Launch Tomorrow

Landing Pages for your Lean Startup

  • Free Tools
  • About
  • Members
  • Corporate Innovation
  • Blog

How to balance working on growth with searching for product-market fit

May 29, 2020 by LaunchTomorrow Leave a Comment

Here’s Marc Andreesen’s take in the original article which coined the term “product-market fit”:

The only thing that matters is getting to product/market fit.Product/market fit means being in a good market with a product that can satisfy that market. You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.Lots of startups fail before product/market fit ever happens.My contention, in fact, is that they fail because they never get to product/market fit.

He goes on to say that you can pretty much ignore everything else until you have product market fit, because that’s the only thing that matters to the business.

up and to the right: how we like our curves

Once you genuinely have product market fit, you stop working on it. So there is no balance.

Or to be even more precise: first get product market fit. Then work on scaling. Any time you spend on trying to scale a product that doesn’t have product market fit is kind of a waste of time.

The style of working also changes once you begin to scale. For example, Brian Chesky of AirBnb says:

At scale, you have to learn how to move from intuition to data. When you are first starting a company — data is not the most important thing. Pre-product market fit — data wasn’t important for us — it was much more about the person-to person interactions with customers.

Be ready for a totally different challenge once you begin to scale. But it doesn’t make sense to prepare for it or start early, because you might be scaling a product turd. Or not have the right team. Just because it might be tempting to jump to scaling, heading to the quantitative stage before you have exactly the right product for your market is just premature optimization. And a waste of resources—(your) time.

<< Help Yo' Friends

Filed Under: uncategorized Tagged With: minimum viable product, product market fit

The Kindergarten, the Construction site, and the Assembly Line

December 18, 2019 by LaunchTomorrow 1 Comment

Last night, I went to a local meetup where we played Legos. It was an event organised by Krzysztof Niewinski. In particular, it was a simulation workshop of large scale product development using alternative organizational structures. But there were lots of colored bricks involved. And the specs were pictures of the end products that needed to be built.

Without getting into too much detail, we covered 3 alternatives with the same group of 20 something people: component teams, cross functional teams of specialists, and finally “T-shaped” interdisciplinary teams where everyone could do everything. In short, we were experimenting with output using alternative ways of working. Each round took roughly 10 minutes.

Here’s what happened

In the first round, we had specialized component teams each dedicated to working with only two different lego colors, a supply team, an integration team, a quality team, and 8 different product managers who wandered from table to table. Sound familiar? Kind of like a massive construction site with lots of project managers. Or in a large company developing and installing software. Most of the building teams sat around doing very little in practice. There were lots of bottlenecks and confusion around getting supplies and exact requirements. I had a chance to engage in chitchat with my table mates. And a stressed out senior executive that walked around and yelled at anyone for not doing anything.

The second round, we continued to have individual performers who were specialists, but they worked together, which resulted in a lean assembly line. The time required to first output went down almost 50%. But there was less top down control. And more legos on the table, relative to the previous round.

And finally–the last round–everyone pitched in and contributed how they could. There were still some constraints, in that people working outside of their expertise could only use their left hand. Despite that, it only took a minute to get the first outcome, so almost 9 times faster. But there were lots of extraneous legos on the table. It was lots of fun, and it was a very tactile learning experience for everyone who pitched in. Just like kindergarten.

Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

What does this mean

This boils down to control, profitability, and speed. This is just as true for startups as it is for large companies. Most of the conflicts among co-founding teams boil down to differences how founders value control and money, according to Harvard professor and researcher Noam Wasserman in Founders’ Dilemmas. In big companies, any larger product development program will implictly or explicitly make a call on these three, based on how the work is organized. It depends on what you optimize for, as Krzysztof the facilitator pointed out.

The construction site was optimized for control, especially of costs. There were enough people to do the work, and enough legos could be procured if you were willing to wait. But the level of resource scarcity locked up the system, relatively speaking. And it took a long time to finish anything.

The assembly line required a slightly larger up front investment but the speed at which things happened increased dramatically. Even though the constraints on each individual were exactly the same. As an expert in yellow and green bricks, I was still only allowed to touch these, even though the configuration was completely different.

