is signed, and the only possible way the signature data is useful is if you have the document it relates to.

To you, what does the future of contracts and signed agreements look like 5 years from now? How will most people be signing and handling confidential documents?

It’s too obvious to say that contracts and the signing process will be paperless. There will be die-hard businesses that still use paper, but changes in regulations such as GDPR will also accelerate the need for everything to be digital, auditable, and in the control of the owners of the data.

I am not going to predict with certainty that you will be using the blockchain to sign everything. You might. Either way, laws and regulations will be focused more on immutable workflows, one way or another. We will have an ever increasing need for systems and databases that cannot be faked, back-dated, or overwritten without some sort of trail. As all things go digital, the danger is the same as with paper: you can destroy documentation and you can create false documentation.

Startupyard, Blocknify

In analogue technology, there have always been ways of using one-of-a-kind aspects of documents to make them resistant to fakery. Watermarks, stamps, holograms, even the grain of paper. The Romans used wood chips that could be matched to each other to verify agreements, for example. They could cut the woodchip in half and only the two pieces matched each other because the wood grains were unique and impossible to fake.

The blockchain replicates that effect. It’s like the blockchain is half of the woodchip, and a private key is the other half. Both unchangeable, both permanent, both only working with the other. That kind of inherent incorruptibility is going to be vital for making digital agreements work in the future.

Of course, blockchain technology also means that we can go beyond the analogue functionalities of a wood chip or a notarized signature. We can construct smart contracts that will only execute when other contracts and agreements have already been fulfilled on the blockchain.

For example, suppose you want to do factoring of your invoices, which means borrowing money against money owed to you as a company, which is a common process in business. Today in order to do factoring, the bank or lender loaning you the money must trust your clients and their agreements with you. If those clients don’t pay, it is your company that is responsible for that. In addition, the lender has to trust that you will pay them back when you get the income you’ve invoiced for.

With a smart contract, you could create a factoring system where that is all automatic. The lender can see the status of the contracts, and can be paid directly from the source. In addition, a smart contract can even put safeguards in place so that a lender knows that the companies which owe money will be able to pay the invoices when they are due. This would also give a lender a way to very safely lend the money, and a company that needs factoring of its invoices a very easy way to get liquidity when it is needed.

In fact, we have built a system just like this for a major bank already. I can’t share more details yet, but this is a really exciting possibility for banks, and for their client companies that face liquidity issues. I believe that solutions like the one we are providing will be the standard in a few years.

What is your go-to-market strategy today, who are you targeting, and where do you see that leading in the next few years?

We were lucky to find our first paid customer early on (Raiffeisenbank) and were able to deliver an API version within a month. Our main go-to-market strategy is B2B as this is business productivity software. Still, because organizations require more significant features, we realize that Blocknify can bring value in a simpler form. With that understanding, we decided first to produce a version meant for freelancers, contractors, and small businesses. We will be launching this version within this quarter (Q2 2018). Then we plan to release an enterprise version in late Q3 2018.   

Startupyard, Blocknify

Today our platform allows us to build processes into our smart contracts.  For example, you have a contract but it is only valid for a certain amount of time. If the contract is self-executing, there’s no need to actively monitor it. Also, we can do something similar for approval processes, and we see these self-executing smart contracts involving more processes over time. We believe this change will happen and we want to provide simple solutions to help companies realize the benefits of smart contracts.

You joined StartupYard in March. What did you expect from the experience, and how has that compared to reality? What has been your biggest challenge in the program?

Coming from consulting, I knew the value of getting an outside opinion for creative inspiration or challenging assumptions. I was expecting StartupYard with the mentors to be the outside consultant to challenge and inspire new ideas. This did happen, and we have benefited greatly from this.

What I didn’t expect was to find partners to help us avoid the common pitfalls, but also going beyond that and helping us grow a business that is self-sustaining and with a strong long term vision. From the outside the acceleration process looks like a carwash, but from the inside, you’re rebuilding the whole engine. When you’re starting a startup, you don’t know how to match your vision with what’s real. At StartupYard you integrate the vision and reality and make it real.

I believe you’re the first American to join the accelerator as a founder. Tell us a bit about your history, and how you ended up in Prague. What was surprising, either pleasant or not, about the transition?

Actually I am Czech on my Mom’s side of the family, but going back to her grandparents. She grew up in a Czech neighborhood in Chicago, with church services in Czech and Slovak. She taught me a lot about the Czech culture, and it ended up being a hobby for me. I used Czechoslovakia and Czechia as topics for a lot of school projects, and things like that.

I started out my career in Seattle, have traveled and lived in South East Asia as a management consultant, eventually living in Seattle again and working for Amazon. I didn’t really want to stay there, and I wanted to run my own company. That’s also a family thing, because my dad also founded and sold his own startup in the past. So I booked a ticket to Europe just to sort of look around. I ended up in Prague, and instantly fell in love. And of course, while I was visiting I met a girl as well. So I was hooked, as many people have been before.

To me Prague is the perfect size for what I want to do. It’s not in the spotlight like San Francisco or London, but it’s smart, there’s lots of local talent, and it still retains this unique atmosphere that my Mom loved about her “Bohemian” neighborhood in Chicago.

Introducing Turtle Rover: Your Raspberry Pi for Robotics

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In a StartupYard batch full of unusual companies, Turtle Rover, led by CEO Szymon Dzwonczyk, has arguably turned the most heads so far. That’s because everywhere Szymon goes, a little robot follows him. Its name is Turtle, the brainchild of a global award winning robotics team from Wroclaw.

Turtle Rover, is like a Raspberry Pi for mobile robotics ideas. A robust, open-source platform on which makers, product designers, and creatives can build the robot of their dreams. Whether it’s photographing wildlife in South Africa, inspecting industrial pipelines, or performing on-site mobile video surveillance, Turtle can be adapted to almost any conceivable need. Fresh from a successful Kickstarter campaign, Turtle’s next move is an open-source platform where developers and others can share ideas and designs for new components and programs for the machine.

I sat down with Szymon this week to talk about the project, nearly 5 years in the making, and find out why prototyping mobile robots is his way of changing the world for the better.

Hi Szymon, first of all, everybody wants to know about the super cool award-winning robot you’ve designed and built. Can you start by telling us how it works, and how it was created?

Actually my first big robot success was Scorpio from Wrocław University of Technology. The robot was built to take part in University Rover Challenges ran by The Mars Society. As a team, we designed, manufactured and then operated a 50kg remotely controlled rover with a payload specialized for life and geology sciences related to space exploration. It was a prototype on which we could test new technology and the team skills with a real goal of preparing the concepts for future manned exploration of Mars.

