8 Steps to Launch an Idea, in Just a Few Hours

Thanks to the spread of "lean" startup techniques, today's innovators are smarter than ever. But in the race to launch that first prototype, some of them might be moving too fast.

Now that "lean" methodology has taken hold of startup culture, many founders and internal innovation teams grasp the virtue of creating a "minimum viable product" or MVP: An initial prototype they can show to potential customers and investors, in the interest of collecting feedback and making subsequent improvements. 

Here's the problem: In their haste to develop MVPs and "fail fast" and "iterate," many creators are not doing enough homework in advance of their initial prototyping.

The good news? You can do a lot of necessary homework in just a few hours.  

In his forthcoming book (due out May 6) The First Mile, innovation guru Scott D. Anthony, a managing partner at Clayton Christensen's vaunted Innosight consultancy, outlines eight crucial steps you can take in less than a day's work. 

1. Conduct desk research. Your ego wants to tell you that no one has considered your idea before. But it's a likely reality that a public company is considering it--and has already declared something about it. To find out, Anthony recommends scouring both the S-1 and 10-K filings of companies that might be players in your space. You'll find them at www.sec.gov. Likewise, you can dig into the analyst calls that public companies hold. You can find transcripts of these at seekingalpha.com

Going one step deeper, you can look into the patent filings of large companies in your space. "For example, analysts had a pretty good sense as to what Apple's iPad product would look like years before its release due to the patent filings Apple had made around critical design and usability elements," writes Anthony. 

Remember, with all of this desk research, you're not just looking for competitive intelligence--you're also looking for potential partners. In a recent phone interview, Anthony told me about a startup Innosight had funded called YFind. Using the above research techniques to build a list of possible partners, YFind happened to find a company called Ruckus Wireless. Innosight brokered a connection to Ruckus. Ultimately, Ruckus ended up acquiring YFind. "We did the desk research to get smarter about the space, and it led to a liquidity event," says Anthony.

Obviously, a result like that won't happen every time out. But in this case, it all began with homework. 

2. Run a thought experiment. What would it look like if your idea succeeded? This hypothetical question--if you ask it to outsiders who'll be objective about your prospects--can help you envision your strategy, unforeseen competitors, possible exits, and possible road blocks. For example: Right now, your supplies might have a certain cost. How would that cost change, if a large competitor began to buy the same supplies at astronomical volumes? You also might have a genius programmer who's doing the brunt of your brilliant work. What happens if she gets sick or gets a job offer she can't refuse?

3. Build a back-of-the-envelope 4P model. The 4 Ps are the target population of your product or service; your planned pricing points; your expected purchasing frequency (i.e., how often will this target population pay for the product); and the required market penetration you'll need to achieve plausible revenue goals. With this five-minute exercise, you can quickly create an easy reference sheet of talking points about your idea's potential monetization. 

4. Make a phone call. Chances are, the success of your idea depends on several key assumptions. With one phone call, you can turn one of those key assumptions into a definite notion. In his book, Anthony tells the tale of a company targeting the universities market with a beverage dispenser. Traditionally, this company had sold through mass-market retailers. It had no experience "cracking" the university market. The sales team assumed it would take about three months. 

Had they operated on that three-month assumption, they would've been left high and dry. Luckily for them, one member of the team picked up the phone and called a friend who sold security solutions to universities. The friend revealed that sales cycles for schools sometimes last as long as three years

A finding like that would obviously influence your revenue projections, or perhaps even whether you want to pursue the business at all. Imagine what you'll learn about your own idea, if you pick up the phone to research just one of your assumptions.

5. Walk through a transaction. Anthony provides a list of five essential questions you should answer: 

  • How will the customers obtain the product or service?
  • When will they pay for it?
  • Where will the customers obtain it?
  • How will the product or service get to the customer? 
  • Is there anyone else who'll get a piece of the transaction (e.g. licensing fee, inventor royalty)?

6. Build a MacGyver prototype. Note: This is not your MVP. This is homemade and inexpensive. You are not creating an actual prototype. All you are creating is a physical representation of your idea--something that can be damaged and quickly remade. This isn't a guitar; it's nails, wood, and rubber bands. It's a layperson's sketch, rather than an artist's rendering. "The idea is to focus on speed rather than aesthetics," writes Anthony. You just want to create an in-the-flesh illustration, so you can more easily explain your idea to others--and so it does not only exist in your head. 

