HELLO MY NAME IS

@thulme

HelloWorkshop - IDEO & Techstars Iain, Jenny, Matt, Tom & Stina London! July 2013

1) Purpose2) Putting people first3) Hypotheses & Experiments

In the next 90 minutes we’ll work through 3 important exercises that are key for any startup - exploring Purpose, Customers and Priorities...

1) Purpose

We’ll start with Purpose: not all great startups are born with it but those that scale well have invariably discovered it. Think of Purpose as your ultimate ambition.

When I began investing startups often measured progress by the size of their business plan. But this is probably inversely correlated with success?

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The same applies to number of lines of code - it’s not a measure of progress, in fact all developers agree that elegant code tends to be more concise...

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Have a look at the splash page above and ask: does number of signups infer progress? Nope - people don’t even know what they’re signing up for.

More recently, a false measure of progress I often see is number of pivots - the real question is are you pivoting toward your goals or away from them?

PIVOTS ≠ PROGRESS

Pivoting just because it gets hard is not progress. This applies to startups and I think increasingly politics - Egypt being a case in point this week.

After all, all startups feel like roller coasters...

Ignorant Optimism

Informed Pessimism

Informed Optimism

One of my first investors drew me this - he said I was ‘ignorantly optimistic’ at the time and if I was taking his money it was a social contract to persevere through the tough times - until I was informed & optimistic...

Seems like a bad idea

Is a good idea

I’ve always loved this image Peter Thiel drew - the best ideas have to seem tough in some way, after all...

“...if it was easy everyone

would be doing it”

(my Dad said this to me - I try to always remember it)

Seems like a bad idea

Is a good idea

Matters

I’d just add one more circle - any great startup has to also matter - this is where Purpose comes in.

What's your purpose?

Purpose acts as a guiding light, it gives you the motivation to work through the tough times we saw before. Importantly it helps you say “No” to stuff.

Facebook’s Purpose: give people the power to share and make the world more open and connected

Look at Facebook: a clear Purpose enabled them to say “No” to aggressive advertising for years - they knew it would have compromised their Purpose.

Facebook’s Purpose: give people the power to share and make the world more open and connected.

“Simply put: we don’t build services to make money; we make money to build better services. And we

think this is a good way to build something.”

Mark Zuckerberg letter to shareholders

HotOrNot.com

(‘Facemash’ when MZ founded it didn’t have this grand Purpose - it was more like ‘Hot or Not’ but he was smart enough to develop ambition over time)

Basecamp purpose: promote and enhance collaboration between a team

Via Speckyboy.com

Your Purpose helps you make design decisions - for example Basecamp lightened their navigation bar because they wanted users to focus on collaboration rather than their site.

OpenIDEO Purpose: Design better, together for social good

With OpenIDEO we have stayed true to the initial Purpose thus far - I hope that we view every design decision primarily through this lens.

you don’t scale

By Smath

Why does Purpose matter? Because, you don’t scale. Many Founders begin because they’re ‘scratching their own itch,’ as you grow this has to be important to others too...

By ketsugi

It’s increasingly clear that monetary incentives (beyond optimising mundane tasks) are a pretty blunt instrument - once you’re lucky enough to have a decent income it’s not the thing that drives performance...

By Ewan McIntosh ...and they’ll always be someone (like this joker) able to offer more cash :)

By Ewan McIntosh

By Ewan McIntosh

...instead great startups motivate employees (and increasingly customers). A Purpose for good is the engine inside your business.

By Wa-J

...but you are what you measure

By goldbergBy Ewan McIntosh

All this is key, but you’d be right to point out struggling businesses often have great Purposes too. The challenge is they usually optimise for something else.

Image by goldberg

Business Insider Purpose: aggregating, reporting, and analysing the top news stories across the web and delivering them to you at rapid-fire pace

By goldbergBy Ewan McIntosh

For example, why do sites embed slideshows? Is it to deliver news faster? Nope - they’re doing it to increase ad impressions. That’s what they’re measuring, in this case it’s absolutely not in line with BI’s Purpose...

