Steve Blank

The U.S. government is discovering that Lean innovation can help them serve the country better and faster.

The Small Business Administration and the digital services agency 18F are trying to help entrepreneurs build successful companies and the 21st century digital government.

The guests on today’s Entrepreneurs are Everywhere radio show explained how they’re working to do that.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Javier Saade

Joining me on the latest show were

• Javier Saade, former associate administrator for the U.S. Small Business Administration
• Hillary Hartley, deputy executive director of 18F, a digital services agency inside the General Services Administration

Hillary Hartley

Listen to the full interviews with Javier and Hillary by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below.

Javier Saade was the U.S. Small Business Administration’s Associate Administrator and chief of its investment and innovation programs.

Prior to his public service, Javier spent 20+ years in investing, management, entrepreneurial and public policy, starting as a strategy consultant at McKinsey and Booz, Allen and at Abbott Laboratories. He also co-founded three companies: a broadcasting network, Air America Media, a solar energy company, Atenergy and a branding agency, Brand Maestro.

Javier explained how the SBA helps drive entrepreneurship in the U.S.:

Javier: … the entrepreneurial engine of the United States is bar none  the most efficient wealth creation and job creation tool that has ever existed. … 

I headed up the programs that focused on high-growth businesses in the United States.

The U.S. government is the biggest spender and the biggest investor in research and development in the world. $140 billion this year, about half of it goes into very basic science research. (For example) we’re trying to discover the 111th periodic element, which you may not have a current application for. And some of it could be in development. For example, the department of defense saying, “We need a very thin plastic that stops bullets and we want it to be this thin.” So essentially, the government invests in both (research), and (development).”

Two of the entrepreneurial programs, which I managed is called the Small Business Innovation Research (SBIR), and the Small Business Technology Transfer (STTR) programs. Essentially the SBIR and STTR programs took ~2% of that $140 billion research and development budget and invested it in small businesses who want to commercialize this government investment in research and development. We give out between $2 and $3 billion a year for these startups as 5,000 and 7,000 grants to small businesses doing everything from advance composite materials, space exploration, to IT, mobile security, you name it. The goal is help these companies take their tech

…It is money extremely well spent. The way the program is structured is not dissimilar to how companies travel the capital formation path in the commercial world.

If you can’t hear the clip, click here.

Getting things done in Washington, he says, is a challenge:

Javier:  … For things to get done, the politics is something that was very difficult to get used to. …

Steve:  Was even the Small Business Administration politicized?

Javier:  Everything is politicized.

Steve:  I would have thought this was kind of neutral, good for the country.

Javier:  It’s neutral good for the country, but there’s always dissension, and that’s one of the things that, probably the only thing I did not like. … I loved the experience, I think it was an amazing experience to serve the country, to do things that are bigger than yourself.  However I had 535 bosses –  if you think about a company, the owners are represented by the board of directors. In the case of the company, it’s 320 million Americans that are represented by 535 (Congressmen). … so that was my board of directors.

Steve:  How about the organization itself? Did you encounter organizational inertia?

Javier:  Well … I was an appointee of the White House, and there’s always that rub … about … the professional managers of the government that at the end of the year you can’t incent them like in the private sector. … (and) you can’t fire them. You can’t … incent them with bonuses. You (are) very constrained as to what motivational tools you (have).

That said, again, just the experience I wouldn’t trade for anything in the world. There’s 28 million small businesses in the United States. While I was there … I touched tens of thousands of companies.

If you can’t hear the clip, click here.

—

Hillary Hartley is co-founder and lead creative at 18F, a digital services agency inside the General Services Administration. She came to the GSA as a Presidential Innovation Fellow in 2013, where she worked on the development of MyUSA.gov. Hillary has been working to make government more accessible and available online for nearly two decades, starting as a web designer for Arkansas.gov in 1997.

