Steve Blank's Blog, page 23

Entrepreneurs are Everywhere Show No. 43: Dakin Sloss and Ajeet Singh

In large companies innovators have to work twice as hard – they spend time fighting the system. In a startup, your ideas turn into reality really, really fast.

A startup founder needs to never lose sight of the vision, but be extremely adaptable to pretty much everything else.

Lots of people have visions. Most are hallucinations.

In a startup, you don’t fight the system; you are the system.

And realizing your vision as a founder takes equal parts determination and flexibility.

How startup ideas are conceived and nurtured was the focus of the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Dakin Sloss

Joining me in the Stanford University studio were

Dakin Sloss, co-founder of Tachyus, which offers predictive analytics and quantitative optimization for the petroleum industry
Ajeet Singh, co-founder of ThoughtSpot, provider of search-driven analytics

Ajeet Singh

Listen to my full interviews with Dakin and Ajeet by downloading them from SoundCloud here and here

(And download any of the past shows here.)

Clips from their interviews are below.

Dakin Sloss co-founded Tachyus, providing predictive analytics and quantitative optimization for the petroleum industry, in 2013.

Prior to Tachyus, Dakin co-founded OpenGov, a platform to share, visualize, and analyze government financial data. Before OpenGov, he built California Common Sense, the open data and government watchdog non-profit.

Dakin was recognized as one of the Forbes 30 Under 30 in 2016.  

While building OpenGov, Dakin learned that founders must maintain the vision for their startup idea while being flexible about how best to achieve it:

Lots of people have visions. Not as many people can figure out how to make them happen.

One of the hardest parts about starting something is being very firm in your big picture vision, and being extremely adaptable to pretty much everything else.

For example, customers usually have a good intuitive understanding of the problem they have. But they can struggle with communicating exactly what that problem is and exactly what solution they’d like. Your job is to help them figure that out.

If you can’t hear the clip, click here

Ajeet Singh is co-founder and CEO at ThoughtSpot.  

Prior to starting ThoughtSpot, Ajeet was co-founder and Chief Products Officer at Nutanix, an enterprise data storage industry. Ajeet learned the ropes of enterprise startups at Aster Data Systems, where he was Senior Director of Product Management.

Prior to Aster, Ajeet worked at Oracle where he was part of the team that first launched Oracle Database to the Amazon EC2 cloud.

Leaving a big company like Oracle to work at a startup was an eye-opener for Ajeet:

In a large company, you come up with new ideas but then you are mostly fighting the system. When you move from a large company to a small company, your ideas turn into reality really, really fast.

Once you realize that your ideas will get implemented very quickly, you think, ‘I’m the only one watching,’ so the bar for your idea actually goes up. You have to make sure that you looked through all the implications of what you are suggesting. Ideas have to be that much higher quality because there are not too many people watching.

If you can’t hear the clip, click here

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One of the things Dakin struggled with at OpenGov was how important it is to get team communication right. Being the smartest person in the room doesn’t always mean you’re the most effective, he said:

We made so many silly communication mistakes – like we weren’t doing consistent one-on-ones and we weren’t facilitating good communication across the team. We were growing really fast and we would deal with issues as they came up, rather than proactively making sure everyone was working really well together.

So much of building a company is about people, independent of the particular subject that you’re focusing on, and so much is about setting things up for it to be a great environment for people to collaborate, to trust each other. A lot of small things – things like how you set up meetings, and how you schedule out your week – have big, cascading consequences. If you get them right, things are really smooth. If you get them a little bit off, you have a lot to fix.

If you can’t hear the clip, click here

Here’s how he makes sure the Tachyus team works well together:

Companies really thrive on rhythms in the same way that people, or families, or relationships do. So we dedicate the beginning of each of our week to our leadership team meetings and then an “all hands” meeting. These seem like small things, but they turn out to be really important, because as you’re pivoting, changing your business model and changing your product, there need to be some things that are stable to keep people on the same page.

The really the big advantage you have as a small company, is that you can get a lot of things wrong but as long as you get people around the table that are flexible, are good communicators, and are smart, you’re going to be able to figure a lot of things out. You may be in the wrong market at first. You may be in the wrong product at first. The key is getting your organization set up to be adaptable.

If you can’t hear the clip, click here

Having the opportunity to make a difference in the world drives Dakin, and so does working with like-minded people

Part of what’s fun about building a company is bringing together people that have a shared thesis or shared world view. There are obviously lots of differences, but creating an environment in which those people thrive and can collaborate together, it’s a new type of community basically.

If you can’t hear the clip, click here

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Rather than put work into creating a new markets for his business ideas, Ajeet looks for business opportunities in existing markets. He explains:

What I am excited about is opportunities in very large markets with multiple multibillion dollar exits and where the technology has become old.

The most important thing is to come up with an idea that solves a big problem. Your solution has to be 10x to 100x better, compared to what is out there. People already have an existing way of solving the same problem.

If you can’t hear the clip, click here

At Aster Data Systems, Ajeet and his team ran into challenges trying to transition their product to mainstream customers:

We had a lot of success working with large web companies. Companies like MySpace and LinkedIn became some of our biggest customers. We tried to sell inside Silicon Valley, so these were all tech companies. We were mostly selling our product to engineers.

As we tried to sell outside the Valley, it is a very different world. Selling to an IT person or businessperson in the middle of Chicago is very different from selling to a LinkedIn engineer.

We struggled with our messaging, how we positioned our product to companies that were in the Valley versus outside.

If you can’t hear the clip, click here

He carried the customer lessons with him to Nutanix and it paid off:

At Nutanix, most of our early customers were on the East Coast. We learned that if you are building a product for enterprises, start with the East Coast. You can scale much better. Your learning will be much, much better.

There are 500 Fortune 500 companies and there are global 2000, and there are another maybe 1 million small and medium businesses in the world. A lot of them do not have the engineering talent that companies in the Valley do.

So if you’re building a product, you’ve got to build it, test it, position it for the large market and the large market is not the Valley – unless you are building technology for developers, then Silicon Valley is a great place to do that.

If you can’t hear the clip, click here

Ajeet added that Silicon Valley’s unique startup ecosystem offers founders a chance to do things they could never do elsewhere in the world:

There is no place like this anywhere else. When it comes to cultural diversity, the freedom to express yourself, the freedom to fail, being able to talk about your failures with pride, these kinds of things just don’t exist anywhere else in the world.

You can go to a coffee shop and run in to a billionaire. If they have been successful, they want to give back and they are very open about giving you their time.

I have been really fortunate to have some really good mentors and advisers over the years from whom I have learned a lot.

If you can’t hear the clip, click here

Listen to my full interviews with Dakin and Ajeet by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Coming up next on the blog:  Jackie Ros , founder of Revolar ; and Christina Stembel , founder of Farm Girl Flowers

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111 to hear these upcoming guests on Entrepreneurs are Everywhere:

Sept. 29 : Julie Cottineau, founder and CEO of BrandTwist; and Rich Fulop, co-founder of Brooklinen
Oct. 6 : David Taylor, founder of Crudefunders; and Bill Keenan, chairman and CEO of Pango Financial
Oct. 13 : George Zimmer, founder of Men’s Wearhouse and now founder, chairman and CEO of Generation Tux; and Scott Adams, creator of Dilbert

Filed under: Customer Development

Entrepreneurs are Everywhere Show No. 42: Tina Fitch and Alice Brooks

The more that people pay you, the more influence customers feel they should have, but they don’t necessarily know what they want.

Customers will try to be polite and tell you want you want to hear. We had to figure out how to get honest feedback.

Doing customer discovery isn’t the same as running a focus group. And customers don’t always know the best way to solve a problem or fill a need they have.

How entrepreneurs gather, understand and use customer feedback to improve their products was the focus of the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Tina Fitch

Joining me in the Stanford University studio were

Tina Fitch, co-founder of Hobnob, an app that lets users send and manage event invitations via text message
Alice Brooks, co-founder of Roominate, toys meant to promote girls’ interest in science, tech and engineering

Alice Brooks

Listen to my full interviews with Tina and Alice by downloading them from SoundCloud here and here

(And download any of the past shows here.)

Clips from their interviews are below.

Tina Fitch  thrives on building products that enable real-world experiences. Before co-founding Hobnob , she founded Switchfly, a SaaS platform that continues to work with airlines, hotel chains, payment companies, and loyalty programs in. She returned to her home state of Hawaii to become a mentor and advisor to tech accelerators and startups, and a parent of two before launching Hobnob.

