Innovation Archives ~ Launch Tomorrow

Disproved: I can just react to everything and have a productive culture

February 26, 2020 by Luke Szyrmer Leave a Comment

Most people are familiar with the 4×4 matrix of urgency and importance that Steven Covey popularized. (Or actually misappropriated from President Eisenhower).

Although it's true that the majority of high growth stories do include a lot of flexibility, agility, and adaptiveness, that doesn't mean that planning is worthless. Eisenhower quipped that “Plans are worthless, but planning is everything." What's most valuable in planning is being proactive–to prevent preventable crises. And if you really are going quickly, it feels like a car chase already.

How prioritizing during a rapid growth phase feels

Like cash flow crunches. The loss of an important resource. A consistent source of sales.

For example, to help prevent cash flow crises around bills for software and tools that I use in my own business, I realized I can buy annual or lifetime plans. Moreover, I can keep a cash reserve for multiple years' worth of using the tools. This way, I guarantee I'll have the option of being in this business for a much longer time horizon.

It helps shift my own focus from an early stage mentality of "low monthly run rate" which made sense as I validated different business models–to one of an efficiently run business. It also means that I eliminate the occasional surprises around not having enough cash to cover this or that bill.

Note: this is an internal change in my business only. It gives me a good amount of flexibility. All it takes is setting up a business savings account and transferring over financial buffer, so that I can sleep easy at night. In short, I am eliminating a whole category of problem in my own business with this one small tweak.

In his classic 7 Habits of Highly Effective People, Steven Covey shared a quantitative benchmark around for highly effective individuals and organizations (based on his research and work with them):

As a matter of habit and culture, notice that proactive businesses spend the overwhelming majority of time in Quandrant II. The important and not urgent. Such as coming up with contingency plans and being proactive, without necessarily tying yourself down and committing unnecessarily before you know what you need to.

In the example above, I still have the option to raid the financial buffer. But then I am deliberately changing my decision.

Interestingly, for people who aren't effective the numbers more or less reverse on average. Most of their time is spent doing things of low importance: quadrants III and IV. This crowds out the time needed to do quadrant 2 work, namely important but not urgent work.

Inadvertently, I fell into that trap myself.

While running an agile and adaptive process–without any real external or existential threats–it was easy to just ignore the need to be proactive. If we were honest with ourselves, most of what we did was neither important nor urgent. And it showed on the bottom line unfortunately, i.e. a team spending 2 and a half years to redevelop a product that ultimately didn't sell much anyway. Most people have some kind of a similar story.

In practice, we only really planned one sprint at a time. And that was good enough for us. Over time, I habituated my stakeholders at the time to this pattern. And allowed myself to fall into it, too. Which wasn't healthy. This was the type of product that can't just be rolled out via the internet or directly. I had good reasons to be suspicious of committing to anything beyond one sprint. If we did commit to anything, the team would need to replan everything a sprint later.

In a way, lack of longer term planning paradoxically helped in this context. Most of the volatility around the work was in the latest news on their side. Even though we knew we needed a longer block of time to get to a truly releasable unit of work, at the end of every sprint I'd hear about a new business priority–before we actually released anything.

When confronted with the need for a plan, I mutinied.

I was pretty vocal about being adaptive, later when asked to provide detailed plans, I locked up. I had forgotten what that meant. I wanted the team to be self organizing, and to be left to our own devices. But, something bothered me.

Begrudgingly, I started to assemble bits and pieces and looked through other examples in the company of "good plans" submitted by other managers. And I realized that thinking through things in more detail was helpful, especially once new products or offerings are largely validated. I'd place small details in a larger context, so that the medium term plan was internally consistent, while still leaving myself the ability to back out easily.

But planning itself is good.

For all the trash-talking about "big planning up front", I think it's worth pointing out that in an agile and scrum context, I've never heard anyone claim that planning itself is bad.

In the agile manifesto, the signatories stress they value people over process. But planning is ideally done in a way that takes into account everyone's needs and opinions. Ultimately agile values the team's need to self organize. And that includes planning, if that's what the team needs. Or what a number of teams need to ship their work.

The main reason I've found planning helpful is to realign details around priorities. If you have a large enough team, there is a car chase of details coming at you in any given moment. Being clear on the priorities and knowing how to apply them is where a purely adaptive process breaks down.

I was afraid making plans would be constraining. And only after a while, I realized that it's the proactiveness in planning that was most valuable. Not the plan itself. The plan itself is just evidence of having been proactive.

