I recently attended a private seminar on the subject of building a “lean” company that was being held at Stanford College. The main speaker of the event was Tristan Kromer, a major lean startup advocate and product coach for companies such as Swisscom, StumbleUpon, and many more. This event was aimed at Swedish entrepreneurs, as the Swedish startup ecosystem is currently seeking ways to grow and expand its resources. The room was filled with about 50 Swedish entrepreneurs that had all either successfully launched companies or were part of the team of small companies, all set to learn some of the best techniques from the “Lean Startup Methodology.” I was lucky enough to interview Tristan after the event and gain some valuable insights, but the seminar itself held some great information as well.
As the presentation started Tristan reminded the crowd of one very important thing to remember when building a lean venture; which is a starting point for most. This simple, yet overlooked, concept was to...
Admit your ignorance - This is the idea that you don’t know everything that your potential customers want. With this in mind, you can conduct your venture in a way that you find out what your customers want quickly and be able to build your product around what you know will solve their problems.
With that in mind, the event continued featuring segements in which a balance of teaching and short, small group activities ensured that we learned "lean" values. Each activity involved a real company story, and pushed each group to think of different and creative ways to get in touch with potential customers to validate the idea. As good ideas were thrown around by all of the entrepreneurs, we all left the seminar gaining a good amount of perspective as to how to actually implement lean startup tactics. After all, most people have heard about running a lean startup, but no many have been able to effectively put the principles into practice.
After the seminar, I was able to catch up with Tristan, and ask some useful questions to present to our Founder Institute blog readers. Hopefully these questions and answers will give you some great ideas on how to structure things in your venture. Below is the interview, with the questions highlighted in large font and answers following.
At what point does a startup know when their idea is going to work?
Tristan: I don’t think you ever know it’ll work until it starts working. You’ve got to see conversions on your home page, feedback from your MVP, the excitement in a customers eyes. No amount of arm chair philosophizing is going to replace that.
Lots of ideas that sound great turn out to be bad and lots of ideas that sound bad turn out to be great. Look at RelaxMyDog.com if you want to see an increibly bad sounding idea that actually works.
Soldsie.com is another idea that sounds ridiculous to me but actually works. They help businesses sell their products on Facebook by letting customers actually post their email address in the public comments section under the photo of the product they want to buy. I just can’t believe anyone is willing to post their email address publically, but people do!
Chris & Arel’s original idea sounded awesome to me, “About.me for SMBs.” But it didn’t work at all!
What are some key indicators that it is time to jump in and pursue your idea 100%?
Tristan: I don’t know of any sign that it’s time to jump in. It’s an individual choice.
Some entrepreneurs have nothing to lose. They’re single, have a low cost lifestyle, no obligations, plenty of time to kill...they can drop everything and pursue any idea that sounds interesting.
Others have financial obligations, family, etc. Sometimes you need to be a bit more certain and you’ll have to look at your runway very carefully. Perhaps you’ll even try and gather a bit of investment from a friends and family round to give a bit of cushion.
Ultimately, I’m only prepared to jump into another startup if I’m passionate about solving a real problem for a real person. If I’m going to put that sort of strain on my family and finances, it has to be worth it on a very deep level.
Are there any main differences that you have seen between successful and not so successful companies in your career?
Tristan: I’m a big lean startup advocate, but I try not to be dogmatic. There are plenty of people out there who were successful just building products for themselves and never tested anything with the market. There are plenty of people who are just lucky.
A few things do pop out consistently:
Successful entrepreneurs tend to build teams. It’s very hard to do a startup by yourself. It’s a brutal roller coaster ride and you’ll need a team to back you up and make up for your shortcomings and blind spots.
Even solo founders have the ability to hire a great team. You just can’t do it alone.
Going farther, the team has to be aligned. You can’t have half of the founder team committed to the lean startup ethos of testing and customer feedback while the other half of the team just wants to write code for 6 months. It never works. I haven’t seen it work even once.
If both halves of the team think the other half is wasting time, then there are only two results. Either the team implodes or they explode. There are no other options.
In what ways do startups actually have an advantage over large companies?
Tristan: The biggest advantage to me is the speed. Most big corps aren’t able to execute quickly. It’s tough for them to get permission to talk to customers, use the company brand on a crazy idea, or even get a team allocated to an innovation project. Startups can pick up on an opportunity at the drop of a hat and execute very quickly without a lot of bureaucratic overhead.
Some large companies are counterexamples to that and are quite lean. I’m thinking of companies like Intuit who have procedures in place that allow entrepreneurial teams to form and leverage the massive customer reach Intuit has.
Still, even large companies that are running lean have a difficult time looking at a small niche product and imagine how it will be worth $50 million in revenue in five years. Especially if that niche product might cannibalize existing sales, even in a very small way. So they tend to ignore or shut down opportunities that a small startup can capitalize on.
You started in the music business in 1996, long before "Lean" was a widely known term, before Eric Ries wrote about lean startups, and before some of our most loved companies today even started. What "Lean" methods worked then? What sort of guidance do you wish you had when you started?
Tristan: That’s actually one of the first things I ever wrote about. The music industry is almost identical to the software industry in some regards so a lot of the same things apply. It’s a rockstar driven industry.
In terms of…?
I mean that people think they’re rockstars here. There’s a lot of folks who move to Silicon Valley like others move to Hollywood to be actors, to New York to be writers, or to Nashville to be singer/songwriters. They usually wind up as waiters.
“I have an amazing sound/app idea, I’m a great singer/visionary and I’m going to be famous/IPO because this idea is just soooo amazing! And all I need to succeed is a drummer/technical co-founder and a AR rep/VC.”
It’s kind of nonsense.
I wish I had understood that art is always a compromise between the vision of the artist and the interpretation of the product. Just like a startup.
You might have a great idea, but does the customer understand it? Do they want it? You need to compromise with reality at some point and make something people want. Not just an album for you and your five friends to enjoy.
I have a lot of respect for those bands that started out as cover bands, working with a well defined customer segment, and then getting instant customer feedback by slowly inserting their own songs into the set until they have their own unique identity. That’s pretty impressive and is a nice example of fast prototyping and extensive customer development based on an existing customer segment.
What made you want to start GrasshopperHerder? Was there any "Aha!" moment in your career where you thought, "Things need to be easier for people starting companies, they need help!"
Tristan: I wish I was that insightful. I started blogging when I was doing StartupSquare as a way to attract customers to our social network. It was a content marketing strategy, but also I just wanted to do something creative that wasn’t playing music or building products.
Playing music is a great outlet, but I enjoy highly improvisational music and that’s best with a band. I don’t have one right now. As I mentioned before, building products is pretty similar, it requires a close collaboration between a few people to be amazing and surprising in the way musical improvisation is.
Writing is very straightforward to me. I can organize my thoughts in a much more coherent way that allows me to think through problems I’m facing for myself. I don’t need help coding it up, pushing pixels around, or someone to lay down a samba beat. It’s just something I can do by myself that, thankfully, other people also seem to enjoy reading.
I should probably note though that I have done some writing using pairing techniques from the extreme programming world. I wrote a post for Luxr with Jeana Alayaay like that, pairing on every word. Very challenging but very rewarding!
Tristan is a large lean startup advocate and coach and runs GrasshopperHerder; a resource for lean startups, user experience and customer development. Follow Tristan on Twitter @trikro
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