Hillary pointed out that there’s plenty of innovation taking place within the government:

Hillary: We are here to help the folks in every government agency trying their hardest to get really awesome stuff done, and perhaps they’re blocked because of budget, perhaps they’re blocked because they don’t have the staff (or) any number of blockers.

They can come to us at 18F and we can help them try to get their awesome idea off the ground. That’s the attitude we take, that we are really just here to help get the amazing things that the agencies are already working that aren’t done.

Steve:  This notion of innovation and the U.S. government doesn’t typically come up in the same phrase.

Hillary: It has been referred to as an oxymoron (but) it’s not true at all. … Even if you think back to the first year of the presidential (innovation) fellowship, when this was just a hypothesis: could we get 15 to 20 folks from the private sector to come in and kick off some of these projects. Even then, the projects that agencies were pitching to that team were incredible. Folks across the federal government have incredible ideas and they’re trying to get some amazing things done. 

Like I said, they often just are blocked in some way, perhaps they don’t have the employees to get it done, they don’t have the resources to get it done, they aren’t sure where to start, so we are here to help them figure out how to start. 

If you can’t hear the clip, click here.

Here’s how 18F works:

Hillary: 18F … is a consultancy. We are a team of digital services experts, about 160 currently to serve government agencies. … We’ve grown about 10x in a little over 18 months.

Essentially our work all starts about the same. Agencies approach us with an idea, with, perhaps, a product or a project that they’ve been kind of stewing on internally or maybe it’s just a big outside-of-the-box thing. …Our work takes primarily three directions: 1) Are we going to help them build the solution or 2) are we going to help them figure out how to buy it or 3) maybe get their current solution back on track?

… One of our most recent launches was with the FEC, the Federal Election Commission. It was a pretty exciting project because it encapsulates what we really want to do and what we like to do and what our goals are for this team.

The FEC came to us and said, “We’ve got all this data. We’ve got an enormous amount of open data, it’s really cool data but nobody comes to us for that data. Other groups like the Sunlight Foundation or Open Secrets, other groups are coming and downloading it, because it’s open data, it’s available for the public, and then they do cool stuff with it.” They wanted people to be coming to the mother ship for this data. We said, well, OK, you’ve got probably two problems, you’ve got a website that needs some help but also we want to lay the plumbing, we want to lay the foundation. We are a data-first and API-first team, application programming interface. You know, really wanted to lay the infrastructure for other people, including us, to use that data more effectively. The first thing we did was we built an API, an application programming interface.

Steve:  So other people can suck out data from their site?

Hillary: That’s exactly right. There are something like 65,000 different end points within that data so everything we really were focusing on. … the FEC deals with campaign finance information, regulating and disclosing all that information.

Steve:  You help people get access to all this government data … that the people who ran the website just hadn’t done before, either because of a lack of skills or a lack of time or a lack of expertise that you brought.

Hillary: That’s exactly right. We launched the API first and allowed a bunch of different researchers and organizations like the Sunlight Foundation and Open Secrets to grab that data and start doing interesting things with it. Then we went to work on building a search website for the FEC, completely redoing their interface to the data (so people can actually search) from FEC.gov.

If you can’t hear the clip, click here.

Here’s how 18F fosters a culture of service:

Hillary: The culture has become so ingrained in me and it really is about service (and) community. The folks on the 18F  team are empowered. They feel like they are able to just get things done.

On our website you’ll see the phrase, “Delivery is the strategy.” The way we are making the cultural change inside all the industries we work with is by shipping — by shipping code, by delivering the things that we’re working on.

And by doing that, we’re also shipping culture, we’re giving the agencies an opportunity to do something in a brand-new way — (for example) to participate in a design studio. To get pencils out and sketch along with us. To go through a deep dive as some sort of daylong workshop that helps them break through a barrier.

It’s resetting their expectations for how all this can get done. It resets our team’s expectations, too.

If you can’t hear the clip, click here.