Turtle Rover, StartupYard Accelerator

Szymon Dzwoncyk, CEO and Co-Founder at Turtle Rover

In 2013 we won 2nd place in the World with Scorpio 3 and in 2014 we were first in European Rover Challenge with a team run by me. We won the challenge designing a robot that gave totally new direction to the topic, we were so ahead of the competing teams all over the World that they needed to raise the requirements of the Challenge in the following years.

The spiritual successor of Scorpio that our customers and mentors are seeing now is called Turtle. The technology is really different, but it comes from the same urge. He’s a little less aggressive, a lot more friendly, and much lighter and more agile. Turtle is built as the culmination of what we learned making Scorpio, and it serves as our base for future development of mobile robotics hardware and software.

Your team is from an academic background. What inspired you to turn to business to make Turtle a reality for consumers and businesses?

Academia is a wonderful environment for experimentation and ideation. However it just lacks the agility and ultimately freedom of business. When you sell something, it really has to work.

It really hurt me and the team that we couldn’t easily check all the ideas and concepts we had came up with for the rover. If you imagine, to change even the simplest interface feature, you needed to convince at least 2 engineers to spend their time and effort for the sake of checking your concept, that most probably won’t work anyway. This is all being funded by someone you have to justify everything to, and you sometimes don’t have that justification. You can’t always just “play,” and find things that work by accident.

After leaving the University I worked in a car brake manufacturing company where I coordinated a process of implementing new products and moving a BMW brake assembly line to China.

Maybe working outside of academia for awhile woke up my mind to the idea that I could take control of my own future, and I could do this on my own terms. That was a liberating realization, and we haven’t looked back! Last year we ran our first successful Kickstarter, which we are now delivering to customers. We sold about 100 rovers, mostly to makers and enthusiasts, but from all kinds of different backgrounds. Each has their own ideas about how to use the technology, and we’re learning a lot from that.

We have so much know-how that we, as a team, gathered during these years of working on the Rovers, that we could never just split ways and forget about it. The idea of allowing people to iterate and prototype with robotics was born then and part of the team reunited with Turtle.

Turtle is much more than a simple rover, isn’t it? Can you describe the ecosystem of products and customers you want to build? How will Turtle enable people to invent new use cases and grow new businesses?

Turtle Rover is a tough, resilient rover chassis that is suited to extreme environments, and is easy to combine with a huge variety of other components, so you can make a Turtle into anything you can imagine, as long as there is hardware and software to support it.

That’s what you can see on our site as a tangible product, but Turtle Rover is a lot more than that. What happens next – after you get it, is the main feature we offer.

We’re here to give you all the support needed during your prototyping process, so literally you don’t need to be a rocket engineer to build your own robotic solution. We’re addressing innovative people all over different industries: agriculture, cleaning, inspection, security, and much more. The idea is to provide you a place to become creative when thinking about concepts with no need of reinventing the basics that normally take the most of the time and effort.

In a way Turtle is like an accelerator for your robot. With Turtle you can do 2 years of prototyping and testing in 2 months, and in 3 months, have a product ready to go into production that works. Imagine how many great ideas are lost in the development process when there is no simple way to test and iterate them.

Turtle as a product provides you a simple plug & play robot capable of working outdoors, but moreover as a community and platform, it provides you access to all the developers and businesses eagerly developing this new techology for their own purposes.

Instead of having a bunch of robot projects all solving the same problems independently, we want to solve these problems collectively, and enable companies and individuals to create advanced functional robots fast and reliably. 

You launched a successful KickStarter campaign last year. Can you tell us something about the people who pledged, and even about some of the live use cases you’ve already seen for the rover?

We found great supporters on Kickstarter. We’re really greatful to them for believing in us and our vision.

The platform really surprised us with all the help and attention we’ve been given during the crowdfunding campaign. We have 96 backers, mostly individuals who plan to experiment in their own areas: gardening, cave exploration, photography and education.

On top of that we have several universities researchers who ordered the rover. They see the idea of accelerating their work convincing enough that they bought the rovers even from their own wallets. Then, the thing that really shows Turtle is not only about ideas and concepts – a couple of the rovers will be used in businesses: pipeline inspection, wildlife photography in South Africa, or even the European Space Agency research.

The amazing variety of uses surprised us, and helped us realize that we were not just building our own dream, but helping others to build theirs as well.

There are plenty of robots like Turtle on the market today. What makes your core technology unique and special? What can Turtle do that nothing else can?

Turtle is the first affordable robot on the market that allows you, as an individual or even startup, to prototype in your environment. No other platform offers this flexibility and speed, at any price.

Keeping software and hardware open-source is really important to us. The rover is designed to be sturdy, waterproof and to be used in outdoor activities and tough environments. Turtle doesn’t end there though, we address your ideas all the way from concept-proofing, prototyping and getting to the market. And with that, we’re open and transparent so you can rely on us all the time.

Imagine being able to go from the drawing board of a new robot project, right into prototyping without having to look for engineers, without having to solve any of the problems that a mobile robot base requires you to solve. You just get it, and a huge range of modules that can be attached and software to make it work.

Our job is to help our customers create the perfect robot for them. That’s what we love to do, and building a community to help them do that is a big part of our vision.

Tell us more about who Turtle is for, in the near term, and then later on when you have a working platform with a range of add-ons and options. Who will buy it in the future, and how will it be used?

At first we will continue to focus on makers and developers, essential people who will help us designing new add-ons depending on their ideas. We plan to open a marketplace for add-ons giving you the possibility to not only buy the rover, but also buy functionalities of your choice. Robot arms, cameras, sensors, even delivery boxes for example. Anything that can be integrated onto the rover can be an add-on, software or hardware.

Just as smartphones have their appstores, robotics needs marketplaces that are set up with interoperability as a priority, with open source software so that you can plug and play, or dig in and design something custom for yourself.

For makers – we’ll open Turtle to be as 3d-printable as possible, so it will be you, who will be able to manufacture the robot. The ultimate goal is to accelerate the process of implementing robotics in real-life use-cases and business uses, meaning that finally individuals and SMEs won’t need teams of genius engineers to autonomize outdoor tasks in their work. See a need for a robot? Design it, prototype it, and deploy it in no time. No engineers needed.

You mentioned that you want to pursue distributed manufacturing and open source the project. How will this be accomplished? What will Turtle be as a business when most of the manufacturing is open sourced?

Most people see robots as hardware products, but in reality – rovers are more about software and implementation, the actual machine is just the tool that the software uses, the way you program it. So in that sense, we look forward to a future where we don’t have to directly supply the machines, but can focus on maintaining a wide range of interoperable and complimentary add-ons and software packages that enable people to get their robots to actually do things.

This is the thing. Right now robots are “cool,” and like any new technology, they will only be cool, and not really necessary, unless there is an ecosystem in place that makes them an easy and even an obvious choice for implementing new ideas. A robot to perform road maintainance or cleanup, or nature photography, or even farming sounds nice, but it has to be built by somebody, and programmed by somebody.

