Amplification beats disruption

Disrupting markets have for years been a formula for success for startups. Be nimbler, nicer looking and cheaper than the incumbents in your market, grow at a blistering pace whatever the costs associated with it and you will be on to doing great things taking your idea from it’s inception into potentially a unicorn scale-up.

While these startups have been blasting the competition to the roadside, there are a couple of things, we haven’t really discussed. One is the obvious fact that the expansion has only been possible due to a presence of excessive funding, sometimes with very little prospects for developing a viable business model going forward (Uber comes to mind as the poster example of this). The other is the more important one; that in the quest for disruption, more value has been destroyed than has been accrued by the startup.

Of course there is no rule anywhere in the capitalist world that suggests that challengers should be mindful of not destroying more than they create, and you could also very well argue that for customers that are left with a better service at a cheaper price, it’s a pure win. But in terms of the prospects of economic growth on the longer term, I would still suggest that the business of disrupting things just for the sake of disrupting it runs counter to what should be our common interests.

The challenge with disruption is that in the absence of real innovation, disruption doesn’t create anything. To put it in other terms the size of the pie stays the same, as there is no real growth anywhere. Now, you could argue that customers being able to get more for less increases the overall economic activity and make the individual better off, because he gets access to more, but we need to ask ourselves whether we really do think that improving our economic prospects by going cheap is really sustainable?

Just ask the American middle class. Think about how much of their economic growth is really down to the availability of ever more cheap products and services – aka crap IMHO – than, say, an ongoing positive development in their disposable income? It’s a lot more of the former than the latter, and it’s actually quite a systemic problem that we have done preciously little to try and fix but will need to fix sooner rather than later. If not for anything else then for ensuring social stability in society.

It might be a small detour to take, but in essence my point is this: The things we celebrate as being innovations and creating value are really the opposite. A lot of it is piggy backing on extracting value that already exists other places while creating nothing meaningful new, and the end result is that while it undoubtedly leaves a few better off, it leaves more worse off. That’s not a winning recipe long term. It is a race to a bottom, you don’t want to reach.

So the question then really becomes how we might work to change this dynamic? How do we get from celebrating the gold calf into innovating in a way that is not only positive in itself but net positive for economic growth and with that society itself?

We need to get back on the track where innovation is about creating breakthroughs that unlock new kinds of value instead of sucking existing markets dry. We need to come up with technologies that create new markets that can in essence function as amplifiers of new markets.

For startups this means that instead of looking to disrupt someone already there and try to get their slice of the cake, the focus should be on how to ensure that the cake itself gets bigger, and whatever is added to said cake the startup in question will be well positioned to grab its significant share off.

Doing that will surely require a vision above and beyond 99,99 % of all vision statements ever presented by startups or corporates. But think about the opportunity? Think about being the innovators edition of Christopher Columbus setting sail to find something that no-one has found before only to end up with far more than what you were able to imagine, you would ever find?

We need that kind of imagination to replace the fighting for scraps in areas we already know really well. We need this to get a situation, where innovation is a net positive of a more significant nature than used as a cover up for ideas that could in essence very well be net negatives for all.

I’ll be curious to see who sets the standard first, and what kind of vision could emerge from this.

(Photo by Daniel Chekalov on Unsplash)

Kill your darlings

Imagine if you were as good at killing product features, as you are at coming up with new ones? It’s an interesting concept, don’t you think?

I have often found that one of the major stumbling blocks towards innovation and increased success is parts of what you already have. The more legacy, you build up, the harder it becomes to really push ahead, as there will always be some sort of argument to be had for spending your time and effort on trying to improve legacy features or products rather than come up with new, largely untested ones.

But you should really consider going on an internal product and feature killing spree in order to weed out those elements of your product(s) that may once have been your darling(s) but now are not really adding value anymore.

And I think there are two very compelling arguments for why you should go through this exercise in regular intervals.