In both of her startups, Tina did a lot of customer discovery to understand customer problems and see if her products offered the right solution. Here’s what she learned about managing customer feedback:

When you sell into the enterprise, there’s a very fine line between making your customers happy and potentially having them influence the product a little bit too heavily.  

You have to have conviction in your product to balance making them happy, but not necessarily changing your entire product priorities based on what they think they currently need.

The more that people pay you, the more influence they feel they should have, but they don’t necessarily know what solution they want.

You have to have enough conviction in your own vision of how you’re going to solve that problem for them to be able to take all those data points and feedback they gave you, then make a better solution for them.  

 

If you can’t hear the clip, click here

Alice Brooks is the co-founder of Roominate . She grew up playing in her dad’s robotics lab and made her first toy when she was 8 years old using a saw she received for Christmas instead of the Barbie she asked for.

Alice graduated from the Massachusetts Institute of Technology with a B.S. in mechanical engineering and holds a master’s in mechanical engineering from Stanford.

With Roominate, Alice wanted to build a toy that would encourage girls to explore science, technology and engineering. She and her co-founder, Bettina Chen, didn’t have kids of their own, so before designing the product, they did a lot of user testing:

We went out into people’s homes and watched girls play with their favorite toys and asked what they liked about them, what they didn’t like. We saw a lot of dolls – Barbies, American Girl dolls – and we saw a lot of doll houses.

We brought some building toys with us to see how girls would interact. We found they liked that just as much, but it was all about the story they were telling around them and the context that they put it in.  

With Roominate, we give them the context of ‘this is what you can with your dolls in.’ Introducing it that way first opened the door. All of a sudden they wanted to build and add more circuits.

If you can’t hear the clip, click here

During customer discovery, Alice learned a critical lesson about gathering customer feedback:

Customers will try to be polite to you and tell you want you want to hear.

We did a testing session with a group of girls where we had to make this spinning-disco-ball-dance party. We were trying to use circuits and build together in some way. They all seem like they really like it. They were dancing to Rihanna with it.

The next day, their dad calls us up, and says, “Kate didn’t want to upset you, but she told me it was very stupid. She asked me not to tell you.”

That’s how we started figuring out ways to get more honest feedback, always following up with the parents the next day.

If you can’t hear the clip, click here

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Tina explained what’s different about starting up a second time:

I remember reading various business books or reading about different entrepreneurial journeys, and I thought at that time probably arrogantly that, oh, I’m never going to make those types of mistakes, I’m too smart for that. And I probably, the first time around, made every single one of them, everything from challenges with co-founders or investors or board members or clients.

The second time around, I not only have the confidence of experience, but I also have the confidence in my own instincts.

If you can’t hear the clip, click here

In her first startup, she quickly learned that everyone has suggestions and advice for how to do things, but that a founder must stand up for their vision:

It’s important to take data points and advice from people, whether they’re your peers, advisors or your board members. But ultimately, you’re going to have to bear the weight of your decision and you can’t point a finger at anyone else.  

You have to have that courage of conviction of your own instincts and believe wholeheartedly at your core that what you’re doing is the right thing.  

If you can’t hear the clip, click here

Having now done two startups, Tina is struck by the different leadership skills needed to build and manage a company:

All the skills that get you to a position where you’re building something and going against the grain – the competitiveness, the aggressiveness, almost like the Darwinistic approach to success – are different from the skills you need to run a company.

As manager, you really have to shift gears and become more of a communicator. You have to have empathy for your team and learn how to get the best performance out of people.  

If you can’t hear the clip, click here

She was also surprised to find that being a founder can be isolating:

When you’re a founder of a company, it becomes almost part of your very being.  

Bearing that responsibility day in and day out and feeling the weight of ownership over not only a product, but your team and their welfare and your community of users and their happiness becomes a very hard and lonely experience a lot of times.

If you can’t hear the clip, click here

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Alice and her team made it point to not just get customer insights but to understand all aspects of their business model.

That included getting first-hand knowledge of how their manufacturers operate:

We spent two weeks in China getting to know our manufacturers face-to-face and understanding what it would take to build this product; what trade-offs we needed to make; and what we could do now, what other opportunities there were.

It was beyond helpful. When we first started setting up our manufacturing, we were using a go-between, and we didn’t understand what was really happening.

Once we got there, walked the factory and saw all the different machines they had, we got to know our manufacturer, how they do business. It was really helpful not just for that first launch, but as we grew the company and as we tried to expand knowing how business was done over there.

If you can’t hear the clip, click here

Once they found product-market fit, they launched quickly.

We had a prototype version so you could get the idea. We had to work very quickly to then make it a real product, and we did. From the start of our Kickstarter to when we actually shipped to customers was less than seven months. It was a very quick turnaround, which often doesn’t happen these days with companies.  

We didn’t have any funding. We didn’t have any money ourselves to spend, so we didn’t do any kind of hype around the launch. It was all just people that we’d met and tested with that were excited about the idea and shared it out to people. I don’t know if that would work now.

 

If you can’t hear the clip, click here

As a first-time founder, Alice had a steep learning curve. Her advice for other first-time founders is be prepared to work hard:

It gets to be more and more work as you go.

There’s this image when you’re a student thinking about being an entrepreneur that it’s going to be really glamorous and you’re going to do your product and raise a bunch of funding and then you’re going to be set. The reality is the more you do, the higher the stakes become. You become responsible to a lot of different stakeholders.  

The exciting part is you can actually get your ideas and your designs out there into real people’s hands so much faster than you could by going a different route.

If you can’t hear the clip, click here

Listen to my full interviews with Tina and Alice by downloading them from SoundCloud here and here (And download any of the past shows here.)

Coming up next on the blog: Dakin Sloss , founder of Tachyus ; and Ajeet Singh , co-founder of ThoughtSpot .

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111 to hear these upcoming guests on Entrepreneurs are Everywhere :

Sept. 22 : Siggi Hilmarrson, founder and CEO of Siggi’s Dairy; and Jonathan Hirsch, founder and president of Syapse
Sept. 29 : Julie Cottineau, founder and CEO of BrandTwist; and Rich Fulop, co-founder of Brooklinen
Oct. 6 : David Taylor, founder of Crudefunders; and Bill Keenan, chairman and CEO of Pango Financial
Oct. 13 : George Zimmer, founder of Men’s Wearhouse and now founder, chairman and CEO of Generation Tux; and Scott Adams, creator of Dilbert

Filed under: Customer Development, SiriusXM Radio Show

7 Steps to Hacking for Defense

Filed under: Hacking For Defense, Teaching

The Innovation Insurgency Scales – Hacking For Defense (H4D)

Hacking for Defense is a battle-tested problem-solving methodology that runs at Silicon Valley speed. We just held our first Hacking for Defense Educators Class with 75 attendees.

The results: 13 Universities will offer the course in the next year, government sponsors committed to keep sending hard problems to the course, the Department of Defense is expanding their use of H4D to include a classified version, and corporate partners are expanding their efforts to support the course and to create their own internal H4D courses.

It was a good three days.

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Another Tool for Defense Innovation

Last week we held our first 3-day Hacking for Defense Educator and Sponsor Class. Our goal in this class was to:

Train other educators on how to teach the class at their schools.
Teach Department of Defense /Intelligence Community sponsors how to deliver problems to these schools and how to get the most out of student teams.
Create a national network of colleges and universities that use the Hacking for Defense Course to provide hundreds of solutions to critical national security problems every year.

What our sponsors have recognized is that Hacking for Defense is a new tool in the country’s Defense Innovation toolkit. In 1957 after the Soviet Union launched the Sputnik satellite the U.S. felt that it was the victim of a strategic technological surprise. DARPA was founded in 1958 to ensure that from then on the United States would be the initiator of technological surprises. It does so by funding research that promises the Department of Defense transformational change instead of incremental advances.

By the end of the 20th century the Central Intelligence Agency (CIA) realized that it was no longer the technology leader it had been when it developed the U-2, SR-71, and CORONA reconnaissance programs in the 1950’s and 1960’s. Its systems were struggling to manage the rapidly increasing torrent of information being collected. They realized that commercial applications of technology were often more advanced than those used internally. The CIA set up In-Q-Tel to be the venture capital arm of the intelligence community to speed the insertion of technologies. In-Q-Tel invests in startups developing technologies that provide ready-soon innovation (within 36 months) vital to the IC mission. More than 70 percent of the In-Q-Tel portfolio companies have never before done business with the government .