Those barriers keep these ideas from being tested and adopted more widely. You see that the majority of robotics projects always remain in the testing phase. That’s where we don’t want robots to live anymore. Now they should live in implementation.

It’s the community we build around this technology, who will find the best use cases and customize the robot add-ons for the job to be done. Turtle will act as a provider of the prototyping platform and a marketplace where you, as a developer, will be able to show your work and monetize it in the real use-cases. The distributed manufacturing method will allow us to focus more on the functionalities that matter and not the basics – being the manufacturing and assembly.

That’s the exact mindset we want to show the people within robotics. Stop testing! Start building.

You’re the first pure robotics company to join StartupYard. What led you to that decision, and how has the program lined up with your expectations?

After a successful Kickstarter campaign and Indiegogo sales, we lost focus on what the product is really about.

To be honest, we’ve never had the focus as we didn’t have any experience in business building. Funny enough, we fell victim to the same mentality we are trying to solve with Turtle. Endless tests, endless ideas and prototypes.

We assumed that if it’s us who have the prototyping issue, then most certainly – there’s more us in the world, so in that sense I guess we thought the idea would sell itself. But it did not, as you might have guessed.  

But it’s not that easy. We joined StartupYard to gain that business focus and to formulate a real comprehensive vision for what we’re doing. In that respect the move has been a real success for us.
How can people get their hands on the Turtle Rover now? How can developers and idea makers start working on the Turtle Rover platform?

The robot is available on the Turtle Shop, where you can get your rover with a 2-3 month delivery time.

We still need to catch up with the orders from Kickstarter and then will stock up to be able to deploy the robots faster. Developers can meet us on GitHub and, I’m revealing a little secret, will be able to join Turtle Challenges – hackathons that we’ll start in the next months. On top of that, as a developer you’ll be able to get 3D-printed parts and build within the Turtle Community right away with minimal upfront costs.

Our aim in the next year or so is to make getting a rover into anyone’s hands a lot easier, and start to become a real marketplace of ideas for makers and business-minded technologists who have an idea they haven’t been able to prototype yet, because of cost or a lack of the right knowledge and experience.

If you can imagine a use for a tough, sturdy rover with flexible programming and extensibility, then we’ve got just the thing for you.

Introducing Elifinty: Hope for the Financially At Risk

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Over 25 million people in the UK alone are classified as “financially vulnerable,” often crushed with debt and in fear and confusion over their options. Elifinty is for people who see no way out: a financial AI that offers custom, pre-approved financial solutions for your unique situation, including charitable options and debt consolidation services.

Maysam Rizvi is CEO and Co-Founder of Elifinty. Coming originally from the UAE, he was raised in the UK, where he began his career in banking. Maysam realized following the financial crisis of 2008, that his true passion wasn’t banking, but helping those who banks were unable to help. He founded Elifinty to help the financially vulnerable become a functioning part of the financial economy again.

Hi Maysam, first tell us a little about yourself and how you came up with the idea for Elifinty?

I’m an ex-banker with about 15 years experience in various institutions doing Risk, Investment Banking etc. with senior positions in United Overseas Bank and JP Morgan. 

If we want to say “when it all started,” then it was when I was in Iceland in 2007/2008, recovering funds for my banking institution during the financial crisis. I saw first hand the impact of the financial crisis on individuals and businesses. The financial contagion that spread from Iceland and other countries around the world consumed institutions, weakened governments, and shook the foundation of our society at the time.

Maysam Rizvi, CEO and Co-Founder at Elifinty

There I was trying to collect on these debts we knew the debtors couldn’t pay back. It was mad. We had irresponsibly loaned this money, and they had irresponsibly spent it, but somehow our responsibility was overlooked, and we were the victims. Meanwhile these people ended up with less than they started with, and the banks ended up getting even richer.

It was a really painful time for me. It didn’t feel good to do that work. We protected our balance sheets, we blamed others, but I couldn’t sleep. I had a suspicion that if we should blame anyone, it might be ourselves.

I spent years researching and understanding the challenges faced by individuals in debt, and how the banking system as a whole was part of the problem. I started to feel I couldn’t go on doing what I was doing, and ignore the damage the system was causing.

Currently, 50% of people in the UK are classed as “financially vulnerable.” That is about 25 million individuals and there are similar statistics across Europe and in the United States. And I’ll note, that this vulnerability across half the population has persisted despite basically 80+ years of barely interrupted growth in economic productivity and overall societal wealth.

I realized as I got to know the banking world that debt had played a key role in making the economic miracle that the world now enjoys. But there is a dark side, and it is found in that half of population that many of us would rather ignore. Still, debt breeds instability and ultimately suffering, when it is not managed responsibly, and when debtors are not treated humanely.

The idea for a solution in the form of an app came together with me and my co-founders just sitting around a table talking about these problems. Our experiences and expertise along with the learning we’ve had about the financial crisis and the banks role in that crisis, led us to realize that if anyone was going to try and solve this, it should be us.

For those of us who have never had subprime debts, can you describe the kinds of people who have these debts, and what some of the conditions are?

In our research we’ve seen a number of factors that can put you on the path to financial vulnerability. One major misunderstanding is that a financially vulnerable person is a poor person. While this may be true, a financially vulnerable person is someone who might be impacted by a small event that can, for example, increase their expenses by £100 and they have no mechanism to deal with it.

Being financially vulnerable means not being resilient: not being able to keep going in the face of even a minor difficulty. Many people have their finances like a house of cards. One blow, and it all comes down fast. Debt makes that process even worse. Perversely of course, lenders punish those who have difficulties paying their debts by giving them higher rates of interest, creating an incentive for some lenders to create more bad debts, and keeping bad debtors from becoming good debtors.

Some of the reasons for becoming financially vulnerable are:

  • Lack of financial understanding. Financial education is the number one factor. People generally get stuck in difficult situations because they are choosing the wrong financial products for the wrong financial situations. Consider the person who bought a car using a credit card, credit card interest is typically over 20% compared to a car loan of 5-9% per annum. Worse yet, credit card companies actively encourage this type of behavior by offering rewards for taking on this kind of debt.
  • That leads to having high cost credit. These range from 20% APR credit cards to your payday loans that typically have interest rates over 1000% per annum. Individuals having high cost credit are stuck in a downward spiral, constantly losing the battle to financial survival.

The simple fact is that many people are financially vulnerable simply because they lack sufficient “social capital,” to ask for and receive the appropriate kind of help. These are people who feel intimidated by walking into a bank, and who may lack the self-confidence to assert themselves over multiple interactions.

If you walk into a bank and ask for a loan, you must answer questions. You must then gather certain documents which you may not understand. You must then return and get a decision. Many people don’t have the nerve for this, and fear a negative outcome.

