Entrepreneurial Teachable Moments

The Professor and the VC

I attended the UW HCDE Corporate Affiliate Program (CAP) on Tuesday morning and sat next to one of my colleagues who also started a “maker” company last year.  As the corporate affiliates were introduced, we were both surprised to see that there was a representative from Andreesen Horowitz, the famed Silicon Valley Venture Capitalists.  He shared that they joined the CAP because they were on the lookout for design and UX talent for their portfolio companies.

After the introductions, I turned to the professor and suggested that there was only one company here that she should pay attention to – the VC in the room.  She agreed and started over to introduce herself.  I went “wait a minute.  Are you going to introduce yourself as a professor or from your startup venture?”

She said “the startup venture of course.”

I suggested she stop and think about it a minute.

She looked at me and smiled “I will learn a lot more and create a deeper strategic relationship if I introduce myself as a professor, because he is here to recruit students and I can help him with that.  Then, maybe he can help me with funding my company.  Good thinking.  Thanks.”

The Marketing Maven

At the end of a long day, I got a brief email message from a marketing colleagure not very politely lambasting Eric Ries’ The Lean Startup.

“Worst appropriation of Deming and Shewhart that I have ever read.

“Two mentions of Deming and they come late. None of Shewhart.

“And it is the worst sort of self aggrandizing craptastic writing. ‘And then I… and later I..’

“Are there no editors left?”

As luck would have it as I was texting to him while wandering through the ferry terminal, I looked up and he was sitting at one of the tables.  So we continued this conversation on the ferry.  I shared some variant of the following with him:

My condolences for having to suffer through the Lean Startup.  It and Steve Blank‘s books are the worst written of the bunch.  Yet, there are some very good ideas, concepts and action plans that others have managed to extract and do a much better job synthesizing and making the ideas more readable.

My current favorite is Ash Maurya’s Running Lean The book does a masterful job of synthesizing the best of Ries’ lean stuff, Blank’s Customer Development stuff, and Osterwalder’s Business Model Generation and Business Model Canvas.  Ash’s slight revisions to the Business Model Canvas make all the difference in the world in his Lean Canvas.  Product Development is on the left of the Lean Canvas and Customer Development is on the right and they even sequence which steps you should go through to fill out the canvas.  You can play with one for free which I would recommend for your company.

This teaser video gives you a quick synopsis of the book. 

purpose of a startup is business model

Note the image of what a startup is about – “the true product of a startup is a scalable business model.”

Spark59 is their company.  UserCycle is the next thing of theirs I want to explore once I have our FlippedStartup Web presence up and going.  It appears to me to be an interesting variant on the Experian Hitwise stuff that you embed right in your website. It doesn’t give you the Hitwise “where did you come from” and “where did you go,” but it appears to be far more actionable.

As we got up to exit the ferry on Bainbridge Island, my colleague shared that when he got home he was going to log onto Amazon and write a scathing review about Ries’ book.  I laughed heartily and suggested that he probably didn’t want to do that.

He asked “Why?”

I responded “Is your new venture going to be raising more money any time soon from investors?”

He allowed as how they probably were.

“All of the VCs love Ries and his ‘craptastic’ writing.  One of their eager beaver researchers will come across your slander of their current God and religion and you will find yourself on the defensive.  As much as it would feel good to write a really nasty review, it is probably not a good idea.”

He paused and then said “That is probably the best piece of advice you’ve given me in a long time.”

Effectual Entrepreneuring Student

A student in my “Designing a Human Centered Venture” class this quarter asked if we could grab a coffee or glass of wine to provide him with some feedback on the class and the “air quality monitor” his team designed and built.

air quality monitor

We agreed to meet at RN74 so we could continue his wine education.  With a nice glass of a French Gamay Noir ingested, he was finally brave enough to ask me directly – so how am I doing in this class and how is our team doing?  I chuckled and shared:

“Here’s what it means to be an entrepreneur.  Nobody is ever going to pat you on the butt and tell you what a nice job you did or are doing.  All they are going to share with you is the large number of things that you are screwing up.  One of the reasons that I sent you the quote from Clayton Christensen is so that I could be clear that I’m not going to answer questions like these.  Entrepreneuring is all about intrinsic re-enforcement.  You have to do things for your own rewards, not somebody else’s.”

What he really wanted to know was did he have the right stuff to start a company and was the air quality monitor idea a good one.  Since I had consumed enough wine to disavow all responsibility for my comments, I decided to share a difficult teachable moment.

“So let’s reflect a little more on what took place this quarter.  Linda Wagner asked a really interesting question during her lecture – who is the product owner for this product? The whole class looked around at each other and realized that there was no one.  Why weren’t you the product owner?”

He looked downcast and then looked at me and shared “Well, nobody put me in that leadership position?”

I looked sternly at him “Leadership is never given.  It is always taken.  Let me repeat very clearly.  Leadership is never given.  It is always taken.”

As I took another sip of our 2010 Gamay Noir, I asked “So what did you do all quarter?”

The effectual entrepreneuring student answered “I focused on designing and building the product.  I was the only one that could have done that as I was the only one with the technical expertise.”

I then asked “Do you remember the lesson of the business vision presentations on the second night of class?”

He proudly shared “Absolutely.  My presentation for our team was the only one that was a real business vision.  Each of the other teams gave a product vision.”

“Exactly right,” I said.  “And each student very clearly got from that experience that there is a big difference between being product focused and being business focused.  And that the intent of this class was to focus on the business.  So what did you do for the rest of the class after that evening?”

I could see the light bulb starting to go on.  He realized “For the rest of the quarter, I got down in the weeds of designing and prototyping the product.  I let others sort of worry about the business side of things, but they didn’t get very far.”

Given that we had gotten through this tough stuff, I decided to be really direct “I was really excited when you came up with the idea for an air quality monitor and had dug up the data on the large size of the market.  That was one of several reasons why I organized the class the way that I did with four teams who would each work on a key part of the business.  You were the most obvious candidate to take the leadership role.  I set up the context, but I didn’t want to be directive so that y’all could learn some key lessons about leadership and inter-dependencies   You had a gift of 15 highly professional resources that would have gladly followed your direction.  We could easily have had an actual kickstarter campaign up, gotten the product funded and generated lots of revenue traction within the 10 weeks of the class if you took on the role to organize and direct ALL of the resources to start a business, not just design a product.”

“I blew it big time, didn’t I?” lamented the student.

“Yup.  From a business view you did.  However, from a learning perspective, you now have a visceral understanding of the difference between a business design and a product design that could have taken you millions of dollars and years of time to figure out.  You got the lesson very inexpensively and in only eight weeks of part time student work.  Now you can really become an effectual entrepreneur.”

And then I couldn’t resist “Now what are you going to do with what you’ve just learned?”

We spent a wonderful hour continuing to enjoy the wine and collaborating on what the next steps should be for the air quality monitor BUSINESS.

Teaching an Old Dog New Tricks

to sell is humanOver our winter break trip to Florida, I had quality airplane time to absorb Dan Pink’s new book To Sell is HumanI was delighted to get to the chapter on “pitching.”  At the very start of the chapter he shared the story of how the elevator pitch came about.  I’d never known the origin of this concept (as much as I want to, I won’t spoil the story for you).  Read Chapter 7 when you get a chance.  Near the end of the chapter, Pink shares research that comes from Hollywood about the factors that lead to the successful pitching of movie ideas by writers to executives:

Lessons from Tinseltown

“At the epicenter of the entertainment business is the pitch. Television and movie executives take meetings with writers and other creative types, who pitch them ideas for the next blockbuster film or hit TV series. Motion pictures themselves offer a glimpse of these sessions. “It’s Out of Africa meets Pretty Woman,” promises an eager writer in the Hollywood satire The Player. “It’s like The Gods Must Be Crazy except the Coke bottle is an actress!” But what really goes on behind those studio walls is often a mystery, which is why two business school professors decided to helicopter behind the lines for a closer look.

