Teague Hopkins

Sep 12 2013

Lean Startup Panel Discussion

Last night I had the privilege of moderating a panel discussion with four other lean startup practitioners at the Ballston BID Launchpad in Arlington, VA. The event was organized by Lean Startup Machine, and the five of us will all be mentoring at the upcoming Lean Startup Machine DC on September 20-22.

Moderator

Teague Hopkins – Founder of THG, Lean Startup Coach. THG helps teams at corporations, nonprofits, universities, and government agencies innovate more efficiently and effectively.

Panelists

Frank DiMeo – VP, Technical Staff at In-Q-Tel. In-Q-Tel is a not-for-profit venture capital firm that invests in high-tech companies to help the CIA and other intelligence firms equipped with the latest in information technology in support of United States intelligence capability.

Frank Taylor – CEO of Restin, Head of Partnerships at Fosterly. Restin provides robotic massage chairs for rent and lease to the engagement marketing industry and for various applications in the corporate wellness & hospitality space. Fosterly is a platform to organize and share entrepreneurial knowledge.

Bruce Mancinelli – Executive Director, Incspire. Incspire is a business incubator education program that supports emerging businesses and startups through the pairing of mentor teams to each incubated company in the program.

Laura Kennedy – Head of Corporate Development, Living Social. Living social is a deal-of-the-day company that features discounted gift certificates usable at local or national companies. Based in Washington, D.C.

Panel Recording

Topics

What was your first introduction to Lean Startup?
An introduction to the components of Lean Startup Methodology.
How have you implemented the lean startup methodology at your company?
What’s the most surprising thing you’ve learned from running an experiment?
We’ve all heard about skunkworks. The goal is to insulate innovation teams from the culture and oversight of the larger organization. To be successful, do companies need to separate those doing innovation from those running operations?
What will we learn at Lean Startup Machine?
What are some tips for getting the most out of Lean Startup Machine?

Jul 03 2013

Lean Startup for Nonprofits

Last October, I had the privilege to go back to Wesleyan University as a speaker. I gave a one-hour talk on how lean startup principles can be applied to nonprofits and social ventures. My talk was part of the inaugural speaker series of the Patricelli Center for Social Entrepreneurship.

Wesleyan has recently made the video publicly available, so I wanted to share it with anyone who is interested in the intersection between nonprofits and lean.

[iframe width=”560″ height=”315″ src=”//www.youtube.com/embed/bJphXf3j8JY” frameborder=”0″ allowfullscreen]

Thanks again to the PCSE for hosting me. It’s always nice to be asked to speak at my alma mater, and I look forward to coming back in the future.

Jun 14 2013

Opportunity Cost

Let me tell you two stories.

Bob and Misha are both entrepreneurs. They each have startups in the software-as-a-service (SaaS) space. Each started with the same initial investment of their own money. They started their companies at the same time. They both had trouble finding product/market fit, and they each spent 3 months iterating, trying to develop a service customers would pay for.

Bob was determined to persevere, and kept his burn rate low and his company running for 6 months on his initial investment before eventually running out of runway and failing to find product/market fit. He finally shut down the business and moved on to his next project.

Misha took a different approach. After the first 3 months, Misha hired a few people to help him with customer development. He paid higher advertising and staff costs, and he ran lots of experiments quickly. After just one month, Misha determined that there wasn’t actually a need for his product. He shut down his company, having spent nearly all of his initial funds, and was ready for the next challenge.

Which entrepreneur would you rather be?

Bob’s company floundered for nine months as he tried to find product market fit. Misha’s only lasted four months, and he ended up at the same place. In fact, by the time Bob’s company failed, Misha was 5 months into his next project.

When you’re thinking about the costs of running a startup, don’t forget to factor in the cost of your own time – and how you could be spending it.

Photo Credit: ToniVC via Compfight cc

May 30 2013

How to Pick a Customer Segment

Customer Service Desk — Photo Credit: nffcnnr

In a lean startup, we like to say that it is better to pick the customer you want to serve and figure out what problems they have than to come up with a solution and then figure out who needs it. Entrepreneurs following this advice often ask me how they should decide which customer to choose and whether they should worry about targeting something too narrow. Specificity is good. Picking a small segment (e.g., parents of grade school aged children in the Washington, DC area) so that you can get enough penetration to start seeing network effects is usually better than biting off a segment that is too large for you to have any real impact (e.g., parents). With regard to what segment to choose, there are a few different approaches:

market sizing,
customer development, and
passion.

I’m going to lay them out from most to least traditional, ending with my favorite method.

Market Sizing

This is your traditional business school approach. Find some research on the sizes of various markets, maybe take a look at which ones already have similar offerings floating around, and pick whichever market has the best combination of size and untapped potential. As a baseline, this is not a bad way to go, but I prefer focusing on either customer development or passion as a way to pick your market.

Customer Development

Form a hypothesis about which market has the biggest problem doing whatever you’re good at doing. For instance, if you’re offering an online service to help customer find places to buy widgets, ask yourself who has trouble finding information about local stores, catalogs, and places to shop. Then, before building anything, go talk to some customers in that segment and ask them about how they currently find the information that you hope to offer, and whether that method satisfies them. Don’t tell them about your solution; just see if they actually have a problem with their current solution. If they don’t, you’re going to have a hard time getting them to use your option. If your first hunch about a market doesn’t pan out, try a few more and see which one yields the most frustrated customers. Start with that market, because it will be easier to attract your early adopters if they are actively looking for a solution.

Passion

The third school of thought, and the one I most often favor, is a variant of following your passion. Let’s take as a given that, barring lottery-like success, you will be working hard on this startup for 5-10 years before you see real returns. If that’s the case, who do you want to spend that time with? Which customer segment is the one you want to spend 5-10 years talking to, learning about, and empathizing with? When you pick a customer whom you like, you’re much more likely to stick with the startup long enough to find the right formula. If, for example, you hate sculptors but love musicians, you probably already know who you want your customers to be.

This post was adapted from an answer I wrote to a user’s question on Quora.

May 02 2013

Ego Risk Downs DC Startup Tixelated

In an article in the Washington Business Journal, Philippe Chetrit speaks candidly about the factors that caused Tixelated to shut its doors.

“What we ran out of first, before ideas, before money, before time, was steam,” [Chetrit] writes. “We spent two years tirelessly working, putting all our time, faith and resources into Tixelated. And what we were getting in return was stress, worry, and emotional haywire.”

This is not a case, as ego risk often is, of cognitive biases tripping up the founding team, but a simple reality that starting a company is hard and our own psychological wellbeing sometimes takes priority over the success of the business. It’s rare to see such open and honest evaluation of the emotional challenges leading to the decision to shut down a business. Kudos, Philippe for being a leader in the conversation on ego risk. We look forward to watching what you do next.