7. Talk to customers. It's incredible how many innovators go forward with their ideas without talking to potential customers. But it actually happens quite a bit. Anthony's advice on this front is consistent with what Tina Weber, who runs Boston's annual Lean Startup Challenge, told me not long ago about the importance of testing a concept before building a prototype. Whether you're surveying customers with online tools or simply building a landing page for your product or service, the bottom line is, you need some evidence that your idea has been vetted by prospective customers. 

8. Build a reverse income statement. This one might sound like it takes more than a few hours, but it's actually not that difficult, if you've done a thorough job with your 4 Ps. For the reverse income statement, you want to start with your ideal annual profit level--and work backward, step by step. The first step, naturally, is parsing that annual profit into two big buckets: your revenues and your costs. From there, you keep going. For a full explanation, Anthony suggests reading "Discovery-Driven Planning," a classic Harvard Business Review article by Rita Gunther McGrath and Ian C. MacMillan from July, 1995.

Source: http://www.inc.com by Ilan Mochari

Thanks to the spread of "lean" startup techniques, today's innovators are smarter than ever. But in the race to launch that first prototype, some of them might be moving too fast. Now that "lean" methodology has taken hold of startup culture, many founders and internal innovation teams grasp the…

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I don't read your newsletters... RANT

It's true, I don't read your newsletters. I simply file them away each day which takes up approximately 10 minutes of my time. Sure I could unsubscribe, but I would just get yet another email from you telling me I "unsubscribed".

I hope you tell your investors in your next meeting that your readership is up this month and your KPI's are a direct result of your awesome strategic marketing planning. Seriously, your newsletters are so perfect and tailored to me specifically that I simply open them just to put them into the trash.

Of course, I did subscribe, I made the initial effort, but if I haven't logged into your awesome service I found once upon a time on producthunt.co or angel.co in the last 3 months, do you think your campaigns are still relevant to me as an individual? As a former customer of your product or service, I think not.

Please consider refining your email marketing lists before sending a blast to your subscribers - segmentation works much better! In fact, slicing and dicing up your lists will not only save you money by lowering the costs of your volume-based emails, but it will also prevent someone from disengaging from your product or service as I did by placing your newsletter directly into the trash.

Please don't get me started on snail mail, especially letters from credit card companies explaining that "they know what I want from a card" or "Hi Eric, We've listened to you". Yes, I have excellent credit. No, I do not need your credit card offer, nor does the ecosystem or trash receptacle. Please consider the environment over my financial well-being.

Also, why do we still have phone books being delivered? There's a stack of 10 outside my apartment. There are only 8 apartment units in the building... wtf.

Happy Earth Day!

This is a rant.

It's true, I don't read your newsletters. I simply file them away each day which takes up approximately 10 minutes of my time. Sure I could unsubscribe, but I would just get yet another email from you telling me I "unsubscribed". I hope you tell your investors in your next…

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Raise Now: VC Funding For Startups At Highest Point In More Than A Decade

There is a reason it feels like everyone and anyone is raising money to build a company: They are. According to two studies, capital raised from venture capitalists by growing, private companies is at its highest point since 2001.

A study by MoneyTree pegs the total sum raised in the first quarter at $9.47 billion. By its number, that is the highest figure since the second quarter of 2001, when venture capital invested $11.5 billion. The year-ago quarter according to the study saw a more modest $6.01 billion of inflow.

A separate study by DJX VentureSource has a slightly different figure for the period, estimating total first quarter investment at $10.7 billion. It also estimates the comparative 2001 figure at $11.5 billion, however.

Regardless of which group has it more right, the trend is plain: Huge dollar amounts are up for grabs at the moment, as investors look to pour capital into companies of all stages while the NASDAQ is high, the IPO window is open, and cash-rich industry titans are more than willing to buy talent and products alike.

Bubble? It depends on who you ask, but I doubt anyone can say with a straight face that we’re living in financially conservative times. Cracks have appeared, with Square delaying its IPO, Box’s S-1 raising questions, and King’s offering struggling to find traction. But that hasn’t stopped others from going public and taking on new cash.

Signs of the times abound.

All that said, it’s important to keep scale in mind. Note the above stats indicate that we’ve reached mid-2001 levels of investment. That says nothing about how high investment was before, naturally. BusinessInsider, in a post aptly entitled “Venture Capital Funding Is Nowhere Near The Levels We Saw During The Dot-Com Bubble,” published the following chart [data is from the above-cited MoneyTree study]:

Screen Shot 2014-04-18 at 1.28.17 PM

Venture capital investment is therefore at record levels when you compare backwards to any moment before the massive implosion of 2001, but remains dwarfed by prior excesses.

