Patrick Vlaskovits, the author of The Lean Entrepreneur and The Entrepreneur’s Guide to Customer Development (whose sleek site presenting his books and blog posts is well worth a visit, both for getting into a surfer and an entrepreneurial mood, visited the Budapest startup scene these days.
Swapping the ocean waves for the Wave of Disruption, Patrick spent two evenings with us.
Sticking to aquatic metaphors, the first night was like a submarine into the world of startups, innovation models and growth hacking (with an in-depth presentation and some Q&A), while the second event was an intense and electrifying regatta (featuring an interesting talk with Tamas Locher and early-stage startups presenting real cases to discuss).
(Photo from Meetup.com)
Let’s revise some of the most intriguing thoughts and advices from the two events in our own interpretation.
Startuppers, fasten your seatbelts, as there is a lot to learn.
1. NO ONE CARES ABOUT YOUR IDEA ITSELF. WHAT THEY REALLY CARE ABOUT IS TRACTION.
– Good news for anyone who thinks of creating a product: you have much more access to tools, people and markets than your peers had a decade ago. It’s much easier to build an MVP and try to scale it.
– Bad news: on the whole, your job just became more difficult. No one really gives a damn whether your idea is good or bad – what really matters is traction. You are competing with others that have (more) traction, not worse or better ideas.
2. SWAP YOUR EGO FOR WISE EMPATHY AND REAP THE BENEFITS.
– If you think that you can surely not be on the wrong path, you are lost. This is called the “myth of the visionary”, when someone thinks that successful people like Steve Jobs or Picasso only had great ideas and so do they. This is wrong: they can’t see the full story, the full picture.
– You’ll have to sacrifice your ego. Forget pointless traits like arrogance, vanity. This is the first step towards turning into someone that is able to listen to what people want – whether it’s customers or teams you lead.
– On the other hand, this doesn’t mean that you have to completely give yourself up. You have to believe in yourself. Don’t wait for others to do something that you imagined – be the person that makes that happen.
– Also, be empathic to your customers, but don’t fall in the trap of thinking that you know everything about them, how they feel. (Rather go and ask for their feedback, even if you are developing something for your own segment.)
– The best entrepreneurs are smart and empathic enough to “hack” VCs brain to make them believe that they are worth the money and the effort.
– Also, they are smart enough to see the silver lining when it comes to introductions, networking instead of being scared that they don’t benefit from it. The real power of the Silicone Valley lies in its social currency, the fact that people are eager to connect others without further ado.
This is something that Hungarians should learn and practice, because the local cultural ecosystem has not been formed in this spirit over the last decades.
– Create a great balance of benefits for yourself and benefits for others by following the “honeypot strategy”: build value that brings people together, build a community around your project or vision, organise events or a conference. Budapest is a great playground for this.
3. EMBRACE UNCERTAINTY AND START MINIMISING YOUR CHANCE OF BEING WRONG
– The world has sped up. Our brains are not accommodated to that from an evolutional point of view. We live in a crazy, hyperconnected, volatile world. Your only chance for success and survival as a startupper is to embrace uncertainty.
– First of all, consider being small as a natural advantage that you have – you are probably more flexible, able to change ways faster and probably also lose less if you failed.
– On the other hand, have a hunger for growth. Start sparing your energy for more value-add activities by eliminating waste in terms of time, people, money and processes.
– You have to ask yourself some questions:
Is your innovation dramatic or game-changing? Is the problem not well understood yet? Do you indeed know little (or almost nothing) about your customers for sure and vice versa? Is the market rather unpredictable? Is it hard to precisely predict ROI?
If you answered yes to these questions, you are on the “disruptive innovation side”.
(Thanks to Mary Collins @ tandemLEAP for the photo)
– In this case, you have to put more effort into validated learning and you also have to get more flexible and creative. If you simply apply processes that companies on the sustainable innovation side use (with existing, predictable market, believable customer etc.), you probably gonna fail.
– Ultimately, you have to eliminate waste from the “discovery” process: turn the unknown into “known” by developing and validating an MVP, doing Customer Development, following the Lean methodology.
– Don’t believe everything that people say. It is very important to ask your customers, but you should have a good nose to judge what is really relevant and interpret it the right way.
4. THE MORE INNOVATIVE YOUR PRODUCT IS, THE MORE INNOVATIVE APPROACHES YOU NEED TO MAKE IT GROW
– Validated learning can help you eliminate waste from your process and it may also help you orientate yourself, but you still need innovative approaches to actually break through.
– The more disruptive you are, the harder to market yourself. And the harder to measure your performance in these terms. Tools like split testing or metrics have limited usage possibilities when it comes to the majority of the disruptive channels.
– “Innovation accounting” is a more flexible approach to figure out what relevant traction looks like and what the indicators are.
– The medium is the message. Innovative products demand innovative context and media.
– This changes over time. For example, SEO was very disruptive a few years ago; in the meantime, it became ubiquitous and widely used.
– There is no one-size-fits-all recipe for it either. The master of growth hacking is to start figuring out where your target customers are by reaching out to them in engaging, novel yet relevant ways.
Some cool examples:
– The 4-hour Chef book that used BitTorrent as distribution channel – something no one did before.
– Tupperware that became a textbook example by being a pioneer and organising Tupperware parties, bringing the product to homes in a social, novel way.
– Airbnb that posted fake ads on their major substitute/competitor, Craigslist, and answered to people who were interested by casually recommending Airbnb’s service to check out.
5. BE READY TO MAKE SMART SACRIFICES.
– Once you started growing, you have to brace yourself to potentially sacrifice some of your customers over your life cycle.
– For example, you will likely have to leave (some of) your early adopters behind if you want to expand to a mass market as there is a chance that some of these early customers will decide to discover something new and less mainstream.
– On the other hand, if you realise that your early adopters had that specific problem you solved but others don’t, you have to sacrifice your mass expansion and focus on the niche segment.
Ultimately, if all goes wrong, you have to be ready to sacrifice your idea and think about a pivot in terms of the solution, the segment or even your role in the project. Failing is not a shame itself, but not doing anything just for being scared that you might fail actually is.
For those who are eager for more, the full video coverage of the first event can be found here: