ENG491 Technology Entrepreneurship

ENG491 Technology Entrepreneurship Fall 2011 – Fall 2012 Emre Oto Building a Lean, Scalable Startup www.eng491bu.org Follow on Twitter: @eng491

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Week 12Executive Summary of ENG491 • Technology entrepreneurship is a hard, human science that follows the scientific method • Today’s class: Final words of wisdom for aspiring entrepreneurs

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #1Planning is guessing • Refertoyourbusinessplans as businessguesses, yourfinancialplans as financialguesses, etc. • Plansletthepastdrivethefuture • Theyinhibitourabilitytoimprovise • Youhavethemostinformationwhenyouaredoingsomething • Makedecisions not far in advance but rightbeforeyou do something

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #2GrowingvsExpanding • Prematurescaling is theprimarycause of deathforstartups • Allcompanieshave a “right size” • Growslowandseewhatfeelsright • Small does not haveto be a steppingstone, it can be a destinationitself

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #3Start makingsomething • Stop contemplating, build a Minimum Viable Product, and start testing • Buildsomethingthat “makes a dent in theuniverse”, andsomethingthatyouwouldneedyourself • Ideasarecheapandplentiful, whatcounts is how youexecute == Validated Learning • No time is noexcuse, manageyour time, start now

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #4Outsidemoney is Plan Z • Youneedupfrontinvestmentonlyifyouarebuilding a factoryor a restaurant • Today’sbusinessesaremostly IT based service economy • Youmayneedlessthanyouthink • Gettobasics, start buildingthe MVP, anditerate • Take on as littleoutsidecash as possible

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #4Outsidemoney is Plan Z • Risks of takingoutsidecash: • Yougiveupcontrol • Cashingoutbeginstotrumpbuilding a qualitybusiness • Spendingotherpeople’smoney is addictive • It’susually a baddeal • Youmaybecomeinvestorcentricinstead of customercentric • Raisingmoney is distracting == Spend time buildingtheproductinstead

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #5Less is a goodthing • Embraceyourconstraints • Constraintskindlecreativityandinnovation • Limited resourcesforceyoutomakethemost of whatyouhavegot • Youneverhaveenough time/money/people/experience • Throwless at a problem

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #6The 80/20 Principle (ParetoPrinciple) • Build a kick-asshalfratherthan a half-assedwhole • Start chopping, youcannot be building 10 things at thesame time • Focus on the “epicenter” • If I tookthisaway, wouldwhat I am sellingtodaystillexist? • Makethebestout of theepicenter • Ignorethedetailsearly on

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea#7Do not delaydecisions • Decide based on validated learning and pivot • Not deciding is not an option • Make calls early and often to reduce batch size • = Move with small decisions vs big decisions • = Big decisions are harder to make • Fail early, fail often, fail fast • Long projects kill morale • Make the call, make progress, get the product out the door while you still have the motivation and momentum

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea#8LaunchNow • In the Lean Startup, the product is the experiment • You cannot learn from the customer unless they experience the product • Build for the few, and not for the man • Save bells and whistles for later • Stop imagining what is going to work. Find out for real

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #8Goodenough is fine • Find the solution that delivers maximum efficiency with minimum amount of effort • Solve problems with simple, mundane solutions, it’s fine if it gets the job done • You don’t always need to demonstrate glamorous skills in each solution • Don’t waste your resources • You are a resource too: Beware from sheer effort overload

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea#9Do not copyideas • Copying skips understanding how you grow • You have to understand why something works • If you copy you lose all the substance and understanding to base future decisions on • If someone else has already done the bulk of the work you are copying

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea#9Do not copyideas • Copying skips understanding how you grow • You have to understand why something works • If you copy you lose all the substance and understanding to base future decisions on • If someone else has already done the bulk of the work you are copying • Two things protect you from copycats: • Validated learning • Pouring yourself into the product: Make yourself a part of it

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea#10Underdoingyourcompetition • New market disruption targets nonconsumers • In new markets/resegmented markets, you can’t compete by oneupping the competition • Solve simple problems in a simple way • “Out of clutter, find simplicity” (Albert Einstein)

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #11Focus on yourself • Do not obsess about competition or potential competition • Focus on your own learning and discovery • Focusing on the competition makes you reactive (rather than visionary) • Obsessing about competition may dilute your own vision

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #12Say notocustomers • Don’t add bananas to your lasagna because a few customers wanted so • Follow the masses • Feel free to say no to customers • ..but provide a solid justification why the answer is no • You can’t be everything to everyone • Remember early adopters vs mainstream • Keep solid positions in negotiations of all sorts • otherwise customers will think you are playing with them

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #13Layinglowfor a while is good • Being obscure is a great initial position to be in • Be happy you are in the shadows • Start small • Use your time to make mistakes without the whole world hearing about them • You don’t want everyone to watch you starting your business • Use this early period to take risks and learn

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #14OpinionLeadership • Companies building new markets or niche markets enjoy one advantage: Opinion Leadership • Build an audience • Speak, write, blog, tweet, make videos • Outteach (You can seldom/never out market, but you can always outteach) • Earn loyalty by teaching, this is beyond marketing

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #15Everythingyou do is marketing • Perception is reality • Marketing is not a department, everything you do is marketing • Marketing is not a set of individual events, it is everything you do • So be careful

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #16Success does not happen overnight • You will not be a big hit right away, you will not get rich quick • “Sustained growth” takes time • Start building your audience, start getting people interested in what you have to say, you will build a sustained Share of Voice

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #17Human resource is everything • Never delegate a task before you have performed it yourself or have strong expertise on how it must be done • Hire slow, and hire when only absolutely necessary • Capabilities are more important than resumés or GPAs • Pass on great people if necessary

ENG491 Technology Entrepreneurship Week #12«KeyLessons Top 18» Idea #18Be honest to customers • Own your bad news and own it sincerely • Honestly be concerned about the fate of your customers • Expectation management is incredibly important: State, in very clear terms, what you will deliver and when

ENG491 Technology Entrepreneurship