Kimberly Elsbach of the University of California, Davis, and Roderick Kramer of Stanford University spent five years in the thick of the Hollywood pitch process. They sat in on dozens of pitch meetings, analyzed transcripts of pitching sessions, and interviewed screenwriters, agents, and producers. The award-winning study they wrote for the Academy of Management Journal offers excellent guidance even for those of us on the living room side of the streaming video.

Their central finding was that the success of a pitch depends as much on the catcher as on the pitcher. In particular, Elsbach and Kramer discovered that beneath this elaborate ritual were two processes. In the first, the catcher (i.e., the executive) used a variety of physical and behavioral cues to quickly assess the pitcher’s (i.e., the writer’s) creativity. The catchers took passion, wit, and quirkiness as positive cues— and slickness, trying too hard, and offering lots of different ideas as negative ones. If the catcher categorized the pitcher as “uncreative” in the first few minutes, the meeting was essentially over even if it had not actually ended.

But for pitchers, landing in the creative category wasn’t enough, because a second process was at work. In the most successful pitches, the pitcher didn’t push her idea on the catcher until she extracted a yes. Instead, she invited in her counterpart as a collaborator. The more the executives— often derided by their supposedly more artistic counterparts as “suits”— were able to contribute, the better the idea often became, and the more likely it was to be green-lighted. The most valuable sessions were those in which the catcher “becomes so fully engaged by a pitcher that the process resembles a mutual collaboration,” the researchers found.  “Once the catcher feels like a creative collaborator, the odds of rejection diminish,” Elsbach says. Some of the study’s subjects had their own way of describing these dynamics. One Oscar-winning producer told the professors, “At a certain point the writer needs to pull back as the creator of the story. And let [the executive] project what he needs onto your idea that makes the story whole for him.” However, “in an unsuccessful pitch,” another producer explained, “the person just doesn’t yield or doesn’t listen well.”

The lesson here is critical: The purpose of a pitch isn’t necessarily to move others immediately to adopt your idea. The purpose is to offer something so compelling that it begins a conversation, brings the other person in as a participant, and eventually arrives at an outcome that appeals to both of you. In a world where buyers have ample information and an array of choices, the pitch is often the first word, but it’s rarely the last.”

Pink, Daniel H. (2012-12-31). To Sell Is Human: The Surprising Truth About Moving Others (pp. 157-158). Riverhead Hardcover. Kindle Edition. (and see the articles “Assessing Creativity in Hollywood Pitch Meetings” and “How to Pitch a Brilliant Idea“).

I was way excited to come across this insight and started reflecting on the major investor pitches and large project customer pitches I’ve done over the last 40 years. This pattern resonated with my memories.  Almost every time we’d been successful we’d followed this pattern.  And most of the times we failed, we didn’t switch to the collaboration mode.  I couldn’t believe that I’d missed this factor of pitch success.

To verify that the pattern worked, I decided to test it out the next day with a pitch I needed to make to a Seattle new venture accelerator.  One of my colleagues in her feedback on the research proposal noticed that I never mentioned what the benefits to the new venture accelerator would be if they accepted our research proposal.  I’d been about to brain storm the benefits and resubmit the proposal.  Instead, I sent a note to our inside supporter that I would like to focus our meeting the next day on collaborating about the benefits that would accrue to the accelerator from this research.  I got an immediate response back that was short and sweet “You read our minds.”

So I went in the next day and instead of over analyzing the proposal, the accelerator partners and I went to the white board and started laying out the benefits.  Before we knew it, 30 minutes had flown by.  We upped the odds of getting the research proposal accepted and we had a much better proposal – together.

What are the lessons we see every day?

As I do the customer development research for Flipped Startup, I am acutely aware of the teachable moments that exist every day for entrepreneurs.  If only we had an “always on” camera that could capture the important moments for later review.

When you get a chance, I’d love to hear your most recent or most memorable entrepreneurial teachable moment.

This entry was posted in Curation, Human Centered Design, Innovation, Knowledge Management, Learning, Relationship Capital. Bookmark the permalink.

1 Response to Entrepreneurial Teachable Moments

  1. Pingback: Seeing Organizations – How do you teach? | On the Way to Somewhere Else

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