The kindergarten required even less top down control and more resources, as well as trust that the teams will get on with it. There was be a higher use of resources (lego blocks laying on the table). At any given moment, you won’t know exactly what is going on, because everyone is contributing and collaborating. The teams were releasing stuff like crazy. So at that point, does it really matter that you need a bit more money up front? If they are releasing stuff so quickly, presumably this translates into revenue, which keeps the kindergarten afloat and then some.

Choosing the metaphor works that best for your company

The way you organize the work matters. And it feeds into culture. Larman said “Culture follows structure“. In a software context, it means you want to allow for chaos and experimentation. And not really just squeezing features out of development teams.

As a company scales from a successful startup to a larger company, the trick is to keep enough of that “kindergarten juice” in the culture and in how the work is organized, in order to allow your company to continue innovating. If the emphasis on control changes as a product matures, you can introduce more of that as needed. But do so consciously, and watch your output and outcomes like a hawk.

By micromanaging the process, even as an assembly line in a feature factory, you’re still missing out on pretty big upside (assuming you care about having lots of new products released).

That said, even a kindergarten needs boundaries. So that the teams don’t cut corners in quality for example. That’s kind of the point. There are a handful of non-negotiables around safety, health, and security in a kindergarten, and everything else is optimized for discovery.

So for a bunch of interested strangers on a random school night, who dug into a few alternative structures and held everything else constant, it was clear that there could be very large differences at play. 14x faster, not 14% faster. These would be results any agile or digital transformation program would love to achieve. That said, it wasn’t clear if these differences came from structure only, or the culture around it. And if culture is involved, that could be what’s preventing the massive change in the first place.

Key Takeaways

  • The way you organize work matters, and it feeds into the culture, particularly in a larger company.
  • By organizing work, you will be making choices about tradeoffs among variables that matter.
  • Control, in particular, seems to be inversely related with learning and speed.

<< Help Yo' Friends

Filed Under: uncategorized Tagged With: faster time to market

Disproved: Most successful products are launched exactly the way they are envisioned

December 11, 2019 by LaunchTomorrow 2 Comments

Icarus and his father Daedalus, the architect of the Labirynth, attempt to escape by air from Crete. Daedalus had become a political refugee. He had helped Theseus, an enemy, break into the Labirynth to kill the Minotaur.

Icarus falls, assuming the plan so good he doesn’t need to watch himself implement it

Daedalus then constructed wings from feathers and wax. Icarus’ father warns him first of complacency and then of hubris. Daedalus asked that Icarus fly neither too low nor too high. The sea’s dampness could clog his wings. The sun’s heat could melt the wax. Icarus ultimately ignored his father’s latter instruction. He flew too close to the sun. When the wax melted, Icarus tumbled out of the sky, fell into the sea, and drowned.

How is this relevant when launching new products?

Entrepreneurs have a strong sense of vision, particularly when creating something new and magical like the wings in the legend above. That’s why we love them. Working alone or as a small team, they execute. They see something no one else does, and they pursue it relentlessly, until it happens. In one form or another.

He dreamed  about a stargazing and slowly getting there.
Photographer: Rahul Bhosale | Source: Unsplash

Conversely, corporate innovators often have to plan a lot up front, to align across multiple departments and stakeholders. Which means that detailed planning results from significant negotiations. And that any change often requires re-negotiation. But there is a great deal of vision and planning required to create something out of nothing.

These two scenarios have more in common with one another. Vision and planning is crucial, but having too much of an attachment to any plan is counterproductive.

Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

Believing too much in the initial plan is clingy (and can feel unproductive)

For years, I was curious about whether there was any data to back that up. If you want to create a successful product, usually you want high growth as an ultimate metric of success. Recently, I found that data point.

In The Origin and Evolution of New Businesses, professor Amar Bhide of Harvard interviewed the founders of an entire year’s-worth of Inc 500 companies in the late 1980s, a ranking of high growth startups. This is independent of sectors and also not influenced by any of the more recent lean startup/small batch thinking. At the time, most startups needed to raise a significant amount of money to launch anything new. From a funding & risk perspective, the success criteria were close to that of corporate product development today.