Listen to my full interviews with Javier and Hillary by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere:  Brandon Bruce, co-founder of Cirrus Insight; and Jack Sundell, co-founder of The Root Café.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | 1 Comment »

Tenacity and resilience. Getting people to buy in to your startup vision takes a thick skin, perseverance and willingness to learn. You’ll probably be laughed out of several boardrooms along the way.

Entrepreneurs refuse to take no for an answer.

The latest guests on Entrepreneurs are Everywhere shared what they learned from having their ideas rejected and how those lessons propelled their businesses forward.

The radio show airs on SiriusXM Channel 111 (weekly Thursdays at 1 pm Pacific, 4 pm Eastern). It follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Nigel Caldon

Joining me in SiriusXM’s studio in New York were

• Nigel and Vaugn Caldon, co-founders of BallStar social network for basketball players
• Kerry Frank, founder of Comply365 digital flight bags for commercial aircraft pilots

Vaughn Caldon

Listen to the full interviews with Nigel and Vaughn and with Kerry by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Kerry Frank

Clips from their interview are below.

Nigel and Vaughn Caldon are brothers who founded the startup The Street Academy for Financial Literacy and now BallStar together. Vaughn served as Associate Director of Alumni Affairs at Prep for Prep. Nigel spent five years working in investment management at Goldman Sachs and Citi Alternative Investments before going in to business with his brother. Nigel also teaches Data Analytics at General Assembly NYC.  

In building their companies, the Caldon brothers have found that when things get tough, there’s always a way to make it work.

Nigel: … We’ve done a pretty decent job … bootstrapping with limited resources — trying to figure out different ways to get work done and move the needle without actually spending any money. … There’s always a way and as long as you’re paying attention you’ll always be able to find some sort of resource that’s there to fill exactly what you need done.

Vaughn: You have to love learning… because some of the ‘no’s’ we’ve had have taught us more about the business than, you know, some of the, “Hey, I’d love to be a part of this.” 

Steve: Give me an example. Tell me about a ‘no’ that made you smarter.

Vaughn: You know, any ‘no’ from an investor that said, “traction” really meant, ‘I don’t understand your idea, but go ahead and try and prove it to us.’ … also someone who said, “You know, XYZ is this doing better,” or “We use this.” They put us onto a competitor that we didn’t know about. That wasn’t a ‘no’, that was a huge misstep on us not knowing this company was in our space.

Steve:  What happens when someone says, “Take a look at this competitor”? What do you do?

Vaughn: You’re in a better position when you know what it is because you don’t have anything and they’re stuck with what they have. That’s really inspiring me to go after what’s already out there.

If you can’t hear the clip, click here.

Kerry Frank co-founded Comply365 in 2007 with her husband. The company has transformed the aviation industry by replacing pilot flight bags with tons of manuals with digital tablets in cockpits.  

She struggled early on trying to get customers to see her vision for maintaining aviation manuals and other records on the cloud rather than on paper:

Kerry: Just a couple short months after that final testing (of Comply’s 365 product using a Kindle) the iPad came out and I looked at that. so I said, “Geez, I got to go with the iPad because look at this dynamic color and all of this.” I started running around to all the airlines with either a Kindle or an iPad and saying, “We’re going to change your business, we’re going to revolutionize the way you work, we’re going to take all the paper off the plane, we’re going to save you this much money.” I was laughed out of every boardroom.

… They said, “You’re way too innovative, we’re too risk adverse, we’ll never do this, you’re crazy, come back in a decade.” 

… I just continued to say, “No, you don’t have to be a legacy. You don’t have to have that “you can’t change” mentality; you guys can change. Anybody can change. You just have to believe it and we can revolutionize aviation. We can change the way we work and this will be safer. It will be the best for aviation in the long term.” I even went to top charting vendors in the world and said if you do electronic charting … 

Steve:  Like Jeppesen?

Kerry:  Yeah, laughed out of their boardroom. They said, “We’ll never do an iPad.”

