In an article in the Washington Business Journal, Philippe Chetrit speaks candidly about the factors that caused Tixelated to shut its doors.

“What we ran out of first, before ideas, before money, before time, was steam,” [Chetrit] writes. “We spent two years tirelessly working, putting all our time, faith and resources into Tixelated. And what we were getting in return was stress, worry, and emotional haywire.”

This is not a case, as ego risk often is, of cognitive biases tripping up the founding team, but a simple reality that starting a company is hard and our own psychological wellbeing sometimes takes priority over the success of the business. It’s rare to see such open and honest evaluation of the emotional challenges leading to the decision to shut down a business. Kudos, Philippe for being a leader the conversation on ego risk. We look forward to watching what you do next.

Original Post: Ego Risk Downs DC Startup Tixelated from Teague Hopkins Group - Lean Startup Services

When you’re doing customer development, you are specifically NOT trying to understand and satisfy all of your possible users, or the total addressable market. You can deal with the whole market after you get off the ground, but you’ll never get there unless you understand and satisfy (or better yet, thrill) your early adopters. You need to find the people with your problem who feel it so acutely that they are willing to try your imperfect solution, and to help you see where it needs to be improved. These early customers are worth their weight in gold once you find them. They will be your greatest source of insight into why the product isn’t working, the most supportive when it seems like you’ll never get it right, and your loudest evangelists when you finally nail it.

Portrait of an Early Adopter

Image by Mike Licht, NotionsCapital.com

To find people with the problem you’re solving, look for five simple criteria:

1. They have the problem,
2. They know they have the problem,
3. EITHER they are paying for a solution currently
4. OR they have hacked their own together,
5. AND they are still unsatisfied.

If you’re talking to people who don’t meet all of these criteria, they are probably not your early adopters. They might be future customers. They might think they’ll buy your product at some future point, but that point may never come. If they aren’t willing to buy until the product is perfect, you can’t afford to focus on building the product just for them. Keep looking until you find the people who need your solution so badly they will climb on board with you before you’ve finished building the boat.

Original Post: The Ideal Profile of an Early Adopter from Teague Hopkins Group - Lean Startup Services

An interview with Agile expert Elliot Susel about using agile to mitigate tech risk.

Full Transcript

Teague Hopkins: Welcome. I’m Teague Hopkins. Today I’m here with Elliot Susel, the senior project manager and primary Agile evangelist for Taxi Magic, an app that helps people book ground transportation. Elliot’s an expert on Agile has worked on it for five years at Accenture and now you’re at Taxi Magic. Is that right?

Elliot Susel: That’s right.

Teague: To start off, what is Agile for people who are not familiar with it?

Elliot: The core idea behind Agile is a series of practices that help you to develop software iteratively. That’s the core idea behind the Agile methodology.

Teague: For some of our entrepreneur listeners, how can Agile help ameliorate tech risk, this idea that we’ve talked about as the challenge of whether we can actually build the things that we’re trying to build?

Elliot: As you’re working toward a technical solution there’s a number of tools from the Agile methodology that you can use to help you work iteratively and to work your way toward a solution rather than having some grand vision and being unable to test that vision until you’ve got this final product and it may fall on its face. The idea is that by having value that you can deliver incrementally by using Agile processes and working iteratively you can test your assumptions as you move along and then also refine your ideas. As it relates to technology specifically, there’s a couple things that you can start to accelerate by working iteratively. The first is that not only are you able to improve the product, you’re also able to improve the team that’s working on the product. So, one of the core Agile practices is this idea of a retrospective where the team talks about what’s going well, what’s not going well, and specific actions that we can do to improve in the future.

Teague: I know that you’ve got a couple of retrospectives that you use on a regular basis. Can you explain what your favorite one is and how it works?

Elliot: Yeah. One of the favorite retrospectives that I’ve ever done was oriented towards gaming and I said, we can make this retrospective not just an exercise where we make some columns on a whiteboard and say here’s what we liked, and here’s what we didn’t like, but we could get really creative. So, we turned it into this game where you would draw on the whiteboard anything that would accelerate us, and you would draw on the whiteboard anything that would impede us, and we were represented as a ship in the ocean. We ended up with giant squid, and fire-breathing monsters, and anchors, and airplanes, and sails, and party cakes, and all kinds of representations, and

Teague: And that still helped you get towards the goal you were getting at?

Elliot: Each one was not just a fun thing to draw, but also had with it an association. I think that the giant squid had to do with our testing, and the team then had to figure out well how do we solve this issue of testing and then they also drew something in to deal with the giant squid which was a fun exercise.