A few data points: Pre-2008 crash, venture investment topped out at $8.45 billion in the fourth quarter of 2007. It topped $28 billion in both the opening quarters of 2000. That’s a pace of around three times the investment we are seeing now, and funds are often going to larger, more established companies with nine-figure revenues.

The market is not in perfect balance, and there is quite a lot of stupid money bouncing around funding foolishness. But the total dollar figure for the first quarter of 2014, given how top-heavy it is toward mega deals for late-stage companies, likely isn’t a reason in and of itself to panic.

IMAGE BY FLICKR USER  Luz Bratcher UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN CROPPED)

There is a reason it feels like everyone and anyone is raising money to build a company: They are. According to two studies, capital raised from venture capitalists by growing, private companies is at its highest point since 2001. A study by MoneyTree pegs the total sum raised in…

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To grow your company and make millions, start working four days a week

Is it possible for an entire company to work a four-day week, grow revenue by 120% per year and do millions of dollars in yearly sales?

Yes.

At Treehouse, the online school I founded in 2010, we figured out how. We work a 4-day week, and in just 32 hours per week, here’s what we’ve been fortunate to achieve:

  • Over $10,000,000 in yearly sales
  • 70 full-time employees
  • Yearly revenue growth of over 120%
  • $13,000,000 raised in venture capital
  • Over 70,000 paying students

What’s the trick?

We have over 70,000 students at Treehouse and only 70 employees—and we only work 32 hours a week. I have been working 4 days a week since 2006 because I wanted time to dedicate to the people I love, and when people join the company they often wonder if we’re for real. Sometimes, they expect they’ll have to work 40 hours anyway—but they end up positively surprised. How are we able to achieve a customer-to-employee ratio of 1,000-to-1? By increasing efficiency.

Here’s how we do it.

1. No internal email

We’ve banned using email internally. Because email is push instead of pull. Instead of going out and pulling the information I need, when I need it, email allows others to push information on me, by copying on emails I don’t need to read, when it’s convenient for them. Therefore I spend the majority of my time trying to clear my inbox, doing things that are important for other people, instead of advancing my priorities.

Instead of the push email model, we use two simple tools: Convoy and Flow.

Convoy is a simple forum, just like Reddit, except it’s only visible to Treehouse employees. You can post ideas, celebrate wins, discuss competitors, say happy birthday, post funny videos—anything really. If someone has time to consume these things, they just go to Convoy. All this ‘noise’ (even if it’s healthy noise) doesn’t clutter up your inbox.

You go pull the information when and if you want it. We have @person tagging in Convoy so that you can mention people to get their attention. However, this doesn’t email the person – it simply puts a notification at the top of Convoy so the next time they log in, they’ll see where they’ve been mentioned.

I get probably 10 to 20 emails a day and they’re almost all from external people. It’s amazing.

We manage our projects with a simple tool we’ve built called Flow. Here’s how it works:

  • You propose a project that you’re passionate about, including a title, description and measure of success.
  • You add “roles” to the project that are needed for completion. For example, if you wanted to add a new page to the site, you’d add a designer and a developer.
  • You hit “Propose Project.”
  • Once a day, everyone in the company is emailed a summary of the all the proposed projects in Flow (one of the few things we use email for).
  • If you think you’ll be able to fill one of the available roles in the Project, you go to the project in Flow and click “join.”
  • Once the all the roles for the project get filled, someone clicks “start,” picks a due date and work begins.
  • At the end of each day, every person on a project enters a simple “status” for what they did that day on the project and chooses a % complete for their role in the project.
  • If you need to discuss something with other people on the project, you go to the discussion tab and start a new discussion (much like a forum) or jump in HipChat and chat about it.

This leads to the second vital secret to the four-day week.

2. Asynchronous communication

95% of all communication at Treehouse is written. We avoid facetime meetings and phone calls whenever possible. Keeping communication in written form means that people can respond when it’s convenient for them.

As you know, it completely wrecks your productivity when someone comes over to your desk and taps you on the shoulder, or pulls you into a meeting. You have to stop what you’re doing and participate in a discussion, whether you really need to or not.

However, if I ping you on HipChat, you can respond when it’s best for you. We remove the “I need to know ASAP!” communication that is often so rampant in companies today.

Yes, we occasionally use Google Hangouts to have a face-to-face meeting, but we avoid them if possible and always make attendance optional.

3. The big picture

There’s just one more small piece to this puzzle: We don’t have managers at Treehouse.

The overarching theme here is this: We treat our employees like the responsible adults they are. We let people set their own priorities and communicate when it’s most convenient for them.

