The Lean Startup Toilet Bowl Trap of Getting Nowhere Slowly

Progress.  That’s a nice word.  “We’re making progress…”, says the workers cutting the road through the forest.   Then, a wise leader climbs a tree and says “but you’re going the wrong way!”

That’s all fine and good, and a good lean startup does this often.  It’s called “Pivot” and it’s central to the Lean Startup concept.  But what happens when you just keep pivoting?  Aren’t you chasing your tail?  Suddenly, you have a road to nowhere, or worse, a road that goes in circles.

This is a TRAP!  Your “lean startup” just got into a slowly dieing spiral of doom.  Your dream is getting flushed in the toilet because you keep climbing that tree and realizing that you’re going the wrong way!

Here’s an example of the Lean Startup in the Toilet Bowl Trap:

  1. You build a website and collect some preorders (yeah, progress!)
  2. You ship the preorders and get feedback from customers that they love/hate certain features (yeah, progress!)
  3. You fix the product based on the feedback, and nobody buys it (yeah, progress!)
  4. You PIVOT to a new product and collect some preorders (yeah, progress!)
  5. Jump to step #2, repeat, all the way to the toilet’s flush.

So, how do you get out of this toilet bowl trap?

First, remember, the definition of insanity is doing the same thing expecting different results.

You have to do something different!

In many cases, the problem is not ‘your product’ or ‘your idea’, but the marketing instead!

Instead of constantly pivoting on “product” you might need to pivot on some of the other 4 P’s of Marketing:

  1. Place: Maybe your lack of orders is because it’s not available where the customers are… and particularly where the customers are that are in the buying mood for what you offer!
  2. Price: Maybe your lack of orders is related to the pricing or pricing structure of your product.  Maybe you need to sell it in parts, or with different options.  It could even be too low!
  3. Promotion: Maybe your lack of orders is related to how you are attracting customers.  Sure, you’re getting a lot of ‘views’, but are those customers: the right ones, in the right mood (buying), with the right goals, with the right problems, with enough education about your solution, etc.?  Or Maybe, your just not reaching your right audience, or just not ‘appealing’ enough to their needs (messaging).
So, avoid the Toilet Bowl Trap: run Lean Startup Experiments on more than just ‘the product’…
Enjoy!

Effort and Leadership – 3 Tips to Motivate your Employees

I am very proud to be able to train in ATA Martial Arts with Chief Master Niblock at his school here in Austin, Texas (Round Rock).  Today, like many other days, Chief Master Niblock gave us not only a great physical workout, but also great lessons in life and character.

[paraphrased] “You have students or employees who don’t give 100% effort, but have you looked in the mirror.  YOU, the leader, need to be giving 100%, or  you can’t expect it from your students.” said Chief Master Niblock.  “It has to be every day.  Nobody wants an employee who only gives 100% on Mondays, so you have to give 100% every day if you expect it in return.”

I was inspired, as I often am when getting to train with such an awesome instructor.  We all need our mentors and people to look up to, and Chief Master Niblock is that to me.   Without further ado, I give you 3 tips to motivate your employees, inspired by Chief Master Niblock.

  1. Lead from the Front  –  You need to be giving 100% effort every day, not just on Mondays!  You cannot and should not expect more from your employees (even in a Startup) than what you are willing to give yourself.  And you need to give this effort “from the front” so that everyone can see you.
  2. You set the Tone – If you are down, or having a bad day, it’s likely they will too.  Somehow, you’ve got to find silver linings, shiny day’s ahead.  Positivity is contagious too… you just have to set the tone.
  3. Be Fanatical about your Vision – Especially for a startup, you have to be absolutely focused on your vision and achieving it.  This means saying ‘no’ to all the distractions that come up, and saying ‘yes’ to anything that might move your vision forward.  Every day, you need to share your vision with the team, loudly, proudly, and with that Positivity.  Your vision will become contagious too.  Suddenly people will start making decisions in an empowered way that will move forward your cause, not just “work for work’s sake”.
Harlan Beverly Training in ATA Martial Arts
Bonus Tip for Investors/Board Members – This tip is for board members and investors…  you need to make sure you consider the Agency Problem.  You cannot expect your startup Management Teams to put forward 100% effort if they are not incentivized to do so.  That means believing in their vision/mission, and making it worthwhile if they succeed.  The trickle down effect of an improperly incentivized management can lead to an entire organization that’s not giving 100% or is giving it to the wrong things.

