Help! My startup’s not disruptive!!!

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It’s terrible, tragic even.  My startup’s not disruptive!  It won’t change the world, or even an industry.  It won’t lay waste to the antiquated detritus of 20th century business, even by accident.  What am I to do???

Ok, that’s a bit tongue in cheek, but as you can appreciate, the impact of companies like Uber, Airbnb and even Apple can make it look like disruption is an indispensable part of the new economy.  Disrupt or perish, right?

In my view, a lot of what gets thrown up as being disruptive is nothing of the sort.  If you take Clayton Christensen’s’ original work on the subject, you can mount an argument that disruption can’t be planned anyway, so why bother?  It’s a serendipitous outcome of an innovation, not something that can be planned in advance.  No one is prepared for disruptive innovation; if they were, it wouldn’t be disruptive, right?

One of the reasons that disruptive innovation is such an influential idea is that it suggests that there’s a shortcut.  A shortcut to massive growth that avoids the need to carefully plan and execute a business idea over a long period of time.  Who wants to spend 30 years building a successful business when disruption offers the change to do it in five?  It gets around the pesky issue of eking out progressively larger market share based on well-honed strategy, tight cost control and incremental product development.

And of course, it’s even more appealing in the startup space.  Want to compete with Microsoft?  Hell no, we’ll just disrupt them!

But of course, disruption has become part of the new orthodoxy.  If you’re not disruptive or not aiming to be, you just don’t fit in quite as well as you might have in the past.  Want investment for your startup?  Be disruptive!

If you’re not disruptive, it makes it just that little bit harder to obtain capital then if you are, because most early stage investors want high returns in relatively short periods.  That doesn’t mean that non-disruptive startup don’t get funded, but it’s a lot easier to make the case for rapid profit if you can grow unencumbered by traditional market completion.

I’m a bit of a contrarian at heart, so I tend to recoil from the hype surrounding disruption.  But I think it’s important to remember that there are lots and lots of very successful businesses out there that aren’t disruptive and never will be.

There was a good article in Harvard Business Review last year that made just this point.  The author pointed out that “the vast majority of profit from innovation does not come from the initial disruption; it comes from the stream of routine, or sustaining, innovations that accumulate for years (sometimes decades) afterward”.  As a case in point he offers Intel, who has made about $287 billion from the series of chips that built on the original X386 chip introduced in 1985.  Not bad for a non-disruptive business, huh?  Then there is Microsoft with Windows ($325 billion) and even Apple with the iPhone ($150 billion).

I also read a piece recently (also from HBR) which talked about why bootstrapping a startup is the most successful approach to a new business in terms of raw numbers.  They criticise the ‘big money’ model that gets all the headlines for startups and point out that most of these business are better off taking it slowly – working out their business model, tuning their product to the market, and learning to get by on less, rather than more.  This article was published before the Innovator’s Dilemma, so you could argue that things have changed and maybe they have.  But I’d wager that the companies that will dominate the world in 20 years’ time are likely small and humble at the moment and will take all that time to ‘disrupt’ their competitors!

Returning to my own startup, what does this mean?  Having recently completed a modest Kickstarter campaign, we’ve been asking the question of ‘what’s next’?  One answer to this question is to ‘go big’ by raising money and taking the idea global.  That’s entirely possible, but some water needs to go under the bridge yet.

And of course, most people get the idea of what we’re doing with WineMinder, but it doesn’t immediately bring forth visions of global dominance.  Which makes it that little bit less attractive compared to rapidly scalable, potentially disruptive ideas.  And that just suits me fine, to be honest.  But occasionally it can make you wonder if its worth bothering with all the hard work and worry (and of course the fun and occasional euphoria!) if you’re not going to disrupt something – other than your family life and your bank account!

Again, being a contrarian, I wonder if a lot of profitable – but not disruptive – opportunities are being left unaddressed in the rush to creatively destroy the status quo.  And maybe my startup is in that space.  And if it is, I’ll gladly make decent returns on my efforts while watching some more disruptive ideas burn through other people’s money, before being disrupted by the next wave of, well, disruptive innovation!

In which case, I don’t really need help at all…at least, not because my startup isn’t disruptive!

Kickstarter success – what I learned!

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What I learned from my Kickstarter compaign

I recently completed a successful kickstarter campaign for a consumer electronics product called WineMinder (www.wineminder.com.au) and I think I’d have to say that I learnt a few things along the way!

Firstly, it’s incredibly rewarding to have your idea validated, and not just by people who know you and the project intimately.  That’s probably a given, but worth saying none the less!

More interestingly, there were a couple of unexpected outcomes from the campaign, which didn’t get much coverage in the Kickstarter guides and commentary that I looked at before launch. These were;

  • A massive increase in brand awareness.  Just going on website traffic alone, we had as much traffic to our site in the first day of the campaign as we had for the entire 3 months prior, and increased total new visitors to our site by a factor of 6!
  • We had two approaches for investment in the business and one from someone offering to be our agent in northern Europe.
  • Our top pledge was the biggest mover, even when it ran out and I created another, similar pledge for the same reward at a higher price level!

Many would argue that we could have found out this last point if we were following a lean startup process, but it hadn’t come up in any previous discussion – maybe because we hadn’t been forced to develop varying offers before the campaign.  So a lesson there is to get really creative with offerings, even if you are following a lean startup methodology.