In the 21st century the DOD/IC community have realized that adversaries are moving at a speed that our traditional acquisition systems could not keep up with. Hacking for Defense combines the rapid problem sourcing and curation methodology developed on the battlefields in Afghanistan and Iraq by Colonel Pete Newell and the US Army’s Rapid Equipping Force with the Lean Startup practices that I pioneered in Silicon Valley and which are now the mainstay of the National Science Foundations’ I-Corps program. Hacking for Defense is a problem-solving methodology that offers the DOD/IC community a collaborative approach to innovation that provides ready-now innovation (within 12-36 months).

Train the Trainers

Pete Newell, Joe Felter and I learned a lot developing the Hacking for Defense class, more as we taught it, and even more as we worked with the problem sponsors in the DOD/Intel community. Since one of our goals is to make this class available nationally, now it was time to pass on what we had learned and to train other educators how to teach the class and sponsors how to craft problems that student teams could work on.

(If you want a great overview of the Hacking for Defense class, stop and read this article from War on The Rocks. Seriously.)

When we developed our Hacking for Defense class, we created a ton of course materials (syllabus, slides, videos). In addition, for the Educator Class we captured all we knew about setting up and teaching the class and wrote a 290-page educator’s guide with suggested best practices, sample lesson plans, and detailed lecture scripts and slides for each class session. We developed a separate sponsor guide with ideas about how to get the most out of the student teams and the university.

The Educator Class: What We Learned

One of the surprises for me was seeing the value of having the Department of Defense and other government agency sponsors working together with the university educators.  (One bit of learning was that the sponsors portion of the workshop could have been a day shorter.)

Two other things we learned has us modifying the pedagogy of the class.

First, our mantra to the students has been to learn about “Deployment not Demos.” That meant we were asking the students to understand all parts of the mission model canvas, not just the beneficiaries and the value proposition. We wanted them to learn what it takes to get their product/service deployed to the field, not just have another demo to a general. This meant that the minimal viable products the students built were focused on maximizing their learning of what to build, not just building prototypes. While that worked great for the students, we learned from our sponsors that for some them getting to deployment actually required demos as part of the means to reach this end. They wanted the students to start delivering MVPs early and often and use the sponsor feedback to accelerate their learning.

This conversation made us realize that we had skewed the class to maximize student learning without really appreciating what specific deliverables would make the sponsors feel that the time they’ve invested in the class was worthwhile. So for our next round of classes we will:

require sponsors to specifically define what success from their student team would look like
have students in the first week of class present what sponsors say success looks like
still encourage MVPs that maximize student learning, but also recognize that for some sponsors, learning could be accelerated with earlier functional MVPs

Our second insight that has changed the pedagogy also came from our sponsors. As most of our students have no military experience, we teach a 3-hour introduction to the DOD and Intel Community workshop. While that provides a 30,000-foot overview, it doesn’t describe any detail about the teams’ specific sponsoring organization (NSA, ARCYBER, 7th Fleet, etc.). (By the end of the quarter every team figures out how their sponsor ecosystem works.) The sponsors suggested that they offer a workshop early in the class and brief their student team on their organizations, budget, issues, etc.  We thought this was a great idea as this will greatly accelerate how teams target their customer discovery.  When we update the sponsor guide, we will suggest this to all sponsors.

Another surprise was how applicable the “Hacking for…” methodology is for other problems. Working with the State Department we are offering a Hacking for Diplomacy class at Stanford starting later this month. And we now have lots of interest from organizations that have realized that this problem-solving methodology is equally applicable to solving public safety, policy, community and social issues internationally and within our own communities. We’ll soon launch a series of new modules to address these deserving communities.

Lessons Learned

Hacking for Defense = problem-solving methodology for innovation insurgents inside the DOD/Intel Community
The program will scale to 13+ universities in 2017
There is demand to apply the problem-solving methodology to a range of public sector organizations where success is measured by impact and mission achievement versus revenue and profit.

Filed under: Hacking For Defense, Hacking for Diplomacy, Science and Industrial Policy

Entrepreneurs are Everywhere Show No. 41: Chris Schroeder and Andy Cunningham

There are only two emotions in startups — utter ebullient enthusiasm and outright terror.

Here’s the big thing about tech companies: They all believe that if they build it, the world will come, but it doesn’t really work that way.

The reality distortion you create is imperative to be able to believe what you’re doing, and get the people around you to believe what you’re doing. But you must find ways to check those realities.

A founder’s conviction will help get a startup off the ground. Hubris can kill it.

Why it’s important for entrepreneurs to temper confidence with regular reality checks was the focus of the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Chris Schroeder

Joining me in the Stanford University studio were

Chris Schroeder, Internet/media CEO, venture investor and author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East
Andy Cunningham, founder and CEO of Cunningham Collective

Andy Cunningham

Listen to my full interviews with Chris and Andy by downloading them from SoundCloud here and here

(And download any of the past shows here.)

Clips from their interviews are below.

Chris Schroeder is an American entrepreneur, advisor and investor in interactive technologies and social communications.  

He wrote the first book on startups in the Arab World, Startup Rising: The Entrepreneurial Revolution Remaking the Middle East, and was previously the CEO and Publisher of washingtonpost.newsweek interactive and co-founder of HealthCentral.com , sold in 2012.

In his work with startups, Chris notices that founders tend to think investors hold some magic key to their success. He reminds them to look to themselves:

Don’t be in awe of money. I think across the board, young people think that if all that happens, if Sequoia invested in my company, everything will get taken care of.

First of all, most of your customers don’t know or care who any of these venture firms are.

Second, the individuals who invest in you are invariably more important than the venture firms themselves. For customers t he venture firm brands don’t matter. For you and your startup it’s the individuals inside those firms who will either make your life miserable or who really understand what it takes to help you build your company. It’s your company. You are the entrepreneur.

Just because someone happens to have access to wealth, more often than not, they haven’t done what you’ve done. They don’t know what you do.

If you can’t hear the clip, click here

And while believing in oneself is critical, it’s equally important for a founder to validate his vision, he says:

You create a reality distortion field, and the power of your narrative is to be able to believe what you’re doing, get the people around you to believe what you’re doing, and to get employees passionately dedicated to work it.

But there’s a very fine line between believing your own spin and taking a dispassionate views of what you’re doing and not getting lost in your own narratives.

You must find ways –without getting caught in 360 degrees of advice– to check those realities, because you can get trapped by naysayers who say it can’t happen or it’s a bad idea. But on the other hand, you can believe in things so deeply and just sort of get trapped in believing in your own idea.  

If you can’t hear the clip, click here

Andy Cunningham is the founder and president of Cunningham Collective, a brand strategy firm dedicated to bringing innovation to market.

Andy came to Silicon Valley in 1983 to work for Regis McKenna and help Steve Jobs launch the Macintosh. When Steve left Apple to form NeXT, he chose Cunningham Communication to represent him. Andy continued to work with Steve for several years and has developed marketing, branding and communication strategies for game-changing technologies and companies ever since.

An entrepreneur at the forefront of marketing, branding, positioning and communicating “The Next Big Thing,” she has played a key role in the launch of a number of new categories including video games; personal computers; desktop publishing; digital imaging; RISC microprocessors; software as a service; very light jets; and clean tech investing. She is an expert in creating and executing marketing, branding and communication strategies that accelerate growth, increase shareholder value and advance corporate reputation.  

Andy says world-class founders exude confidence and refuse to listen to the naysayers:

You have to believe in yourself and realize that it’s lonely at the top. If you can live with being lonely and if you can believe in yourself, then just go for it.

Be crazy, be wild, just go for it and don’t listen to anybody telling you that it can’t be done.

If you can’t hear the clip, click here 

However, to be successful, founders must be more than confident and passionate, she says:

Here’s the big thing about tech companies: They all believe that if they build it, the world will come.

You have to believe that because it’s all about believing in yourself, but it doesn’t really work that way. That’s where marketing comes into play.

If you can’t hear the clip, click here

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Chris said the hardest thing about doing an internal startup at the Washington Post was to convince others in the company to share his vision for the new interactive product:

I probably spent 30 percent of my time in shuttle diplomacy between departments inside the Washington Post, convincing them that if we did not leap into the future, the future would be would be taken from us.  

The good news was that you had amazing clay to play with –  amazing content, amazing journalists and journalism – and you could rethink worlds powerfully.  

The down side of it was a lot of the legacy businesses at the Washington Post, particularly on the business side, didn’t understand the interactive and online business and felt threatened by us.

If you can’t hear the clip, click here

Keeping the interactive unit separate from the rest of the company helped, he said. But he wonders if the company could have made a bigger move:

They were very smart to break us off. We were a separate company completely, reporting to the Board in a separate physical space and for a time, to give us cover, I think that was important – at first.