7 Key Lessons Entrepreneurs Should Learn from CES 2016

I just got back from my 10th year of CES the biggest consumer electronics show in the USA.  Here are the things entrepreneurs messed up heartily!
1. Lesson one
Be prepared for success. At least a dozen startups in Eureka park (the startup area of CES) had run out of fliers and business cards by day 3.  Seriously?  There are investors walking around as well as buyers and distribution and you have no card for them?  (P.s. See our website is not an answer). Kinko s is an answer.
2. Lesson two
Not everyone is important. In fact most of the joes walking around cannot help you.  So, what do you do?  You have to ask people about them before you tell them all about you.  If you learn they are a reporter, great! Share the vision.   If you learn they run a recipe website (like me) maybe you don’t need to share your founding story, just tell me what you do and be polite.
3. Lesson three
For goodness sakes make it easy for people tonl figure out what you do!  I should not have to read your entire wall and your brochure before I it out.   Make it a one line statement, big and bold and in front of me.  This will help a lot with 1 and 2 above by the way…  The important people will find you. Others who figure you out may not need that flier you ran out of.  And for goodness sakes don’t make it a goal to hand out fliers!
4. Lesson four
Have a goal!  Many of the 200’or so startups I spoke to had no goal for the show, none.   “We’re just here showing our stuff off” is not a goal.  Get Press, sales, investment, leads, those are goals.
5. Lesson five
Let people know your goal and do stuff that will help you get that goal.   An hourly giveaway is not going to attract investors.  A party?  Hah!   How about setup meetings in advance?  How about have a “investor area” of your booth to chat with any that come
by?
6. Lesson six
Do not drink on the job.   It’s sloppy and shows a lack of selfcontrol.  If you drink, do so after the meetings and don’t overdo it… CES is a long show, and being late to open just looks really really bad!
7. Lesson seven
Don’t hire or bring show workers who know nothing about your products or services.  Especially don’t leave them alone.  “Im sorry, nobody is here who can answer that” is not a good answer.  You just lost a huge sale, forever.
So, was CES a good show for me?  Yes!  I leave CES 2016 feeling great about technology!  The future gets cooler every year, and it is no surprise nor secret that it’s startups leading the charge!

Harlan Teaching “Lean Startup Essentials” at the University of Texas Austin – Spring 2016

This coming semester, I will be teaching Lean Startup Essentials!   The 2-3:30pm section (section 2) still has seats open.  
NOTE: THIS COURSE IS OPEN TO ALL UT STUDENTS ( from any College, not just McCombs School of Business )!
LEAN STARTUP ESSENTIALS (MAN 337) – SPRING 2015
 Tuesdays & Thursdays from    2pm-3:30 in CBA 4.344

If you are a UT Student, you can login with this link to register:

https://utdirect.utexas.edu/apps/registrar/course_schedule/20162/results/?ccyys=20162&search_type_main=INSTR&instr_last_name=Beverly&instr_first_initial=H&x=34&y=20

Want to know what this course is all about?   
First, hear what some students had to say:
  “great class”
  “awesome teacher”
  “course was awesome”
  “most practical class … at UT”
  “unique content and very useful”

Okay, interested?  Here’s the course description:

This course uses the “Lean Startup” concept as a canvas to give students the essential knowledge needed to either start their own business or join a startup and be a major contributor.  In addition to learning about entrepreneurship, the legal aspects of starting a business, and the life and experience of working at a startup, students will get hands-on skills they can use in any startup or to start their own business.  Every student will practice these skills in-class by building a real startup business (based on a pre-set collection of products and services).  This course focuses on the “Lean Startup” methodology, but will also cover the traditional new venture development and the entrepreneurial process (problem identification, innovation, business plans, fund raising, launching, and managing a startup). This course will also cover the essential knowledge derived from entrepreneurship research covering proven keys to success as well as scientific research about what it takes in an individual and group to succeed in entrepreneurship.  The final project is one of the pre-set business ideas, up, running, and operating in the build-measure-learn cycle that is the core of the “Lean Startup” methodology.

Prerequisites: None.

Need more?  Here’s a link to the syllabus for this Spring: https://drive.google.com/file/d/0B19bmn5A18VtMTVONVpoSFl4TFU/view?usp=sharing 

Got a question, email me!
harlan.beverly@mccombs.utexas  (and dot edu of course)

Small Thinking; why Austin entrepreneurs need to think bigger!

