anders.tyckr.com

Lately I've been gaining a lot of interest in the #leanstartup "movement". Eric Ries of StartupLessonsLearned is probably the lead missionary, but there are many out there liking this concept. To give you an idea just search for #leanstartup on twitter.

With this post I'm starting a series where I'll be writing about how to apply lean startup methodologies when revamping a complex product that already has a lot of customers (though not necessarily happy). I'll be expressing my personal opinions on how stuff work and may be completely wrong in many cases. My aim here is to work through this problem for my own gain, but with your help, and at the same time share the experience for others to gain from as well. So here it goes...

I'm not going to go in to the specifics of what a lean startup is but here's a crash course.

1. Be efficient with your capital. Operate with as little waste (of time) as possible.
2. Don't reinvent the wheel - use open source solutions that fits your needs
3. Extreme customer centric, rapid iteration, agile develpment process. (see Customer Development by Steve Blank)

These tips seem pretty fair and I got extremely interested in this considering my experience with Tablefinder.com where we were probably as far from customer developed as possible, even though we were agile (in some ways).

A little background

Now I'm part of a much larger company, about 50 people, working in the travel industry. The company is 10 years old, but our CEO still considers it a startup, and I agree in some ways. The way I see it the company is extremely customer oriented and has been since the start - developing a destination packaging system for the first clients. We are now the market leader in Scandinavia and have most destinations as our customers.

Imagine developing a web solution over 10 years where each new customer says "Yeah, I want to buy this... if you make these modifications so it suits our needs". Our customers, Destination Marketing Organisations (DMOs), are all very different in terms of business models and financing and so on. This is why we have had to make our system extremely flexible and dynamic, and also very specific for our customers needs. One problem with this is that some solutions for one customer is directly the opposite of what another customer need.

I guess one could argue that this is Customer Development, but I don't think so. This is Customer driven development which is in some ways completely different. A client says: "I want this feature in the system, and I'll pay you X to do it." Running after all X:s will soon create a chaos in the product and 100% of resources will be busy maintaining the system. Each new improvement of the system will take extremely long to implement and test. And many times, the feature that a client want to pay for may be something that their board has decided that they absolutely need. IE no end user verification what so ever.

We recently acquired a company that delivers free downloadable travel guides for over 400 destinations world wide in up to 22 languages. I'm now the acting CTO and have a mission to develop the new arrivalguides.com site. The main product of the company is a downloadable PDF guide which is free (includes a few local ads for the destination). But the product is much more complex than that. We have a large partner network including partners like Ryanair, SAS, and other big travel related sites, where users can download the guides. Then we have the DMOs, our paying customers, which pay to control (parts of) the content of the guide. And finally we have the local advertisers on each destination, which are paying for each download made.

The problem with both products mentioned here is that due to the complexity of the systems (especially the first, Citybreak DMS) implementing a new customer takes very long time and involves a lot of costs.

So Arrivalguides is also a very complex product that have many different requirements that still need to work after we revamp the product.

How to start?

My goal is to implement the new arrivalguides.com using lean startup and customer development techniques even though this is a complex product already in production.

The problem is... where do I start? I honestly don't know. I'm all for feedback here but I will go down the path that I think is best taking decisions as I go along. People say that I'm bad at planning, and I agree, but it's on purpose :). As in a startup, there is no point writing a 5 year plan, if that delays getting your product out there. I like to call this Reactive Planning. But please do comment on all the things I'll be doing wrong. This is a work in progress.

Analysis

Analysis step 1: Identify problems with existing product

• new partner integration is too complicated
• the system consists of too many parts in different programming languages
• the system is not focused
• the system is used in different ways for different partners
• Many different "customers"
  • End users
  • Partner sites
  • DMO partners
  • Guide Advertisers
  • (Site advertisers)
• Slow databasemodel
• Slow administration system
• We don't have metrics for everything end users do

Analysis step 2: Identify the stuff that is working

• End users must like something since we reach over 500 million travelers every year. Problem is that we don't know how many we are missing/not converting
• The guides are great, once people have downloaded the PDF they usually love it.

Actions

The first thing do to here must be to evaluate what features people are using, and then set up a couple of different MVPs (Minimum Viable Product) for those and test it out. But how can you test an MVP when the system has so many demands from existing customers?

Action Step 1: Get metrics for how users are using the product

In order to know what metrics to collect I guess I need to know what goals we are trying to accomplish. One revenue stream that is easy to measure is downloads of guides. Of course we already have metrics for the number of guides downloaded per partner site etc. But I want something more where I can track the exact funnel and see where we are loosing downloads.

Action Step 2: Prepare for a continous deployment development environment.

We are going to develop the new site in C# ASP.Net MVC 2, and probably use MongoDB as the database engine. For other projects we use the awesome TeamCity product from JetBrains and will do so for this as well.

Action Step 3: Prepare for a good A/B testing environment

This has been one of my main questions for a while; what are the best practices for setting this up in an MVC solution? I guess that in the end it is just a matter of switching views for a certain number of visitors, and keep the underlaying controller logic the same. Please give me feedback on this if you've done something like it before. I'm also looking forward to a KISSmetrics beta invite to use to be able to track the stuff I want in a way that is more difficult to do with say Google Analytics.

Being lean?

We have all the technical skills we need to execute this project, but one thing we don't have is time. This is mainly due to how other products have been developed in the past, and we are only a couple of guys running this. Isn't this the perfect setting to try and be lean? I mean in a way that we need to absolutely optimize our time and not spend any time developing something that our customers don't want.

One big problem here is the organization. We have very talented sales people that sign new deals everyday selling stuff that we will develop, which is nice on a financial view. But I don't think this is the right way to go. (I hope I don't get fired for writing this though...) We need to have better focus on our existing product and analyze how people are using it. This sounds easy in theory, but how can we do this when we are dependent on the cash flow from paying customers?

I think I'll leave this for part 1 of this series, and it's time to take the first steps. My mission will be to try and force this type of product development strategy in the organization by proving that it works. So again, I need all the help I can get, and if you're a pro in this area, don't hesitate to leave a comment or contact me directly.

Related articles by Zemanta

• Customer Development for Web Startups (steveblank.com)
• Maverick Entrepreneur: Without the Fat (seedcamp.com)
• 2010 03 09 The Lean Startup Gdc (slideshare.net)
• Requirements Gathering Is Not Customer Development - But It Does Define The Problem Statement (meatinthesky.com)

I love inspirational videos like this one. This is exactly what I stand for when it comes to not only entrepreneurship but also life. But then again to me entrepreneurship==life. Any challengers?

 

When I was pitching Tablefinder.com to investors I always ended my pitch with:

-Do you want to leave this market fragmented?
Or...
-Do you want to help us change the world?

The answer is quite simply: A lot!

Yesterday at 12 noon the first 24 hour business camp ended. I participated with my Getting Things Done service rmindr.com that I first wrote about a while back.

My 24 hours consisted of everything between 4-hour-dig-downs in weird php errors (later saved by a Hjalmar php hack), and taking a soothing bath outside in 40 degrees water overlooking the snowcovered rocks in the Stockholm archipelago spa Hasseludden Yasuragi.

The event itself was without a doubt one of the best and most productive entrepreneurial events I've been to. The location certainly added to the excitement, but mostly it was the people's attitude towards entrepreneurship that made an impact on me. When the event ended, the participants were asked if they would want venture capital for their idea, and only about 3 out of 90 put their hands up.

I don't want to put too much into that because it is normally not 24 hour ideas that get funded anyways, but it shows that starting a service or product on the internet has never been easier or cheaper. These services will not likely be the next Google's or Amazon's, but it can easily be services that bring in some revenue for their creators. This type of "minipreneurship" is really starting to boom, and events like 24hbc is proof of that. You can easily start something in 24 hours if you put your mind to it and make sure to focus your idea.

Learning from my Seedcamp experience "focus" and "metrics" are the two most important words I've brought with me. So based on that this is how I focused by 24 hours at 24hbc:

• Step 1: Make my development setup work on the production server. (to enable fast deploy during the development)
• Step 2: Define basic functionality for the site to be valuable. For rmindr.com those features were:
  • Create actions with tags and notes
  • Access context lists through a private rss feed
  • Move actions to different focuses (inbox, next, someday/maybe, scheduled)
  • Collect ideas by sms from a cellphone
• Step 3: Define advanced features that can be included if there is time left
• Step 4: implement

I managed to get all of step 1 and 2 done to a level where they could be released in an alpha version. I never managed to get into the very necessary but quite advanced feature of organizing actions into projects in an infinite number of levels. That will come in the beta release. Maybe in another 24 hours... or not.

I've had this idea for almost a year now and I did the interface design this summer. So an event like 24hbc was exactly the push I needed to get it out there.

Thanks for any input regarding rmindr.com and feel free to vote for my project at http://www.24hourbusinesscamp.com.

I just found this presentation which says a lot of the things I stand for. Passion is the most important ingredient in a startup. With passion and the right connections, you are almost home safe. Of course you have to pick the right thing to be passionate about, but that's another story.

Thanks Jonas for the tip.

Apply online at http://application.seedcamp.com. The deadline for entries this year is 23:59 on Sunday 10 August.

