Final Exam Nail it then scale it Flashcards
Why do most entrepreneurs fail?
“Entrepreneurs fail precisely because they believe in their idea and then follow conventional wisdom about how to build a new product or a new business. In doing so, they tackle the wrong tasks, do good things in the wrong order, and in the end fall prey to their strengths.”
3 myths of Entrepreneurship
Hero, Process, Money
Hero Myth
passionate, determined, visionary entrepreneurs lead to failure more than they lead them to success. Fall in love with their product. passion, vision, and determination don’t lead to success.
Process Myth
Don’t follow the correct way to build a product: “If you build it they will come”
Money Myth
Money leads to success. Money at the wrong time can kill you.
fundamental attribution error
Attributing any success from Entrepreneurs to the personal qualities of the individual.
Traditional Product Development
- Identify product opportunity
- Create product specs
- Build Alpha product
- Test product, build beta product
- Sell product
raditional Entrepreneurship Process Model
- Entrepreneur has a idea
- Discuss with/raise money from friends, family and fools
- Find a location
- develop the product
- perfect the product and add features for broad appeal
- sell the product.
What is the reason most entrepreneurs fail?
They didn’t build what the customers wanted.
Money More or less. Why?
The truth is less money can help you focus on the external market–on your customers– and increase your ability to develop creative solutions for those customers.
NISI 5 steps
- Nail the pain.
- Nail the solution.
- Nail the go-to-market strategy
- Nail the Business Model.
- Scale it.
Innovation distinguishes
a leader from a follower - Steve Jobs
What is key for a sustainable advantage?
Understanding and empowering the innocation process
Invention
is the discovery of a new technology, product, or service.
Innovation
is the combination of an invention with insight about a market need. Lies at the intersection of invention and market insight.
Over 90% of businesses fail because
they couldn’t get anyone to buy it, not that they couldn’t build it
2 fundamental risks when building
Technology Risk → Can we make it?
Market Risk → Will customers buy it?
Entrepreneurs _____ and customers ____
Innovate and customers validate. Entrepreneurs jobs to nice the pain and connect that with an invention to solve a problem.
Innovation diffusion
The early majority sticks with the herd. The inability to establish market credibility creates a chasm between a startup and a the mass-market adoption of its products. To cross the chasm moore suggests focusing on a single industry vertical, leveraging all of your resources to win early-majority reference customer sin that segment.
Importance of validation for bosses
The first thing you should do is get the hell out of the building” → Steve Blank. by fact of our human nature we become convinced we understand outside world when in fact we do not
Fail _____ and learn to _____. _____ when needed.
Fail fast. learn to change. Pivot when needed.
3 luck traits. Who came up with them.
Richard Wiseman
- Lucky people take advantage of chance occurrences that come their way.
- Lucky people pay attention to what’s happening around them and, therefore, are able to extract greater value from each situation
- Lucky people are extraverted - they make more eye contact and smile more frequently, leading to more positive and extended encounters
Hiring. What is not an important question
Salary
What is the best predictor of future performance?
past performance.
If you don’t build your dream
someone else will hire you to build their dream”
I never want to build something
no one wants to buy” -Thomas Edison
“If i had asked customers what they wanted,
they would have said faster horses Henry Ford
4 Different Traps:
Confirmation Trap, Motivation Trap, Overconfidence Trap, Familiarity Trap
Confirmation Trap
we tend to see what we already believe and discard evidence to the contrary. The confirmation bias nevertheless has a powerful effect upon out ability to learn.
Motivation Trap
sunk costs leading to irrational decision making.
Overconfidence Trap
Although we may be confident, we may not be right. Overconfidence leads to disasters. TRAP of NOT LISTENING.
Familiarity Trap
One of the challenging things most entrepreneurs struggle with is discovering what they don’t know or don’t have. Tendency to lean on your familitaries or your strengths when they may no longer be appropriate
The Solution to the 4 traps:
Developing an attitude of learning.
expert novice
Someone with knowledge and confidence, but always maintains a seed of doubt that they may be wrong.
In all your innovations and throughout the invention process, focus on _____
simplicity
Simplicity increases _____ and reduces ____
reduces cost, increases customer adoption, simplifying doesn’t mean you are taking away customers choice
Keep Teams Small.. At the core you need:
Someone to Define it, Build it, and sell it.
NISI Fundamentals
- get into the field
- fail fast and change
- focus on intellectually honest learning
- conduct rapid, inexpensive, simple experiments
2 types of pain
vitamins vs. painkillers. Mosquito Bites, vs. shark bites.
Monetizable pain
A pain so significant that the customers recognize the pain, have the money to pay for the solution, and will return a startups cold calls to solve the pain
Three mistakes entrepreneurs make
- Guessing but not testing the pain
- Selecting a small customer pain (low on the pain scale)
- Selecting a narrow customer pain (small number of customers willing to pay.
Big idea Hypothesis (2 OF THEM)
Break through Hypothesis or a better, faster, cheaper hypothesis.
Big Idea Process Steps (5)
- For
- who
- The
- That
- Unlike
- Our Solution 1
3 tests.. memorizable pain.
- Find a sample of customers
- Cold call or email them.
- Capture and Measure the results.
3 Questions for Customers
- Do you have this problem?
- Tell me about it. concerns. experience. current solutions. listen!
- Does something like this solve the problem?
Hassle test
Takes results from Smoke tests and asks them about the hypothesized problem and the hassle along with it.
3 types of customers
end user, a technological customer, and an economic customer.
Noncustomers
influential journalists, analysts, or investors: while they have wisdom, they aren’t necessarily your customers
Sufficiently large market
Over a billion dollars in potential sales, company can achieve over 100 million in sales
Easier to compete in a slow market or rapid?
rapidly growing markets.
maslows needs 3
- Food, shelter, clothing, and security
- Love, friendship, feel important
- Self fulfilment needs.
Nail the solution (4 tests)
- Develop a minimal feature set
- Virtual Prototype Test
- Prototype Test
- Solution Test
The feature creep Syndrome:
When entrepreneurs try to add as many features as possible to get more sales. Ends up losing more money and not being as effective.
Toyota’s 5 why approach
keep asking why to get to the root cause
Be Extraordinary! Quote
Be Extraordinary! everywhere, everyday and in everything!
FIVE ACTIVITIES EMPLOYED TO BE MORE INNOVATIVE
QUESTIONING OBSERVING EXPERIMENTING NETWORKING ASSOCIATING IDEAS
Think Entrepreneurially:
Challenge conventional wisdom
Break the rules!
Brainstorming
The less the better
Ideally 60 minutes in duration
100 ideas in an hour is a good rate
Write down your ideas
Luck
Being observant, open-minded, friendly and optimistic INVITES luck you way!
Hiring People:
Salary is not the most important question, instead you should give the most attention to:
- How much value a high talent person could reasonably bring, versus
- How big the cost could be from weak performance and having to replace a failure
Top Grading
A-players hire A-players –> Love Acct.
B-players hire C-players
Starting a Business
Naming
Business License (if you have a physical location)
NISI fundamentals are
- get into the field
- fail fast and change
- focus on intellectually honest learning
- conduct rapid, inexpensive, simple experiments
Nailing solution
Develop Minimum Feature Set
Virtual Prototype test
Prototype test
Solution test