Meanwhile, a short-term lender or even a loan-shark can makes the process of getting a payday loan very easy indeed. Walk in with a paycheck, walk out with a loan. The customer sees an immediate response, and feels immediate relief.

Payday lenders know this. They listen to a customer’s problems and offer real solutions. Their customers don’t feel judged or shamed for being bad with their money. Though the customer may not be taking a deal that is good for them in the long run, they really are solving a short term emotional pain and crisis. That is powerful competition for a traditional bank.

You’re targeting people at risk of default and bankruptcy. How do you work with that type of consumer? What are some of their unique problems?

 

Most importantly, we need to work with these types of customers in as humane a way as possible.

Banks and subprime lenders both have motivations which are fundamentally misaligned with their customers when it comes to debts. It’s this: to a bank or a payday lender, a person is a number. A big bank wants to get an “underperforming” customer off their balance sheet, and a payday lender wants to get a cash-cow at high interest onto theirs. Getting people out of debt is not really in either’s interests. Banks want people who can comfortably pay, and short term lenders want people who have no choice but to pay them.

This is where we stand: between two industries who either don’t want to work with at-risk customers, or do want to work with them, if only to take advantage. Our aim is to turn these at-risk individuals into healthy members of the economy who have healthy levels of debt, and the ability to pay it back.

We’ll do that by bringing a hybrid and gamified approach to each individual at-risk consumer. Do they need cash flow management? Debt forgiveness? Restructuring? We can use open banking data and a network of charitable public organizations to catch these people who are grinded between the gears of banks and payday loans.

Banks will tell you, and with justification, that they do test many tools to help their customers become better credit risks. But a bank is a big organization, and it’s primarily focused on its bottom line, at the end of the day. They would like for their customers to be more financially healthy, but they are not able to focus on these customers. Rather, they are incentivized to get rid of them.

Elifinty aims to work with both charities and banks to stabilize and improve the finances of “bad debtors.” How do you see your future relationship with these institutions?

The UK already has a well-developed network of private and public charities that do things like rent-support, utilities, income support, and debt forgiveness as well. There’s a big range of them, but because of the nature of their work, they are most often focused on particular localities and specific cities. Their reach is limited in that most of their funding does have to go to doing what the charity promises.

We absolutely need these charities, but they are not able on their own reach the people who need their help most, before the biggest financial and life damage has been done due to financial struggle. Often these charities step in when families are already splitting apart, when drug addictions may be involved, and when people are at a particularly low point. We want to help charitable money reach people before their lives are truly cracked open, and get them the right help before that happens.

For charities, we can digitize their services and get them to the right people earlier, when it has the maximum impact. This helps them help more people, and it helps them show their funders that they are making a difference, leading hopefully to  more funding.

Elifinty can streamline their enrollment  processes so they can access a self-managed portal that stays in the charity’s control, and not ours. Far from replacing charities, we’re going to give them the tools to make a bigger difference.

On the other hand, we will be working directly with banks too. As I said, a bank’s focus in getting bad debts off the balance sheet. We will be able to help them do that in a way that serves the customer’s interest as well. The truth is that such bad debts are typically bundled and sold off to debt collectors or debt investors, often for a small percentage of the total amount, with the bank taking a loss, often over 80%.

In the future, Elifinty could function as a marketplace for that debt which favors the organizations that have the most human practices in debt collection or reconsolidation. For example, a debt collector who runs as a non-profit organization, looking only to cover its own costs, or a charity that buys debt in order to forgive it.

Collectors and debt aggregators today can be incredibly aggressive, intimidating, and heartless. They rely on consumers not understanding their rights and feeling afraid of the consequences of non-compliance. We want to break that whole industry, and make this kind of abuse a thing of the past. We want to convince banks to work only with collectors who stick to an ethical and humane system.

That won’t be easy. Regulation in the US is practically non-existent, and almost totally uninforced in this market. In the UK, things are better, but abuse is rampant. Still, we believe that offering a better way can show the financial world that we don’t need to stoop to these evil tactics to have a fair and equitable society that takes personal responsibility seriously.

Why are there not more stringent controls on the types of debts that consumers can get themselves into? What would you advocate for in terms of regulatory or legal changes to the current system?

As I said, the market is not unregulated now. The problem with debt is that fair or unfair, there will always be those who have the skills and the knowledge and the luck to make it work no matter their financial situation. Then again, there will always be those who get into trouble, even if they are relatively lucky, and not necessarily dim or stupid either.

When the economy is growing, it just gets easier to get credit, and as a society we accept that this means that some of the money will find itself in the pockets of people who shouldn’t have it. It’s only when there’s an economic downturn that we turn the screws on these people, and make them pay for their mistakes. That’s something I learned in my years of banking: those who are blamed are often those who we should have considered more carefully to begin with.

One the great mistakes, I think, that occurred during the Great Recession of 2008 was that politicians got so focused on saving the banks, they didn’t think about what would happen to all those people who the banks had lent money to. Rather than forgive their debts and clear the bank’s toxic balance sheets that way (which is what I would have preferred), the governments instead injected even more money into the banks, and left the banks still to collect on the outstanding debt they had foolishly created themselves.

In that way, the banks got paid twice during the last crisis, and the debtors paid twice: first by losing their homes and their savings, and then again by having their tax money go to keeping the banks liquid. Many people from that period have never recovered- and this is not even to mention that nothing has fundamentally changed. We still have a massive pile of debt at the core of the world economy, and no real way of paying that back.

I do believe that initiatives like PSD2 and GDPR are causing some needed disruption to this cycle. Giving outsiders in the financial industry like us an ability to compete on a level with banks is going to bring more customer focused solutions to the debt problem, and I think that’s a great thing. I also think GDPR can go a long way to cutting down on the bad actors in debt collection, and it will force banks to be more transparent about what kinds of people they are contracting with to collect debts. This can’t happen in the shadows anymore.

We are a part of the Open Banking Consumer Forum, which advocates for a code of conduct for finance companies, to try and protect consumers from becoming essentially a source of funds for bad actors. I believe PSD2 and GDPR on the whole are going to help that mission.

How exactly does Elifinty’s technology help its users to make better decisions and stabilize their finances?

Two important aspects. First: predictions. We are able to use PSD2 Open Banking data and customer supplied data to predict the likelihood and the size of a potential financial disaster for an individual, and we are able to then put that person in contact with the right solution or service for dealing with that problem, even before it becomes really serious.

We’re able to see which customers are at risk of taking bad loans, or who are already beginning to follow the ‘death spiral” of unpayable debts, and arrest that spiral with a quick intervention. Customers may not even need drastic help if they come to us in time.

Beyond that, we are able to use our app to help change the customer’s behavior and thinking about their debts, offering strategies and even tricks to get them out of debt faster. This could be done with or without an outside partner- it would depend always on the persona and the nature of their problem.