What ended up happening, however, was we were eventually subsumed under the traditional media business. I think the one audacious step would have been the reverse that, have the print people working for the interactive people.  At the end that what’s happening to journalism and the Washington Post.

If you can’t hear the clip, click here

Here’s how Chris compares his intrapreneurial experience at the Washington Post with what it was like to do a startup:

There are only two emotions in startups — utter ebullient enthusiasm and outright terror.  

The good news is that when I was doing HealthCentral, I didn’t have to ask anybody’s explanation for anything, I didn’t have to worry about newspaper circulation being affected as I did in the intrapreneurial experience I had at the Washington Post.

The bad news is that as a startup founder you have no brand, you have no balance sheet, you have investors behind you, you have employees that you’re responsible for, you have an impact you’re trying to make on people’s lives while building a business. Every day was a sine wave of highs and lows of figuring that out.

If you can’t hear the clip, click here

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Andy explained that, years ago, a PR person’s was to turn so-called influencers like journalists and analysts into advocates for your client. That goal hasn’t changed, but the playing field has:

What I do today is what I really did in the old days, which is to make sure that the story is differentiated and compelling.

When there was only a small number of influencers, it was a little bit easier to do. Now today, there are zillions of influencers and they don’t have to be anyone famous. They can just be somebody who writes a blog.

With social media and with bloggers and with the cable TV and all the different networks that you can get on television and radio like this, everybody you look at is an influencer now. It’s a lot harder to target it.

If you can’t hear the clip, click here

The way to get influencers’ attention is to show how you’re different from everyone else. This is called positioning and it’s different from marketing. Here’s how Andy did explained it to a client:

I reverse-engineered the process that I’d been going through for decades and out of all the hundreds and hundreds of companies I’d worked with, there was really only three types of companies.

First, there are product-oriented companies, like Microsoft or Oracle;

Second, there are customer-oriented companies like Zappos or Airbnb; and

Third, there are concept-oriented companies like Apple was in the early days.  

I gave product-oriented companies the nickname of mechanics, I gave customer-oriented companies the nickname of mothers and I gave concept-oriented companies the nickname of missionaries.

In the end, it’s about how you tell the story, and the center of that story has to be a differentiated statement about your role and your relevance in the market.

If you can’t hear the clip, click here

Positioning must be authentic, she stresses:

Here’s the thing about great positioning or great PR: You have to be aligned with who you are.

It’s like I can’t go out into the marketplace and convince people that I am a blonde ballerina. I’m not blonde and clearly I’m no ballerina. Because my DNA tells me I’m really more like a racquetball player I can’t pretend to be a ballerina for very long before I get found out.  

The same is true with companies. If you’re a product-oriented company and you want to be a missionary — which many of them do, in a very short amount of time the marketplace will find out you’re not authentic.

You have to align who you are, your DNA, with how you position yourself in the marketplace.

If you can’t hear the clip, click

Listen to my full interviews with Chris and Andy by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere : Sunny Shah , assistant director of the Engineering, Science & Technology Entrepreneurship Excellence Master’s Program at the University of Notre Dame and Curt Haselton , co-founder of the Haselton Baker Risk Group .

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com  describing your entrepreneurial journey.

Filed under: Customer Development

Entrepreneurs are Everywhere Show No. 42: Sunny Shah and Curt Haselton

We as researchers go in with a bias – that obviously these guys want our technology – but that is not the case for a lot of customers. What you think about your technology is great, but at the end of the day you’re not the one buying it.

It was intimidating from day one. I am good with doing research and doing experiments but talking to customers is not my forte.

Scientific research it is hypothesis-driven. You’re just guessing and then trying to prove it true or false. This whole commercialization side of things is not that much different

For scientific researchers who want to commercialize their technology, doing a startup first pulls them out of their comfort zone. But then the Lean Startup’s scientific method of validating their business idea quickly has them feeling right at home.

What it’s like to go from the comfort of the lab bench to the chaos of a startup was the focus of the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Sunny Shah

Joining me in the Stanford University studio were

Sunny Shah, assistant director and faculty of the ESTEEM Graduate Program at the University of Notre Dame
Curt Haselton, co-founder and CEO of Haselton Baker Risk Group

Curt Haselton

Listen to my full interviews with Sunny and Curt by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Sunny Shah is an Assistant Director for the ESTEEM Graduate Program at the University of Notre Dame.  In addition he conducts research with Dr. Hsueh Chia Chang in Chemical Engineering. Sunny received his Ph.D. from University of California, Davis in Biomedical Engineering. For his doctoral work, his research focused on liver tissue engineering and stem cell differentiation.

Sunny’s startup idea emerged from a diagnostic tool he’d developed in his lab to detect pathogens. He thought it might have an application in the food service industry and so leapt at the chance to join the National Science Foundation Innovation Corps.

He was initially overwhelmed:

It was intimidating from day one. I was out of my comfort zone. I am good with doing research and doing experiments but here there are these four teaching faculty trying to infuse into us to find the need and then see if your problem fits the need.

The only way to do that is by going out and talking to the customers who would eventually buy this. We’re used to just talking to scientists, but here they were asking us in six weeks to do a 100 interviews. Not on the phone, not over Skype but in-person interviews with potential customers.

I’ve never talked to people at food processing plants and meat processing plants.

On our flight back from the workshop, I was trying to come up with excuses to drop out of the program. I thought, ‘This is not something I signed up for. I’m interested in the commercialization side but this fast-paced talking to the customers is not my forte.’

But we stuck with it. We found people to talk to through Google searches. We went to the USDA list and found whatever meat processing plants they inspect and food processing plants they inspect, and went from there.  

If you can’t hear the clip, click here

Once he found customers, he had to speak with them. Here’s what he did, and why he had a change of heart about I-Corps that marked a career pivot for him:

I started not even cold calling; it was cold showing up. There were a couple streets, the meat district of Chicago, and I just started knocking on doors.

I was afraid these guys weren’t going to understand what I was doing but it turned out that once you get in the door and start talking to them about how they do testing for pathogens right now, that’s when you saw them open up.

That’s when I realized that this is something I can do because even though it is uncomfortable for me, they are very interested in talking, they just want a sounding board and that’s what I wanted to be.  

 

If you can’t hear the clip, click here

I realized the importance of talking to customers, listening and learning from them. The more you talk to them you start seeing how painful it was for them.  

They said, ‘We currently have detection techniques that take two days and while we wait for the results we have to store the food.’  What that meant was that until the test results came back the food can’t ship and that’s lost revenue for them. In talking about how expensive the costs of that two-day delay are for them we could start seeing that maybe our research could help these people.  

For me, it was seeing not just what goes on the bench in our lab but there is some sort of real-world application for it.

And to hear it from these people who are not scientists, that was kind of cool.

If you can’t hear the clip, click here

Curt Hazleton is a leader in structural earthquake engineering, focusing on building code development, building collapse safety assessments, and earthquake damage loss estimation. He’s a co-founder and CEO of HB Risk, and a Professor and Department Chair in Civil Engineering at California State University, Chico. He received his Ph.D. in Structural Engineering from Stanford University in 2006. Among his awards, Curt received the 2013 Shah Family Innovation Prize from the Earthquake Engineering Research Institute, honoring an individual under the age of 35 for creativity, innovation and an entrepreneurial spirit in earthquake risk mitigation and management.

Like Sunny, Curt participated in the NSF I-Corps and quickly learned how illuminating customer interviews could be:

We were extremely surprised that by simply getting out of the building and using the customer discovery process you can go and interview people and they’ll tell you exactly what they need and what you can build for them and how much they’ll pay for it.  

If you can’t hear the clip, click here

In doing customer discovery, Curt and his co-founder started out with one customer in mind, but quickly found a more lucrative option:

We initially started with the structural engineers as our target market because that’s what we knew. That’s where we saw the initial need.

As we went through that it’s been verified that there is a market there and they’re interested, but we’ve also seen there’s another market that we call the risk-pricing market. Those are the people insuring the buildings and underwriting the mortgages for the buildings.

They care more. Engineers care about the design of the building, absolutely, but they’re not the ones with the money on the line.

If you can’t hear the clip, click here

Along the way, they met both skeptics and visionaries:

The difference between early adopters and mainstream people was very interesting, especially in the emerging market on the structural engineering side.

The early adopters would see the vision that we see. I was told by one of them it doesn’t even make sense that not everybody is adopting this right away today, because in five years everyone’s going to be doing it.

Then I’d go to people that I would characterize mainstream and they’d say, “Well, it doesn’t meet a need that we have right now.”