Of course, many of the other things I learnt were much more commonly discussed, like;

  • The euphoria of the first day or two, where early pledges really get things going – followed by the nail chewing when this drops off temporarily!
  • The need to prepare early and well to make sure you hit your targets, because very few people are likely to stumble upon the project via the Kickstarter site itself.
  • The fact that you’ll spend the last week of the campaign mailing, texting and ringing people and just generally making a pain of yourself until all those people that said they’d pitch, get off their backsides and actually pledge!

I’d definitely do it again.  The funding we raised will be extremely useful, the brand awareness we’ve developed we simply couldn’t buy at this point and the validation of the product and insights into pricing structures was unbelievably valuable!

And, of course, it was just straight out fun!

Encounters with the Mythical Man Month

Train wreck “Question: How does a large software project get to be one year late? Answer: One day at a time!”  Frederick Brooks, 1975 (The Mythical Man Month).

I’ve been run-over by the mythical man month recently.  It’s been slowing down my startup, and it’s driving me crazy.  None of the start-up books or blog posts talk about it, but its as effective at slowing down my attempts to get to market as anything else I can think of.  Not familiar with the ‘mythical man month’?  I bet you are, you just don’t know it by that name.

As an example, some time ago, when I was working in well funded tech start-up, a consultant said to me that getting a successful product into the market would take twice as long and cost twice as much as the company thought.  It certainly seemed to be taking longer than management said and that would also certainly lead to more costs.  But twice as much?  No way!  The company had lots of great people, working really hard to get the product out the door.  It had well credentialed management (although in retrospect, perhaps less well credentialed at running that particular type of business) and was very well funded – to the tune of tens of millions of dollars in the bank.

As it tuns out, it took much longer than twice as long to get the idea to market – in fact, six years after I left the company, they the technology has yet to be fully commercialised.  So maybe that consultant was right…

Fast forward to the present day, and I’m facing the same problem again, only this time on a much smaller scale.  I have gathered a small group together to bring my idea to market, and the clock is ticking.  Why is the clock ticking?  Well, my idea is a consumer product, so Christmas sales loom large in the calendar.  I start every email to my business partners with “X weeks to Christmas!!” just to make sure my sense of urgency isn’t lost in translation.  But despite my best efforts to push things along, the mythical man month keeps biting me on the you-know-what.

If you’re not familiar with the idea of the mythical man month, it’s an idea coined by Frederick Brooks in his 1975 book, the Mythical Man Month (go figure..).  Brooks was a software developer and after some analysis he observed that  “adding manpower to a late software project makes it later”. What resonates with me more than that is the quote at the top of this post which points to the fact that it’s often not the major disaster that makes a project late, but the accumulated effect of lots of small delays.  Fred was sick on Monday, the photocopier was broken Tuesday. Wednesday the courier company was on strike and Thursday the computer network was down… Again. You get the idea.

In my case, the issues are things like aligning calendars, days of delay responding to email, family issues and many more.  Individually they don’t really matter, but I can feel time running through my fingers every time one of these little events occurs.

Is there a solution for this?  Well, good planning and agreed ways of working never go astray. Having everyone signed up to the project and business timelines also helps (going back to the start-up I mentioned above, the challenge of getting everyone to sign up to goals was so problematic, that the company’s internal slogan one year was ‘delivering on our commitments’…). But much like the problem is no single event, the solution isn’t one either.  And that’s where good management and leadership come in.  It takes a consistent and persistent effort to make sure everyone responds to emails (or use the phone!), to organise meetings well ahead of time, and putting some slack in the schedule so that time risks can be effectively managed.

This sort of discipline often gets missed in discussions of innovation, pivots, minimum viable products and the customer discovery process.  But it’s an important discipline to have or to develop when you’re in start-up mode.  Because as sure as VCs will want more than you want to give (!) there will be a range of things that you can’t control that will slow you down.  So when there are things that you can, you’d better make sure you’re on top of them, or you’ll end up being a lot more familiar with the mythical man month then you are at the moment!

My Startup Journey, Episode I

I have a start-up.

Well, it’s sort of a start-up.  More of a pre-start-up start-up really, but a start-up none the less.  It’s a very part time gig, but I have a novel (i.e. innovative!) product idea that I’m developing with a co-founder and we intend to bring it to market some time in the next 12 months or so.  The vehicle for that effort is “Smart Sensor Technologies” and the reason for that name will become clear in future posts.

The purpose of this particular post is to flag an intention to blog about my own, personal start-up journey with Smart Sensor Technologies.  The reason for this is that although I know a lot about a very small slice of innovation (I did a doctorate in the area, after all…) there’s a lot to know outside that small slice of innovation.  In an effort to improve the chances of my start-up succeeding, I’m trying to learn as much as I can about what goes on outside my slice, while also placing that learning within the context of what I already know.  I thought that others might be interested in that journey, as what happens to my initiative might be instructive to others.  Hopefully it’s not the learnings you get from the train-wreck kind of experience, but that would be useful too!

So I’ll interweave my start-up experiences with my other blogging to show what I’m learning and the lessons I’m drawing from the journey.  I’ll put that logo at the top of the page at the start of each start-up blog entry, and tag the posts with ‘start-up’ as well, so you can see the whole, unfolding journey in all its magnificent glory.

In discussing that journey, I’ll be a little evasive on exactly what the product actually is, at least until it’s advanced enough that we’ve got a firm launch date in mind.  Hopefully readers will understand the reluctance to not completely open the kimono at this stage of the game!

Given the nature of these posts, I would also invite comments from readers, as many of you will have experiences that are vastly different to mine, including many in the start-up space.  In that way, I can learn from you too.

So here we go.  An experiment in starting-up, as well as blogging about it.  Can’t wait to see where it goes!!!