It is dangerous to use a plan as an organizational commitment device, as that shut down the ability to respond appropriately as new learnings came up. But other than that, there is a time and place for a thought through plan for a team in "execution mode" as they're going to market.

Key Takeaways

Even though high growth requires you to be highly flexible, planning is still a high value activity.
Ideally, you want to aim for spending 65-80% of your time and resources on high importance and low urgency tasks, even as you validate new business ideas.
As a team matures, there will be a longer time horizon of planning ahead, especially if it isn't possible to actually release at the end of every sprint.

<< Help Yo' Friends

Why improving requires change

February 18, 2020 by Luke Szyrmer Leave a Comment

This isn't a how to post, as usual. Just an observation.

Photographer: Armand Khoury | Source: Unsplash

Quite often, an ambition to innovate is paired with an unwillingness to change.

Usually, the latter isn't conscious. But it blocks you from finishing or shipping anything.

It can be quite subtle. In how people speak or collaborate. In pushing back. In sub-par levels of trust.

It might seem obvious at the face of it. Yet, it's probably a common issue companies face when trying to become more innovative.

So before trying to convince anyone about a new product, you might be better off trying to introduce a smaller change of some sort, and seeing where the pushback comes from. And where the fault-lines actually lie. Even though it will create a conflict of sorts, it will highlight what you are up against.

Key takeaways

An ambition to innovate is often paired with an unwillingness to change.
Introduce a small change to test how a culture will deal with a bigger innovation.

<< Help Yo' Friends

How the infamous 1984 Apple launch commercial was canned…almost

February 5, 2020 by Luke Szyrmer Leave a Comment

From the very beginning, Apple always had a flair for marketing. Mike Markkula believed that a fledgling venture needed to act like a successful company if it wanted to become one, at least in terms of external perception, and Steve Jobs always insisted on the highest possible production values, even while Apple was still in the garage. The Apple II was featured in an expensive, two page spread in the September 1977 issue of Scientific American, for example, even though Apple had less than twenty employees and minimal sales at the time.

Apple's advertising agency was Chiat-Day, founded by Jay Chiat in 1968. Jay Chiat was compulsively innovative, brash and irreverent, much like an older version of Steve Jobs, and the two hit it off great when they were introduced in 1981, just before Chiat-Day acquired Regis McKenna's advertising operations. Jay and his talented team, featuring Creative Director Lee Clow and star copywriter Steve Hayden, crafted Apple's first TV commercials, recruiting talk show host Dick Cavett as a spokesperson, and created the campaign that launched the Lisa, including a TV commercial that starred Kevin Costner while he was still unknown.

Toward the end of 1982, art director Brent Thomas and Steve Hayden came up with the idea of doing an ad campaign based on the timely tagline "Why 1984 won't be like 1984". Chiat-Day shopped it around to a number of clients, including Apple, where it was proposed to be used for a print ad in the Wall Street Journal promoting the Apple II. But Apple didn't go for it, and the idea was filed away until the spring of 1983, when they met with the Mac marketing team to start working on the launch, which was scheduled for January 1984.

Steve Jobs wanted to launch the Macintosh with an inspiring commercial that was as revolutionary as the product itself. He loved the Orwellian tagline when it was presented, and he encouraged the Chiat-Day team to pursue it. Steve Hayden and Brent Thomas put together an intriguing story board, envisioning a visually striking, highly symbolic, miniature science fiction epic featuring a young female athlete who liberates the subjugated masses from totalitarian domination by throwing her sledgehammer to smash a huge screen displaying Big Brother.

Macintosh marketing manager Mike Murray and Steve Jobs loved it, but they needed to get new CEO John Sculley's approval for such a large expenditure. Sculley was a bit apprehensive (after all, the commercial hardly mentioned the Macintosh), but he gave his OK for an unprecedented production budget of over $750,000, to make the one-minute commercial.

Chiat-Day hired the best science fiction oriented director they could find, Ridley Scott, whose previous movie, Blade Runner, possessed the visionary dystopian feel they were striving for. Ridley was based in London, so they decided to shoot it there, at Shepperton Studios. Several Apple and Chiat Day executives, including Mike Murray and Steve Jobs, travelled to London for the week of filming.

By the time the Apple folks arrived, Ridley's team had assembled a cast of almost 200. To play the oppressed, downtrodden baldheaded workers, his people recruited dozens of authentic British skinheads, paying them $125 dollars a day to participate. It was harder to cast the young heroine, since most of the models who tried out had trouble spinning with the heavy sledgehammer. Luckily, one named Anya Major was an accomplished discus thrower, and she could do it faultlessly, so she got the part.