Steve:  Are they on the iPad now? 

Kerry:  Yes they are.After a year of persevering, it was tough. We’re living on 50 bucks a week, a family of five (with the business) in the basement of our home. We have some employees, and we never missed payroll and we’re trying to change the world right? We’re trying to change industry. We got our first win and then our second win, and then within 16 months I had pretty much flipped the market.

If you can’t hear the clip, click here.

—

Focusing on your vision is critical, Vaughn Caldon said:

There’s so much that you want to do and then there’s what you have to do. I think the biggest learning curve is how to be in focused on that straight line. … because there’s something going on over here that you’d love to be involved and have your name next to it … may not be as important as another hour kind of vetting the design with someone you’ve been through it with a hundred times already.

It’s just really about focusing on what’s clearly the next step in front of you. That’s been the biggest lesson for us because … we were quick to bounce around.

If you can’t hear the clip, click here.

Being domain experts and having done one startup together gave the Caldon brothers confidence about starting Ballstar:

Vaughn: The confidence that we can start anything together , came from the fact that we had been the CEO and Director of Development of an organization that we created, and we started interacting on that level. …

The next step (in confidence) was knowing the space. We’re from Brooklyn, we play basketball, we know basketball players. …

… people got on Twitter because Shaquille O’Neal was there first … (Keeping that in mind) we … led with … aspirational leagues.

We went to sign up leagues like West Fourth Street, EVC at the Rucker, Dykeman, Tri-State Classic. These are all iconic leagues that people want to be involved and want to be affiliated with, so getting them on the platform first and catering to them, building that as our customer, and developing those customers was our focus. We knew we could do that.

If you can’t hear the clip, click here.

Here’s how they knew their idea could be a business

Nigel: It obviously started out as an absolute passion (for us).

We had to back-end our way into, figuring out, where is the business (model) in that? You could sell ads or you could sell the data. What we really found that our client was essentially the basketball league, and we could throw ourselves in the middle of the transaction.

There’s almost $2 billion spent in North America on paying to play basketball. If I’m providing a platform-as-a-service to amateur basketball leagues all over the world, now I have the opportunity to take a transaction commission the way Uber does. You can download Uber for free, but as soon as you hail a cab, you’re paying. Download BallStar for free, as soon as you want to play basketball, leave us some change.

If you can’t hear the clip, click here.

—

Customer discovery paid off for Kerry

Kerry: I listened and it was magic. Everyone started raising their hand and saying, “I have this problem, I have that problem.”

Steve:  Did you know you were doing customer discovery?

Kerry: I did. That was a key to my consulting business. … The beautiful thing is when you ask the customers, they’re in the space, they understand it, and they also then have buy in, right, because you’re going to solve their problem … 

Steve:  For our listeners, this is a brilliant insight. It sounds like you practiced it perfectly. They essentially taught you what the product should do.

Kerry: Right. I have 13 products today and everybody says, “How did you think of those?” I say, “I never thought of those, I was just a really good listener.”

If you can’t hear the clip, click here.

Being self-taught, she said, gave her an edge:

I didn’t go to college. I just started working for people … in all kinds of different jobs. …. I was always really good at whatever I did, because I loved working so much, it was my passion. I’d always start getting promoted to another level, but I have this inner thing inside of me that I can’t describe, that as soon as I started to get promoted to management levels I would quit.

I would say, “No, I have a destiny to do something else, and I’m trying to find my way.” I always also struggled with this part that had to get back into help. I was always then also giving to charities, or working for charities, or working for churches, or youth groups. It was kind of this back and forth. It was this incredible path that people look back on and say that’s crazy.  

At the same time it gave me key foundational things that I look on today as a CEO I needed. … (Things) like accounting. I was a bookkeeper, and I managed properties for a long time. It taught me all the accounting principles. It taught me how to handle some of the basic general ledger things.