Teague: Great.

Elliot: It kept it light-hearted and it got everyone really engaged.

Teague: Uh huh. (affirmative) It sounds like a lot of this idea of working on the technology in an iterative way sort of dovetails with a lot of the Lean startup methodologies. In your experience have you seen any byplay there?

Elliot: I would say yes and no. You can do Agile without being Lean, which is unfortunate, but I would say that there’s really three roles on an Agile team. One role is the product person, the product owner more formally, where their vision and their goal is to set the vision for the team and define what the team should be building. Now a product owner may or may not be working according to Lean principles and can march the team in a direction that may or may not be consistent with Lean. There’s the scrum master whose job it is to remove impediments and to help the team move as quickly as possible.

Teague: Uh huh. (affirmative)

Elliot: And, the team whose job is ultimately to be in the iteration.

Teague: Uh huh. (affirmative)

Elliot: And the more time they spend in the iteration and not on distractions, the better.

Teague: If you were talking to somebody who’s adopting Agile for the first time or trying to adopt Agile for the first time, what would be the most important piece of advice you can give them in terms of taking their first steps?

Elliot: Find a really good coach. Find the best possible practitioner that you can actually spend time with. And, to use the words of the scrum master and practitioner that I learned from, to spend time in their dojo.

Teague: Uh huh. (affirmative)

Elliot: A scrum master really is creating an environment and it’s not just this series of practices; although the practices are important, but it’s an organizational mindset where yes the team can build incrementally and that’s lovely and that mitigates your tech risk. But, also, it helps if the product team is also thinking incrementally and how can we test our assumptions incrementally, and how can we incrementally work toward our solution in the best possible way?

Teague: Excellent. Well, thanks, Elliot, for joining us today. You can find out more about Agile, and Elliot, and Taxi Magic at Elliot’s website at www.elliotsusel.com. Thanks for listening.

This interview originally appeared in The Three Biggest Risks to Your Startup.

Original Post: Interview with Elliot Susel: Tech Risk + Agile from Teague Hopkins Group - Lean Startup Services

Starting any new venture is risky. Before we can limit or manage the risk, we have to understand it.

Most startup (or new product) risk can be divided into three buckets:

1. Tech Risk
2. Market Risk
3. Ego Risk

Tech Risk

Tech risk is what entrepreneurs (or intrapreneurs, for those starting something within an existing structure) most often think about when starting a new venture. Can I build this thing? Is it scalable? Do I have enough servers? The irony is that, especially for consumer web startups, this risk is usually negligible. Most web startups aren’t doing anything that hasn’t been done before, unless it involves patentable algorithms. It may not be easy, but there’s high certainty that it can be done, given sufficient resources.

Market Risk

Market risk is the antithesis of the idea that “if you build it, they will come.” Do people have this problem? If we can deliver the solution, will people even want it? Can we reach the people who will buy this product? Do people believe that our solution is credible? Entrepreneurs should be thinking carefully about market risk.

Ego Risk

The final type of risk facing any new venture is ego risk – and it’s probably the most important and the least discussed type of risk. Ego risk is the chance that an entrepreneur can’t get out of her or his own way, pay attention to the data, overcome cognitive biases, and avoid falling prey to a reality distortion field.

With so much risk, it’s a wonder any new venture survives (many of them don’t). But researchers and entrepreneurs have worked hard on each of these types of risks, and there are strategies for ameliorating each one.

Tech Risk + Agile

Tech risk is often mitigated with some implementation of Agile methodologies. I sat down with Agile expert Elliot Susel to ask him how entrepreneurs can get started with Agile. Listen to that interview here: 
See the Full Transcript.

Market Risk + Lean Startup

Minimizing market risk is the driving force behind much of the lean startup movement. By making a set of small bets in the form of lightweight experiments, entrepreneurs can validate market demand before investing in building a system to deliver a solution or product. Plus, talking to customers often helps entrepreneurs identify problems they had not originally imagined. Sometimes those new problems are more pressing for the customer, and lead to a new product with less market risk.

Ego Risk + ?

Ego risk is the final and most difficult hurdle. There’s no clear-cut answer to this challenge. Religions and philosophers have been focused on ego for millennia. But a meditation or mindfulness practice can be particularly useful in helping us step back from our impulsive reactions to external stimuli (e.g. data that challenges our preconceived notions, particularly if our self-worth is invested in being right, or in one particular self-image.)