When he arrived at the studio, Mike Murray went looking for Jay Chiat, who was supposed to already be there. He found him lurking off to one side, seemingly hiding behind some scenery. Apparently, some of the skinheads were in a nasty mood, and they were looking for trouble during breaks in the filming, so Jay thought it was prudent to make sure he stayed out of their way.

While the filming was taking place in London, I got a call from someone at Chiat-Day asking if I could write an Apple II Basic program to flash impressive looking numbers and graphs on the screen, to be overlayed on the image of Big Brother. I spent an afternoon cooking something up, and I sent it off to them, although I was never sure if it was used or not.

Lee Clow and Steve Hayden presented a rough cut of the commercial to the Apple team a few weeks later, and everyone was ecstatic. The commercial was classy, suspenseful and enigmatic, and seemed certain to garner lots of attention. It was shown for the first time at Apple's 1983 annual sales conference in Honolulu in October, with Steve preceding it with a clever rap positioning Apple as the industry's last alternative to IBM (see The Times They Are A-Changin'), to a rapturous reception, almost as apocalyptic as the commercial itself. The response was so great that Apple booked two expensive slots, for sixty seconds and thirty seconds, costing over a million dollars, to show it during Super Bowl XVIII, which was just two days before the Mac introduction.

Mike Murray and Steve Jobs screened the commercial for Apple's board of directors in December, to get final approval for the huge Superbowl expenditure. To their surprise, every outside board member seemed to despise the commercial, with Mike Markkula suggesting that Apple begin a hunt for a new ad agency. One of the board members remarked that it was the worst commercial that he had ever seen. Steve and Mike were devastated.

The chilling reception from the board compelled John Sculley to ask Chiat-Day to sell back both time slots that they had purchased. But Jay Chiat was true to form, and only sold off the thirty second slot, telling Apple that he wasn't able to get rid of the longer one at so late a date. Apple considered using the slot for a more conventional commercial, but in the end decided to take a chance on the 1984 spot.

The Mac team was told that the commercial would air early in the third quarter, at the first commercial break after the second half kick-off. Burrell and I wanted to see a real audience's reaction to the commercial more than the commercial itself (since we had already seen it plenty of times), so we watched the Superbowl at a sports bar near Stanford called the Oasis, with some other Mac team friends. The game was boring, but the bar was packed, and the commercial looked great when it aired at the designated time. We thought we heard a small murmur in the bar after the commercial, but it was hard to tell if there was any significant reaction.

That evening, we were surprised to see the commercial run again on the evening news shows. Apparently, it made such a big impression on lots of viewers that, coupled with the fact that it only was supposed to run once, it became a news item itself, as well as increasing expectations for the upcoming launch. It ran dozens of times on news shows in the next couple of days, gathering Apple over five million dollars worth of free publicity.

A week after the Macintosh launch, Apple held its January board meeting. The Macintosh executive staff was invited to attend, not knowing what to expect. When the Mac people entered the room, everyone on the board rose and gave them a standing ovation, acknowledging that they were wrong about the commercial and congratulating the team for pulling off a fantastic launch.

Chiat-Day wanted the commercial to qualify for upcoming advertising awards, so they ran it once at 1 AM at a small television station in Twin Falls, Idaho, KMVT, on December 15, 1983. And sure enough it won just about every possible award, including best commercial of the decade. Twenty years later it's considered one of the most memorable television commercials ever made.

This was a repost from folklore.org, a collection of war stories from Apple's early days.

<< Help Yo' Friends

Disproved: Politcians claim entrepreneurship is the economy’s job growth engine

January 22, 2020 by Luke Szyrmer Leave a Comment

When I was close to finishing a degree in economics, I was still a bit unclear about what actually causes economic growth after 4 years of study. Economists have a complicated and sophisticated set of models to understand how economies work, on both a theoretical and empirical level.

When it came to the topic of growth, if I remember correctly, the key factor underlying economic growth was productivity. And the primary driver of productivity were external technology shocks. Which can't be modelled. They're just assumed to happen. So basically, the economics department at PENN pulled an intellectual bait-and-switch on me. And I ended up going into software anyway.

Ultimately improvements in technology drove productivity and economic growth of countries. This was true of both developed and emerging economies, with the latter often benefiting from imported technologies, rather than creating their own.

Is entrepreneurship a job growth engine?

This blog doesn't cover politics. That said, I thought it might be worth drawing your attention to a half-truth that often comes up among politicians (and that's often repeated as conventional wisdom):

Entrepreneurship is an engine of growth.