We also have some exciting ideas about how we can use debt forgiveness as a kind of motivational tool. Imagine if a person’s debts could be reduced simply by that person meeting daily spending targets, or committing to certain changes in their financial lives? We could bring debt from 100% collectible to only 50%, or 30% or all the way down to zero. All it would take would be the customer committing to changes that make them a better financial consumer, and a charity or investor interested in helping people turn their finances around.

In this way, our hope is eventually to have an end-to-end turnaround process, taking a person who is unfit for the banking system, helping them alter their behavior and gain knowledge and wisdom about finance, and eventually getting them back into the financial world as a productive and contributing member.

Where do you see your features and your main customer base a few years from now? Who will be your key competitors then?

For the near future, we’re focusing on simple aspects of a person’s financial life, like grocery shopping, utilities, car loans, insurance, etc. We will allow our users to save money on these kinds of things in order to improve their financial health. Then slowly we will be rolling out cooperations with charities and other services to tackle the hardest-to-solve debt problems.

Elifinty, StartupYard

My wish is that in 10 years, there won’t be a need for us on the market, because banks and other lenders would have become ethical and human centric. I have hope that we can do that, but I am also a student of history. I sense that our work may not be done in my lifetime, but I want to get started now making finance fairer for all of us.

You joined StartupYard a few months ago. How has the experience stacked up against your expectations and preconceptions?

We thought StartupYard would be like any accelerator. However we were not quite prepared for what it really is. It’s an intensive experience, meetings with 120 mentors over 5 weeks, with a huge range of varying feedback and advice that we had to somehow bring together and reconcile.

That really forced us to stand up and work on our pitch and our value proposition in the face of so many possible objections and problems. At the same time, we got so much support in everything from developing our content and messaging to our design and our management and financial planning that we just didn’t expect to get.

What I love about it here is the sense of urgency you get to accelerate your business. You have to be on your toes and you have to always drive towards your goals. The bad part is missing my family as much as I have. I tell myself it’s for the greater good, but that’s a big challenge for me starting a business. My family is a source of strength.

Why is helping people to get out of financial trouble so important to you? What about the current situation keeps you up at night?

I’m from the UAE and despite what you may think about the country based on movies and TV, with the riches and excess, our family were always focused on helping people as part of everyday life. Our culture before the crazy economic changes in past decades was nomadic, and while we have been in fortunate positions our people were very dependent on the kindness of strangers. We still are in many ways.

I think this is why my Icelandic experience was so profound for me. I couldn’t reconcile how I could do my job, that I knew wasn’t helping people, but really hurting them. In those days I had trouble waking up in the morning and going to work.

Recent events have also convinced me that many of our problems as a global society come ultimately from us not being focused on the human beings who make society work. The UK is a rich place, by historical and current world standards, and yet so many of its people struggle so much day to day. That just doesn’t make a lot of sense. Whether your a socialist or a capitalist, you can’t argue, based on the available evidence,  that having half the population under constant pressure is conducive to real economic productivity.

I’m afraid that my children will grow up in an unjust society and despite their own position in society they will not be able to reconcile what I teach them with the harsh realities of life. That’s why I’m doing what I do.

What kinds of partners are you looking to connect with following the StartupYard program. Which existing players can most benefit from working with you to solve the subprime debt problem in the UK?

We’re looking for team members who want to go with us on this journey, and believe in the right of what we are doing. In terms of banks, the big 4 in the UK are Barclays, Lloyds, RBS, and Santander, and we will be looking to connect with all of them.

Credit unions and credit union associations like ABCUL will also make great partners, so we are looking for ways to connect with them.

Charities are a big part of our plans, so we are very open to partnerships across the UK financial charity ecosystem. Anyone can contact me directly at maysam@elifinty.com, or on twitter @elifinty, or visit our website: www.elifinty.com

2 Mental Tricks That Will Make You a Better Entrepreneur

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This week at StartupYard, our current batch of companies has been in the tall weeds trying to finalize their marketing and messaging for our press launch, which went off last week.

The cliché expression for the feeling they are experiencing is “jumping off a cliff and building your wings on the way down.” A version of that quote is often attributed to Reid Hoffman, who uses it to describe entrepreneurship generally. In fact, the quote originated with the science fiction author Ray Bradbury, in a review of the National Air and Space Museum in Washington D.C.

In a way that makes much more sense. The quote describes inventiveness and forced creativity. It can be the realm of the entrepreneur, but it is more generally the realm of anyone creative.

The reason I mention this is that a founder can be both very strong in creativity, and still very unconfident in their ability to creatively communicate with customers. That’s what my job with them is all about.

Creativity and Empathy

This week I’ve done two workshops with our startups. One on “Storytelling,” and the other on “Customer Personas.”

To me these are essentially the same topic. Stories are the way that the human mind invents and creates the future, and how we understand our past. It is about how every “character,” or person undergoes an arc, and how those arcs interact and impact each other. Building personas, in the way I see it, is how we examine our assumptions about people, formulate tests of our insights, and discover ways to empathize with and understand those who use our products.

Here we’re going to talk about some simple mental tools that are going to help you ideate and test your own assumptions about your customers, in order to better serve and sell to those who need your products most. In many ways these will not be unfamiliar concepts, but to the mind of an engineer or a maker, they are often mysterious and elusive in terms of application, particularly when it comes to marketing.

I’ve written a number of posts on this topic, so I encourage you to start with these. Go on, I’ll wait.

…

Double Loop Learning

Double loop learning is a basic model for creative and flexible thinking. In essence, it suggests that there are two ways to approach the learning process (such as in product development), a “single loop,” or a “double loop” process.

 

Here is how they look: 

 

In the Single Loop Thinking:, you begin with assumptions (a mental model), logically leading to a set of rules, which lead to a decision. From there, you adjust your decision based on feedback.

In Double Loop Thinking: You do the single loop, but at the same time, you go back to the initial assumptions and adjust the mental model, which may cause you to adjust the rules, and not just the final decision.

Example of Single Loop: In deciding on buying a car, I imagine the car I want to buy: Color, Type, Make, Model. Using this model, I decide which dealership to go to, and how much I can expect to spend (making rules). Based on this, I decide on a dealership. Now I go to the dealership, and I find out if I can get the deal I want for the car I want. If I can’t find the car, I go to another dealership (information feedback to decision).

Example of Double Loop: I do all of the above. But I also ask myself: should I be trying to buy this type of car? Were my ideas realistic? Based on what I learned from my visit to the dealer, what other cars got my interest, and might be better for me? I adjust my expectations, and make a new decision about the kind of dealer I need.

Why it Works:

Single loop is in fact the way we are taught to learn in school. We are given rules, and told to apply them continuously, looking for the correct decision given the stated rules. Just think of all that math homework you had to do.

That kind of singular repetitive learning works most of the time, particularly when a desired outcome is pre-determined. However, this can also lead people to forget that the initial mental model may be flawed, particularly after gaining real experience with it. 