Of course, even a zen-master-like separation from the ego doesn’t completely protect us from cognitive biases, nor does a higher IQ or more awareness of these effects. In fact, there is some evidence to suggest a correlation between higher IQ and higher susceptibility to cognitive biases. We don’t yet have any proven methods for overcoming biases, but the Wikipedia page on mitigation is very interesting reading, and a good starting point for learning more.

For more about ego risk and some ways to deal with it, be sure to subscribe to the Innovator’s Digest.

Original Post: The Three Biggest Risks to Your Startup from Teague Hopkins Group - Lean Startup Services

Recognizing that finding the right question can be more challenging than finding the right answer, Warren Berger of Fast Company asked five innovation experts “What questions should every company ask itself?”

Our favorite responses

Tim Ogilvie: “Where is our petri dish?”

“Where, within the company, can you explore heretical questions that could threaten the business as it is–without contaminating what you’re doing now?” In answering that question, it’s up to company leadership to “provide permission and protocols for experimentation”

Eric Ries: “How can we make a better experiment?”

Shifting emphasis from Ogilvie’s where to the how of experimentation, Ries’s question is counterintuitive for most managers, who tend to think in terms of “making products,” not “making experiments.” But as Ries points out, anytime you’re doing something new, “it’s an experiment whether you admit it or not. Because it is not a fact that it’s going to work.” … This means that instead of asking “What will we do?” or “What will we build?” the emphasis should be on “What will we learn?”

Couldn’t agree more with these two. The key to innovation is experimentation, and making it easy for employees to conduct better experiments faster is an excellent way to start.

Visit Fast Company for the full article.

Original Post: Questions from Innovation Experts from Teague Hopkins Group - Lean Startup Services

Minimum Viable Products (MVPs) are experiments, but not the kind you learned in school. You won’t get statistically significant results that could be published in a peer-reviewed journal – but you will get the kind of information that can help you make a choice about your next move.

Photo by Todd Klassy

In business, the scientific method doesn’t give you proof or absolute certainty. It doesn’t make the decision for you. It does reduce uncertainty to let you place smarter bets. A small amount of data can get you from 50/50 to 25/75, and that’s a big difference.

If you think of starting a company as playing blackjack, then lean startup is counting cards. You still have to make the bet, and you’re still going to lose sometimes. But by playing smarter – by making a series of small bets, and betting bigger when you’re more certain of the outcome – you can tilt the odds of winning in your favor.

Original Post: Certainty in Lean Startups from Teague Hopkins Group - Lean Startup Services

Three Feline Founders. Photo by amanky.

Dave McClure of 500 Startups calls it the holy trinity of startup founders. The frequent mantra in the startup space is that there are three primary types of founders: hackers, hustlers, and designers. The prevailing wisdom is that you should have one of each of these on your founding team. But we don’t often talk about what constitutes each of these archetypes.

Hackers

Hackers are not simply code monkeys. They need to be able to do more than just code well. Comfort with ambiguity and an understanding for coding in that context is invaluable for the hacker-founder. Many programmers are happier simply building what they’ve been told to build, but the good entrepreneurs are those who think about what happens when the requirements change – and code as if they will. This means building some things quick and dirty, and accepting that there will be some technical debt incurred in favor of rapid iteration.

Communication skills are also critical for hacker-founders. To achieve company success beyond personal success, you need to be able to communicate a vision to other technical team members and to translate for your non-technical co-founders. Likewise, some comfort with project management is valuable. Finally, any good programmer should understand how their outcomes tie to the success of the business. For programmers working for others, this is the way you communicate your worth; for hacker-founders, this is how you prioritize, test, and iterate for your startup.

Hacker-founders are not the only ones who need these skills, but the reality that there is far less supply than demand for excellent technical co-founders may tempt many non-technical folks to overlook these gaps in their search for a technical co-founder. If all you’re looking for is a code monkey, don’t make them a co-founder; just hire them on a contract basis until you can attract someone who has the complete package.

Hustlers

Hustlers are usually the business development specialists in a startup. It is important to note that this is not the same as an “ideas person.” Ideas people are thinkers; hustler-founders are doers. In a startup, anyone who fails to contribute anything beyond ideas is dead weight and should be cut loose at the earliest opportunity. Hustlers are the ones making deals happen, talking to customers or partners, raising funding to extend the runway, and generally removing obstacles for the rest of the team. Hustler-founders need to be resilient in the face of an endless stream of “no” and tireless in their pursuit of opportunities to promote the company.