Unfortunately, it's not really true if you look at the data. It is true the primary engine of growth are…high growth startups. These tend to be high technology startups or highly innovative ones. These are most likely to be hitting growth rankings like the INC 5000. In the US, these consistently make up a whopping 3% of all new businesses, according to Scott Shane in The Illusions of Entrepreneurship:

"In fact, only about 7 percent of new companies in the United States are started in industries that the government defines as high technology, and only about 3% of business founders consider their new businesses to be technologically sophisticated."

Industry breakdowns of high growth companies also reflect this insight. For example, on the INC 5000 for 2019, there are:

The 3% of technologically sophisticated startups made up around 30% of the INC 5000 in 2019. Thus as the startups grew, they are likely to be hiring rapidly. And creating jobs.

Conversely, 97% of new businesses fall into the category of a new hairdresser's, convenience store, or a new pizza joint around the corner. Necessary everywhere. But not particularly likely to grow rapidly. And hire rapidly. And that's totally fine. Most of these are sole proprietorships; the founder created his or her own job.

To be clear, growth is not an end to itself. Not every business should be designed to be high growth business. If this is the ambition of the founding team, then great. But just because it's a convenient soundbite for a handful of tech VCs and politicians, it doesn't mean it's the right choice for entrepreneurs. There are many potential measures of success and self-accountability. Growth, including job growth, is only one of them.

Keep your ears peeled during the upcoming elections, as this convenient half-truth is repeated by politicians all over the spectrum. It is, however, more in the category of "what voters want to hear", rather than actually being true.

<< Help Yo' Friends

Why outcome discovery trumps product discovery

January 1, 2020 by Luke Szyrmer Leave a Comment

Discovery, at the product level, makes a lot of sense. You need to figure out exactly what product needs to be built, so that you build something that will hit a sweet spot for your customer. However, what that customer cares about is NOT your product. It’s the outcome your product helps them achieve. Outcomes are clearest in a B2B context. Almost all enterprise sales are driven by 4 factors: increasing revenues, decreased cost, decreased risk, or improved customer experience. For consumers, this isn’t always clear cut. In many cases, though, there are specific objectives the customer is trying to achieve.

And yet, discovering client or stakeholder ideal outcomes is more important than discovering products. It might sound like an academic distinction that has little practical meaning. But actually shifting from products to outcomes is the most important step in moving from a “my company” focus to a “customer-centric” focus. Because a product is still something that only you and your team cares about. An outcome is the main thing your customer cares about.

The Copernican Revolution of focusing your product development around your customer

Instead, I think the core learning process my team goes through is how to achieve specific business outcomes for specific people as quickly as possible. Usually this is a case of being laser focussed on only what must be shipped first in order to achieve those outcomes.

All other ideas are added to the backlog and delayed until after the immediate next release. Any time spent analyzing them, developing them, testing them, or reporting on them delays your current release. And your highest priority outcome. Counterintuitively, this includes longer term activities like planning, estimation, or budgeting.

If you allow all of these other features to creep into your release, you are delaying the possibility of achieving your customer’s outcome. And your customer has to achieve their outcome before you can achieve yours. That is the true total cost of incrementally adding the extra features. Not just the extra product team time (regardless of how much more time it does require).

Let’s gather round the pork barrel and see who negotiates what

The fact of the matter is that it’s not worth aligning around big laundry lists of features that go into a release. Because it then becomes a case of pork barrel politics in favor of individual stakeholders in a larger company. If that is going on, the main goal or outcome of a release is already difficult to see. And everyone wants to get in their piece of pork.

When do you know you have a useful outcome?

Let’s say you have 200 possible features you can build and ship. Of that 200, you can combine them into subsets that achieve a particular benefit for one or more clients. These clients can be external or internal. So the goal of a release is to make that subset small enough to make an impact for at least one person. Possibly a few people. Or one client.

1. A Specific Person, Company, or Role in a Narrow Market Segment

You have one specific person or at least persona in mind. You can use the Hero Canvas, or not, doesn’t matter. But it’s important to frame discussions of value around people impacted.

Having a specific person in mind grounds your effort. Most of the meaning around products will be based on how they impact your customer’s lives. How it plays into the stories they already tell themselves about their struggles and efforts.

Also, by choosing a specific persona or person, you choose an angle or perspective. Similar to the Copernican revolution, you “choose your sun”. This is what gives life to your business, not the other way around.