We had to take both pieces of feedback and realize it was an emerging market and not everyone would see the vision.

Since then, a few of those skeptic mainstream people have actually come back to us for licenses once they’ve had clients that want this done for them.

If you can’t hear the clip, click here

—

Ultimately, Sunny and his co-founders killed their startup idea

We decided as a team that there was no match between what we’d learned in customer interviews about where the need was and what we were providing.

We decided we shouldn’t pursue this market.

It was tough at first but when you think about it, we saved time and money. That was the whole point of the exercise.

If you can’t hear the clip, click here

Today he teaches his students at Notre Dame how to use Lean Startup principles. He tells them:

Scientific research it is hypothesis-driven. You’re just guessing and then trying to prove it true or false. This whole commercialization side of things is not that much different. It’s a scientific method.

What you think about your technology is great, but at the end of the day you’re not the one who will be buying this, it will be the customers who will be buying this. The only way to know what they want is to get out of the building and talk to them.

If you can’t hear the clip, click here

Curt said the pace of startup life surprised him

I made more progress in the startup in the first four months than I did in the first four years as an academic chair.  

That doesn’t mean we didn’t make progress in the department. We made a lot. It’s just a different nature. The startup pace has been a lot of fun.

If you can’t hear the clip, click here

Here’s his advice for other academics with tech ideas they’d like to commercialize:

Most researchers come at it with, “I have a product that I really love and I think someone should buy it from me,” and don’t come at it from, “There’s a need in the industry somewhere and I can create something to fill that need.”  

Getting as quickly away from that first approach as possible would be my first recommendation, because in the Innovation Corps process we clearly saw that.  

Most people said, “I have this great technology. I’ve never been out of my lab. I think someone will want to buy it from me,” but the commercial side of it wasn’t there.

You need to get at, “Does anyone care? Does anyone want to buy it?” as quickly as possible.

If you can’t hear the clip, click here

Listen to my full interviews with Sunny and Curt by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Coming up next on the blog: Tina Fitch, co-founder and CEO of Hobnob; and Alice Brooks, co-founder and CEO Roominate

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111 to hear these upcoming guests on Entrepreneurs are Everywhere:

Sept. 22 : Siggi Hilmarrson, founder and CEO of Siggi’s Dairy; and Scott Adams, creator of Dilbert
Sept. 29 : Julie Cottineau, founder and CEO of BrandTwist; and Chase Jarvis, founder and CEO of Creative Live
Oct. 6 : Jonathan Hirsch, founder and president of Syapse; and George Zimmer, founder of Men’s Wearhouse and now founder, chairman and CEO of Generation Tux
Oct. 13 : David Taylor, founder of Crudefunders; and Bill Keenan, chairman and CEO of Pango Financial

  Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show

Working Hard is not the same as working smart

Measuring how hard your team is working by counting the number of hours they work or what time they get in and leave is how amateurs run companies. The number of hours worked is not the same as how effective they (and you) are.

I had been invited by Rahul, one of my students from long ago, to stop in and see how his startup was doing.  Actually startup would be a misnomer as Rahul had built a great company, now over $50M in annual revenue with hundreds of employees.

We were scheduled for dinner, but Rahul invited me over in the afternoon to sit in on a few of his staff meetings, get some product demos, admire the furniture and the café, and get a feel of the company.

Before we left for dinner I asked about the company culture and the transition from a startup to a company. We talked about how he was on-boarding new employees, managing scale by writing operations manuals for each job function, and publishing company and department mission and intent (he said he got the idea from reading my blog posts on mission and the one on innovation culture). It was all impressive – until we got on the subject of how hard his employees worked. His response reminded me what an idiot I had been for most of my career – “Our team knows this isn’t a 9-5 company. We stay as long as it takes to get the job done.” I looked a bit dumbfounded, which I think he took for impressed, because he continued, “most days when I leave at 7 pm my employees are still hard at work. They stay all hours of the night and we often have staff meetings on Saturdays.”

I cringed. Not because he was dumb but because for most of my career I was equally clueless about what was really happening. I had required the same pointless effort from my teams.

Our dinner was scheduled for 7:15 around the corner so we headed out at 7, announcing to his staff he was off to dinner. As soon as we got outside his building and into the full parking lot I asked Rahul if he could call the restaurant and tell them we were going to be late. I said, “Let’s just wait across the street from your company’s parking lot and watch the front door. I want to show you something I painfully learned way too late in my career.” He knew me well enough to patiently stand there.  At 7:05, nothing happened. “What am I supposed to be seeing?” he asked. “Just wait,” I replied, hoping I was right. At 7:10 still no movement at the front door. By now he was getting annoyed, and just as he was about to say, “let’s go to dinner” the front door of the company opened – and a first trickle of employees left. I asked, “Are these your VPs and senior managers?” He nodded looking surprised and kept watching.  Then after another 10-minute pause, a stream of employees poured out of the building like ants emptying the nest. Rahul’s jaw dropped and then tightened. Within a half-hour the parking lot was empty.

There wasn’t much conversation as we walked to dinner. After a few drinks he asked, “What the heck just happened?”

21st-Century Work Measured by 20th-Century Custom and Cultural Norms

In the 20th century we measured work done by the number of hours each employee logged. On an assembly line each employee was doing the same thing, so productivity simply equaled hours worked. Employees proved they were at work by using time cards to measure attendance. (Even today the U.S. government still measures its most creative people with a time-management system in 15-minute increments.)

Even as white collar (non-hourly) jobs proliferated, men (and the majority of workforce management was men) equated hours with output. This was perpetuated by managers and CEOs who had no other norms and never considered that managing this way was actually less effective than the alternatives.

I pointed out to Rahul that what he was watching was that his entire company had bought into the “culture of working late” – but not because they had work to do, or it was making them more competitive or generating more revenue, but because the CEO said it was what mattered. Every evening the VPs were waiting for the CEO to leave, and then when the VPs left everyone else would go home. Long hours don’t necessarily mean success. There are times when all-nighters are necessary (early days of a startup, on a project deadline) but good management is knowing when it is needed and when it is just theater.

Rahul’s response was one I expected, “This is what we did in investment banking at my first job in my 20s. And my boss rewarded me for my “hard work.” Sleeping at my desk was something to be proud of.”

I completely understood; I learned the same thing from my boss.

Productivity

The rest of the dinner conversation revolved around, if not hours worked what should he be measuring, when is it appropriate to ask people to work late, burnout, and the true measures of productivity.

Lessons Learned

Define the output you want for the company getting input from each department/division

Use Mission and Intent to create those definitions and the appropriate metrics for measuring them
Publish and communicate widely
Provide immediate feedback for course correction


Define the output you want for each department

Define mission and intent for the department
Create the appropriate metrics for each employee to match mission
Measure and document output at appropriate intervals (daily, weekly, monthly, etc.)
Publish and communicate widely
Provide immediate feedback for course correction


Ensure that the system does not create unintended consequences

Filed under: Family/Career/Culture

The National Geospatial Intelligence Agency Goes Lean

We tend to associate the government with words like bureaucracy rather than lean innovation. But smart people within government agencies are working to change the culture and embrace new ways of doing things. The National Geospatial Intelligence Agency (NGA) is a great example.

The NGA, an organization within the U.S. Department of Defense, delivers geospatial intelligence (satellite imagery video, and other sensor data) to policymakers, warfighters, intelligence professionals and first responders.

A team from their Enterprise Innovation Office has joined us at NYU as observers at our 5-day Lean LaunchPad class, while another team is in Silicon Valley with the Hacking for Defense team learning how to turn their hard problems into partnerships with commercial companies that lead to deployed solutions.

The Innovation Insurgency

Over the last year the National Geospatial Intelligence Agency (NGA) has become part of the “Innovation Insurgency” inside the U.S. Department of Defense by adopting Lean Methodology inside their agency.

In July the NGA hosted the inaugural 2016 Intelligence Community Innovation Conference with attendees from across the Department of Defense and public sector. At the conference Vice Chairman of the Joint Chiefs of Staff Air Force Gen. Paul Selva said, “Implementing innovation [in the government and large organizations] is like a turning battleship, you may have an upset crew with cooks having to clean up spilled food and sailors falling out of beds but that ship can turn with effort. The end result is often that change can happen but it is going to come at the cost of disruption and difficulty.”

The good news for the country is that the leadership of the National Geospatial Intelligence Agency has decided to turn the ship now.

To connect to innovation centers outside the agency, their research group has set up “NGA Outpost Valley” (NOV), an innovation outpost in Silicon Valley. The NOV is building an ecosystem of innovative companies around NGA’s hard problems to rapidly deploy solutions to solve them.