First of all, if you don’t do it, be sure that your competitors are going to. Because aside from coming up with their own bright, innovative ideas, they are looking for weaknesses to exploit in your product(s). And those are most likely exactly the same ones as the ones, you should be putting out of their misery yourself.

Second, by eliminating features and products you don’t really need anymore, you get yourself in a much better position to grow your future business. You free up valuable ressources that you would otherwise have needed to spend keeping these outdated features alive, and you also have the opportunity to use the exercise as an inspirational tour towards what you need to build next. Because maybe, just maybe, there is something in the old that will be a powerful guidance towards what should come next.

It is truly a helpful exercise to do every once in a while, and it helps keep your startup at its toes by always being on the edge and attacking (pardon my French) the market in an aggressive form with great products and features rather than trying to protect something, which you deep down know can’t really – and shouldn’t – be defended over the longer term.

I fully realize it can be an awkward feeling to go about killing features rather than giving birth to new ones, but just remember that you’re doing it, because your darlings have served their purpose, and now it’s time to let them provide room for something new and even better.

(Photo by Icons8 Team on Unsplash)

Avoid hellish bureaucracy

No matter what framework you uphold to justify your decisions, stakeholders will typically acknowledge the logic of it, but in practice ignore it.

The Great Silence, Brad Dunn on Product Coalition

It is so easy to be lean and mean when you’re small and go heavy and lazy when you get bigger. In one of lifes great mysteries otherwise capable people transform from being efficient and getting things done to being caught up in infights and bureaucracy with limited progress to show for it.

I have often wondered why this is so? Why is it that even agile entrepreneurial organizations have a tendency to become stuck, as they grow bigger? Is there some kind of inflection point for startups in which, when they reach a certain size, the fundamentals of the culture just change, and you go from focusing on customers and solving their pains to being stuck in a world of your own organizational pain? I am tempted to say yes.

Maybe this has something to do with the stakes getting bigger or the stakeholder map expanding. When people invest their time and money in helping you out, complexity grows. Relationships need to be forged, managed and balanced. Especially the balancing part takes time and skill, and getting those things right take away time, ressources and focus from what you were doing before that essentially brought you into the position, where you could take more people and money on.

It’s probably impossible to think of a threshold for when this transformation happens, and it’s equally impossible to come up with a ‘one size fits all’ fix to it. But I do think there is one general piece of advice for to startups worrying about becoming too complacent and bogged down in bureaucracy:

Keep hold of the people in your team, who are die-hard executers. Provide them with the freedom to operate and do what they do best. Grant them the flexibility to devise their own ways of scaling their efficiency, and resist the temptation to step into their way.

You need to have someone on board to provide direction and guidance for where your startup should go on it’s growth journey. In essence that’s a job for you in the founder team. Don’t fall into the trap of starting to overthink processes and stay clear of the idea that frameworks are the silverbullet to solve anything. They’re often not.

Bad ass execution have a tendency to move things forward. So keep traveling down that road.

(Photo by the blowup on Unsplash)

The future work OS

For quite some time I have been thinking about how the new hybrid work culture requires a new operating system facilitating getting work done through collaboration and efficiency.

I fully realize that there are a plethora of legacy systems for all parts of the journey out there, but on the other hand, I believe the opportunity is so fundamental that it warrants thinking about in OS terms. With all the different takes on how this is done through stitching things together, I think there is a need for a more hardwired system.

If that is true, the big question of course becomes, what the key components of such an OS could and should be. I have been thinking about that too, and the following is nothing more than a list of four different key components that I would personally love to see in such an OS. That’s by no means the same as somebody ever doing it, but bear with me and allow me to hope.

Fundamental to any work OS is the ability for me as a user to control how I can get distracted, when I am doing work. One of the big challenges to collaboration is the reality that you’re essentially always adapting your work to somebody else’s agenda, and I just think there is a huge loss of productivity in that.

