I’ll claim the necessary propensity to rapidly adjust your new business strategy is inversely proportional to the time you invest in writing a traditional business plan.

The more you invest in a business plan the less likely you’ll be willing to adjust.  Don’t let a plan weigh you down. It is more important that, as you enter the market and learn, you be willing to adjust… no matter what “the plan” said.

The most important thing you can do is learn from your customers.  As the leader of your startup your job is to then filter that information and adjust strategy as needed.  If you’re “married” to a plan you’ll hesitate when you should quickly move in a new direction.

Writing a business plan can be a good exercise.  It helps you think through your approach to the market and how to describe your offering. Whatever you put in that plan will be wrong so don’t treat it like the gospel.  It’s an exercise, not a panacea.

Good investors understand this too.  If they don’t, the weight of that plan doubles.

Image courtesy of Jen Waller

You should constantly move from idea to idea when you’re working on a new startup… until you get to something that is scalable.  Then stop the ideation and focus on execution.

Rarely will the first idea be the one that should be scaled.  My friend Scott Clark (BuzzMaven) talks a lot about adjacent possibilities as a way of exploring new ideas which I think applies here.  You need to find a good solid idea to start the process and then riff on it.  This takes time so you should make sure you have the runway to go through this process.

I’ve been “riffing” on my new startup Punndit for about a year and a half now.  The original idea has matured and we now have a much more solid understanding of where we can create real value and build a business.  That was unclear 18 months ago.  We went from what would have been solving a local maximum to what we now think could be a global maximum.  Not sure you can get there without going through that process.

Your original idea is rarely the best answer so being comfortable with an iterative design process is critical to solving the right problem.

Most people don’t realize how much energy goes into starting a new company.  Only by participating in one will you get a sense of the investment of time, money, and energy needed to give a great idea a shot at becoming a sustainable business.  And it won’t happen over night.  One of the big challenges for first-time entrepreneurs is being ready for the multi-year slog that it normally takes to reach viability.  Most don’t have the stomach for it.  It is truly a labor of love.  For some its love of the idea or product, for others it’s love of the process.  Now on my third startup, I think I fall into the latter.

I meet a lot of people with lots of ideas.  I come up with new ideas constantly myself most of which are mediocre at best.  But ideas are inert.  They are fun to talk about and from that standpoint provide good entertainment, but without the massive amount of energy needed to turn any idea into a business it will sit idle.

It doesn’t have to be a “great” idea to build a viable business.  With enough energy average ideas can work.  It’s the great ideas that don’t have the commitment of the founders to slog it out that is disheartening.  It’s not easy, but great things don’t come from easy.

I watched Apple’s iCloud announcement a couple of weeks ago.  Here’s what I heard.  ”We’re going to trade complex for simple.”  

It sounds like they plan to copy (cache) all of your data on every Apple device you own.  The iCloud service will be used to synchronize the devices ensuring that you will find the same data no matter which device you are on (iMac, iPad, iPhone, etc).  They will store a copy of that data on their central servers as well.

So what Apple is going to “trade” is storage costs for simplicity.  They’re going to put the files you own and access on every device and keep them synchronized without having to think about it.  A copy of the same file will automagically find its way onto every one of your Apple devices.  From a design standpoint this would be heresy to most engineers!  What a waste of space and resources.  What Apple clearly understands is that 1) storage costs will continue to approach zero and 2) Apple customers are not engineers nor are they versed in the complexities of traditional data management.

From a product design standpoint I think this is a smart move on their part.  ”Normal” people don’t understand networks, file systems, data synchronization, or any of the other intricacies of data management.  Simple wins over optimized, as it should.

From a business standpoint Apple is leveraging their strengths with this strategy.  They know a large number of their users have more than one of their devices.  They will set a new bar for simplicity and expectations and fortify the desire to have all Apple devices because “it just works”.  People are willing to pay a premium for that.  They will also build obsolescence into their devices as your storage needs increase due to their inefficient ways.  Smart move on their part.

Most software companies are in some phase of incorporating the “cloud” into their product/service strategy.  Apples “Fat” storage strategy could be a blueprint for simplifying your offering. 