I teach a class at UT Austin called “lean startup”, I also help run the UT Texas Venture Labs and I volunteer at Capital Factory.  I mentor or advise dozens of startups.  I also run my own startup and have started 3.   All this is to say, I am plugged in to startups in Austin.  As with all my blog posts, this is not anything official from UT or anywhere else, just my own opinions.

I see probably 50 (or more) startup pitches per year.  One thing I have noticed recently, since Venture Capital has mostly dried up in Austin and worldwide, people have stopped thinking big.  I see so many deals where “the startup” is really “a product or service”.  For example, your app idea, your IoT idea, your new restaurant concept, and so on.  If it could be done on Kickstarter or bootstrapped in a year or two, it’s probably not big thinking.

This article is a call to get entrepreneurs to THINK BIGGER!  It is also hopefully a few tips for entrepreneurs to do just that.

First, let me explain what I consider ‘small thinking’.  Small thinking is when an entrepreneur is so focused on ‘the first product’ or ‘getting to revenue’ that they fail to communicate (or possibly fail to think) what the big picture is.  If you are not thinking past ‘your first move’, you are playing Startup Chess with a massive handicap.  If you don’t have ‘a second move’, you are failing to plan.  In both cases, you are not THINKING BIG!

Now, let me explain what I consider ‘big thinking’.  Big thinking isn’t doing, it’s thinking, and maybe talking.  Doing is what you are doing first and now (probably being Lean and Agile and building an MVP and focusing on Getting Customers and Feedback)… all very smart and important stuff.  However, while you are off ‘Doing’ that important stuff, you should be ‘thinking’ and probably ‘communicating’ your big vision a bunch more than you are.

Big thinking is having a big vision for wanting to ‘change’ something.  ‘Change’ is the operative word, and it implies a disruption in the status quo.  Big thinking is having ‘the end in mind’ before you begin.  This is more than a personal financial goal (which is also important).  This is understanding where your company might play in the big picture of the world.  This requires understanding ‘the world’ e.g. your market today, and where your market will be after you have risen to power and achieved your ‘big vision’.

Here’s the problem.  Many companies in Austin simply do not have this ‘big vision’ in mind for their company.  I ask you, how is your company going to change the world?  How are you going to “shake up” your industry.   If you do not have an answer, then you are not Big Thinking.

I urge you now, go out, and think bigger!  If you do it, WHILE staying focused on “DOING LEAN” there are so many awesome benefits.  Here are some personal examples I will share.

At my first company, Bigfoot Networks, our “big vision” was to End All Lag!  In fact, we even had a website, t-shirts and events, all around “Ending Lag Now!”.  We had a clear big picture mission, near 0-latency & 0-lag online gaming.  We were going to change the world… and as a result:

  1. The press cared about our story… even though many didn’t believe we could do it, it was still a story (rather than a non-story).
  2. Employees LIKED working for Bigfoot Networks… we all understood our mission and it gave us energy to tackle the day-to-day “Doing” because we knew where we were ‘Going’.  
  3. As a result, my attrition rate was lowest at Bigfoot Networks than any other company.  And my recruiting was the easiest.
  4. I was able to raise ‘big’ VC money, not because of our results (which were average), but because of our vision (and technology to back it up).
At Karmaback, my second company, our vision was also clear… we wanted to ‘Prove Social Marketing Works”, and create analytics behind social network marketing.  What is interesting here is that we did so many ‘day to day’ “Doing” that did not line up with this goal (to pay the rent) that we ultimately lost sight of this vision… when that happened, we had to sell the company.  It just wasn’t honest to say “this contracting job” had anything to do with our vision.  Had we stayed truer to our vision, Karmaback probably would have been even bigger and sold for much more.
So, I hope you can see where I am headed.  Have a big vision, execute on a plan towards doing it, and change the world!   If your company does NOT have a ‘change the world plan’… maybe it needs to get one.  Personally, I am on a mission to make sure all my endeavors have one.  At U.T. Austin, “what starts here changes the world”… and I’d like to see all of Austin take the charge and “THINK BIGGER”!
Harlan T. Beverly, PhD + Daughter, think BIGGER in Denali National Park

Otaku Marketing Plans

Otaku is a Japanese term, now used throughout the marketing world, to mean a person or group of people obsessed with a particular topic/problem/or interest.  Recently, I was astonished to learn that there is an Otaku group who are obsessed with a specific kind of ice – nugget ice.   I learned this from doing a deep analysis of what causes IndieGogo campaigns to succeed or fail.  You see, there is an Opal Ice Maker, which does 1 thing ~ makes nugget ice ~ that recently raised $2.5 Million dollars on indiegogo.  And this got me thinking….