The most typical case in startups, is the startup that makes some early decisions about who the customers were and what they wanted, but never came back to those assumptions, and ends up serving a smaller niche than necessary, because all their later decisions are based on data they’ve gathered so far. The longer a company remains in this “single loop,” the less likely they are to challenge their original assumptions and thus be able to successfully pivot to a new market. 

 

Here is a concrete example using a classic business case many people face even as kids:

Single Loop:

1. I decide to sell lemonade. I choose a location for my lemonade stand and a price for the lemonade, based on my intuition about what people will pay. 

2. I observe the sales cycle. How many people visit, and how many people convert to buying a lemonade.

3. I slightly adjust prices and location to optimize my sales.

4. Go to 2.

 

Double Loop:

  1. I decide on a location for my lemonade stand and a price for the lemonade based on my intuition. 
  2. I observe the sales cycle.
  3. I slightly adjust prices and location to optimize my sales.
  4. I re-examine my initial strategy, and try a new location, or even a new product (maybe ice cream?) 
  5. Go to 2.

The OODA Loop

 

Ok, maybe running a startup isn’t exactly like flying a combat mission in a $50m fighter jet in the U.S. Airforce. Still, you can learn from the mental training that fighter pilots, spies, and military strategists use on a continuous basis – often minute to minute.

 

It’s called the “OODA Loop,” for Observe Orient Decide Act, invented by Air Force strategist John Boyd, called by some “the greatest military thinker no one ever heard of.” Here is a very thorough explanation of the general philosophy behind it, written for a popular audience. In as simple terms as possible, the OODA Loop is a mental tool which forces its user to continually adjust their future expectations, based on current realities.

Why it Works: 

The OODA loop is a tool for forcing oneself to continually affirm their past decisions using current information, and to drop previous assumptions and goals based on current circumstances. The OODA loop is used as a mental tool to keep you focused on the current moment, and what is happening around you, to avoid sticking to a strategy which is not working, and to continually notice new opportunities. 

Boyd’s central thesis has become a core principle of modern warfare, and a frequently used technique in sales training, and even by professional chess players. The core tenet is this: the mental models one holds tend to lose their usefulness in chaotic situations. Therefore, updating our mental models, or “orienting” our expectations can help us to make better decisions for any given situation.

What does that look like practically? I’ll refer to a thought experiment that Boyd himself proposed:

“Imagine that you are on a ski slope with other skiers…that you are in Florida riding in an outboard motorboat, maybe even towing water-skiers. Imagine that you are riding a bicycle on a nice spring day. Imagine that you are a parent taking your son to a department store and that you notice he is fascinated by the toy tractors or tanks with rubber caterpillar treads.”

Now imagine that you pull the skis off but you are still on the ski slope. Imagine also that you remove the outboard motor from the motorboat, and you are no longer in Florida. And from the bicycle you remove the handle-bar and discard the rest of the bike. Finally, you take off the rubber treads from the toy tractor or tanks. This leaves only the following separate pieces: skis, outboard motor, handlebars and rubber treads.”

The thought experiment then asks us to orient to this new situation by putting all the elements together, not in reference to how they were introduced, but rather only focusing on what the elements themselves are, or can be.

You are on a ski slope. You have skis, you have a motor, you have handlebars, and you have rubber treads. What’s going on?

Spoiler: You’re on a snowmobile. That’s what’s happening. Nothing you learned to this point other than those facts matters. To master the OODA loop, you have to be able to clear your mind of these details when they are no longer useful.

The OODA loop focuses on observing the current situation, combining that data with experience and knowledge, and making a decision focused on what is happening right now. 

Actually we are quite familiar with elements of the OODA loop in pop culture. Films like The Bourne Identity, or the recent Bond films show classic outcomes of the use of OODA loop, which is the result of real special operations personnel training the actors and consulting on the scripts and fight scenes.

The tension that arrises from these films, in which we observe someone using the OODA loop, comes from the audience being slower to understand how the protagonists are processing situations. As an audience, we have a hard time dismissing details and living in the moment, so it is exciting to see characters who are unpredictable, and yet acting very logically.

This scene from The Bourne Identity is a classic example of the OODA loop in action.

Here’s another from the classic film Top Gun, handily labeled so you can follow the steps that the fighter pilots are using. This video has an added bonus in that Maverick, played by Tom Cruise, fails to use the OODA loop, and suffers the consequences.

 

The Monty Hall problem

The OODA loop is a practical tool in decision theory. Probably the most famous case of a practical application is the so-called “Monty Hall Problem.”

The problem was first articulated in the 1970s in response to an American game show called “Let’s Make a Deal.” The problem goes like this:

“Suppose you’re on a game show, and you’re given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door, say No. 1, and the host, who knows what’s behind the doors, opens another door, say No. 3, which has a goat. He then says to you, “Do you want to pick door No. 2?” Is it to your advantage to switch your choice?”

What’s important here is differentiating between a decision strategy, and a single decision. While the chances of the original choice being correct are indeed ½, the odds that the initial choice would be correct over many iterations are only ⅓. That means that if you consistently stick to your choice, you will only win ⅓ of the time, whereas switching will give you a win ⅔ of the time.

Why?

Think of the problem again, but with different numbers. Suppose there are 100 doors. 99 with goats, and 1 without. Now suppose you picked a door, and the host them revealed to you all 98 other doors with goats behind them. Now do you switch your choice? Whereas your initial choice had a 1/100 probability of success, your new choice, has a much higher probability. This time it’s 99/1.

If you don’t believe me, you can actually test the phenomenon here.

Applying the OODA Loop

Now that we see the difference between decision theory and probability, we can begin to understand better how the OODA loop works. Because it requires that we observe according to the latest data, we begin to see that applying decision theory in real life becomes more practical.

Take this situation:

You walk into a bar, and observe a group of large men in military outfits standing at the bar. The men are sweating profusely and breathing heavily. No one speaks. You see that all of them are carrying rifles or pistols. They appear not to notice you.

Your observation moves to orientation: your judgement says there is probably trouble. Based on the available data, you decide that turning and walking out will draw attention and cause them to panic, or even attack you. Challenging them is too dangerous, as you are alone and unarmed. You decide to continue past them to the bathroom, where you know there is probably an exit.

You get out of harm’s way and look and listen from safety. The men stand quietly. Eventually a bartender appears and they order beer. The men begin to laugh, and one of them explains to the bartender that they are just coming back from a game of airsoft.

Orientation Leads to Better Decisions

Notice first of all that observation and orientation happen always before a decision is made, or an action taken. The decision is then subjected to another round of observation, where the first set of data are taken together with the new set.

