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Kindle Notes & Highlights
by
Salim Ismail
Read between
August 27 - September 8, 2021
Step 1: Select an MTP (Massive Transformative Purpose).
Keep in mind, however, that an MTP is not a business decision. Finding your passion is a personal journey.
“Don’t just ask what the world needs. Ask what makes you come alive and go do it. What the world needs is people who have come alive.”
“The most successful people are obsessed with solving an important problem, something that matters to them. They remind me of a dog chasing a tennis ball. To increase your own chances of happiness and success, you must find your tennis ball—the thing that pulls you.”
Finding an MTP can be seen as a novel and perhaps more interesting way of asking yourself the following questions: What do I real...
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Two more questions that can help speed the process of discovering your passion: What would I do if I could never fail? What would I do ...
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“Work is love made visible. The goal is not to live forever; the goal is to create something that will.”
Step 2: Join or Create Relevant MTP Communities
There is a fundamental DNA path dependency here. Are you primarily a community or are you primarily a company? The reason you have to ask yourself this is because sooner or later the two will come in conflict. We [DIY Drones] are primarily a community. Every day, we make decisions that disadvantage the company to bring advantage to the community.
According to Mullenweg, “Whenever this moment comes up, always bet on the community, because that’s the difference between long-term thinking and short-term thinking.”
Basically, if you get the community right, opportunities will arise. If you get community wrong, the engine of innovation dissolves and you won’t have a company anymore.
The following roles are critical if founding ExO teams are to deliver diverse backgrounds, independent thought and complementary skills: Visionary/Dreamer: The primary role in the company’s story. The founder with the strongest vision for the company comes up with the MTP and holds the organization to it. User Experience Design: Role focuses on users’ needs and ensures that every contact with users is as intuitive, simple and clear as possible. Programming/Engineering: Role responsible for bringing together the various technologies required to build the product or service. Finance/Business:
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Discovery skills: The ability to generate ideas—to associate, question, observe, network and experiment. Delivery skills: The ability to execute ideas—to analyze, plan, implement, follow through and be detail-oriented.
“I would rather have somebody much less brilliant and who’s a team player, who’s straightforward, than somebody who is very brilliant and toxic to the organization.”
Remember, the three key success factors for an ExO idea are: First, a minimum 10x improvement over the status quo. Second, leveraging information to radically cut the cost of marginal supply (i.e., the cost to expand the supply side of the business should be minimal). Third, the idea should pass the “toothbrush test” originated by Larry Page: Does the idea solve a real customer problem or use case on a frequent basis? Is it something so useful that a user would go back to it several times a day?
We believe, however, that it’s better to start with a passion to solve a particular problem, rather than to start with an idea or a technology.
Those who really want something will find options. Those who just kind of want it will find reasons and excuses.
“Tell me something you believe is true but [that] you have a hard time trying to convince others [of].”
“The day before a major breakthrough, it is just a crazy idea.”
Step 5: Build a Business Model Canvas
Step 6: Find a Business Model
Christensen emphasized that it is not so much about disruptive products, but more about new business models threatening incumbents.
Kelly identified the following eight ways to build a business model when the underlying information is free: Immediacy: Immediacy is the reason people order in advance on Amazon or attend the theater on opening night. Being the first to know about or experience something has intrinsic cultural, social and even commercial value. In short: time confers privilege. Personalization: Having a product or service customized just for you not only gives added value in terms of quality of experience and ease-of-use or functionality, it also creates “stickiness,” as both parties are invested in the
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The model tracks the following layers and key metrics: Acquisition: How do users locate you? (Growth metric) Activation: Do users have a great first experience? (Value metric) Retention: Do users come back? (Value metric) Revenue: How do you make money? (Value metric) Referral: Do users tell others? (Growth metric)
The following is a guide to implementing ExO attributes into a startup: MTP: Formulate an MTP in a particular problem space, one that all founders feel passionate about. Staff on Demand: Use contractors, SoD platforms wherever possible; keep FTEs to a minimum. Community & Crowd: Validate idea in MTP communities. Get product feedback. Find co-founders, contractors and experts. Use crowdfunding and crowdsourcing to validate market demand and as a marketing technique. Algorithms: Identify data streams that can be automated and help with product development. Implement cloud-based and open source
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The table below shows our assessment of leading ExOs and the attributes they’ve most leveraged, showing a good distribution and usage of both SCALE and IDEAS elements.
“Culture is what happens when the boss leaves.”
Establishing a corporate culture starts with learning how to effectively track, manage and reward performance. And that begins with designing the OKR system we outlined in Chapter Four, and then continues through the process of getting the team habituated to transparency, accountability, execution and high performance.
There are eight key questions to think about—not once, but repeatedly—as you build out your startup. Successfully answering each one gives you a passing grade in terms of this chapter: Who is your customer? Which customer problem are you solving? What is your solution and does it improve the status quo by at least 10x? How will you market the product or service? How are you selling the product or service? How do you turn customers into advocates using viral effects and Net Promoter Scores to drive down the marginal cost of demand? How will you scale your customer segment? How will you drive
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As Ray Kurzweil says: “An invention needs to make sense in the world in which it is finished, not the world in which it is started.”
When you develop a product with the near future in mind instead of the present, it greatly increases your chances of success.
“It takes a 9x improvement to move people from incumbent products to new products from startups.” There is a certain threshold value, which is why we’ve set a minimum 10x requirement for starting Exponential Organizations.
Leading platform expert Sangeet Paul Choudary identified the four steps needed to build a successful platform (as opposed to a successful product): Identify a pain point or use case for a consumer. Identify a core value unit or social object in any interaction between a producer and consumer. This could be anything. Pictures, jokes, advice, reviews, information about sharing rooms, tools and car-rides are examples of things that have led to successful platforms. Remember that many people will be both producers and consumers, and use this to your advantage. Design a way to facilitate that
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To implement platforms, ExOs follow four steps in terms of data and APIs: Gather: The algorithmic process starts with harnessing data, which is gathered via sensors, people, or imported from public datasets. Organize: The next step is to organize the data. This is known as ETL (extract, transform and load). Apply: Once the data is accessible, algorithms such as machine or deep learning extract insights, identify trends and tune new algorithms. These are realized via tools such as Hadoop and Pivotal, or even (open source) deep learning algorithms like DeepMind or Skymind. Expose: The final step
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As Steve Jobs said, “We run Apple like a startup. We always let ideas win arguments, not hierarchies. Otherwise, your best employees won’t stay. Collaboration, discipline and trust are critical.”
Experience has shown that transforming an existing enterprise into an Exponential Organization requires two things. The first is a company culture that can quickly adapt to rapid, often radical, change.
Needless to say, imposing the ExO model on a more traditional company—one with a hardened culture or a rigid managerial hierarchy—is much more difficult.
That leads us to the second requirement for turning an established company into an exponential one: a visionary leader who has the full support of the board and senior management.
Information moved slowly and insights took a long time to be implemented. Reality, as with the game of “Telephone,” became distorted at each point of transfer. The flow pattern of the information inevitably bypassed a tremendous amount of intermediary brainpower and experience. The process often caused organizations to behave in a sociopathic manner, ultimately forcing employees to do things against their better judgment.
We can generalize the many issues facing large organizations to the following three: Most focus and attention is internal, not external. Emphasis tends to be on technologies with existing expertise; converging technologies or adjacencies tend to be ignored and breakthrough thinking is punished. Reliance on innovation from inside rather than outside.
“Companies may promote the idea of new business creation, [but] in the end they are all in the business of reducing risk and building to scale—which is, of course, the antithesis of entrepreneurship and new ventures.”
“If you are relying on innovation solely from within your company, you’re dead.”
Transform leadership. Partner with, invest in or acquire ExOs. Disrupt[X]. Implement ExO Lite internally.
Recommendation: Bring in outside sources to update your senior management and board on accelerating technologies.
Not surprisingly, smart CEOs are already setting up sessions geared toward helping board members come to grips with the new realities of an exponential world.
Recommendations: Educate the board so that it is equipped to buy into the CEO’s plan for radical change. In addition, track your board using OKRs.
“When I’m hiring employees today, imagination is much more important than experience.”
Recommendations: Break up bastions of old-line thinking and replace them with individuals and teams offering diversity in terms of experience and perspective. Remember that one of the most important aspects of diversity requires putting young people into positions of power and influence. In addition, include more women on your board.
Optimizers: Run large businesses at scale and squeeze efficiency to maximize profits. Scalers: Take a proven model and grow it. Evangelists: Champion new ideas and move projects from the idea stage to initial commercialization.
Recommendations: Keep diversity in mind when appointing to governance and advisory boards. Regularly take your senior leadership through a personal transformation program. Examine your own leadership skill sets. Remove anyone who puts his or her own career ahead of the success of the enterprise.