Bhide reported that approximately 2/3 of the founders he spoke to pivoted away from their original concept:

More than one third of the Inc 500 founders we interviewed significantly altered their initial concepts, and another third reported moderate changes.

The majority of the founders shifted away from their original vision. Was it out of necessity? Or is being both willing and able to adapt is actually a requirement for new product success. One third of the founders were lucky to have guessed exactly what their customers wanted. But most needed to adapt and pivot to the best possible business model.

Plans are worthless but planning is everything –Eisenhower

In other words, the most helpful mindset & approach is to:

  1. assume that you will be wrong about something when launching a new product
  2. make sure you have the option to pivot
  3. often, this happens once you collect data that challenges your assumptions…so collect data first!

This is how innovators work. This is also how “search” for a new business model differs from executing a known business model and aiming for efficiencies only.

This post is part of my “7 Lies of Innovation” email course. Click here to sign up if you’d like to know when the common wisdom around innovation doesn’t actually hold up in the data.

<< Help Yo' Friends

Filed Under: uncategorized

How to identify your riskiest assumption

December 4, 2019 by LaunchTomorrow Leave a Comment

Richard Branson, the billionaire adventurer, has a complicated relationship with risk. On the one hand, he loves trying outdoorsy stunts and attempts to break world records.

Richard Branson getting punched in the face

Branson as an expert at managing the risk of getting punched in the face professionally

For example, he managed to cross the Atlantic, Pacific, and then circumnavigated the globe in a balloon. He even succeeds at doing so, despite the occasional crash:

  • bike
  • spacecraft
  • balloon
  • car

On the other hand, he’s brilliant at managing his risk professionally, when starting new ventures. For example, thirty five years ago, he was stuck for hours on Peurto Rico. He wanted to fly to the British Virgin Isles to join his girlfriend, and came up with the following scheme:

Branson walked to the back of the plane and asked for a chalkboard and a writing implement. He figured out how much it would cost to charter a plane to BVI — and how much it would cost each passenger if the expense were pooled. And then he went for it, walking up and down the aisles of the grounded airplane selling tickets. On the chalkboard he wrote, “$39 one way to BVI.”

In one move, he confirmed that there was demand for an alternative. So he charted it. That got his appetite wet. Piggy-backing on his record store chain, Branson went on to sell plane tickets. He entered into a conditional lease of a plane from Boeing, where he insisted on having a one year break clause, to be able to return the plane if necessary. He aimed to fly it between the UK and the Falkland Iles. So Virgin Atlantic was born.

In short, he made a couple of moves which significantly limited his downside while giving him the possibility of evaluating whether it was worth soldiering on.

With new products, your primary goal is to manage your risks

Denying the existence of risks only makes you more susceptible to them. Particularly when you are faced with a high risk of failure. Like 50-90%, depending on the study you look at. No joke.

“Jed’s dead. Dead dead.”

It’s really important to note that this is not about being pessimistic. Or questioning your vision. This is about figuring out your vision’s fastest possible path from your head and into reality.

The “magic pixie dust” resides in prioritizing what you test. By testing your riskiest assumptions first, you reduce the chance you go belly up. Regardless of where you are in your new product’s journey, you will always face unexplored or unmitigated risks.

Yet, identifying this riskiest assumption is hard. The key factor to consider when managing your resources (including your time) is risk. All of that requires you to have a solid grasp on what your biggest risk actually is at that moment. Which isn’t always easy, particularly if you are doing something new.

What makes this particularly hard: it’s likely there are some “unknown unknowns”. So even if you do deliberately try to identify problem areas, you’re likely to miss something.

Essentially, the idea is that you want to generate a large number of ideas about what’s risky. And then prioritize to identify what is riskiest (and were you need to start).

About to start a greenfield project?

Have Launch Tomorrow run an in-house "riskiest assumption workshop". Remote delivery options also available. Discover where to prioritize your validation efforts, to get to market fast.