We see from this example that quick reactions are, over the long run, less important than correct decisions. Anyone who has been trained to drive a car in mountainous areas has probably been told that the best decision when a deer runs across the road in front of you is to hit the brakes, but not to turn. This is not because turning is unlikely to help you avoid the deer, but rather because swerving away *is* more likely to cause you to crash the car (possibly into another car).

Those with relevant experience know that the deer will mostly likely run away if you slow down but don’t turn. If you turn, the deer can become confused and may hold still, causing you to hit him anyway. Even if you hit the deer front on, this is less likely to endanger your life than a side collision or losing control of the car. Either way, your best decision is not to turn: no reaction is better than an overreaction.

If in the former example of the OODA loop in the bar, you had reacted as quickly as possible to the situation, you would have made mistakes. First of all, you would have suddenly run out of a bar that was perfectly safe. Or worse, you might have attacked a group of men who were armed.

If you had challenged the men, you might have been killed, or beaten. If you had run out, you might then have called the police, causing further trouble, and perhaps even unneeded violence. If you think that’s overselling it, keep in mind that police shoot civilians with distressing regularity, in some countries, for such offenses as holding a mobile phone, or a toy gun. That often occurs because the police are not trained properly – such as with the OODA loop. Your effective use of the OODA loop could prevent that from happening.

Thus, in this situation, a slow reaction was preferable to a fast one, which is why you made a conscious decision to continue to the bathroom, rather than to engage with a situation you didn’t understand yet. You then moved back to observation and orientation. Discovering that the men are just coming back from a game, you may decide that no further action is necessary.  If the new situation, by itself, does not appear dangerous, you may then decide to dismiss your concern, or you may decide to continue to observe.

OODA for Entrepreneurs

As Malcolm Gladwell points out in his book Blink, which explores decision loops in human interactions and business, as well as in historical conflicts, an ability to continually orient to one’s current circumstances is the greatest predictor of failure or success- a predictor more powerful than numerical data or objective observations.

Consider how this can be applied in the thinking of a small business. In the fact of numerical advantages, or sudden threats (such as bad PR, or even a troll on twitter), to what degree is your decision making purposeful, and designed to accomplish a known goal? Are you capable of altering your strategy to take advantage of new information and new events?

Observing new facts is easy to do. But consciously challenging an existing mental model is much harder. Reacting to data only after deciding *how* to react, can make the difference between a major gaffe, and a well-handled situation. Those who are able to act according to the most relevant information in any given moment are likely to win in the long run. Just as in picking stocks, or playing poker, success is found in not allowing your initial strategy alone to determine your future actions.

As John Boyd himself put it, to paraphrase: “in any game, the winner is most likely the one that can orient to new developments and alter their decision making as a result.”

 

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Teskalabs, GDPR

StartupYard Alum TeskaLabs Tackles GDPR With New Enterprise Solution

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Hi Ales, TeskaLabs has done really well post-StartupYard. What have been your biggest successes in the last 3 years?

Thanks, Lloyd. Very glad to hear that. There is a lot of work behind it. As you know, TeskaLabs launched with StartupYard with a focus on securing enterprise mobile applications and networks.  Originally this was with a single core “secure gateway” technology called SeaCat. Based on our cooperation with large corporations such as 02 in the Czech Republic, we have expanded the uses for this core technology into new product lines that support enterprises with large networks and sensitive data in the field.

It is a cruel request to name the most successful piece of work we’ve done. We play a synergic game: we aim to have any new product or feature enhance the whole. So in that sense we are moving on several fronts all at once.

But if I have to choose one, it will be Black Swan, which we first talked about in our annual report last year. Black Swan is originally a part of SeaCat – but today it is a standalone product. It’s a real-time stream analyzer designed to detect anomalies, trend changes, and things that should not be happening on a high-value network. It can be used to identify cybersecurity breaches, detection of malfunctioning IT technologies, but also as a business analytics and intelligence tool.

We deployed Black Swan last year on the national network of a large mobile operator (I won’t name them here), on LTE, 3G, 2G, voice, and data. That investment from their side, I’m happy to say, paid back for them in 5 days.

You also recently announced a new data-anonymization product for GDPR compliance: TurboCat.io. Who is it designed for, and why is it needed?

This is why I said our work is so synergistic. Every time you dive into the problems of securing big networks with lots of different things going on, you discover yet another way to provide more value with the same technology base. That is the case for TurboCat.io as well.

TurboCat.io originated as a part of Black Swan. Black Swan collects and processes billions of datapoints, and a great deal of them are sensitive personal information. Obviously this is a huge concern for telco operators and really anyone who is handling a lot of customer data. GDPR comes with very expensive consequences if data is mishandled or stored in a way that isn’t permitted, so corporations are all thinking now in terms of how GDPR will impact their operations and products.

Therefore, there was particular demand from customers to develop robust tools for anonymization, pseudonymization, encryption, and other tools to ensuring air-tight data privacy. We came up with TurboCat.io thanks to a review with a corporate data privacy officer. We discovered the urgent need for a broader solutions to these issues, so we decided to make it available for others too.

So we created TurboCat.io, a product focused on de-identification of personally identifiable information (PII) as defined by GDPR. You can find more on our blog, where we are publishing a whole series about data privacy for big companies with large databases.

For those who still haven’t brushed up on GDPR and its many new requirements for online businesses, can you tell us what is most important to understand about the new framework?

I think, perhaps a little controversially, that GDPR was needed. Many companies are still in shock and trying to come to grips with the complexities and the limitations on their old data-use practices, but on the whole I think this is a constructive process.

You know, we do cybersecurity, and what we sometimes saw, in the sense of how some companies worked with personal data, scared me frankly. It should scare more people.

GDPR can be viewed as a kind of “scared straight” moment for many companies dealing with a lot of sensitive data and with customer privacy. This was really needed, and it helps to get all of us on one page, dealing with security in a more thorough and complete way. This put everybody on notice that privacy is a right for customers, and must be respected and strictly upheld.

The way the EU bureaucracy has done this is, of course, another matter. It’s not perfect, and it’s not what I would have done, but we are here to deal with it and help companies to adjust.

I view it as essential to privacy and real security, that personal data such as names, emails, addresses, and the like be recognized as having value for their owners. If a business decides to store or process these data, it must also adequately protect them. Fundamentally what GDPR does is to strongly state that these data are our property, and that our property and our privacy are not to be sold or traded as someone else’s assets, beyond our knowledge or control.

GDPR is putting a lot of businesses into panic mode right now. What do you see as the biggest vulnerabilities, and in which industries will GDPR present the biggest challenges?

Yes, you are right. There is a lot of panic.

In general, B2C companies are more exposed than B2B. Obviously B2C companies are dealing with many individuals, and often have many different products and many overlapping data sets and uses for these data that need to be understood, not only by customers but by the companies themselves.

