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Lean 15: Lessons for Kiwi startups

Working with Kiwi Connect to support the New Zealand startup and innovation ecosystem, I was particularly interested how applicable the lean approach is for New Zealand startups to be able to make their mark on the world stage? How do you learn from your customers? What is the role of ethics? What is the role of failure?

Below I share some of my Lean 15 insights for Kiwi startups.

  1. Fall In Love With Your Problem

It is natural as an entrepreneur to fall in love with your solution: After all, it’s what you have been pouring your heart and soul into. The trap here is becoming attached to a certain idea, rather than a solution to a problem.

David Bland, Principal of Neo Innovation Inc, challenged us to fall in love with the problem. This is the root on which everything else should be built upon, so you better make sure the problem is something that you are 100% passionate about. Recent research reported by TechCrunch found that purpose-driven companies outperformed others in the market by 10 to 1 over a period of 15 years.

“Is this something that justifies you putting your entire life into it, all your emotional energy?” – Nick Gerritsen, Crisp Start

Image: Nick Gerritsen. Photo: Neil Price for Wellington City Council

  1. Challenge Your Assumptions. All Of Them

The takeaway message from many of the speakers, was to get to the root of your users’ problems with one-on-one interviews, and to build the minimum viable product (MVP) towards a solution.

“The path to startup success is not paved with products, the path to startup success is paved with problems” – Justin Wilcox, Customer Development Labs

According to David Bland, it is best to conduct “problem interviews” to help you get to the root of your customer’s problem. He also cautioned that all too often we go through the process of conducting interviews, only to pick and choose those learnings that support our initial assumptions and biases.

“With an MVP, you determine what is minimum; the customer decides if it is viable.” – David Bland, Neo

Image: David Bland demonstrates the ideal early adopter, at the top of the pyramid, who is intimately familiar with the problem you are trying to solve. Photo: Alina Siegfried, Kiwi Connect

  1. New Zealand Has The Lean Advantage

In a time of rapid exponential change, small is the new big. Earlier this year, Samil Ismail, founding director of Singularity University told a Wellington crowd that New Zealand’s small population, relatively agile government and lack of corruption will offer huge advantages over larger, inflexible and slow moving nations in the coming decades.

Our resourceful Kiwi attitude, approach to problem solving, small population open to being first adopters, friendly business environment and two degrees of separation make New Zealand the perfect “Incubation Nation” – a place where you can truly experiment with transformative ideas, test them quickly and then take them to the world. We’re in the best place in the world to build lean startups, to learn and iterate fast, and create a proof of concept for scale – our nation is lean by its very nature.

Nick Gerritsen was quick to point out that while New Zealand provides a great test market, you need to be thinking global from day one. He also urged Kiwis to not be afraid of being Kiwi. Using personal stories illustrating how being himself has opened doors for him, he highlighted the importance of being authentic and embodying Kiwi values of humility and openness to earn respect and succeed internationally.

  1. Be Resourceful

When you’re doing things lean, you have to think creatively and operate with limited resources. Particularly in New Zealand, where we are often resource-constrained, ask yourself – what is available and accessible to me?

When Larry Lieberman, co-founder of Dynamite Labs was looking to set up an accelerator programme in Ohio, he approached the City of Cincinnati and struck a deal for free use an abandoned council-owned building that they were glad to be rid of, resulting in a significant reduction of overheads.

With the increased focus in open source and creative commons, startups can often leverage new platforms to collaborate in a resourceful manner, share knowledge and resources, and create more value collectively without reinventing the wheel every time.

Bonus idea: Larry also pointed out that out that offering free trials of your product to other businesses is a fantastic way to get your name out there – and often results in paid contracts down the line.

“Community is the most important part of startups” – Larry Leiberman, Dynamite Labs

  1. Actively Learn

A key component of lean methodology is that you are never done learning. Taking what you have learned and applying it should be a habitual process, not a procedure you go through once and then call it done.

Paradoxically, you can learn a lot in lean startups by failing fast (see point 7), at the same time as striving for continual improvement.

“The nature of an entrepreneur is to be perpetually slightly dissatisfied.” – Christina Wodtke, Adjunct Professor, Continuing Education, Stanford University.

Josh Seiden of Neo provided a great example of getting creative with your learning, telling the story of Ask Alexis – a new SMS-based advice service for men. Looking for new users to test their concept, they posted a call out on HackerNews. Suddenly they found themselves at 10 in the top stories, with nearly 1,000 users signed up within a day.

“You are always a student, never a master, you have to keep moving forward” – Conrad Hall

Photo: Neil Price for Wellington City Council

  1. He Tangata, He Tangata, He Tangata (It is people, it is people, it is people)

In his workshop on the Tuesday, Nick Gerritsen also reminded us what is the most important thing of all:

“He Tangata, He Tangata, He Tangata – It is people, it is people, it is people” – Nick Gerritsen, Crisp Start.

The issue of ethics was a hot topic of discussion. Astronomical amounts of user data are readily available for use, especially if you are ready to “get a little bit evil” as Alistair Croll of Next:Money put it. When your competition is applying unconventional strategies or hacks to gain the upper hand, it’s tempting to follow suit. The difficulty with this is that it’s often a fine line between unconventional strategies and unethical or immoral behaviour.

In a time when both customers and talent are increasingly looking to be involved with companies whose values match their own, it’s important to ask yourself what kind of company you want to be? In the long run, you don’t want to compromise long-term success by aiming for short-term wins by unethical means.

“Experiment with your customers, not on your customers” – David Bland, Principal, Neo

“Just because lean is new, doesn’t mean we can’t learn [about ethics] from scientists who have been before us” – Christina Wodtke, Adjunct Professor, Continuing Education, Stanford University

Christina Wodkte. Photo: Neil Price for Wellington City Council

  1. Fail Fast. A lot.

Lean 15 Programme Director David Allen closed the conference by reminding us that the only real failures in life occur when people are too afraid to ask. The lean approach to failure is that if you haven’t failed to some degree or been embarrassed by an earlier version of your MVP, you’ve probably launched too late. In order to understand your problem, and the solution to it, you need to understand what doesn’t work as well as what does.

If it’s difficult to stomach failure, think of it as a means of getting an education:

“Failure is just like going to university – it takes time, and it costs you money” – Larry Leiberman, Dynamite Labs

8.   Trust Your Instincts.

Nick Gerritsen cautioned the audience to remember that we can read all the books in the world on lean methodology, and pore over the musings from all the experts, but ultimately the person who you really need to trust is yourself.

Lean is just one way of approaching startups. Yes, it’s an efficient, effective method, but generally it doesn’t pay to get caught up in terminology, buzzwords, and measuring yourself by other people’s standards.

Follow best practice by all means, and always be open to change and learning, but when it comes to the crunch, go with your gut.

If you’re waiting for someone to tell you what success looks like, you’re fooling yourself. Doing your best is success.” – Nick Gerritsen, Crisp Start 

Alina Siegfried is part of the Kiwi Connect team, a group of passionate entrepreneurs building global bridges to connect world-class talent, impact capital, and high-tech innovation to the New Zealand startup ecosystem. Check out Kiwi Connect on Facebook, Twitter, LinkedIn and YouTube.

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