Hidden in my facebook profile is something I started saying a few years ago, “Creation versus Consumption should be a 90/10 split”.  I thought about this again week before last when I was talking to a group of high school juniors/seniors participating in a week-long entrepreneurial camp called the Entrepreneurial Leadership Institute.  The program has been around the better part of a decade in Lexington and is run by Pamela Troutner at Commerce Lexington.  The goal is to expose the students to entrepreneurship.

What I mean by that quote is that I believe people are happiest when they are creating, not consuming.  A comment made in the PBS series Triumph of the Nerds (http://www.pbs.org/nerds/) by an early Microsoft executive formed the basis for my thesis.  During the interview they asked the executive if Bill Gates had changed after he made his millions.  The exec quoted Gates as saying something to the effect of “You reach a point where you can’t stay in any better hotel, can’t eat any better food”.  It really struck me at the time that at some point there is a “diminishing consumption return”.  Also helped form my anti class warfare political beliefs.  Why does Gates continue to get up and go to work every morning?

Gates has spent his life creating, not consuming.  He is driven by the creation, not the consumption.  He could never consume as much as he has created.  I’ve followed this philosophy in my own scholastic and career choices.  The times that I worked the hardest; pulling all-nighters in arch school working on drawings or a cad model, working 90 hour weeks to get a client project out the door, were in hind-sight the most rewarding times of my life.  I think it’s because I was creating.  The toil was followed clearly by the reward of creating something I could be proud of.  I reminded the students last week that as they pursue their scholastic and career choices they should look for something they not only enjoy doing but can become passionate about.  If you can wake up every morning eager to get to “work” because you’re excited about what you’re working on and know you’re creating something of value for yourself or others the hours sail by.

By contrast I’ve seen too many people “consumed by consumption”.  They are distraught over things they wish they could have but can’t afford.  They spend most of their time wanting.  They spend their life consuming.

I like to consume too.  I enjoy great meals, nice cars, travelling.  The trick is balancing this consumption with your contributions.  I don’t think it’s a 50/50 split.  Rather, I’ll claim that your happiest days on earth will be when you are creating rather than consuming.  For me it’s more like a 90/10 split.  I’m happiest when I’m creating and have trained myself to care little about the consumption.

The term critique derives from the Greek term kritikē (κριτική), meaning “(the art of) discerning”.

Yesterday I wrote about the value of Iterative Design and Critique and how I’ve carried the valuable lessons I learned attending architecture school throughout my career.  Last year I started hosting Kritikē sessions for local entrepreneurs at Base163, Lexington’s new hub for entrepreneurs and creatives.

A key to entrepreneurial success is the ability to quickly evaluate ideas and set the proper course.  Good constructive critique by peers, mentors and early customers coupled with the ability to “pivot” from the analysis defines success.  However, exposing ideas in their nascent state is often intimidating in the minds of entrepreneurs for fear of someone “running” with the idea or of diagnosing Ugly Baby Syndrome.  Kritikē is an exercise in confronting those fears and working to set your new venture on the best possible vector to success.

Select Fridays at noon, base163 hosts Kritikē, an informal forum for peer/mentor critique at the critical early stages of new ventures.  We limit to one entrepreneur/team for one hour with a format of the entrepreneur presenting the idea for 5-10 minutes followed by free-form discussion for the remainder of the hour.  We try to assemble the best and brightest in the region to help vet the business opportunity.

We’re hosting a Kritikē session today for a local entrepreneur looking for feedback at a critical time in his company’s development.  If you think you could benefit from a Kritikē session for your business or would be interested in bringing your insights to the table to help our region’s entrepreneurs shoot me an email (rstevens [at] archvision.com).

August will mark 20 years since I graduated from the UK College of Architecture (now College of Design). I started at UK in 1985 as a freshman with a declared major in electrical engineering but changed direction and entered the architecture program my junior year.  Best decision of my life.  While I have not practiced architecture a day in my life I look back on the time in the arch program as a great investment.  I often tell people in hindsight it might have been the last great liberal arts education.