Make sure that you look at the application guide and answer the questions as short and concise as possible.

Feel free to ask me for help filling out the application.

Ok, this is a little bit late news, but Seedcamp has released the application guide for 2008 applications. The applications are due August 10 and I really encourage anyone with an idea and a great co-founder(s) to apply. Even if you are not interested in applying for the "competition" I think it would be good for everyone with an Internet business to look at the questions and answer them for your own sake. If you ever will be looking for funding, those are the questions you will have to be able to answer.

I think the key is to write really concise answers. Don't write marketing material. Write short answers that your grandma would understand.

Last week something odd happened. Or how often would you say that two of your friends start the same business idea - separately - without them knowing about each other. One was started in Sweden, and the other in San Fransisco. I think we have ourself a match.

The two companies are Tuurf.com and Zkout.com. I don't know any details of the business ideas, but I do know that both are operating in the mobile social networks market. They are not alone, and reports keep coming in that the mobile social network market is going to be huge.

What is really interesting here is that the two companies have taken two completely different approaches to creating their businesses - one silicon valley style, and one European style. During Seedcamp we discussed that European startups are usually to humble in their approaches to solving a problem. That Europeans do not aim big enough, and on the other hand, US startups go super big with sometimes very crazy ideas. But crazy ideas are only crazy and funny if they are done with bad timing.

Tuurf has not yet taken any funding, and that is not because they can't but due to strategy. Zkout has on the other hand taken an angel round and are hiring at least 10 people from what I've heard. Tuurf does not yet have any full time employees and it is treated as a project as the founders all have other jobs or are still in school.

So what is the best strategy in this situation. Either you go full speed and work in the market and closely follow all developments in user trends, burn though a lot of cash fast to try and get an early piece out of a growing market? Or do you watch this market grow from a distance, and try and get a trend line on the direction of the market without following all ups and downs, and let others do the dirty work of breaking in the market?

As I'm all for the "go big, or don't go at all" kind of mentality my first thought would be to go for the more aggressive Zkout. But then again, I think this market is still a bit too immature for even early adopters to use these types of services. So, if Zkout are to come out a winner in this fight, their pockets better be deep, or they will run out of cash before the market is ready.

On the flipside, Tuurf might miss out on some key trends by not being focused enough, and might not have the manpower to scale up in time when the market is ready. Going too slow might be a problem, and is probably as hard to fix as going too fast.

I'm not that passionate about the mobile market, so for me I might not even be an early adopter for these types of products. But looking at this match in terms of business strategy, I would not want to miss a minute of the action to come.

Today in about 1 hour I will go down to Condeco, Linnégatan to see if there will be anyone else wanting to network around business. I started OpenCoffeeClub Göteborg as I saw the concept was really working well in London, and I saw that this is something that is missing in the Göteborg area.

So if you need to get in contact with some interesting people and perhaps want to get some feedback on your new business idea, don't be afraid to share it, as this will probably only help you make a better business from your idea.

Looking forward to seeing you all at the first OpenCoffeeClub Göteborg event!

One of the TechCrunch40 companies, .dockstoc, just launched and I got an opportunity to take a first look. What they provide is something I have been looking for for a very long time. Bye bye to all companies trying to charge for their "professional" document templates.

I havn't played around much with it, but just the first look when I logged in was brilliant - all of the documents I have been looking for in one place, for free (for now anyways):

I strongly recommend anyone who is doing any sorts of business planning to take a look at the site.

Here is a screencast of some of the stuff you can do.

Last week I was at Catapult in London - a conference about launching your business in the US - and it was a very good networking experience.

Talking about networking, social networking, which of course is very hot these days, it is starting to turn into something so much more than just playing around on the internet. On one of the panels at the conference a panelist said that

"Social networking is turning into Business networking"

And I couldn't agree more. Not only online, but social networking IRL is one of the best ways to do business.

We would not be where we are today without doing serious business networking. I think that how it is done is one of the main differences when comparing European entrepreneurs to US ditto. In Sweden when people do business networking it is almost always about making money or connections to people that will help you make money. What I have experienced these last few trips to London, but also going to conferences with great entrepreneurs is that, there, the focus of business networking is helping each other.

People are much more happy to help you and give you advice, rather than focusing on how they can make money off of you. This difference might seem marginal, but is an essential detail in the "new" Business networking that is starting to occur. I guess one could say that the sharing trends of social networking and open source are finally coming to business networking. By helping each other I believe we are creating a collective wisdom of business.

So, I believe that by surrounding yourself with great entrepreneurs that are willing to share their knowledge is a key to success in doing business in the future. But it is important that you are as willing to help them, as you are eager to get advice. With this said, I'm happy to give advice, for free, to anyone who would want some.