If you look at different steps in my path, and I’m like, “Wow, that was great,” because now as a CEO I know all these different tools that I needed. Traditionally, you might get that in college, but I didn’t go the college route, so there’s a lot of skills that I picked up along the way that enabled me to be who I am today as a CEO.

If you can’t hear the clip, click here.

Here’s the biggest thing Kerry’s learned from doing a startup:

Kerry: If you have passion and if you’re dedicated to this. It doesn’t matter who you are, where you came from, or what your education is. You can do anything. Everything is possible.

If you can’t hear the clip, click here.

Listen to my full interviews with Nigel and Vaughn and with Kerry by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere:  Javier Saade, former associate administrator for the U.S. Small Business Administration, and Hillary Hartley, deputy executive director of 18F.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111. 

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | 1 Comment »

“This is the West, sir. When the legend becomes fact…print the legend”

The Hollywoodization of Silicon Valley startup stories “prints legends,” but for most startups those stories are pure fiction. They don’t tell the awful, painful, and exhausting job it is to build a business.

The two guests on today’s Entrepreneurs are Everywhere radio show tell it like it really is to navigate the chaos of a startup.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Drew Silverstein

Joining me in SiriusXM’s studio in New York were:

• Drew Silverstein, co-founder and CEO of the music technology venture Amper Music
• Craig Kanarick, founder of the indie food site Mouth

Craig Kanarick

Listen to the full interviews with Drew and Craig by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below.

Drew Silverstein is an award-winning composer, producer, and conductor for film, television, records, video games, and an MBA student at Columbia Business School.

He created Amper Music to change the way music is composed and created for video content, but it is not his first startup.  

At his first venture, Henry O’Bryan, LLC, Drew quickly learned that startup life is nothing like the movies.

Drew: It wasn’t a successful startup. We didn’t sell it. We didn’t IPO it. It went really well for a while … and then we closed it down breaking about even. I think that removed the sheen of startup glory (for me).

… I had the perception of, “You start a company, you build it, you go, and ta-da!”

Steve:  It grows up like Facebook.

Drew:  Exactly. … Just like the movies. I should’ve known (that wasn’t true) because I’m in Hollywood, and we know what really happens behind the scenes. … 

… In a startup you need to be an expert in what you’re doing – not just doing something you have a cool idea for. You better know the problem in and out, and if you can have lived it, even better.

It’s important to have a fantastic team around you. We had a great team, but I wasn’t the best, most valuable team member I could’ve been for the project. 

… I learned that in a startup things don’t always go well. In fact, usually they’re not going well.

If you can’t hear the clip, click here.

Craig Kanarick’s career has integrated digital technology, design and strategy. In 1995, he co-founded the digital services firm, Razorfish and grew it from a two-man startup to more than $250 million and 2,200 employees. Craig also co-founded Razorfish Studios, a media and entertainment company, producing books, films, TV shows, albums and websites. 

After leaving Razorfish in 2001, Craig spent a year immersed in food, including a stint as a prep cook at Babbo, Mario Batali’s flagship restaurant. At the Rockwell Group, the architecture and design firm, he co-founded Studio Red and the Lab, an incubator for integrating digital technology into physical spaces. He founded Mouth in 2012.

At Razorfish, Craig’s lack of startup experience showed:

We expanded too quickly, and in particular we merged with a company that was a complete culture clash with the rest of the company. We were creative designers and front-end developers in a highly creative environment, and we merged with a Boston-based back-end technology company who was working in Fortran, and old school.

(In hindsight, the culture) mattered a huge amount. After the merger people were asking, “Why am I working for these people now? I don’t get them. I don’t understand them. I don’t like this place … “

… The other (mistake) was … not responding to the market and understanding how the market was changing and how quickly it was changing.

If you can’t hear the clip, click here.

Founders, he acknowledges, sometimes get past their skill set

…there’s a big difference between creating things, managing things, and operating things. We were better at creating things and not so good at managing or operating them.