I’ve carried two important lessons with me all these years that were at the heart of the architecture program at UK and became second nature in my thinking.  These lessons have helped shape my approach to product development, business, and particularly tech startups; improving through Iterative Design and Critique.  While they became second nature to me I quickly realized not everyone understands or appreciates their value in every creative endeavor.

The process of Iterative Design is analogous to the Customer Development / Lean Startup processes that have caught so much attention in the tech startup world and evangelized by the likes of Steve Blank (http://steveblank.com/) and Eric Ries (http://www.startuplessonslearned.com/).  By engaging with others throughout the design process you learn very quickly that your project (and understanding) will improve with each external interaction.  The more iterations the better.  Great design results from a process, not an epiphany.  The same is true in tech startups.

An important part of the Iterative Design process is learning to manage Critique.  As you engage in the learning process of soliciting feedback from others you have to learn to digest the good and the bad.  The “bad” may be the most important feedback you get.  Not taking “negative” feedback personally and making it a natural part of the process is a skill that needs to be practiced.  I try to make a distinction between critique and criticism.  Critique should never be personal.  I’ll admit it is difficult to not take things personally.  Nobody likes to be told they have an ugly baby.  But the understanding that comes from good critique may be the difference between success and failure; both in design and your startup.

Nike made Just Do It part of our vernacular.  JDI, or as some put it JFDI (http://www.urbandictionary.com/define.php?term=JFDI), has become a rallying cry for startup entrepreneurs.  You can’t be content or frozen in fear and expect to move forward.  You have to keep moving to grow.  Discovery and learning are what keep the juices flowing.

I started this blog because 1) I need to practice writing, 2) I wanted to understand tumblr as a product and 3) I wanted to make sure I squelched any fear of putting things out there for critique.

I started writing and quickly had a handful of short posts so I queued them up to release one-per-day over the first week.  Then I started questioning whether or not I could sustain a post a day.  The following weekend I wrote another week’s worth and had notes for 7 additional posts.  Maybe it’s a pace I can sustain.  If not, the world won’t end :)

I’ve had a couple of people ask me how many people read the blog.  My answer is I assume none.  Nobody knows about it.  Doesn’t mean I shouldn’t do it.  The value for me comes from the practice and discipline.  JFDI!  The rest will take care of itself.  Complacency is the enemy of growth, both personally and professionally.  

Local maximums can be a blight on a small company’s growth and should be the bane of every startup.  I wrote last week about Chess vs. Checkers which ties into the “trap of local maximums” in that successful entrepreneurs have to always seek knowledge about their market and look for clues as to how far their concept and team can go.  They are engaged in a process of constant learning so they can push their venture to its ultimate success.

Success is of course a relative term and as an entrepreneur you need to always reevaluate where you are versus where you think you could be.  You have to be willing to give up short term gains in order to fulfill the promise of finding your global maximum.

You can’t get too caught up in trying to optimize what is ultimately a local maximum.  Eric Ries wrote a great post related to this last year.  Rather, you have to know when to ditch local optimization in favor of pursuit of broader opportunities.  There are inherent risks in pursuing these opportunities and there should be no shame in understanding you’ve taken something as far as you should.  Blind pursuit leads to diminishing returns.  Knowing when to quit and start over or push to the next level defines the art of entrepreneurship.

Startups are a lot like the game Plinko.  You wake up with a “brilliant” idea (doubtful… my experience is new ideas are actually a melding of lots of observations made over a period of time) and start a journey of discovery and learning.  You won’t end up where you originally imagined because of this process.

Testing your hypotheses are like the pegs in the Plinko board.  You may have thought you should go right but the peg shot you to the left.  Meeting with customers and absorbing their feedback will do the same to your startup journey.

The difference in the startup journey and the Plinko board is chance.  You have little control over where your chip goes after you release it on a Plinko board.  Not true with your startup.  You’re involved with the potential “pivot” that can occur at each step along the startup journey.  You decide if it is better to go left or right.

It’s when you have your eye on that $100 slot but along the way learn there is a $10,000 opportunity that keeps the entrepreneurial juices flowing.  You often can’t see the $10,000 opportunity when you start the process.  It’s only when you get out there and learn from the market that the big $ slots are exposed.