I would even argue that the control of distractions would be as essential a component to a work OS, as privacy controls are in many other types of software. I need to be put in charge of defining what’s needed for me to be most productive, and the OS just seamlessly need to comply with that, once I have configured it. Putting some ML on top could allow to suggest adjustments to my configurations based on how I actual work, but that would be about it.

While unrivaled distraction controls should be a cornerstone, the OS should also be adaptable to different types of work cultures. That’s the second component of the five, I would love to see in a work OS.

Think of adaptable work cultures as essentially an extension of a role based user interface, where I get the experience, flow and features that’s essential based on how I work and how we work together as a team. That’s the cultural adaptability.

It’s an important component of a work OS, as there are significant differences in how different organisations like to work together. Some have a more conservative approach with a ‘command and control’ set of values, where others on the other side of the spectrum have more of a ‘we’re all in this together, so let’s help each other out’-approach.

The point I am trying to make is that the work OS should be born with a rich set of templates based on research and market insights that allows you to configure the OS for your culture with a few clicks max. That would be really powerful, and done right it could serve as an important digital custodian of company values and ways-of-working.

With both distraction controls and an adaptable work culture facilitated directly by the OS in place, we can focus our attention of actually getting meaningful work done. This is the third key component of my ideal work OS.

How does meaningful work get done? In many ways but one of them is by making it easy, fast and efficient to not only make business critical decisions but also to execute on them. Like a startup, I met lately put it, it is all about creating ‘the path of least resistance’. I really like that way of looking at it.

There are many approaches towards getting work done in an efficient matter and a lot of frameworks and tools that support those in various ways. I think the important part here is that the method applied resonates with the adapted work culture as mentioned above, so that decisions and execution are as closely aligned with the individuals and the teams preferences for getting things done as possible. The less we need to think about it, the better and more efficient it is.

Getting things done efficiently also includes tying things together in logical ways ensuring that conversations are transparent, and that meetings called have meaningful agendas and outcomes, and there is a process for follow-up that ensures that things actually get done and nothing gets lost between different chairs. A lot of those things can be automated through flows, and I think it should be a core part of the work culture templates with the opportunity to optimize the configurations as needed.

While process is important for getting things done and make efficient decisions, it is equally important to have the context for the decision present and ready. Thus a significant part of being able to have an efficient work OS is to have the data supporting decision making ready and available at any time.

Thus doing the mundane work of ensuring that the work OS can integrate towards any type of data and platforms that your organisation uses for storage and work will be crucial. There are already a lot of precedent in how to do these types of integrations, and there are several providers, who already provide a federated view from one interface into countless different tools and platforms. So it can definitely be done.

The more the data you already have gets integrated into the work OS, the more supercharged it will be. People tend to live their work lives digitally wherever their data is stored and available, so it will probably be one of the key drivers to easing the adoption of the work OS.

The goal with a work OS should be everybody in the organisation becomes part of it. Why? Because it’s the cornerstone of the fourth and potentially most critical component to why a work OS could be a cornerstone of the future of work both on premise and in a hybrid mode:

Programming and automating the ways-of-working policy of the organisation.

Ways-of-working will be increasingly important as the means of turning a set of values and policies into a modus operandi for how the organisation and the people within it work and behave with and towards each other as well as externally.

As organisations become even more hybrid, and most of the people in it will in periods of time be working remotely, having a firm set of values and policies will only increase in importance. It will be the glue that keeps the organisation together. But it won’t happen by itself. It will need help. By a set of configured and carefully calibrated and adapted rules and policies for the individual organisation that sets seamless boundaries for what’s good and productive behaviour and what’s not.

Most of us working with software in our daily work lives are used to systems setting up rules for us or at the very least having the capability of creating our own. But they are perhaps to disparate across different systems and in some ways also too much in flux all the time to be truly efficient. Ensuring a broad, common adoption and custodianship of the set of rules of the entire organisation will perhaps be the one point where the work OS will really be able to make a foundational difference.