Who in their right mind would PRE-ORDER a $450 ice machine?
Clearly, I’m not an Otaku for nugget ice.
But also as clear, this marketing plan worked.  And it was a pretty simple plan really, and had almost NOTHING to do with advertising or promotion.  I’ve written extensively in the past about marketing plans, and how marketing is SO MUCH MORE than just advertising.  This Opal Ice Maker is clearly a perfect example.   So, what made this successful? And how can you build a marketing plan just like it?
  1. The Opal Ice Maker is targeted specifically and exclusively to people who love nugget ice, and would die to have it at home… Clearly, there is a passionate following of nugget ice, and this entire product was built EXCLUSIVELY for that audience.  (I would never buy one, for example).
  2. The Opal Ice Maker ‘completely’ solves the problem of making your own nugget ice at home…. it does exactly what it says it will do, and most people cannot even imaging using 24 pounds of nugget ice at their home, even at a party!
  3. They went after and got people who love nugget ice, targeting people who ‘like sonic drivethru’ (who have the nugget ice), and other chains where people frequent just to get their ice fix.
  4. It’s not a low price, but a high price… because Otaku people would pay it, and a high price signals quality.
So, to replicate this marketing plan all you need to do is:
  1. Find a problem that a very specific small Otaku group have, and are extremely passionate about.
  2. Completely solve the problem.
  3. Target and reach out to that group directly (ads, PR, gorilla marketing).
  4. Charge a high enough price to signal quality.
Now, go out and market!

5 Ways to Test your Startup Idea – Lean

So, you have an idea?  An invention even?  How do you know for sure it is any good? Here is 5 ways you can test your idea without building it first.

1.) create a free website at http://wordpress.com and make 2 pages.  Page 1 describes your idea, and includes a link to Buy Now!  Page 2 says “sorry” out of stock and asks for an email.  Now send everyone you know to the page… And see how many you ‘sell’.
2.) Setup some interviews with people who should really want your product/service.  Ask them about the idea and ask how much they might pay for that…  judge the amount as validation!
3.) Go to a trade show and try to hand out a flier about your idea… Judge people’s reaction and ask them what they think.
4.) Search the web for similar products and especially for  targey customer types actually complaining about the problem your idea solves.  Hear nothing/find nothing…. Probably not good for your idea.
5.) Make a mockup of your idea and stand at a corner where target customers might walk by.  Ask people if they would like to learn and what they would pay for that. 
The key idea is: will your target customer pay for the idea?
Go out and see BEFORE you build it.
Thats lean startup.

Redefining Intelligence

Yesterday I was lecturing to a bunch of awesome UT Students and I was asked for an example of one of ‘my’ lighthouse principles.  I said ‘fairness’, because I do believe in fairness; primarily fairness of opportunity.   When I said this fairness principle applies to ‘grading’, the students were quite happy about that!

A similar value of mine is ‘effort’.  That if people will apply enough effort they can achieve anything.

So, how does this relate to intelligence?

Well, two things, a child can be intelligent, but not given equal opportunity (fairness), and thus fall behind others… and specifically fail to learn how to effectively learn (i.e. they might be quick to learn, if they had the opportunity).  Thus when that child does poorly in school, and drops out, and stops learning new things, are they less intelligent?  Society says no… I think the answer should be ‘yes’.

Second, and opposite, a child can be considered a ‘slow learner’, but who puts in maximum effort, and learns how to learn (for them), and gains average grades in school but sticks with it.  This child learns advanced mathematics, science, history, and more… is this ‘slow learner’ still considered as not very intelligent?  Society says yes… I think the answer is no.  This child is MORE intelligent than the quick learner who (for reasons in or out of their control) does not put in enough effort to continue learning.

Here’s what this all means:  I believe that intelligence should be a measure of the knowledge that a person has gained and retained.  This is not how fast or how easy it is for that person to learn new things, because with enough effort, that can be overcome.  This is instead how MUCH that person has learned, whether by whatever amount of effort it might have taken.

The quickness of how fast someone can learn (or memorize or problem solve), is a totally separate trait, barely worthy of consideration (e.g. IQ is useless).  Thus we must not call the lazy quick learner who does not apply themselves as intelligent.  We must not accept the messed up education system that does not give the quick learner enough opportunity.   Even more so, we must not call the ‘not as quick’ learners less intelligent, instead we must give them ‘fair’ opportunity to apply effort to gain intelligence.