The amazing benefits

There are plenty of reasons to work a four-day week.

  • Recruiting is easy (we still pay full salaries and offer a very generous benefits package). We regularly have new employees choose Treehouse over Facebook, Twitter and other top-tier tech companies.
  • Retention is easier. One of the team told me he regularly gets emails from Facebook trying to win him over and his answer is always the same: “Do you work a four-day week yet?”
  • Morale is boosted. On Mondays everyone is fresh and excited—not jaded from working over the weekend.
  • 50% more time with our family and friends. I get to spend three days a week, instead of two, with my family. 50%. It’s insane. For those on the team without kids, they get to spend this extra 50% on their hobbies or loved ones.

I hope our experience encourages you to consider working a four-day week. It sounds insane, until you try it.

Follow Ryan on Twitter @RyanCarson. We welcome your comments at ideas@qz.com.

Source: http://qz.com/

Is it possible for an entire company to work a four-day week, grow revenue by 120% per year and do millions of dollars in yearly sales? Yes. At Treehouse, the online school I founded in 2010, we figured out how. We work a 4-day week, and in just 32 hours…

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Express 4 in production

Express 4 just got released thanks to the great work of @defunctzombie and the expressjs team.

The main change is, that Express does not have connect as a dependency anymore, which means that the bundled middlewares are no longer available in the express module. These should be installed and listed in your apps package.json. This allows faster updates of the middlewares without affecting the release cycles of express.

Migrating

The things you should pay attention to:

  • app.configure(): removed, no longer available
  • app.router: removed, no need to manually do it
  • express.createServer(): removed, use express()
  • public API for the Router

It took only a day to change to new version of express, in a medium size application like ours.

For more, please check the migrating guidelines and the list of new features.

In production

We have deployed to only one API node for testing purposes (after running it several days on our staging environment) just to see how it performs under heavy load. We are serving millions of requests every day so even in this setup the node with the new version still receives lots of requests.

In short: hats off! All of our metrics improved on the API node using the new version of Express:

  • response times dropped by 20%
  • memory consumption dropped by 10%

Conclusion

As you can see, the effort you have to put in to migrate the new version is very little compared to the performance gains. If you have at least integration tests to check if everything is okay, you should definitely start using the new version.

Express 4 just got released thanks to the great work of @defunctzombie and the expressjs team.The main change is, that Express does not have connect as a dependency anymore, which means that the bundled middlewares are no longer available in the express module. These should be installed and listed…

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France Just Made It Illegal To Answer Work Emails After 6pm

Editor's note: The post below was immensely popular on our social networks today--clearly, this story hit a nerve with email-weary workers across America and the world. We wish to clarify some information in The Guardian report. French unions did not ban French employees from sending emails after precisely 6 p.m.--the agreement meant to protect some workers from too much after-hours work intrusion (and consequently, burnout) does not stipulate 6 p.m. as a hard stopping time for work-related emails. In addition, the agreement won't affect as many people asThe Guardian report suggested--about 200,000-250,000 workers will be affected by the rule, according to French media.

There are many ways to distance yourself from the crushing tidal wave that is your work inbox. You can, for instance, impose an email sabbatical, which is supposed to be good for your mental health. Or you can plow through all of your emails in one go with the savvy use of search filters.

Now, there's a new lifehack for dealing with email 24/7, and it might just be our favorite yet: Move to France. The Guardian reports that the country's workers unions just imposed a ban that forbids employees from attending to "work-related material on their computers or smartphones" after they clock out for the day:

Now employers' federations and unions have signed a new, legally binding labour agreement that will require staff to switch off their phones after 6pm. Under the deal, which affects a million employees in the technology and consultancy sectors (including the French arms of Google, Facebook, Deloitte and PwC), employees will also have to resist the temptation to look at work-related material on their computers or smartphones --or any other kind of malevolent intrusion into the time they have been nationally mandated to spend on whatever the French call la dolce vita.

Emphasis added. So, in addition to 35-hour work weeks, it is now frowned upon for the French workforce to tend to business once it's time to eat dinner. Germany's labor ministry has similar after-hour measures in place. Though it's unclear exactly how that will be enforced, it's a nice perk to have in any case. C'est la vie.

Source: http://www.fastcompany.com/

Editor's note: The post below was immensely popular on our social networks today--clearly, this story hit a nerve with email-weary workers across America and the world. We wish to clarify some information in The Guardian report. French unions did not ban French employees from sending emails after precisely 6 p…

Read More