Instagram Purpose  "lower the bar for producing and sharing awesome images"

By goldbergBy Ewan McIntosh

Contrast this with Kevin Systrom’s approach at Instagram. He optimised speed & simplicity in creating great images - choosing to make images low res & square. They even reduced number of features in some updates :)

Amazon Purpose: be earth's most customer centric company

By goldbergBy Ewan McIntosh

Amazon measures load times - they found in some cases an increase of 100ms led to a 1% decrease in sales of that item. Speed is in line with their Purpose. Pingdom can be your design partner :)

46,000 users or...

OpenIDEO Purpose: Design better, together for social good

By goldbergBy Ewan McIntosh

With OpenIDEO’s Purpose in mind, what should we be measuring? Number of users? Number of countries represented? Nope, they might be leading indicators but we should be measuring Impact.

OpenIDEO Purpose: Design better, together for social good

So that’s what we’ve begun to measure. We started by defining it and now we share Impact and celebrate each story. Note: we’re still figuring this out :)

Exercise 1

So let’s dive into our first exercise - in the next 15 minutes work through the questions in this document. Home in on a Purpose that would help you hire your 100th employee, then print it on your project wall...

2) Putting people first

Next up - customers. You might want to check out my talk at the G8 on this.Note: I’ll try not to use the term Users as that makes them sound like addicts

This is a desire path, it’s the route that we actually take, rather than the paths that were designed in (across Highbury Fields in N London in this case)How do you think the urban planners react to this?

I bet many say we’re lazy or stupid for ignoring the paths. The answer to this question is key - do you empathise with citizens/customers or dislike them? I think disliking customers is a leading indicator of failure in any startup.

How can you dislike customers when they share exactly the same basic needs as you, we’re all human. Let’s look at 3 ways to build your empathy for customers, particularly for those not scratching their own itches...

1. Live like the customer

First up, actually live like your customer...

This is what it feels like to be a patient in your average hospital. Until you live like a patient you don’t see this stuff.

Our colleague Kristian admitted himself as a patient, he saw the dull ceilings all day and heard medics speaking in acronyms. This became an experience he could design against. Do you live like the customer?

2. Observe them in the real world

Next up, observe reality...

Focus groups are not reality - not because people lie but because people struggle to articulate their real thoughts and behaviours.

Instead, observe real life. I admire AG Lafley of P&G because he did this in many of his markets when traveling, eg ladies washing clothes in India - clearly they wouldn’t lug around 5l bottles of detergent that P&G sells in UK.

People are incredibly creative - in a focus group would this lady tell you that she had her own hack for hands-free use of her mobile? She may not even remember when she’s out of context.

Or in a focus group this old lady might tell you she manages to take her tablets every day without problem. But if you watch her behaviours you notice she was uses a meat slicer to open the container. (this is for real)

You should observe how people really use your digital products too. For example, periodically check what search queries people make on the homepage (amazingly this is rare in my experience).

Here’s a word cloud of the search queries from OpenIDEO - you can see that there’s a desire path toward ‘education’ that we’re missing. We don’t quite know what John represents - we may need to ask...

Also try heat mapping tools like Crazy Egg - that truly reveals desire paths. You can see clearly in the image above that there are desire paths to Challenges and How It Works on OpenIDEO, you also see redundancy.

3. Today’s extremes are tomorrow’s

average Joes

Next up - learn from extremes...

Statisticians & marketeers love bell curves, and most businesses focus on the middle ‘it’s where the money is’. The problem with that is often the middle is moving - the extremes today may become the norm tomorrow.

We therefore often look to extremes for inspiration. For example, when observing someone fearful of credit this is what some IDEO researchers were confronted with. A credit card in a block of ice. You can design from this...