To promote innovation inside the NGA, they’ve staffed an Enterprise Innovation Office (EIO) to coach, educate and advise the entire agency, from core leadership to the operational edges, with methods and concepts of validated learning through rapid experimentation and customer development.

The NGA has adopted Lean Innovation methods to make this happen. The process starts by collecting agency-wide ideas and/or customer problems, collecting a group insight, and sorts which problems are important enough to pursue. The innovation process uses the Value Proposition canvas, customer development and the Mission Model Canvas to validate hypotheses and deliver minimum viable products. This process allows the agency to rapidly deliver projects at speed.

To help start this innovation program the NGA’s Enterprise Innovation Office has had their innovation teams go through the already established Innovation-Corps classes at the National Security Agency (NSA), and they’re about to stand up their own Innovation-Corps curriculum inside the NGA. (The Innovation-Corps (I-Corps for short) Program is the Lean Innovation class I developed at Stanford and teach there and at Berkeley, Columbia and NYU. It was first adopted by the National Science Foundation and is now offered at 54 universities, and starting last year taught in all research agencies and the DOD.)

This past week a team from the NGA’s Enterprise Innovation Office observed the 5-day Lean LaunchPad class I’m teaching at NYU.  Their goal is to integrate these techniques into their own Lean innovation processes. From their comments and critiques of the students, they’re more then ready to teach it themselves.

At the same time the NGA Outpost Valley team was in Silicon Valley going through a Hacking for Defense workshop (we call a “sprint.”) Their goal was to translate one of their problems into a language that commercial companies in the valley could understand and solve, then to figure out how to get the product built and deployed. Like other parts of the Department of Defense (the Joint Improvised Threat Defeat Agency (JIDA) and the Defense Innovation unit Experimental (DIUX),)  NGA’s Outpost Valley team is using a Hacking for Defense sprint to build a scalable process for recruiting industry and other partners to get solutions to real problems deployed at speed.

Putting lean principles into NGA’s acquisition practices

As part of the Department of Defense, the NGA acquires technology and information systems through the traditional DOD’s acquisition system – which has been described as the antitheses of rapid customer discovery and agile practices. The current acquisition system seldom validates whether a promised capability actually works until after the government is locked into a multiyear contract, and fixing those problems later often means cost overruns, late delivery, and under performance.  And as any startup will tell you, the traditional government acquisition processes create disincentives for startups to participate in the DOD Market. Few startups know where and how to find opportunities to sell to the DOD, they seldom have the resources or expertise to navigate DOD bureaucratic procurement requirements, and the 12 plus months it takes the government to enter into a contract makes it cost prohibitive for startups.

A year ago Sue Gordon, the deputy director of the NGA, sent out an agency-wide memo that said in part, “…we must build speed and flexibility (agility) into our acquisition processes to respond to those evolutions. It is our job to acquire the technologies, data and services that NGA and the NSG need to execute our mission in the most effective, efficient and timely manner possible …”

In addition to NGA’s internal Lean Innovation process and innovation outpost in Silicon Valley, they are starting to use open innovation and crowdsourcing to attract commercial developers to tackle geospatial intelligence problems.

This week the NGA posted its first major open Challenge  – The NGA Disparate Data Challenge– on Challenge.gov, the U.S. government’s open innovation and crowdsourcing competition. Government agencies like the NGA can use the site to post challenges and award prizes to citizens who  find the best solutions. Putting a challenge on a crowdsourcing platform is a groundbreaking activity for the agency and opens the possibility for a number of benefits. 

Presenting a problem instead of a set of requirements to startups leaves the window open to uncover unknown solutions and insights
Setting up the challenge in two stages hopefully gets startups to participate while learning about the NGA and its technical needs
Asking for working solutions offers the potential for minimal viable acquisition to quickly validate who can solve the problem prior to committing large sums of taxpayer funds
Finding solutions at speed by shrinking the timeline for determining the viability of a solution without the need for executing any large scale contract.

The NGA Disparate Data Challenge has two stages.

Stage 1: teams have to demonstrate access and retrieval to analyze NGA provided datasets. (This data is a proxy for the difficulties associated with accessing and using NGA’s real classified data.)  Up to 15 teams who can do this can win $10,000.  And the winners get to go Stage 2.
Stage 2: the teams demo their solutions and other features they’ve added against a new data set live to an NGA panel of judges, in hackathon style competition. First place will take an additional $25,000; second $15,000; and third $10,000 with an opportunity to be part of a competitive pool for a future pilot contract with NGA.

NGA’s challenge is its first attempt to attract startups that otherwise would not do business with the agency. It’s likely that the prize amounts ($10-$25K) may be off by at least one order of magnitude to get a startup to take their eye off the commercial market. Curating a crowd and persuading them to work together because the work meets their value proposition is hard work that takes incubation not just prizes. However, this is a learning opportunity and a great beginning for the Department of Defense.

Challenges in Embracing Innovation in Government Agencies

Innovation in large organizations are fraught with challenges including; building an innovation pipeline without screwing up current product development, educating senior leadership and (at times intransigent) middle management about the difference between innovation and execution, encouraging hands-on customer development, establishing links between department and functional silos that don’t talk to each other (and often competing for resources), turning innovative prototypes and minimum viable products into deliverable products to customers, etc.

Government agencies have all these challenges and more. Government agencies have more stringent policies and procedures, federally regulated oversight and compliance rules, and line-item budgets for access to funding. In secure locations, IT security can hinder the simplest process while a lack of access to a physical collaboration space and access to data, all set up additional barriers to innovation.

The NGA has embraced promising moves to bring lean methods to the way they innovate internally and acquire technology. But what we’ve seen in other agencies in the Department of Defense is that unless the innovation process is run by, coached and scaled by innovators who have been in the DOD and understand these rules (and have the clearances), using off-the-shelf commercial lean innovation techniques in government agencies is likely to create demos for senior management but few fully deployed products. (The National Security Agency has pioneered getting this process right with the I-Corps@NSA.)

Lessons Learned

Lean Innovation teams are starting up at the National Geospatial Intelligence Agency (NGA)

NGA has an Innovation Outpost in Silicon Valley working on it’s first hacking for Defense Sprint 
NGA is experimenting with open innovation with its first problem on Challenge.gov


The goal of Lean in government agencies should mean deployment not demos

In order to successfully deliver products with speed and urgency, this requires coaches and instructors who have been the customer: warfighters, analysts, operators, etc.
It will take innovation built from the inside as well as acquisition from the outside to make it happen

Filed under: Customer Development, Hacking For Defense, Science and Industrial Policy

Entrepreneurs are Everywhere Show No. 40: Stan Gloss and Matt Armstead

A lot of people, especially in the Midwest, will spend their time thinking too small. They’re a creature of their habit and habitat, in looking at potential investors and market opportunities.

If you see a need or problem and you think you can solve it, you don’t want that destiny to belong to someone else.

You have to disprove the naysayers. You sometimes get a chip on your shoulder and say, “You know what? I’ll show you.

 Thinking big, destiny and naysayers — three things in the life of a startup founder.

Why founders need to be their own boss and how they capitalize on business opportunities were the focus of the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Stan Gloss

Joining me in the Stanford University studio were

Stan Gloss, co-founder of BioTeam, consultants that design computer systems for life sciences companies
Matt Armstead, a serial entrepreneur and co-founder of Lumos Innovation, which helps Ohio-area founders launch their startup ideas

Matt Armstead

Listen to my full interviews with Stan and Matt by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Stan Gloss co-founded BioTeam following his tenure in business development with AVAKI Corporation, a pioneer in global grid software solutions. Previously, at Blackstone Computing, a computing and IT consulting company for scientists, Gloss led the sales initiative that launched the company in the life sciences market. Prior to working at Blackstone, Gloss was a department chairman and faculty member at Quinnipiac University. 

Leaving the corporate world to do a startup was a leap of faith Stan welcomed:

The previous jobs that I had in big corporations were almost like being in school again. There’s all that structure and all these things that really didn’t play to my strengths.

By being an entrepreneur I have the freedom to build things and do things that play to my strengths.

If you can’t hear the clip, click here

—

Stan was an account manager at Blackstone Computing when the company was reorganized under a new CEO. Though they’d never done a startup before, Stan and some of his co-workers saw an opportunity in the leadership change. Together, they started down a new path:

Eventually we saw the writing on the wall with the new company and four of us decided to go off on our own and continue doing the consulting piece of what we did.  