New technologies can be applied in a number of different markets or segments. And the details will vary widely based on which segment you choose. For example, you invent a way for drones to collaborate autonomously. This invention can be used in agriculture, military, construction, oil exploration, or games. In each case, it’s the same base technology, but you will prioritize different first features for each one as you productize the technology for each application in each segment. Without targeting a specific market, all you have is a clever invention.

2. Their success metric

You have an understanding of their motivations, metrics, and how they define their own success. Again this is often clearer in a B2B context. Here’s an example of different metrics with an HR department:

focus on the right metric–one which customers actually care about

The problem [our failed startup] set out to tackle, reducing turnover and improving new hire performance, was felt acutely by our buyers (CHROs / Heads of Talent). It was NOT felt acutely by our users (recruiters). Recruiters are measured against average time-to-hire, not new hire retention or performance. We were trying to improve outcomes about which users would pay lip service, but which didn’t impact their paychecks or promotions. –Sam Stone of @ansarotech

By choosing a person or group of people, they will be measuring themselves against particular metrics, such as the average time-to-hire for recruiters. By helping that person with that metric, you improve their life. Provide value. Whether you do that with a product, service, article, app, or anything else doesn’t really matter to them. It matters a lot to you. But to you only.

3. No side effects

You aren’t causing unintended side effects that matter to that person. To counter-balance the previous point, if you significantly do improve one metric but damage something else that matters to that person, then they won’t be interested.

Like taking aspirin for a headache and getting a stomachache as a result

Let’s say your product speeds up the average time to hire for recruiters, but it requires that they work 12 hours days in order to achieve that outcome. In particular, they need to stay at work for 4 extra hours per day, to maintain the information about candidates in your SaaS app. For many recruiters, this will be an unacceptable side effect, as they will have to sacrifice family time also, in order to achieve the outcome.

4. Easy to execute or confirm

If you are at a validation stage, it should be easy to validate what the outcomes are by talking to those customers.

If you are already building product, this implies you have built your product in a way that is cheap to release. In the software case, this means you are using a lot of automated software testing. So you are sure of exactly what is in the product and what is working. And you can release as soon as all of your tests pass. Better to commit to fewer features, but only release ones that work.

If you are in a big company, it should be easy to get alignment around a particular outcome. There can be multiple conflicting agendas of the stakeholders, and it may be difficult to agree what the intended outcome is. Figuring this out takes time, but it’s still relatively the fastest path to the outcome, if you want to work sustainably.

The challenge with outcome discovery is often that the #1 or #2 are unclear. And after they become initially clear, they often change.

Case Study

Sometimes you discover a smaller, nearer term outcome that helps align everyone as an incremental step. For example, in an enterprise software case, it can be worth helping a different stakeholder in the shorter term.

Giving a salesperson something to demo, before delivering an initial release only directly to a client. The salesperson has a lower bar. She only needs to build a picture and narrative around the product. She don’t need it to be fully functional, taking care of all edge cases and side effects.

What if my releases require Herculean efforts?

Release scopes need to be as small as possible, and organized around specific outcomes which you are trying to achieve. Because this means it gets out to customers faster. And you achieve the outcomes faster.

If releases are really big, then quite possibly, that’s the most productive outcome you need to address. It makes more sense to streamline your existing processes, before it’s even worth looking at creating new products. If you don’t streamline first, you’ll create resource locks among partially finished and unreleased products all over the place.

Actual time frames will vary significantly by industry. A good general rule of thumb nowadays is a maximum of a month, for any product that doesn’t have a manufacturing component. For example, you’re unlikely to be able to build an oil tanker in a month. But you could come up with a design prototype for one in a month.

Why discovering outcomes first matters even more than discovering product

The person being helped decides whether your help was valuable. It doesn’t matter how much effort or resources or blood you lost, if it’s not relevant to your target customer. Usually, product teams don’t spend nearly enough time to getting deep enough into the customer’s world. They don’t need to at first, but at that point they are relying a lot more on luck than they care to admit. Taking beta they don’t need to. Even using the word product already pre-supposes a solution. Namely, that it’s a product. As opposed to a number of other solutions, like a service.

Key Takeaways

True outcome discovery and alignment is even more valuable than product discovery at an early stage.
Outcomes focus you on people for whom you want to create an impact, as this will ultimately drive your success.
A well-chosen outcome needs: a clear person affected, a metric they use to evaluate the outcome, no side effects, and easy and clear path to execution

Next Steps

Get details of my hero canvas course over here, to help you narrow your focus on the outcomes your customers and users care about.

<< Help Yo' Friends