Contact Us

or call us now at:

US/Canada: +1 202 949 4478
UK: +44 773 952 7708
EU: +48 692 870 297

Ways to get inputs on what’s riskiest:

1. Intuition

This is hard to describe. Sometimes you just have a gut feel. Pay attention to it. And run with it. Essentially, you’re looking for what feels like it could have really big & bad implications. And it is likely to be a problem.

Personally, I feel this with tension in my gut. So it’s just a question of tuning into that sufficiently, especially before making bigger decisions. And that’s often good enough. But it has taken some effort to be aware of this. Moreover, in a larger company, you may still need to convince others and create alignment, and “I feel it in my gut” is not a strong enough argument. Even if it’s true.

2. Who is the customer and does the customer actually have problem you think?

This is a great insight I got from Lean Startup Machine specifically. Running around London like a headless chicken with some friends, trying to interview young parents. (admittedly before I was one myself). We had a product idea which we though would be attractive for this group. We made some guesses about their biggest challenges. And then we hit the streets and looked for anyone pushing a buggy/pram.

This was the net result:

hitting a low point somewhere during 67 customer interviews in one weekend


 

After a few failed hypotheses, we had to acknowledge that we actually had no idea what parents of kids 0-2 years old struggled with. And while there were some patterns in what we were hearing, it was clear that it was still too wide of a market to have clear patterns. The tool on the wall helped us systematize testing:

  • who is the customer?
  • what is their biggest problem or challenge?
  • would the solution be an appropriate solution to that problem?

In the end, we had to acknowledge that we the pie chart we were drawing had too many possible answers.

survey of product managers

 

So we weren’t going small enough to have a clear pie chart, with a significant share of answers being the same:

 looking for well ordered market segments like this


 

In other words, we needed a consistent easily identifiable & reachable group of people who share a particular challenge. That is a good market segment on which you can build a business.

This is almost always true. And often overlooked up front. Without it, you’ll have a hard time building something that will be relevant for enough people to make a dent. At least in a B2C business, where you need a lot of sales to get started.

In a B2B business, that breadth is less important, as much as depth. You need to be certain that whatever you do build and launch fully addresses the customer’s problem. And has positive and measureable side effects around:

  • increasing revenues
  • reducing costs
  • lowering risks
  • improving their customers’ experience.

At a high level, most businesses will only pay for those outcomes. But each industry and business is a bit different, so you will need to dig into the details of how to achieve it. But the starting point is really deeply understanding the problem from your prospects’ eyes.

3. Analogs

In short, ask people having similar success in different areas or industries doing things similar to what you want to achieve. This was an insight from Getting to Plan B by Komisar and Mullins.

For example, let’s say you discover a really powerful yeast which helps give red wine a unique and attractive flavor. Then you buy wine in bulk, add your magic dust, and then try to resell it to large supermarket chains.

Coming up with the yeast was the hard part. To figure out how to sell the supermarkets, you can probably speak to any salespeople who also sell to supermarkets in your country. It doesn’t have to be other wine merchants or wholesalers. You will learn a lot from a few conversations with people like that, enough to get your head around how this sales cycle works. So even though you don’t have in depth experience doing it yet, you’ll have a clear picture of how to proceed. In this case, you are using an analog to discover any hidden assumptions that could derail the use of direct sales as a distribution channel.

Channel testing example: selling superior wine into supermarkets

 

This is a good technique to turn “unknown unknowns” to “known unknowns”. Possibly even “known knowns”. Even though it’s less likely to have a company killer impact, it is still possible that you are making assumptions about that initial sales process which could derail you.

4. Antilogs (or Picnic in the Graveyard)

Some industries, especially software and internet, have a lot of public information about startups that have tried something. And failed. There are lots of writeups by previous founders of why they think their startup failed, such as:

  • CB Insights
  • 77 failed startups
  • Autopsy

If you are thinking of building something similar, you are just at the beginning. Those founders had been through years of trying to get a similar idea off the ground. So it’s quite likely you will learn something from them, if you can read about their failed attempts. Or even better, call them up and speak with them directly.