Up to today, large B2C companies such as retailers often did not know all of the data they were storing, who had access to the data, and what all of the data was being used for across the whole company. That can no longer be the case, because in order to do any of these things legally, the company must inform the customers and ask for their permission. They must offer a way of removing these data in many cases, and that requires real changes in the way they operate.

How do you expect that GDPR requirements will change company cultures, or require big shifts in the way some companies operate?

We are working  with several big companies to help them adopt GDPR requirements, and I have to say that it is not really a significant shift at the end of the day.

Staff needs to be well informed and instructed. Bad practices need to be changed, but here it usually correlates with cybersecurity issues, so it needs to be fixed anyway. That’s why I see it as overall positive, not just for society but also for business. These things needed attention, but now there is a strong incentive to make positive changes.

One typical example is a shared account for various online (SaaS) marketing and BI tools. It is very common, and it can do a lot of damage. Single sign-ons for large organizations present a single point of vulnerability that can be exploited. If there is only one way in, then all a company’s associated data is then at risk. GDPR is going to change the behavior of these SaaS providers *and* the companies who use them for the better.

And of course, you should consult your lawyer and review your user agreements. There are probably issues you need to fix. You can no longer hide your data practices behind a general user agreement.

Aside from challenges, what opportunities or positive long-term effects are you expecting from GDPR?

I suspect the landscape of personal data dealing will change significantly. So it is definitively an opportunity for new businesses and innovations. If I have to bet, blockchain technologies and crowd monetization of the access to personal data resonates a lot.

Blockchain allows the possibility of always being in control of what data is shared, and always having visibility on how it is being used. The opportunity to change or correct personal data is really important, and the blockchain allows these changes to be made based on consensus, and not just on the decisions of a particular company. Unfair and descriminatory practices can be defeated in this way, for example by giving individuals the opportunity to see how theirs data is being used in comparison with the data of others.

How should companies make sure they’re compliant with GDPR within the next month?

It is not even a whole month until GDPR become effective. If you haven’t started, I bet you are late already. But no worries, you can still prepare your business. I think that the EU is very much expecting this to be a learning curve, and they must be prepared to give some room to manuever. Then again they will also need to make examples.

Technically: Get a good understanding what personal information you are collecting. Who has access to what, and how you protect these data. Evaluate all data exports and implement de-identification of unneeded entries. And implement monitoring of your IT systems, which will give you an audit trail. That is important for any eventual dispute and will help you a lot.

 

StartupYard, Startup Founder, Brutal

11 Ways Being a Startup Founder is Pretty Brutal

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Are you a startup founder? Welcome to the suck. Last week I emailed StartupYard alumni to ask them one question: “What has been the most brutal part of your startup journey?”

We talk a lot about the joys of success and the feeling of accomplishment our founders get from overcoming their challenges. Actually though, being a startup founder can be pretty brutal sometimes, and there are plenty of situations where there is no real silver lining. A big part of making it as a founder is relying on your friends and your mentors when things go bad. Even if there isn’t a way to fix it, we can help you move past it and use the experience to grow and mature, even just a bit.

Brutal Doesn’t Mean “Not Worth It.”

It’s rare that a negative emotional or inter-personal experience as a founder is enough to make our alumni give up- in fact we’ve never seen it. Still, it can make the world of any entrepreneur lonely and discouraging, sometimes for long stretches. The best founders have to stick out those patches and make it through anyway.

I’ll be quoting our founders in this article without revealing names. There are some things we can learn from, that are still best not discussed in detail. Here is what a few of our alumni had to say:

  1. Partners Suddenly Change Directions

“Representatives of [A Big Tech Company] said we would ‘build an ecosystem together.’ They got us really excited. 3 months later they ended that initiative and nothing happened. Everything we thought was going to happen never did.”

  1. People Waste Your Time

“I traveled hours to meet this VC, only to find out he wasn’t interested at all. I talked with him for 20 minutes, then traveled hours home for nothing.”

“People want to meet you and they want to cooperate with you, and they can’t do anything. They don’t have anything for you. They’re doing it just to do it. You have to be able to say no at some point.”

  1. People Break Apart

“I had to break up with my co-founder, whom I have known since childhood. It was for the sake of the company, but it made me very sad.”

“I saw that our vision of [my co-founder’s] role, was not the same. He wasn’t doing what we had agreed, and we suffered for that.”

  1. Investors Get Cold Feet

“We shook hands on an agreement. I followed up with him the next week, and he never returned my email. He didn’t even say why he was backing out.”

“We were going to sign, literally that week. The papers were all finished, and they backed out. We had to start from zero.”

  1. Customers Are Harsh

“You change one crucial feature in a way [your users] don’t like, or it doesn’t work for 1 day, and they kill you in the [app store] ratings. They absolutely kill you.”

“The product was just not working well, and I was trying to ignore it. I was trying to be positive, but we needed to really close in and refocus on our existing customers. It was very hard to admit the product was not what we were promising.”

  1. Sometimes Nobody Cares

“We invested in this whole campaign. We thought it was really valuable and people were going to like it, and share it, and buy the product. Nobody did. Not one person.”

“Some features you think are going to be a killer, and nothing happens. Other times it’s something stupid, and everybody loves it, which is confusing.”

  1. You Have to Let People Go

“I had to reduce the staff. It was very hard, even though they knew it could happen. I have since felt cautious about getting close to new people I hire. I am afraid of having to do that again.”

“She was really a great fit for the role, with the right personality and the talent, but she just didn’t want to do the work required. She didn’t have the commitment, and I had to let her go.”

  1. You Run Out of Money

“We were going to be broke in like a month or two. It was either fire everybody right now, or we make a product and sell sell sell. That was a scary time. We kept everybody, but we worked our asses off to do it.”

  1. You’re On Your Own

“You feel a real let-down when you leave the [StartupYard] program. It feels like there was all this momentum behind you, and now you are flying on your own and you don’t feel so confident all of a sudden.”

  1. Your Relationships Can Suffer

“She put me on notice. I knew I couldn’t make her happy and do this, and I had to do this, so we took a break, mutually. So many people depend on you, it’s not possible to be everywhere.”

“[My co-founder] and I were friends  since we were in high school. I think we will get past this and be friends again. But not right now.”

  1. You’re Not Always Sure Why You’re Doing it

“It just wasn’t working. It wasn’t happening, and I was just sticking with it ‘to the end.’ I felt very alone.”

“I fear the risk of failing, so I just try to keep things going, but why am I doing this if it’s going to be like this forever? I don’t want that.”

Luck, and getting Getting Past the Brutal Parts

Every founder in our experience has at least one story like this one. Usually they have lots. The only thing that separates the startups that fail from those that succeed, apart from a lot of luck, is sticking through the hard parts. One of the best ways to do this is to build a very strong network of advisors and mentors. That’s something accelerators like StartupYard can help you do.

Are you ready to build the network that will take you to the global market? View StartupYard’s Open Call for Startups:

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