cyberlaxamana

by Joshua Chuang Hypothesis-driven, lean entrepreneurship can be the difference between a successful venture and a failed one. This strategy requires one to propose a hypothesis, develop a test around the hypothesis, test it, and learn from it. At its core, hypothesis-driven, entrepreneurship strives to reduce the biggest risk startups face: building a product that no one wants. A powerful tool for entrepreneurs, but potentially dangerous for those who don’t fully understand it or who overlook certain dangers. The following serves as my warning label to the entrepreneurs out there following the lean startup methodology: 1. BEWARE of Assumptions People tend to presume they understand how things work, when in fact they often don’t. For example, with Cake Financial, the founder and CEO, Steve Carpenter, assumed that the user-interface wasn’t what people cared about and focused his attention on the back-end. He also assumed that Yodlee would be a bad business partner, based on his pr...

by Natasha Prasad A few weeks ago, Fred Wilson and Jeff Bussgang supplanted our usual LTV class with a fireside chat on lean startup methodologies, monetization and VC value-add.  A Fred idea I found particularly compelling suggests that entrepreneurs should be “hunch-driven”, rather than “data-driven” in the early days of a startup.  Indeed, if Jack Dorsey and Mark Zuckerberg hadn’t stuck to their hunches, Twitter would never have gotten past 1000 users and Facebook’s newsfeed wouldn’t exist. Hunches, however, can only get you so far: most successful startups will at some point face the excruciating transition from early adopter glory to mainstream success.  Founders like Dennis Crowley, who admit to having built products for their own friends, are now struggling to gain momentum with the mass market.  If users outside of NYC, LA and San Francisco lack the vanity-driven penchant for public bar and restaurant hopping, how can Foursquare possibly grow beyond its 6 mil...

…they are in effect social enterprises that are for profit by necessity not by design by Evan Baehr (blog: http://www.evanbaehr.com) "[My aspiration is] to change the world," said Dennis Crowley, cofounder of Foursquare.  "If this turns out to be an amazingly big business at the same time, well, that's an added bonus."  This is hardly what you would expect to hear from a founder who raised $20 million in a Series A from all stars including Andreessen Horowitz.  Aren't these guys supposed to be razor focused on monetization?  In a quixotic way, many founders of revolutionary internet companies begin with visions that have no component on monetization.  How can we explain this irony: some of the "best" and "most innovative" internet companies--and therefore those with the highest valuations--are often founded by visionaries who are supposedly indifferent to--you might even say disinterested in--monetization. Consider Crowley, a dreamer who...

by Lucas Vargas Entrepreneurship in the 20th century was about getting a lump sum of capital from professional investors, growing the company to reach as many locations as possible, and imposing the power of scale. Big companies – like AT&T and Home Depot – followed that model. They applied techniques envisioned by Ford enthusiasts, relying on improving efficiency. Such enthusiasts assumed the plant was stable and tried to arrange inputs and processes so that the outcome picked up. Today we have a different landscape. Barriers to entry – especially in tech industries – have decreased in consequence of the very limited capital required to start a company and create value. Therefore competition has increased and companies in the 21st century see their ability to differentiate themselves threatened. Many enterprises don't have a clear competitive advantage and, to be really successful, companies need to differentiate their products and services significantly, to envision what is u...

by Jeff Bussgang, republished with permission from his blog I had the pleasure of teaching a new case at HBS yesterday on  foursquare  that I co-authored with Professors  Tom Eisenmann  and  Mikolaj Piskorski  as part of Tom's new course  "Launching Technology Ventures" .  Foursquare executives Dennis Crowley, Naveen Selvadurai and Evan Cohen were kind enough to allow us to interview them in preparation for the case, which framed some of their current key strategic issues and looked back on the choices they made in the early days to draw pedagogical lessons of lean start-up best practices, building a platform business, network effects and running monetization experiments. The foursquare team was consumed this week with SXSW preparations, but we were fortunate to have as class guests Charlie O'Donnell, who wrote the  original blog post on foursquare  that got many in the community excited about the company, and Andrew Parker, who was an a...