… I’d not even managed myself. I’d never been a boss of anybody before Razorfish … so we really had to learn everything on the fly.

If you can’t hear the clip, click here.

—

Drew shared where the idea for Amper came from:

We recognized that what we were doing in terms of writing music … could be distilled.

Not distilling the high artistic level but at its core we could distill what we were doing into a process that could be replicated by a computer.

… Algorithmic computer music has been around for decades but we think we’ve figured out a novel way to approach the solution based on our experiences as film composers.

At the same time we had clients coming to us and saying, “We need this. Not every project we do is this high-budget triple A blockbuster. With these other projects, we don’t like the (music) solution that we have. Can you do it for us instead?”

We … put one and one together and said, “If we can offer you a solution that provides the product that you want, the music that you want, that’s driven algorithmically, is this something that you’d be interested in?”

Overwhelmingly the response was like, “Yes. Yes. Can we have it yesterday. Why don’t you have it already?”

And that’s … when we said, “All right. We don’t know if we can do it but it sounds like we should explore the opportunity.”

If you can’t hear the clip, click here.

Customer input shaped Amper’s product:

One of the things that was really important to us was using Lean methodology. We … ended up doing it before we knew what Lean was…  

… Before we had a clue what that was, (we had customer input). …We said at its core, what are our assumptions, how do we validate them, and then how do we change paths or iterate based on that as quickly as possible?

 … outside the building, you learn how many nuances there are to what you’re doing. It’s not one big umbrella of a problem; there are so many different elements to it. … We learned it’s not just music for media it’s, well, here’s one use case, here’s another use case, who is doing it and why? You you need to boil this down to the most pinpoint thing you’re going to do, be successful at that, and then grow.

I think unless you’re asking people and learning from people and asking to meet more people and figuring out where this is going … it will take a lot more time to figure that thing out than doing it the lean way.  

If you can’t hear the clip, click here

Drew wishes there was a playbook for how to be a startup CEO at Amper:

There is a lot of information on, “How do you raise money?” (but) there’s a lack of information, or certainly less thereof, in terms of what do you do after you raise money? How do you run a business and how do you be the person you need to be to everyone you’re interacting with? How do you deal well with investors, with customers, with employees, with your colleagues?

… you are responsible now. People have given you a lot of money and said, “Do this thing.” …fortunately, we have a great team of advisors, who I think are invaluable because, just like anything, it’s an apprenticeship.

If you can’t hear the clip, click here.

—

Craig explained how fund-raising has changed since doing his first startup:

It’s completely different. … There was no angel investing in the days of Razorfish. It was all strategic partnerships leading to IPOs. That’s just not the path right now. The whole idea of crowdsourcing and crowd-funding and doing angel investing, and then a series A with VCs, that path didn’t exist in the late ’90s at all.

(Today) there’s more access to capital, and it’s a pro-entrepreneur world. It’s cool to be an entrepreneur. 

If you can’t hear the clip, click here.

Here’s why Craig started up again:

The first thing that I tell people is to make sure that you love what you’re doing, because you’re going to have to work an enormous number of hours doing it.

You’re going to spend a huge percentage of your time doing this, you’ve got to love what you do, you have to be good at it, and you have to be honest about both of those two things. 

Because you can fool yourself into thinking it’s worth it because I’m going to get paid at the end.  When the Internet was on fire people said, “How do I make some money off this Internet thing?” If you’re asking that question, you’re in the wrong place.  

Steve:  You know my line is, “Entrepreneurship, it’s not a job, it’s a calling. It’s the world worst job, but it’s the world’s best calling.”

Craig: It is. It’s the reason I’m doing it again.  

If you can’t hear the clip, click here.

Listen to my full interviews with Drew and Craig by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere:  Nigel and Vaugn Caldon, co-founders of BallStar and Kerry Frank, founder of Comply365.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | 1 Comment »

In a startup cheap may be expensive.

And just having cool technology doesn’t make a successful business.