Losing your temper in business. The take 5 rule.

I’ve done it.  We’ve all done it.  At some point in your life, you lose  your cool.  You get mad, and you show it ~ sometimes quite visibly.  But what happens when you lose your temper in business?  What can happen?  And what are the long lasting effects of losing your temper in the office?  Here’s my experience and what you can do to avoid or minimize problems when it inevitably does happen to you.

1. I’ve lost my cool numerous times in the office, usually I get red in the face, start to frown dangerously, and get real quiet…. I can tell you from experience, that look usually shuts people down and RARELY does it get beyond this point for me.  Yah, it’s clear I’m mad, but people that have worked for me know that I’ll cool down in a few minutes… especially if….

1.b. The best tactic not to go beyond this point (turning red/ frowning) is to say “let’s take 5” and walk outside or get some water… remember to breathe, and that life is bigger than whatever you are mad at.  After 5 min. you should be cool enough to talk rationally again.

2. Occasionally, even after 5 min., I’m still angry.  Heck, I can still be mad after 2-days, and sitting down with that person again just sparks back up the anger.  I can’t keep “taking 5” constantly.   What to do?

2.b. The best thing to do is to try to take an ‘active listening‘ approach.  This involves starting at the beginning (after a take-5 or when you’re cooled down), asking again about the problem, then most importantly repeating the problem back to the person from their point of view.  They will feel heard and then they will be ready to listen.  Explain your problem.  Ask them to say it back to you.  Then ask them to explain what they want.  Say it back to them.  Tell them what you want.  Ask them to say it back to you.  Now find a solution.. you’ll both be read to figure it out.

3. So… uhoh.  I yelled.  I screamed.  I lost it.   Have I done that?  sure.  Just never let it get physical… more on that later.   All you did was yell… maybe you cursed… What do you do now???

3.b. My best advice is to quickly acknowledge you lost your cool and you need to “take 5”.  The world is not over.  This happens. Has happened to me.  Nothing too terrible is going to happen.  Follow 2.b above, and all will be okay.  After your take 5, acknowledge that you were wrong to yell, but you are still angry, and then move to active listening.

4. So, you got physical?  This has not happened to me.  Hopefully you’ve taken 5, got away from the situation.  In my companies, there is a rule: no-one can refuse or get upset about someone’s need to take 5.  I HAVE seen someone get physical at work 1 time.  I was the manager.

4.b. So, what happens if you get physical at work?   I can tell you what I did. I fired the person, immediately.  On the spot.  No regrets, no 2nd chances.  You get physical at work, you should be fired.  Period.  Hopefully your workplace has a take 5 rule… if not take it yourself.  Getting docked 5 minutes of time is better than being fired.

I hope this blog has left you with some thoughts.. feel free to post them below.  I respond to all comments and questions.

Lean Startup Essentials: Harlan’s new Class at University of Texas McCombs School of Business

Hello Friends and Followers!  My NEW UT McCombs Undergraduate Class on Entrepreneurship – Lean Startup Essentials, begins this Fall 2015!

* no pre-req.

This class is designed for any undergraduate student at UT Austin who wants to learn about Entrepreneurship.  You will learn all the basics (essentials), but in a way that also teaches the latest and greatest in startup trends: especially Lean Startup, the groundbreaking new trend in startup success.  A great thing about the class is that it will also teach practical skills to actually launch a startup.  In fact, YOU WILL LAUNCH A STARTUP as part of this class (albeit from a canned selection of products/services).

There are still open seats!


Simply search the catalogue for the course name:
Lean Startup Essentials:
  http://registrar.utexas.edu/schedules

Please add… or consider drop->add to get into my class!  It’ll be really fun and send you on your way to a great career in a Startup (maybe your own!)!

Here is the course official description:

Course Unique ID: 04967   
T,TH 11:00 a.m.-12:30 p.m.
CBA 5.328
Instructor: BEVERLY, HARLAN T
MAN 337 LEAN STARTUP ESSENTIALS
Prerequisite: None.

Topic description:  


This course uses the “Lean Startup” concept as a canvas to give
students the essential knowledge needed to either start their own
business or join a startup and be a major contributor. In addition
to learning about entrepreneurship, the legal aspects of starting
a business, and the life and experience of working at a startup,
students will get hands-on skills they can use in any startup or
to start their own business.

Textbook: The Lean Startup by Eric Ries