We were already entrepreneurial. We just took a leap of faith and said, “We can get all the clients that we had in the consulting company, and we can go out and get more of them together. Look at how good we did here. Let’s just go do that.”

If you can’t hear the clip, click here

Starting the company was a little scary, but it helped that Stan was surrounded by domain experts and recognized his personal strengths, he says:

Everything was new every day. I didn’t even know that area, so I used to sit at meetings and not understand the science. I really didn’t understand high-performance computing either.  

But I knew how to make meetings productive, I knew how to facilitate meetings, and I was smart enough to put our domain expert in the room with the domain expert from the customer.

I used to sit there and just let them talk — and then collect the order at the end.

If you can’t hear the clip, click here

Stan adds that being dyslexic gives him an edge as a founder because from an early age he had to develop skills that turn out to be critical when building a startup:

Every day in school was a day of fear, uncertainty and doubt. You never knew if you were going to get called to the board, you were going to have to stand up and read, all of these things that are very challenging for kids like me with dyslexia. School became was just day-in and day-out hard to do.

You learn to become comfortable with being uncomfortable. You learn to outwork everybody.

You also learn to negotiate. You say, “Hey listen, you’re good at math. I’m good at English. I’ll do your homework if you do mine.” Or you negotiate with the teacher.

And you face people telling you, “No, you’re not going to go to college, no you’re not going to be doing this, no you’re not going to be doing that.” You have to disprove the naysayers. You sometimes get a little chip on your shoulder and say, “You know what? I’ll show you.”

If you can’t hear the clip, click here

—

Having now done several startups, Matt has learned to keep his eye on a singular aim: The goal is to get customers, not to raise money:

There are a lot of people that are just chasing dollars, trying to get a VC to fund them, and they’ll give up 40 percent of their company in the first round just to get some major amount of money.

I learned that you can actually do things very inexpensively. You can bootstrap it. You can build a Minimum Viable Product. You can learn from your customers.

If you can’t hear the clip, click here

He learned, too, that building a company outside a major startup ecosystem like Silicon Valley doesn’t have to limit a founder’s horizons:

A lot of people, especially in the Midwest, will spend their time thinking too small. They’re a creature of their habit and habitat, in looking at potential investors and market opportunities.

They have to think outside of their own back yard, get really active and make trips out to San Francisco or to New York to build some very important relationships.

If you can’t hear the clip, click here

Matt’s advice for other entrepreneurs included this recommendation about finding co-founders:

I’ve talked to a lot of startup and entrepreneurs that need to find a technical co-founder. They’re just looking for the first person that can code, the first person that fits that capability that they’re looking for.

That’s a mistake. You really have to date a little bit. You have to build a relationship with a prospective co-founder. These are the people you’re working 24/7 with.

If you can’t hear the clip, click here

Listen to my full interviews with Stan and Matt by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Chris Schroeder, Internet/media CEO, venture investor and author of “Startup Rising: The Entrepreneurial Revolution Remaking the Middle East” and Andy Cunningham, founder and CEO of Cunningham Collective.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show

Clusters, Class, Culture and Unfair Advantages

I just finished reading J.D. Vance’s excellent book Hillbilly Elegy, and had that funny feeling when you find the story arc of someone else’s life eerily paralleling yours.

Vance’s book and the story of my own life suggest that there is an archetypal journey (a pattern of human nature) that describes the flight from a dysfunctional family and the escape from the constraints of cluster, class and culture.

Here’s how my story unfolded.

Limited Horizons

I grew up in New York in a single-parent household that teetered on the bottom end of lower middle-class in what today we’d call “working class.”

In my neighborhood, successful entrepreneurship meant small businesses entrepreneurs. Before my parents divorced they had owned a small grocery store. One neighbor owned the corner drug store, and another had a furniture store, though most of our neighbors were simply employees with 9-5 jobs in retail and construction. No one I knew had a white-collar job let alone were executives. (Eating out meant a slice of pizza or as a treat, a deli. I wouldn’t eat in a real restaurant until I went to college. I would then discover that this thing called “salad” was ordered before the main course.)

No one I knew had ever started a company (other than a small business). None of the relatives of my parents’ generation had gone to college. The highest aspirations immigrant parents had for their children in my social class were: doctor, lawyer or an accountant – and to drive a Cadillac and live in a house in the suburbs.

Graduating high school our collective aspirations weren’t much higher. Our overworked guidance counselors were adept at slotting most kids on the bottom of the deck into potential blue-collar jobs. In my graduating class of 1,000 students, the “smart kids” wanted to be teachers. A few even aspired to be writers, poets or scientists. The guidance counselors steered them into good state schools.

I was pretty much on my own in high school, which was a huge improvement over the previous 5 years. (Having interludes of normalcy by visiting my aunt’s house a few miles away was one of my havens of sanity and stability. Watching her family having dinner together or listening to them describe their weekend outings or vacations, I remember thinking how weird their family was. It would take me a long time to realize that this is what normal families do together.) My mother was rarely home and never asked about or looked at my homework. I signed (forged) all my report cards. My final grades in my senior year classes were four “mercy” 65’s (the minimum passing grade) and one 98. Most of my classmates who opted for college went to the local colleges or New York State University schools. (The Vietnam War was raging, but going to college gave you a draft deferment.)

Interestingly, none of us believed our possibilities were limited, yet in hindsight our first barrier was that knowledge was local – constrained by our culture and cluster. (Forty years later when the Internet has made knowledge global, we’ve run into the second barrier – just knowing about things is not the great equalizer we expected. We’ve rediscovered that career choices are referential and experiential. Just because you read about it does not mean you know how to apply it to your own life. We still tend to gravitate to careers we’re exposed to in local clusters, and bound by our class and culture.)

In short, even though it was 15 miles into midtown Manhattan, our horizons were limited, and mine, perhaps even more limited. (I would visit my first museum in Manhattan only years later when I returned to New York with my girlfriend showing me around as a tourist.)

The notion of having an idea and building a company was unimaginable. We weren’t dumber than the kids who eventually would populate Silicon Valley, but our career trajectories had been flattened by the limited knowledge and expectations of our cluster, class and culture.

(A cluster is a concentration of interconnected businesses in a specific field in one city or region. Silicon Valley is an innovation cluster that makes hardware, software, biotech and semiconductors. Detroit is an automotive cluster, Hollywood an entertainment cluster, New York City for media and financial services, etc. Class is short for “social class” and refers to wealth, but also to education and social status. Culture is the shared beliefs of others around you. Culture has a strong correlation with class but also is influenced by ethnicity, religion, region, etc.)

Fly Away

Unlike my peers with stable families who stayed in New York, my untenable home life provided the escape velocity for me to leave New York. I wanted to get as far away from it as I could. However, filling out a college application was a mystery to me — What were the right colleges to apply to and how should I answer the questions on the application?  Somehow I figured out how to apply to school in Michigan. (Pre-infinite information on the Internet about colleges, I picked Michigan because I saw them play football on TV, but I ended up applying to the wrong school in Michigan – my first time around I ended up in Michigan State not the University of Michigan. Lucky for me as I never would have been accepted. After the Air Force I found the right Michigan.)

But once I made it to college I was lost. I had none of the discipline, study skills and preparation I needed. After one semester, I dropped out when my girlfriend said, “Some of us actually want to be here and are working hard to learn something,” and I realized she was right. I had no idea why I was in school. Some small voice in the back of my head said that to survive I needed some sort of structure in my life, and had to learn some marketable skills.

In the middle of a Michigan winter, I stuck out my thumb and hitchhiked to Miami, the warmest place I could think of. I had no idea what would be at the end of the highway. But that day I began a pattern that I still follow—stick out your thumb and see where the road takes you.

I managed to find a job at the Miami International Airport loading racehorses onto cargo planes. I didn’t like the horses, but the airplanes caught my interest. A technician took me under his wing and gave me my first tutorial on electronics, radar and navigation. I was hooked. For the first time in my life, I found something I was passionate about. And the irony is that if I hadn’t dropped out, I would never have found this passion…the one that began my career. If I hadn’t discovered something I truly loved to do, I might be driving a cab at the Miami airport.

While college had been someone else’s dream, learning electronics became mine.

So I enlisted in the Air Force during the Vietnam War to learn how to repair electronics. I didn’t tell my family I had enlisted (I told them I was going camping) figuring that if I couldn’t make it through basic training, no one would know. (It turns out my unconscious search for a stable, structured environment is a common theme among many military recruits.)

After nine months in electronics school, when most everyone else was being sent overseas to a war zone, I was assigned to one of the cushiest bases in the Air Force, right outside of Miami.