The idea here is to formulate a good reason why you think you will be successful this time around. It might be a different feature or market. It might be market timing. It might be any number of reasons. Because if you can’t articulate it, it questions whether it’s an idea worth pursuing. Not to mention, it will be hard to convince investors, too.

5. Risk Scorecard

This is kind of the left-brained alternative to #1 above. Basically, you can create a spreadsheet scorecard, where you:

  1. list all of the risks
  2. assign each a weighting from 1 to 5 for both likelihood and impact
  3. multiply the weights together
  4. reverse sort by the highest number going down

The outcome is that you have 1 specific risk you need to address and start focusing your experimentation on.

Here is a more detailed writeup of how to do this. Or here.

6. Pre-Mortem

Imagine your business failed 4 years into the future. You meet with your cofounders over beers or tea. As your tears flow, and drip on your Business Model Canvas (BMC), you discuss what you wish you would have known up front.

Which is the likeliest to have caused the failure?

  1. Write down all possible additional reasons you come up with onto post-its.
  2. After a general session, you can also think through any assumptions in each box of the BMC which might be relevant for this particular business.
  3. Prioritize them using dot-voting
  4. Create an initial risk backlog based on this discussion, sorting from the most dots down to the least

The best source for this is Dave Gray’s excellent Gamestorming book, if you need any more detail. But that should get you started.

7. My “ace in the sleeve” questions

Based on my own mis-adventures in startup land discussed in Launch Tomorrow, I have a few following additional questions which I use to “stress test” any idea:

  • Am I going after the right customer–for me or my company? Is it a strategic fit?
  • Can I reach my customer cost-effectively?
  • Is this customer type willing to do anything about the problem? Because if they aren’t, they aren’t likely to spend any money.

So for example, it’s a good idea to build a business around a group of people you can easily relate to and who you like. I tried building a business in the weight loss industry despite not having a medical background or being a middle-aged woman. So while I did have a signature success story in this context, my marketing would always be less effective than if either of those requirements were fulfilled. And I wasn’t keen on going back to school to become a doctor first.

All of these do matter in certain contexts. And they’re probably good “spot check” questions anyway, before you proceed with a specific idea.

8. Talk to industry experts

Once I get outside of the internet and software worlds, there is a lot I don’t know. Lately, I’ve been working with AgriTech and MedTech startups, for example. And while I know the concepts behind innovation, I honestly don’t know have that much experience in how they apply to those sectors.

For example, agriculture has a “crossing the chasm” like curve. However, it’s heavily skewed to the right. So basically, there are many more people in the late majority or even the laggards. In other words it takes a lot longer for a technology to diffuse. But when it does, it’s everywhere.

negatively skewed tech adoption curve


 

Anything related to medicine has to go through regulatory approval. In this case, you can’t just pooh pooh the regulators like various marketplace startups did (Uber, AirBnB). People’s lives and health are potentially at stake. In practice, for founder this means it takes a decade before you can go to market. Which means two things:

  1. you need a lot more money up front
  2. you have less attempts at building a business during a founder’s lifetime

In short, these industry specific details significantly change how you’d look to innovate in these areas. And I learned both of these points from experts with decades of expertise in the industries (thanks Huw and Anthony).

From a risk management perspective, expert’s ideas are simply ideas that require testing. You don’t want to ask experts for their opinions and treat it as gospel either. As that would mean you replicate their biases. Gather your own data and proof. But at least you know what to pay attention to.

9. Red team, Blue team

Finally, to stress test your business model, you can use this approach that the British military came up with. This is a strategic exercise, to try to identify any holes or oversights in a plan. The red team tries to penetrate a well designed defense plan.

  1. Essentially nominate a few well-meaning friends.
  2. As them to “red team” your current business model.
  3. Looking together at the current BMC together with your “blue team” consisting of the co-founders or delivery team, ask the “red team” to identify any major assumptions you might have missed. Holes that need to be covered. Things which could easily go wrong and derail your product launch.