Similarly look at extremes in digital products. For example, the rise of ‘white-walling’ (people erase their FB profile at the end of each day). This would show us many people increasingly want ephemeral services eg Snapchat...

Sometimes these extreme behaviours can be inspiration for your core product. For example this is the first tweet sent suggesting hashtags - now a cornerstone of Twitter. Startups thrive at the edges of existing markets.

By the way, Highbury Fields wasn’t originally designed badly it’s just Arsenal Football Club moved its ground so on game days thousands of people now take this route. The council’s job is to react to this change of use...

Here’s my favourite desire path in N London - This is my favourite desire path because someone has adapted to it - instead of cordoning off the grass they laid gravel. We all need to have the humility to see and then adapt - the only truth is how people really use your product.

Exercise 2

Our second exercise is around understanding your customers - can you name ten right off the bat. Everyone in your team should be able to name at least one. Do you really understand and empathise with them?

3) Hypotheses & Experiments

Finally, let’s talk through how to prioritise in any startup...

3

A B

3

A B

3

A B

Your startup is a simply a series of unanswered questions. If you don’t think you have any unanswered questions then you really are in the s**t.

The fantastic Startup Genome Project taught us that the most common reason for any startup to fail is ‘premature scaling’ - this is essentially scaling before you’ve tested critical assumptions.

The best entrepreneurs prioritise like scientists, they select their experiments...

There’s art to building startups but thanks to Steve Blank and others it’s increasingly a science - your job is to choose and run the right experiments.

Hypothesis basedImportant

Feasible

Great experiments are:

We can learn much from the Scientific Method in this respect...

?

Efficient Answer:

ACCURATE Make it as real as possible, preferably do it in the real world

LOW COSTHijack existing technologies/ networks where possible

You need to test your Hypotheses efficiently...

I guess that’s why huge business plans bring me out in hives - it is hardly ever the best way of testing hypotheses. It shows questionable judgment.

GHETTOTESTING

Instead it’s usually more efficient to get out in the real world to test your hypotheses - as Steve Blank says “the answer is outside the building,” eg Zynga tests ideas for new games by advertising them before writing a line of code.

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That approach, called Ghetto Testing is not the same as these ambiguous splash pages by the way. These don’t validate any hypotheses, except perhaps ‘we can build a website splashpage’ :)

This approach, of Launching to Learn / validate hypotheses is increasingly important. For example, Wonga began issuing loans to assess if it could use data to assess default risk - this was way more efficient than locking actuaries in a room to endlessly talk about it...

For those of you building physical products you can use this approach too. For example, Tim Ferriss tested different book covers by placing them on the New Release table in the Palo Alto Borders to se how people reacted to each.

That’s the beauty of Kickstarter et al - enabling you to validate a market prior to production. It worked well for our former colleague Scott Wilson when his Tic-Toc watch raised just under $1m, he’s built a great company since.

EXPERIMENT: will IDEO’s brand have convening power?

When launching OpenIDEO we wanted to test the hypothesis: IDEO has the convening power to attract diverse people to the discussion

To find out we launched ‘BIG CONVERSATIONS’ on Facebook first.

So we launched a Facebook page to test just that- we found very quickly that people would come and contribute. Hypothesis validated.

It gave us the confidence to launch OpenIDEO - please contribute if you have a spare minute, or simply browse it for inspiration...

Exercise 3

Our final exercise today is to begin outlining our hypotheses and prioritise them - the good news is that you have access to mentors, digital tools and hopefully customers to validate efficiently. Your success will be a function of the number of learning cycles you fit in your runway...

1) What’s your Purpose and how will you measure it? Is your team aligned around it? Will you review it weekly?

2) Who’s your customer today? What are their real needs? Which extremes today will be the norm tomorrow?

3) What are your hypotheses, what order will you efficiently test them and how?

We’ve covered some critical stuff, I’ll structure the next session around your needs at that time but it’s likely to include pitching & business models...

HELLO MY NAME IS

@thulme

Thanks