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EDHEC Course Introduction

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CYCLES Course (3): Build
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EDHEC Course Introduction

  1. 1. Cycles The simplest, proven way to build your business. EDHEC Course Introduction
  2. 2. Building a business is hard work… In this class, a new, simplified way to increase Speed while reducing Risks
  3. 3. Bryan Cassady • 11 Start-ups in 6 countries (8 winners, 1 loser, 2 unknown) • Professor: KU Leuven , Solvay Lecturer : Chicago, Berkeley, INSEAD, LSE • Director Founder Institute/ The European Innovation academy • 4 years of research with over 400 companies on the drivers of Innovation success • New Book Cycles – 24 co-authors around the ABCs of Innovation 3 Beliefs 1. Anyone can innovate 2. Bad systems will beat good people over time 3. Good systems can make average people great Helping companies bring bigger ideas to market faster, while reducing risks
  4. 4. • Master in econometrics and tax • 30 years of professional experience in sales & marketing and finance • SME family business, B2C, B2B • Retail, healthcare/software, chemicals 3 Beliefs 1. Innovation is not about big ideas (only). It is about solving problems and creating value out of the solutions. 2. From Thinking to Doing to Being 3. WE-nnovate instead of I-nnovate Orchestrating the partnership between entrepreneurs and finance professionals allowing successful innovation Dominique Baekelandt
  5. 5. Why together … 1. Share working methods 2. A new course Innovation for CFOs 3. How to build Innovation Habits ?
  6. 6. What I see… (at companies of all sizes) 1. An incredible focus on the positive 2. A continual search for silver bullets 3. Scared to ask for help 4. If they ask, too much done internally 5. What they want to do lacks clarity / focus 6. Lack of systems / Lack of urgency 7. Avoid tough decisions and stay in a business too long Deluded Scared of Negative Alone Unclear Lacking Systems Not Making Decisions
  7. 7. Good versus great Entrepreneurs If you have real product market fit and momentum you can (but probably won’t) succeed without systems and processes. The reality is most successful companies have hit the wall many times and pivoted their way to success. Processes / systems increase your odds of getting the pivots right and on time
  8. 8. A test… Who are these companies today? Personal podcasting and sharing audio content
  9. 9. How do you think they used Lean Start-up Techniques ? 15
  10. 10. Lean start up overview • Scientific method (hypothesis driven= if, then , falsifiable) • Remove waste in the start-up process (lean) • Validated learning to reduce risks • Accelerate in batches • Build measure learn and famous pivots
  11. 11. Lean Start Up How many of my clients interpret this: Build, measure, learn Build, measure, learn Build, measure, learn Pivot to a Miracle. I believe miracles seldom happen, ideas are built over time “Step by Step”.
  12. 12. What an amazing idea !!
  13. 13. The Real Story : Build, Measure, Learn and improve 25 “Cold, but cool” “Someone might pay for this” “Love the rooms” “We’ve got an ICE Hotel” 1988 Started as an ice sculpture event 1989 A central unit was created called ARTic Hall. (60 M2) A specialist survival group of the Swedish Armed Forces spent the night They decided to put in a bar 1990 French Artist Jannot Derid No rooms in town, so they stayed 91-93 ARTic Hall expanded to 250 M2 Rented for Corporate get-aways Artists come and go and start making rooms 1993 Still losing money, needing corporate support Absolut Vodka got interested in corporate get-aways
  14. 14. Based on 4 years of research with over 400 companies There are companies that succeed and companies that fail. The biggest difference between winners and losers is smart winners make good, even mediocre, ideas great over time. The Reality… Quality Of Ideas Time Start Learning Cycles No Changes Bad Cycles Smart Winners Lucky Winners Losers Losers
  15. 15. Cycles: The ABC’s Of Growth. Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Align/Ask Build Communicate Check Systematically Improve Idea Quality Time
  16. 16. The Mental state you need as you go. • Humility... know you will get it wrong • Vulnerability to ask for help/ to say you don’t know • Get lots of feedback • Learn and move on • Don’t lose hope (but don’t be stupid)
  17. 17. Systems … Every system is perfectly designed to get the results it gets. W. Edwards Deming 30
  18. 18. A simple idea… Many forms The Demming Cycle • Lean Start-up • Design Thinking • Scrum
  19. 19. Design Thinking UNDERSTAND EXPLORE MATERIALIZE Empathize Define Ideate Prototype Test Implement
  20. 20. Scrum DevelopTest Accept Plan DefineReview Backlog Sprint Increment
  21. 21. The challenge is how to make it simpler. The Common Feature Cycles of learning
  22. 22. A simpler, easier to remember formula with clear instructions “how to”. My Goal
  23. 23. