As you all know, or will learn the hard way, you need be sure there is a market, before you build your product or service.
That is a basic premise of Eric Ries’ Lean Startup methodology, so I was very excited to be able to attend the Lean Startup Conference this week. It was a great opportunity to learn new ideas and refresh old ones.
I got to the conference early to hear Ryan Hoover from Product Hunt who had a great idea for community-oriented scalable startups
– “Go where you are loved. Give it away. Build a community around it.”
Startups within companies are apparently catching on as well. Bennet Blank from Intuit suggests that for internal startups, the idea is to show people how to do it rather than tell them what to do, i.e lead by example.
Specifically for internal starups, the idea is to use the company culture but to do things slightly differently. The key idea is to avoid scaring anyone that something might break.
Startups within government have got to be a breath of fresh air. There are 2 parallel efforts in the US government to create better software and openness: USDS and 18F.
Leah Bannon spoke of how the FEC.gov is trying out open git repositories for collaboration at
A startup is a way to solve new problems. The best way to learn of problems is to talk to people.
– Unfortunately, people are nice.
– They will make up problems to make you go away.
– What people do on the other hand is interesting.
– They create inefficient work-arounds.
– This is where a product may fit in.
-There is a difference between Needs vs wants.
– Needs are well defined by behavior.
– Wants on the other hand are what people say they need. It changes.
So, how to find people ?
– Post on groups that have a concentration of users.
– Use surveys that take a maximum of 1 minute to answer.
– This can create fast learning.
So, what to build?
– Make it small and useful.
– It should take as little work as possible.
– And be easy on first time users.
– Give them something easy to do.
Amir Shevat spoke of how he initially built a meditation app.
It was initially hard to find the button on the app.
It’s also hard for first-timers to meditate for 45 minutes!
I reduced the meditation time for much better results.
Here is the meditation app.
At lunch I met Eric Leppo from the Silicon Valley Software Group, who told me about an MVP calculator he built, which estimates the cost of creating an MVP based on various features of the app.
There is a focus on marketing people these day. Amanda Richardson from Hotelstonight.com may have a point redirecting focus to problems instead. It seems more relevant since you can only solve problems. In other words, you need talent to solve problems and market the solutions to people.
They built an app that solves the problem of the last minute booker.
Its an easy to use interface to be used on mobile.
If they just worried about hiring stars, they’d not get anywhere!
But I keep feeling people-light in my startup. Lots of skills are involved in building things.
So I’m not really clear about the importance of finding the best people and getting a massive cast of characters.
Also, I learned that I should reward small failures because they enable learning.
One of the ideas from the closing conversation with Eric Reis and Chris Dixon from Andreessen Horowitz was that too much money is a major problem.
Money gets spent in the same 18 months no matter how much.
If you don’t have product/market fit, it’s a waste and can lead to big losses.
Startup movement is about building things.
The important change in this generation is that entrepreneurship is a viable career path.
Business has become more democratic.
Lyft was initially Zimride for a long time. They had a carpooling app for long distances.
What they learned from that car-share experiment was that it had to be:
-Dramatically increased supply.
-Community: there is the idea that taxis were disgusting.
General startup algorithm is to find the best problem to solve.
– Develop the technology to solve it.
– A lean startup keeps risk low with fast iterations.
– Accurate bad news is better than inaccurate good news.
– Valuation is not a KPI.
Find the thing needed to be successful.
– Brady Nagel had a great talk on using LinkedIn (the free part)
– Google is not bounded by LinkedIn’s rules that restricts search size.
– When you want to find problems you’ve to talk to strangers.
– LinkedIn is a database of strangers. It’s free!
– The goal should be to define the problem.
– So, don’t talk about the solution.
– Take out details about past positions in LinkedIn profile.
– to avoid biasing peoples answers.
– Find a group on LinkedIn.
– Promote events.
– Talk about problems.
– Look for relevant groups.
– Say that we are doing research if the group is moderated.
– Create a group on LinkedIn
– Invite people to participate.
-Other useful sites for meeting strangers:
– Find alumni networks
Here is an idea on how to start a conversation with a stranger:
Send an opening email saying:
– I’m involved in a program or am a researcher on X.
– You are knowledgeable about topic Y
– Can I have few minutes of your time or someone you know.
– How about such time on Tuesday?
– Follow up 3 times. That is persistence, more than that and you’re a pest :)
Andrea Hill from ReadyTalk on spoke about internal startups:
The key here is to find early customers who are stakeholders, then measure the importance of stakeholders in terms of:
– Contribution. Legitimacy. Willingness. Influence.
– Contribution: have valuable info.
– Legitimacy: are they affected?
– Willingness to engage.
– Necessity of involvement.
– Understand their needs.
– What does success look like to them? For example with the CFO, the idea is “Don’t break existing cash flow!”
– Find a sponsor to support and be the face of the project to the rest of the organization. This makes it easier to work on the product rather than explain all the time.
– Create a clear 2 way communication channel with management; in exchange, be honest when something is wrong.
The tradeoff with internal startups is that you take less risk and get less reward.
I went to this interesting talk about an experiment in a kitchen. The talk was called: Caution Live Subjects: by Lauren Braun
It was about an experiment to test if a sub-menu of possible substitutions on a menu added value.
They created real “looking” experiments for data and measured real behavior.
The conclusion from the test was that the list of substitutions added too much friction to add value.
In conclusion, the Lean Startup Conference was an interesting place to me as an entrepreneur. I met a lot of great people and heard many new and interesting ideas.
I’m a quant, so when I started Quantprice I tested the market, because it seemed the logical thing to do.
Since attending the Lean Conference, I look forward to using more lean methodologies as I build Quantprice.
And in case you are wondering, Quantprice improves Shopify’s e-commerce store margins over 30% in the same way that larger retailers and airlines do by enabling them to manage their offers in real-time based on factors that are automatically learned from past consumer behavior using big data and AI techniques.