Designers

When we talk about designer-founders, most people think about web design or mobile app design, but these are not the most important skills. What startups really need is UX designers, not graphic designers. This point gets lost because many designer-founders have both sets of skills. But make no mistake: this role is not about making your product pretty. It’s about making your product enjoyable and effective. Designer-founders should have extensive experience with problem solving and a disciplined approach to understanding the customer’s problem and designing for the customer’s interactions and experiences with the solution.. Designer-founders might approach this task from perspectives including design thinking, lean startup, user experience design, ethnographic research, or some other school of thought. The important part is that the designer-founder focuses on creating an complete end-to-end experience for the customer, not just the gloss that covers it.

A little of column A, a little of column B…

Few roles fit squarely into one of these categories without overlapping with the others, and any early startup employee needs to be prepared to tackle any challenges that arise. However, if your founding team has the right mix of skills to cover each of these three areas, it will give you a better chance of overcoming challenges and ultimately building a sustainable company.

Original Post: The Founding Trio from Teague Hopkins Group - Lean Startup Services

Photo by vincen-t on Flickr

There’s a simple experiment you can run in a single afternoon that will give you all the information you need to improve the website for your restaurant or bar. Most bar and restaurant websites are terrible. This is almost a mantra in the web design community. Running a great restaurant doesn’t require having the skills to create a great website, but a good website also doesn’t require hiring an expensive firm to design and build your site. Visual designs are time-consuming and often need some technical knowledge to carry out but you can create a perfectly acceptable visual design based on a customizable template. A great website might take expertise, but it only takes a little to take a bad website and make it good enough.

The biggest gain (and best way to set yourself apart) is not how your site looks, but how it makes the user feel. User experience (UX) matters and it’s not hard to be just a little better than your competition.

The Simple UX Experiment

1. Recruit 5 potential customers from your local Craigslist board (offer cash or a discount or voucher for a meal at your restaurant).
Example
Come spend 10 minutes helping us test our Thai restaurant’s website. We’ll give you a voucher for $20 off a meal to use whenever you like. Respond by email with your availability and we’ll let you know where to show up.
Don’t reveal the name of your restaurant. You don’t want people to become familiar with your website until you can watch the process.
2. Stagger arrival times by 15 minutes to give yourself time to reset between test subjects. When your first volunteer arrives, sit them down in front of a computer and tell them the name of your restaurant. See if they can find your website on the first try.
   Explain to your volunteer that you’d like them to speak their process out loud, stream of consciousness style, so that you can understand where they hit problem spots.
3. Ask them to try to find your restaurant’s address on the website. See how much time and how many clicks it takes. Pay attention to how long they spend deciding which links to click, and see if they make mistakes or get frustrated.
4. Ask them to find a menu on your site. See if they can find and open the menu. See if they get confused or lost if they are downloading a PDF.
5. Ask them to make a reservation. See if they use an online reservation service (if you have one) or if they find a phone number to call.
6. BONUS: Ask them to try each of these tasks on a smart phone or other mobile device.

Going through this process with 5 volunteers will take you less than 2 hours and only $100 (or less if you’ve offered vouchers). The insights gained from actually watching your customers struggle with your website will uncover the most common barriers that are keeping visitors to your website from becoming visitors to your restaurant. As an added benefit, even customers who succeeded at using the old website will be happier with the improved user experience. A few simple changes can make a big difference.

Original Post: A Better Website in One Afternoon from Teague Hopkins Group - Lean Startup Services

Culture Camp DC was this weekend. We had an amazing group of attendees, fantastic sessions, brilliant ideas, and some great discussions.

Photos

Photos from the event are available on Google+.

Blog Posts

In keeping with the spirit of an unconference, we’ll leave it to the attendees to tell you what they thought of Culture Camp DC. Here are two blog posts about the event written by our attendees.

Creating a vision or aspirational model for what you want your organization to be like as a persona by Paul Boos

Culture Camp DC: Innovation, Tinker Toys, and the Downside of Early Success by Brenna Cammeron

Twitter

You can also find discussions and live tweets from participants under hashtag #culturedc or by following @CultureCampDC on twitter.

Thanks to Motley Fool for hosting; Chad, Elliot, Paul, and Leah for helping put the event together; and to all our attendees for making the day great.

Original Post: Culture Camp DC Recap from Teague Hopkins Group - Lean Startup Services

I’ve written a guest post for TLC Labs titled 6 Smart Ways to Innovate Inside Your Corporate Culture. I invite you to check it out, along with the rest of their fantastic blog about adopting lean startup methodologies and fostering a culture of innovation inside a 40-year old corporation.

Original Post: 6 Smart Ways to Innovate Inside Your Corporate Culture (Guest Post at TLC Labs) from Teague Hopkins Group - Lean Startup Services