In summary there should be more than enough opportunity in this space for someone to have a go at creating a true work OS; something that could be foundational to powering the way we work efficiently in ways that resemble the original PC OSs. Yes, that’s how big this opportunity is. Question is whether someone has the audacity to go after it in a way that is bold enough?

(Photo by Leone Venter on Unsplash)

The complexity trap

One of the great privileges of my job is that I get to meet a lot of different startups and their founder teams and hear about their ideas, and how they have the ambition to take on the world and conquer it.

Among these great people are also seasoned veterans trying to turn great insights into new startups with, based on pure logic, really interesting potential, but who still seem to struggle raising the necessary funding to take off. And when I come across them, I wonder why it is that they struggle, when everything else seems to check out?

Of course there can be an element of timing. They can be too early for the risk profile, an investor has, or they can be doing their work outside the field of interest to the investor. That all makes a ton of sense. But I think there is something much more fundamental at play.

When I look at what make investors tick, it is things that either cater directly to the particular interests or experience of the investor in question or just seems like a super easy sell in the pitch deck; a story which everybody can understand and relate to.

Let’s face it: As investors we look at a lot of different pitch decks, and I think it’s fair to say that it’s easier to remember and get excited about those with a really compelling, easy-to-understand story that seems like something you have heard about before, than it is connecting to a complex pain and an even more complex solution for something, you have little personal relationship with.

Remember, investors are not experts in everything. Some aren’t even experts in anything except investing (which is also an essential skill, to be sure). And they are not particular fond of being put in a position, where they are reminded of all the things that they don’t know.

When that happens, the lack of insight by experience translate directly to a feeling of increased risk, and instead of getting into a complex discussion, it’s just easier and less painless for the investor to say ‘No’ before the discussion move too far.

And it makes a ton of sense too. Because when you look at startups trying to solve complex problems for complex customers, there is a myriad of questions presenting themselves:

How will you position the product towards the customers? How will you engage in the dialogue and show that you can be of value? How will you onboard users? How will you make them stay? How will you facilitate the necessary changes to the way the customer works in day-to-day operations in order to have the full impact of your product (if it’s a B2B related product, of course) etc. etc.

There are just so many complex moving parts that it more than compensates for any great team or idea. Because as an investor you know that a lot of things have to go the right way in order for this startup to be truly successful. And we are generally not looking for cases where a lot of factors align in the right way, before the startups, we invest in, can become successful.

It’s perhaps a bit brutal and to some extend a crying shame. And the obvious risk of it all is of course that brilliant startups founded on the ‘wrong’ complex pain and solution won’t get the funding they need and thus won’t be able to have an impact on the world and ultimately be successful.

But I just think it’s collateral damage to the way that a lot of investing in startups happen; unless you’re lucky and you have that influential person on the investor side, who has insights gained through experience and just knows that the solution has real merit, you as a founder can have a hard time of getting your startup funded.

So, in essence, the best piece of advice, I can give you, if you’re a founder with a less compelling ‘simple’ story to sell is to really spend time on finding investors – angels, VCs – whatever who has the hands-on background and experience that will make them truly see the potential in what you’re doing and sign off to help you achieve your vision.

Because for complex solutions to complex issues you not only need investment – you also need real hands-on help making it happen.

(Photo by Timo Volz on Unsplash)

Your customer is the bottom line

There are many approaches towards building a healthy startup business that will take off, grow end endure during both good and more challenging times. But honestly I cannot think of a better one than to treat your customer as the bottom line.

The math behind it is simple: Every time you delight a customer by solving her problem and giving her a delightful experience more than worth the money, she’s paying, she will stick around. And not only that. She will also be advocating your product and brand to those she knows or comes in contact with who are experiencing the same sort of challenges as the ones, you helped her solve in the first place.

When I think about it there is actually no real viable long term alternative to this approach. Of course there are numerous other ways you can optimize for growth, gain initial traction and stretch your available funds to last a bit longer, but over the longer term? Don’t think so.