What it was like to get out of the research lab to build a startup was the focus of interviews with two of the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Nina Tandon

Joining me in SiriusXM’s studio in New York were:

• Nina Tandon, CEO and co-founder of EpiBone, the world’s first company growing bones for skeletal reconstruction
• Brandon McNaughton, co-founder and CEO of Akadeum Life Sciences cell sorting technology company

Brandon McNaughton

Listen to the full interviews with Nina and Brandon by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below

In addition to her work with EpiBone, Nina Tandon is the co-author of Super Cells: Building with Biology. She is an Adjunct Professor of Electrical Engineering at the Cooper Union. Nina has a bachelor’s in Electrical Engineering from the Cooper Union, a master’s in Bioelectrical Engineering from MIT, a PhD in Biomedical Engineering, and an MBA from Columbia University. Her PhD research studied electrical signaling in cardiac, skin, bone, and neural tissue.  Fast Company named Nina one of the 100 Most Creative People in Business.

While building EpiBone, she quickly learned to avoid business shortcuts:

Nina: Cheap is expensive.

Steve: What does that mean?

Nina: I don’t think there’s any corners that can be cut. Sometimes if someone offers you free services …, it can be tempting to take them up on that offer, but then you might create a problem that’s a lot more expensive to unwind down the road.

Steve: Because you’re committed to the wrong people, the wrong service or whatever?

Nina: (Nods.) I’ve made some mistakes that are inadvertent but that needed to be undone.

If you can’t hear the clip, click here.

A tech entrepreneur and inventor, Brandon McNaughton was entrepreneur in residence for Detroit Innovate, an early-stage venture fund. He also founded and served as chief technology officer of Life Magnetics. Brandon teaches entrepreneurship at the University of Michigan Center for Entrepreneurship.

Brandon’s current startup Akadeum was one of the 760 teams to go through the National Science Foundation (NSF) Innovation Corps, which teaches scientists and engineers how to take their science out of the lab and into the marketplace.

Brandon’s biggest takeaway from the NSF program had nothing to do with technology:

I’ve learned that business is about relationships. Relationships with customers, it’s relationships with your employees, your investors, because when you buy something, there’s an expectation, there’s a back and forth.  

That’s something that I didn’t really appreciate until after my first startup. I thought it was all about the technology, “Oh, if I could just get this technology to work. If I could just get it to do this, then everything’s going to be OK,” and in some ways I now think technology doesn’t matter. … what matters more is the … the customer’s problem.

… I think the epiphany was when we closed down Life Magnetics …It was hard to find that right product-market fit. The technology was working, but finding that market fit was challenging. …

…We couldn’t figure out the right business model to move forward with. That’s actually how I look at startups now. It’s trying to find that business model as quickly as you can that will support a company. You don’t need new gee-whiz technology to do that. What you need is to understand the problem to know what do deliver to the customer.

If you can’t hear the clip, click here.

Getting to know customers, Brandon said, only happens if you get out of the lab and talk to them:

Brandon: (The I-Corps program) was a combination of being an accelerant, but also getting us (the founders) on the same page, because we all had … different mental images and … different expectations …

Steve:  Of what a customer was and what commercialization was?

Brandon: (Nods.) And whether or not we wanted to start a company, when we were going to start a company, and what the company would look like.

The I-Corps process was great. It was exciting to see Gwangseong Kim, (my grad student and member of the Akadeum founding team) up in front of the class because as the entrepreneurial lead he was the one who got up there and presented what we learned. (co-founder) John Younger and I just stood there … I mean, we also did the work, too, talking to customers, things like that. But the entrepreneurial lead is the one who gets to represent the team.

… It was so amazing to watch the transformation in him. And for Gwangseong one great moment was (when) he did his first cold (customer) call. When we were in Berkeley, we were talking about cold calling and how to do it. (And Gwangseong) was a little bit of apprehension…

Steve: Because he’s a scientist?