There was a good example of this in the HBO serial Newsroom. The news team was working on a high stakes story. Certain people were intentionally kept in the dark about the big scoop. When the team producing the story was ready to go live, they assembled the people who had been intentionally left out to form a Red Team. The Red Team’s job was to poke holes in the story, as the paper was risking its reputation by going live with this story. People kept in the dark are more objective. They aren’t invested in the story, so they see it from a different perspective.

What you are after

Basically the goal is to uncover as many assumptions as possible. And to prioritize them. So you have 1 specific assumption to start testing. This focuses your experimentation on company killers and existential risk, the most meaningful place to start managing risk. This is, in fact, what successful founders like Branson excel at–like when he put up a cardboard sign and started confirming there was enough of a market to create a challenger airline.

If you can take smart risks while being better at managing them, then you are much more likely to do better over the long run. Any particular risk might still go sour. But this ability to manage risk will ultimately define your career as a startup founder and business builder.

 

<< Help Yo' Friends

Filed Under: uncategorized

Why over-focussing on velocity causes the opposite effect

November 27, 2019 by LaunchTomorrow Leave a Comment

Following up on the slightly longer analysis of overfocussing on output and velocity, I think there are a few things that are overlooked with a pure velocity based model. Most of them have been known for decades in the software industry. They are squishy.

  1. It’s essentially a Taylorist factory where most of the interest is in efficiency, and not on outcomes. by Taylorist, I mean Frederick Winslow Taylor. In fact, Kanban originally came from manufacturing. Cost accounting is the beginning of the imposition of a Taylorist model, to describe something more nuanced than what you see in a factory. (please comment and say why if you disagree). By using velocity as a yardstick, you pervert velocity’s purpose and dilute its usefulness.
  2. As per PeopleWare by Tom DeMarco in 1987, most new technology development problems are actually people problems, either on the product development team, or with respect to the customers.
  3. Outputs are assumed to be linear. This is patently not true for knowledge work. Even in 1975 at the time of the Mythical Man Month, it was already acknowledged that adding people tactically is a major blunder in the context of creative work. 
  4. More recently, I’ve fascinated by psychological safety in the team as articulated by Amy Edmonson as an underlying factor influencing actual performance.

At its core, companies care about being able to release quickly. Velocity and story points are just one way to get at what’s happening and why it’s taking so long. But it’s essentially an internal process. At some level, it’s just bureaucracy created to manage product creation…on its own usually not valuable to customers.. So in and of themselves, if the teams provide value and can show they are doing so, then velocity doesn’t matter.

<< Help Yo' Friends

Filed Under: velocity

  • 1
  • 2
  • 3
  • …
  • 16
  • Next Page »

By Role

  • Startup Founder
  • Software Manager
  • Remote Leader
  • Innovation Executive
  • You Like?

    Search

    Key Topics

  • Faster time to market
  • Early-stage Growth and Marketing
  • Product-Message-Market Fit
  • Experiments and Minimum viable products
  • Metrics
  • About Luke

    Luke Szyrmer is an innovation and remote work expert. He’s the bestselling author of #1 bestseller Launch Tomorrow. He mentors early stage tech founders and innovators in established companies. Read More…

    Topics

    • agile
    • alignment
    • assumptions
    • case study
    • conversion rate
    • delay
    • Estimation
    • experiments
    • extreme product launch
    • find people
    • funding
    • Growth
    • inner game
    • innovation
    • landing page
    • landing page MVP
    • manage risks
    • marketing
    • metrics
    • minimum viable product
    • modelling
    • modularity
    • personal
    • Pitch
    • podcasts
    • priorities
    • proof
    • release planning
    • Risk
    • software
    • startup
    • stories
    • time management
    • tools for founders
    • uncategorized
    • unknown unknowns
    • velocity
    • vizualization

    Tags

    agile funding automated testing bottleneck case study conway's law covid customer development digital taylorism existential risk extreme product launch faster time to market growth headlines identifying needs landing page mvp launch lean lean startup managing priorities market risk minimum viable product modularity numbers options output paypal planning principles prioritization problem to solve process risk product market fit real options split testing startup story systemic test driven development testing time management tool underlier value hypothesis value proposition work time

    Copyright © 2021 · Log in · Privacy policy · Cookie policy