The problem with a lot of more tactical approaches towards building your bottom line is that they are inherently short term. They may put a band on the sore or enable you to play through the pain barrier, but they don’t fundamentally cure or fix anything.

You will always be in the need to come up with new approaches, new tricks, new creative ways of doing things, and chances are that the positive effects of these things will vane over time. And then you’ll really just be playing catch. All. The. Time.

So focus on the customer and delighting her. Make that the primary outcome of everything you do in your startup. If you’re looking at doing something that cannot be directly related towards a positive contribution to this outcome, think hard about whether you need to do it. Be tough on yourself. And eliminate all necessary distractions in order to focus on – you guessed it – delighting the customer.

If you’re looking for proof that the approach works, look no further than to Amazon and its founder Jeff Bezos. He is notorious for always wanting to put the customer and customer satisfaction first. Often to the extreme and – sometimes, I would argue – to the detriment of his own team. That’s more than dedication. That’s obsession. But the results speak for themselves.

Of course your not Jeff Bezos, and your startup isn’t Amazon. But there are still things that you can do in your everyday operation to put the delighted customer left, front and center of everything you do.

You can start by really taking customer success and support seriously. Stop looking at it as a support feature, you need to have but don’t really invest in. Invest heavily in it. Put some of your best people there. Give them the mandate to truly listen to customers and feedback, and allow them time and space to turn that feedback into thoughtful suggestions for things your startup can do on the product side in order to further delight customers.

That’s not to say that you should just go with any whim and whichever customer yells the highest about something they may think they want or need or something they want you to remove. Far from it. But it is about keeping an ear to the ground and maintain a balanced approach to listening in that will help synthesize the most crucial nuggets back into both your product and everything surrounding it.

Your product will most likely be all the better for it. It will delight customers more and help attract new ones. And it will fuel the success of your business and your bottomline in ways that nothing else can.

(Photo by saeed karimi on Unsplash)

Tactital vs strategic use of data

There is no doubt that data forms a really solid basis for making business critical decisions not only in large organizations but also in startups. That especially holds true when ressources are tight, and the ambitions are grand; you need to really ensure that what you’re spending your time and money on truly works towards keeping the momentum high.

In reality it might not always be so easy to work with data in the most impactful way. Because it’s not only about looking into the numbers and keeping track of incremental improvements. It’s more about knowing where you want to go with your startup, figuring out which metrics make sense in order to report on your progress and then setting yourself up with data sources that enables you to keep track and optimize the operation, so you end up meeting or exceeding whatever goal you might have.

Doing this the right way takes dedication and a fundamental feel for and understanding of the underlying business dynamics, your products or services and – not least – your customers and their needs and expectations. In other words, in order to be able to use data in the most efficient strategic way, there is a lot of prep work you need to do beforehand, which doesn’t necessarily have a lot to do with data in itself.

And this is precisely where I often see warning signs when I look at especially early stage startups and the way they try to work with data in order to grow and scale their business. Many of these don’t have as much of a strategic view of how to enable their business to run on data as they have a more tactical view on using data.

So what is a tactical view on looking at data?

An example could be that you’re trying to grow engagement of your app. You want to get users to spend more time in the app and engage more by liking or sharing things. You could pretty easily define a couple of more or less standard metrics, and you could also quickly find a ton of tutorials online that will help you optimize for those more or less generic metrics (let’s just choose Daily Active Users or DAU as an example to make it concrete).

It would indeed be possible to apply well-recognized best practice ‘hacks’ towards optimizing for those metrics, and there would probably also be some improvements to show for it. But the trouble is that not only is this a very mechanical, one-size-fits-all approach towards working with data. It is also short term and has no real bearing on either the quality of the product or service, you’re offering, let alone the needs and aspirations of your customers.

Thus, in essence, by applying this generic tactical approach towards working with data in your startup operations, you end up optimizing for…what exactly?

This is precisely the reason why it’s so important that any effort working with data to improve the prospects of your startup and meet the goals, you have set up, needs to be strategic in nature. So what does that mean?