Brandon: Exactly. I still have that even when I talk to certain people, it’s like, “Oh, I’m bothering somebody …”

(But) Gwangseong made the call and within 15 minutes he gets invited to lunch the next day. Right? So he hit a nerve with a potential customer and was incredibly excited that you could make a call and get that kind of response. 

…this (lunch meeting) was the kind of thing you dream about (when you’re starting a company). You want to find those moments of opportunity and you don’t know unless you make the call, you don’t know unless you go.

If you can’t hear the clip, click here.

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Nina shared what it was like to get out of comfort zone of the lab:

As a scientist you think that you’re confident about uncertainty because you’re operating in the uncertainty of knowledge, and yet you have the crutch of the scientific method constantly at your side saying, “Hypothesis, test, conclusion, reevaluate.”

But to take that to the jungle in the real world (outside the lab) is a totally different level of uncertainty. (And to add even more uncertainly) throw in having to make a payroll, wanting to make sure you take care of people, knowing that people’s lives and livelihoods depend on my ability to make sure there’s enough money in the bank.

Now that’s operating in uncertainty.

If you can’t hear the clip, click here.

There was a moment when the startup became real for her and her team:

Nina: We had a lot of conversations with people and having talked about ideas, and all of a sudden there were things that were manifesting in real time, in front of us, that gave us the sense of, this isn’t a joke. This is real.

Steve:  We’re going to have to actually build something?

Nina: Yeah, it became concrete.

…We were hiring our first employee … we didn’t have a lot of (money in the bank), we only had one grant $350,000 at the moment. We said, “Well, we’re going to hire our first employee, and you know what? We’ll pay him before we pay ourselves.” That was a moment where we realized, OK, we’re setting a precedent here. We want to take care of our employees and we’re willing to sacrifice our own salaries in order to do that. Luckily we only ended up hiring him two weeks before we hired ourselves, but we joke that he’s the most senior employee.

If you can’t hear the clip, click here.

Nina also shared the best advice she’s received:

Nina: My mom says that people often don’t remember what you’re saying, they remember how you made them feel, and be really careful not to try and use other people as a stage from which you can display your own intelligence. …

My dad who retired at 55 told me, when I was thinking about my career … “You can’t be afraid to jump off the merry-go-round,” because he’s seen people who’ve built elaborate cages for themselves as their desires … changed along with their economic potential, and then there was no going back. 

Nina: And my third (piece of advice) is from Steve Blank. … I don’t know if you remember you told me this, but when I called you after getting a really important investor on board … you said, “Nina, don’t you dare confuse money with scientific validation, don’t you dare.”

If you can’t hear the clip, click here.

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Brandon explained how Akadeum determined if their cell-sorting technology could be a business:

Brandon: … The first thing we wanted to find out was is there a need for our product.

Steve: You woke up and said, “Who needs cell sorting?”

Brandon: That’s right. We started reading the literature,… trade magazines … scientific publications. What we’d see is sometimes people would be quoted as thought leaders and (we’d) write down their names (and) reach out to them.

Steve:  What would you say? “I’m a scientist in the University of Michigan. I want to talk to you”?

Brandon: Yeah. We would say, “we’re looking at developing a new technology. We just need 5 or 10 minutes of your time. We’re trying to figure out if this needed or not.” …

Steve:  They would respond?

Brandon: Yeah. They would respond. … in our experience, people are very nice. People are very generous (with their time.) If you’re genuine, and honest, people, they’ll spend time with you. They’ll help you. Really, they were helping us figure out if there was a need for this or not.

… The first thing they would do is share a little bit about whether they thought this was a good idea. Sometimes, they would say, “We have a problem that we’re trying to solve that this might be a good fit. …”

If you can’t hear the clip, click here.

Listen to my full interviews with Nina and Brandon by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere:  Nigel and Vaugn Caldon, co-founders of BallStar and Kerry Frank, founder of Comply365.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

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