We’ve taught our Lean LaunchPad entrepreneurship class at Stanford, Berkeley, Columbia and the National Science Foundation in 8 week, 10 week and 12 week versions. We decided to find out what was the Minimum Viable Product for our Lean LaunchPad class.
Could students get value out of a 5-day version of the class?
The quickest way to create a billion dollar company is to take basic human social needs and figure out how to mediate them on-line.
(Look at the first wave of the web/mobile/cloud startups that have done just that: Facebook, Twitter, Instagram, Match.com, Pandora, Zynga, WordPress, LinkedIn.)
It’s your turn.
Hard-wired This week I’m in New York teaching a 5-day version of my Lean LaunchPad class at Columbia University. While the class teaches a process to search and validate a business model, it does not offer any hints on how to create a killer startup idea. So after teaching several hundred teams in the last few years, one of my students finally asked this question – “So how do we come up with an idea for the next billion dollar company?”
Is It a Problem or a Need? I’ve now come to believe that the value proposition in a business model (value proposition is the fancy name for your product or service) fits into either one of two categories:
It solves a problem and gets a job done for a consumer or a company (accounting software, elevators, air-conditioning, electricity, tablet computers, electric toothbrushes, airplanes, email software, etc. )
Or it fulfills a fundamental human social need (friendship, dating, sex, entertainment, art, communication, blogs, confession, networking, gambling, religion, etc.)
Moving Needs to Bits = a billion dollars Friendship, dating, sex, art, entertainment, communication, confession, networking, gambling, religion – would our hearts still beat and would our lungs still breathe without them? Of course. But these are things that make us human. They are hard-wired into our psyche. We’ve been doing them for ten’s of thousands of years.
Ironically, the emergence of the digital world has made us more efficient yet has left us with less time for face-to-face interaction. Yet it’s these interactions that define our humanity.
Facebook takes our need for friendship and attempts to recreate that connection on-line.
Twitter allows us to share and communicate in real time.
Zynga allows us to mindlessly entertain ourselves on-line.
Match.com allows us to find a spouse.
At the same time these social applications are moving on-line, digital platforms (tablets and smartphones) are becoming available to hundreds of millions. It’s not hard to imagine that in a decade, the majority of people on our planet will have 24/7 access to these applications. For better or worse social applications are the ones that will reach billions of users.
Yet they are all only less than 5-years old.
It cannot be that today we have optimally recreated and moved our all social interactions on-line.
It cannot be that Facebook, Twitter, Instagram, Pandora, Zynga, LinkedIn are the pinnacle of social software.
Others will do better.
Others will discover the other unmet and unfilled social needs that can move on-line.
It could be you.
Value propositions come in two forms: they solve a problem or they fulfill a human socialneed
Social Needs are friendship, dating, sex, entertainment, art, communication, blogs, confession, networking, gambling, religion, etc.
They have always been fulfilled face-to-face
They are now moving on-line
The market size for these applications equals the entire human race
Epiphany e·piph·a·nynoun /iˈpifənē/
A moment of sudden revelation or insight
We now know how to teach entrepreneurs how to think about business models and use customer development to turn hypotheses into facts. But there is no process to teach how to get an epiphany. We can only try to create the conditions where this might occur.
It All Just Came to Me In a Flash
Luis, one of the CEO’s from our first National Science Foundation class, came in to speak to our next class. We had a couple of minutes to catch up between sessions and the conversation got strangely awkward when I asked him how their startup was going.
“I’m kind of embarrassed to tell you, but we dumped the entire business idea and are doing something else” he said, avoiding eye contact. “Oh, you pivoted when your team analyzed customer feedback?” I said as I grabbed some coffee. He looked uncomfortable. “No, I was standing in the shower when it just hit me that our nano-materials technology should be used for something completely different. I didn’t change a few business model components, I changed all of them.”
I guess my jaw dropped a bit because Luis just continued. “I’m feeling guilty because I was using Customer Development and the Startup Owners Manual until I had that insight. But there was nothing in your book that prepared me for what just clicked in my head. I just saw our entire new business model in a flash, all of it at once. I’m now having the company execute on what came to me in the shower. A small part of me is confused whether I’m doing the right thing, but mostly I’m just convinced it’s as right as anything I’ve ever done. But there’s no chapter in your book or anyone else’s on this.”
Realizing what I was hearing, I pulled Luis outside the conference room into the quiet of the hall. “Luis, did this ever happen to you before?” I asked. “Well no, not in a startup, this stuff is new to me.” “No, I replied. “I mean in your lab. Did you ever have this feeling where it all just came to you? He thought for a bit as he stared in the distance and then responded, “Yeah, I never thought about that until now, but in fact I did. It felt a lot like when I was writing my thesis five years ago. I had struggled with the data for two years. Then one weekend I went for a walk by the ocean to clear my head — and I had an insight that won me the fellowship. I had to spend six more months checking the data and working my tail off, but my thesis was awarded best paper of the year.”
I tried to stay calm as I realized what I was hearing. “Luis, you need to pay attention to me very carefully. You just had an epiphany. If you’re lucky you may have a few more in your career. But while epiphanies are extremely rare, they are immensely important and need to be listened to. What you had was no accident. You were collecting enormous amounts of data on one side of your brain, but it was the other side that recognized the pattern. No one knows if epiphanies are always right, but people who follow them tend to get rich, famous or both.”
Epiphany Equals Insight For thousands of years, every culture has had words to describe what happened to Luis: a flash of insight, an epiphany, strategic intuition, a revelation, etc. An epiphany is a different way of solving problems than the problem solving we do every day. In an epiphany, you see the entire answer to a complex problem without realizing you were even consciously thinking about it (very different from a snap answer or a quick response.) We hear stories in almost every field, in art, science and business, about how “the idea just came to me.”
Getting Ready For the Epiphany While we can describe an epiphany, we don’t know how to teach it or make it happen. But we do know how to set up the conditions for it to occur.
First interact with lots of people — the more they are different from you with different ideas, and different perspectives the better. (Getting out of the building in the Customer Development process guarantees you’ll do just that.) Next, attack whatever problem you’re working on head-on. In Customer Development that means building a set of business model hypotheses, and running customer discovery to test those hypotheses. Most of the time you’ll be slogging through a ton of data operating in chaos trying to figure out what direction to take your company.
Here’s the part that’s counterintuitive – on a regular basis make time to take an hour, or even a day to do something completely different. Go for a hike or a drive. Walk around the city. Don’t distract yourself with something that makes you focus (the movies, TV, email or the net.) Instead, shut it all down and do something that’s relaxing and gives the problem solving part of your brain a rest – let the pattern recognition side take over.
It can be challenging for an entrepreneur to slow down, disengage from the relentless pace and smell the roses. But making this kind of time for your right brain to process what your left-brain has learned can bring you insights you’d never uncover otherwise. You can’t force an epiphany but when it comes, you’ll know it.
You’ll be blinded by the light.
An Epiphany is a moment of sudden revelation or insight
Epiphanies cannot be planned or scheduled
They require a constant stream of data, from multiple sources
An Epiphany is a pattern recognition moment
Often they match a pattern from a different industry or field