First of all it means having a general direction of travel, you want to take your startup on.

Second, it’s about validating with customers and market research that the direction is the right one and – if executed in the best way – will actually bring the wanted results to your startups prospects for success.

And third it’s about figuring out what that direction in tandem with the validation from the market and customers means in terms of defining custom metrics that both prove to be valid indicators of success and which are also possible for you keep track on.

Once you have those metrics in place to represent desired strategic outcomes for your startup, you can start doing the setup of your data and analytics to support keeping track of it all. The first time you go through that exercise it will probably feel like a lot of work, but just like plumbing for your home, if will not be something you need to do more than once. Once you have it settled, the systems are in place, and data is flowing like you want to, you’re set.

And then – and only then – are data set to work efficiently for you and your startup.

(Photo by Stephen Dawson on Unsplash)

No-code sort of FTW

Back in the day when you wanted to build a startup you either needed to be or to find a skilled developer in order to get anything done. This hard requirement was one of the reasons why developers generally won the designation ‘rockstars’ on most ambitious startup teams; you simply couldn’t do without them.

You still can’t if you want to build something that’s solid enough to scale. But in order to figure out whether your idea has any merit at all, there is a lot of things you can do with No-code tools; software platforms that basically allow you to configure your application rather than code it from scratch.

There is an argument to be made that No-code tools have been around for years. Some say that Object Oriented Programming tools were essentially the precursor to the No-code tools of today with the UI being the main differentiator. Whether that’s true or not, I do not know, but fact of the matter is that the ability to ‘build’ applications have been democratized to people outside the hardcore developer realm.

And that’s a good thing. Because it allows more people to build more applications. And aside from the proportion of duds among them, chances are that more really cool applications – small scale, yes – will be built as a result of this. And that’s all good.

For founders it is amazing because it does three things: It solves the problem of having to find a hard-to-find-hard-to-get developer, before you can get anything done. It allows you to roll the sleeves up yourself and put your money where you mouth is and just get something out there to start getting some feedback from the market. And it allows you to get an understanding whether there is anything there there, before you go out and look for investment in order to build the full-blown thing, which also means you will need to give less equity up in order to get the investment, you need. In theory at least.

But aside from the lack of true scalability there is one obvious pitfall from betting on No-code platforms that founders should be aware of;

No-code tools shouldn’t be seen as an excuse for not being diligent about delivering real value to users and customers. It shouldn’t be an approach used on the ‘Fail fast’-terminology that IMHO has mostly been used as an excuse for not really caring about quality of what you offer.

What founders need to be mindful of is that it’s real people – potential customers – they are putting their solutions in front of. And with the competition in almost every sector out there being rampant, you as a founder can little afford to basically p*** off the same people that are going to be your bread and butter in the future. If you do so they will have plenty of other opportunities to get the problem solved, and they will – most likely – never look your way again.

This also goes to a point which I think is often sadly neglected, when we talk about startups and founders venturing out to do great things: It’s never about you. It is about the customers you serve, and the problems they have that you help them solve.

That is – front and center – the recipe for your startups success, and thus it would be helpful, if we got a bit more empathy for the customer into a lot of startup conversations rather than focus most of our attention on the founders and their credentials. Yes, they are crucial. But successful founders don’t exist without happy customers.

Why is this a relevant discussion in the context of No-code platforms? It is because with the ease of shipping also comes a responsibility to ship something that’s worthwhile. The good things about things being hard to get out the door is that you have amble time to reflect during the process and ensure that things work, when they go out, and that the things, you ship, are shipped for a reason. While it obviously slows founders down a bit, I think the process is overall healthy and has a net positive long term impact on both the product and the ultimate success of the startup.

For that same reason No-code platforms shouldn’t be seen as a shortcut to success but as a way to get more insights quickly on what’s truly worthwhile building in order for a startup to achieve ultimate success.

(Photo by KOBU Agency on Unsplash)