The opposite may also apply.  You can have your eye on $10,000 when you start only to find your Plinko chip landing in a $100 slot.  Not the market you thought it would be but an equally important part of the learning process.

Can’t win if you don’t play!  I’ll claim the process alone is worth it.

A lot of startups face the chicken or egg questions:

Where should I start?  What should I do first?  How do I attract x if I don’t have y?

If you’re a startup you have to do both.  I’ll claim the answer lies in doing a little bit of everything, particularly in the early stages, but concentrate extra efforts on the areas where you have some insight and/or leverage.  I wrote about “leveraging your assets” and “painting with broad strokes” earlier this week.  These lessons help answer the chicken or egg dilemma.

That’s why you have to burn on all cylinders in the early stages.  You need to test as many of your hypotheses as possible in as little time as possible.  The amount of time you have to learn is directly related to the amount of $ you have.  The trick is to figure out “an” answer before you run out of $.

It’s chicken and egg.  Choosing one or the other too early in the startup process will leave you stranded.

Startups should be continually inventorying their assets to figure out where they have the most leverage. That asset list will give you a clue of where your next steps should be. Sounds logical and simple but I think it is often overlooked.

When you’re starting something from scratch there are hundreds if not thousands of unknowns that need to be considered, tested, and the results digested. The scale of the unknowns often paralyze founders in fear and the result is they spend most of their time replaying what they do know and where they feel most comfortable, avoiding the uncomfortable.

I’ve found the best way to avoid these lulls is by leveraging your assets (strengths) as a starting point in probing the unknown.

Are you pre-demo? Leverage your personal or business connections for early feedback. Use them to setup meetings where you can test your latest market hypothesis. Listen and learn. You’ll build knowledge, understanding, and confidence to move on to meet with people you don’t know but may have better market insights.

Already have a demo? If your process or technology is “showable” (not necessarily finished, just showable), schedule as many live demos as possible and get direct feedback. Sure, your product can be tested and demoed online by hundreds or thousands who visit your website but you won’t be able to gauge their reactions and ask questions. I’ve recently given demos of Punndit, my latest project, that last only 3 minutes. It’s the conversation that’s still going on an hour later where I’m learning the most!

Working on the next generation of your product or service? Call on your key customers for early feedback. They’re an asset that you can learn from and bounce new ideas around with.

There are always dozens of unknowns in front of you. Best to leverage your assets as a starting point in your learning.

I think successful entrepreneurs play chess, not checkers.  They are always thinking at least 2 or 3 moves ahead.  This is what drives them to continually innovate and positions them to remain relevant.  They are looking beyond what is “now” to what is possible.  They are willing to gnaw off their arm, alarming and uncomfortable to the rest of a team, because they can see the brighter future just over the horizon, two moves away.

The trick is balancing the long term strategy with short term execution.  If your team isn’t engaged in a kick-ass game of checkers it can kill you.  Game over.  If your team can execute in the short term with an eye on the long term strategy, you’ll likely reinvent yourself and/or redefine the market and find yourself swimming in bluer waters.  Check mate.

Painters don’t start in the top left corner of the canvas and work their way down to the bottom right, meticulously executing to a finished work. They develop the painting across many layers starting with broad strokes and culminating with fine-stroked details. The painting emerges over time.

This is the best analogy I know that illustrates the process of designing a product, starting a company, or any endeavor that benefits from an iterative, design/learning process. Entrepreneurs and designers don’t simply dream up their product or company idea and spit it out. Most people assume some sort of devine creativity is at play when they witness great designs or innovative businesses models. Rather, success is found by engaging in a process of learning; moving from broad themes to detailed execution. As the godfather of startups Steve Blank (http://steveblank.com) puts it, your job is to manage the process of testing your hypotheses. Start with your broad assumptions, test them, build toward a detailed understanding of the problem you’re solving and deliver an elegant solution.

Painting from top left to bottom right is a futile, frustrating exercise and as you can imagine, doesn’t produce a great result.

Are you building your product or business from top-left to bottom-right or with broad to fine strokes?