by Mohammed Aaser After studying entrepreneurship for two years at Harvard Business School (HBS), I’ve been trying to understand what makes some startups more successful than others.   Moreover, I’ve been especially interested in this since I launched a startup a few years back which I eventually had to shut down ( http://www.cafexi.com ). I believe that there are two factors that significantly increase the likelihood of success for startups.  These two factors are adopting an “Arranged Marriage” mindset, and the second is having an “Unfair Advantage”.    This first post covers the Arranged Marriage mindset, and my next post will be about the Unfair Advantage. The arranged marriage mindset assumes you don’t know much Take a few seconds and think about what life would be like if you had to have an arranged marriage.  An arranged marriage would likely involve getting to know someone for a short period of time, and making a permanent marriage decision...

by Sarah Dillard “Listen to your customers, but don’t do what they say.” Eric Ries I ’ve been on Quora fewer than ten times.  My impressions of it are thus snapshots, and I have not grown gradually with it.  Each time I’ve visited Quora, I’ve been impressed by the quality of answers to questions about the Silicon Valley ecosystem. But on the non-Silicon-Valley topics I care about, the questions still aren’t good, let alone the answers.  One only needs to browse through “microfinance” or “emerging markets” for ample evidence.  Meanwhile, each time I go back, the feature set is larger and more confusing—I have followers?  An inbox?  Notifications?  I thought I was just looking for an answer to a question, maybe one I didn’t even know I had.     I’m not privy to Quora’s iterative process, but it feels like a company that is listening to its current user base rather than thinking about what it will feel like to join as a new user.  For ...

by  Charlotte Jepps Conventional wisdom in ‘lean startup’ theory appears to prescribe the following formula: 1.      Sketch out an initial vision 2.      Test these ideas and the resulting products rigorously, engaging users to play with a ‘minimal viable’ version early on as a tool for learning 3.      Use these test results to pivot the product systematically to nestle it snugly into the chosen market niche, ensuring maximum engagement 4.      … and then scale scale scale!! 5.      Follow up with ongoing A/B tests and refinements “Product-market fit” is the pivotal moment, at the end of step 3, that serves as the trigger for transition from research and development phases to customer acquisition and eventual monetisation. While convincing as an approach to attain maximum user engagement at launch, I think it is important to remember that “fit” is less of ...

by Mark Datta The customer is not king. Sounds like heresy, right? Perhaps put more accurately, the customer is not always king. Two companies we have studied – Dropbox and Aardvark – espouse user-centric design as their guiding design philosophy. Essentially, products are designed around how users can, want and need to use a product – so no behaviour adjustments are required from the user to accommodate the product. It fits well with the lean start-up philosophy, using multiple rounds of iteration based on metric-driven assessments, and neatly embodies the ‘customer is king’ mantra. But both companies deviate from this philosophy on at least one substantial aspect. Dropbox refuses to allow users to sync any folders which are outside of their local Dropbox folder. Aardvark refuses to maintain a searchable database of previous questions and answers. Neither would be particularly expensive or technologically challenging (from my outside-in impression). Four possible explanations come to...

by Joris Poort  In a hypothesis-driven lean start-up environment, lean theory recommends maximizing your learning from customers while minimizing effort.  While the theory sounds great, if lean startups follow lean principles blindly it could lead to unintentionally bland results.  More specifically, if the product vision is truly inspired, lean approaches can drive the development path away from a disruptive new solution and gravitate more toward incremental improvements upon existing products. Lean methodologies can stifle innovation Lean principles originated in the manufacturing environment to help reduce waste and focus on value-added activities.  In manufacturing environments however, lean principles are typically only implemented once both the production processes and product are very well defined.  In contrast, in the R&D lab lean principles can inhibit collaboration, creativity and innovation.  To be sure, there are certainly ways to improve th...