My first week on the base our shop chief announced: “We’re looking for some volunteers to go to Thailand.” I still remember the laughter and comments from my fellow airmen: “You got to be kidding, leave Miami for a war in Southeast Asia?” Others wisely remembered the first rule in the military: never volunteer for anything. Listening to them, I realized they were right. Not volunteering was the sane path of safety, certainty and comfort. So I stepped forward, raised my hand—and I said, “I’ll go.”

I was going to see where the road would take me. Volunteering for the unknown, which meant leaving the security of what I knew would continually change my life. People talk about getting lucky breaks in their careers. I’m living proof that the “lucky breaks” theory is simply wrong. You get to make your own luck. 80% of success in your career will come from just showing up. The world is run by those who show up…not those who wait to be asked.

For four years I worked within a “cluster” of like-minded individuals (the Air Force) who shared the same mission. More importantly, as an electronics technician, I was now hanging out with a crowd of pretty smart guys (the military was then all guys) repairing complex electronics and microwave systems.

We tutored each other, read books together, went on adventures together and learned together. And while most of us came from totally different backgrounds (I never knew you put salt of watermelon, that Spam was food or muffuletta was a sandwich), as far as the military was concerned, we were all the same “class” – enlisted men – denoted by the rank on our sleeves. And what I didn’t realize at the time is that I was being mentored some of the senior enlisted guys a decade or two older than me. I’m not sure it was a conscious effort on their part, (I know it wasn’t on mine) but what people don’t realize is that mentorship is a two-way street. While I was learning from them – and their years of experience and expertise – what I was giving back to them was equally important. I was bringing fresh insights to their data. This pattern of mentorship would continue and profoundly impact my career in Silicon Valley.

So here I was 19, my first days of adulthood, in the middle of a confusing and unpredictable war zone learning how to repair electronics as fast as I could. It was everything life could throw at you at one time with minimum direction and almost no rules. (Service in the military is a life and death lottery. While we were living the good life in Thailand, the Army and Marines were pounding the jungle every day in Vietnam. Some of them saw death up close. 58,000 didn’t come back – their average age was 22.)

A few years of this sifted and sorted us in a way that foreshadowed our future career paths. It turned out that the skills I had learned growing up in order to survive in constant disorder turned out to be what I needed to excel in this environment: comfort in working in chaos and uncertainty (heck, that was how I woke up every day), pattern recognition (if you couldn’t see it coming before others, you were screwed) and the ability to shut down external distractions and relentlessly focus on a single problem (staying sane in my home life.)  While I might have refined these skills in a different environment, the sink-or-swim daily exigencies of the Vietnam War honed them to a fine point.

These would be the identical skills I would need to succeed in Silicon Valley. Though I would pay the cost of having learned them for the rest of my life.

While the paths of our lives would radically diverge, for the first time I had a sense of a cluster, class and culture where it felt like I belonged. The Air Force turned out to be the first melting pot I would encounter (Silicon Valley the next) where individuals from different classes and culture had the opportunity to share a common goal and move beyond the environment they grew up in (foreshadowing Silicon Valley startup culture.)

When I came back from Southeast Asia, I was assigned to a Strategic Air Command base with nuclear armed B-52s in Michigan where the Calvin Ball rules of a war zone — “do what you need to do to get the job done” — no longer applied. It was now, “follow the rules exactly” – not something I was really good at. Realizing that this wasn’t the long-term profession for me, I left after my four years were up, having learned electronics and gained awareness of a larger world and career paths.

Silicon Valley

I now found myself back in school in Michigan, and my girlfriend who first told me to leave as an undergraduate was now my wife working on her Ph.D. Within a year I would drop out again (a divorce, and an extreme lack of interest in theory and more desire for practice – more payback for learning survival versus social skills). It would be the last time I would spend on a college campus as a student. It would take 25 years to return to a campus — this time teaching at Berkeley, Stanford, NYU and Columbia.

I found a job in Ann Arbor working as a field engineer. Decades later, I realized that the broadband network company where I worked, installing high-speed process control networks in automobile assembly plants and steel mills (before Ethernet existed), was one of the few pioneering startups in Ann Arbor. It would turn out to be the first of many bridges to somewhere else.

One day the company sent me and an engineer across the country, to a city none of us had ever heard of – San Jose, California – to install a process control system in a Ford Assembly plant. (We were so clueless about where San Jose was that at first the company admin got me tickets to San Jose Puerto Rico.)

Getting off the plane and into our rental car headed to our motel we tuned the radio to the local music station and a commercial came on blaring, “scientists, engineers, technicians, Intel is hiring…” We almost drove off the road. Did we just hear this right? Someone is advertising electronics jobs on the radio?  And then the music came back on like this was just another ad. WTF?

To put our reaction in context, in Ann Arbor there really wasn’t much of an electronics cluster (a few machine vision companies), so for amusement each week a few of us would scour the local newspaper for electronics job listings to see if other companies were paying any better than ours. It was a good week when we would find one or two listings.  What kind of place were we in that advertised for engineers on the radio?

After we checked into our motel, I bought the Sunday edition of the local newspaper – the San Jose Mercury News. I was a bit confused why this newspaper was thicker than the Sunday New York Times. In our room, as my roommate grabbed the shower first, I turned on the TV and started flipping through the paper. First section – normal news, second section – normal sports, third section – normal arts/entertainment, fourth section –  classified ads and more classified ads and more classified ads and more classified ads. In fact, there were 48 pages of classified ads (I counted them several times) and almost all of them were for scientists, engineers, technicians, and tech support – woah.

Just as I was trying to process what I was seeing in the newspaper, thinking this couldn’t be real, the TV program switched to an ad and snapped my head right out of the newspaper with an earsplitting – “Engineers, looking for a better job? Four-Phase Systems is hiring…”

I leapt off the bed, banged on the bathroom door, dragged my roommate out of the shower, and with a towel wrapped around him we both stared at the TV and caught the last few seconds of the TV commercial. There would be several more during our stay. We spent that evening reading every one of the 48 pages of job listings.

The next day, working at the Ford assembly plant, I kept wondering, “Where the hell was I?  How come none us had ever heard of this place?”  (The answer was that Silicon Valley at the time was primarily building military weapons systems, semiconductors and test equipment, all business-to-business sales with no products aimed at consumers.)

After our work in San Jose was done, the engineer who came out with me flew back home. (For decades I couldn’t understand why. All he said was, “My parents are in Michigan.”)  With nothing holding me to any place, I stayed, started interviewing and got my first job in the Valley.

My horizons of cluster, class and culture were about to expand once again. I felt like I was in on a secret no one else had yet understood. In phone calls to my friends back in Ann Arbor I tried to explain what was happening here, but to be fair even I didn’t understand we were standing at ground zero of inventing the future. Here was an environment where what you could accomplish meant more than who you knew. Technologists were running companies, as no serious MBAs would go near these places, and investors were company builders, teaching founders how to grow revenue and profit. While I would struggle for years accepting help from others (in my previous life it always came with strings) those who succeeded paid it forward by sharing what they had learned with new arrivals like me.

Endlessly curious, I drank from the firehose of opportunity that was the valley. I went from startups in military intelligence to microprocessors to supercomputers to video games to enterprise software. I was always learning. There were times I worried that my boss might find out how much I loved my job…and if he did, he might make me pay to work there. To be honest, I would have gladly done so.  While I earned a good salary, I got up and went to work every day not because of the pay, but because I loved what I did.

As an entrepreneur in my 20s and 30s, I was lucky to have four extraordinary mentors, each brilliant in his own field and each a decade or two older than me. For the next four decades I would work for them, be mentored by them, co-found companies with them and get funded by them.

In Silicon Valley in the 1970s, I had come pretty far from someone who had puzzled through how to fill out a college application. Though the imprints of how I grew up would always be with me, (many detrimental) through intuition, curiosity and luck, I had started to move beyond the cluster, class and culture of my youth.

——

In reading Hillbilly Elegy I realized that my story is not just my story, it’s a recurring archetypal journey about lucky individuals — those whose brain chemistry is wired for resilience and tenacity and who manage to flee from a dysfunctional family and escape from the constraints of cluster, class and culture. They come out of this with a compulsive, relentless and tenacious drive to succeed.  And they channel all this into whatever activity they can find outside of their home – sports, business, or …entrepreneurship.

Lessons Learned

Your local environment – cluster, class and culture – shape your initial trajectory

Some people who don’t have the advantages of  cluster, class and culture growing up will seek them out


It takes a lot of escape velocity to break out

Filed under: Air Force, Family/Career/Culture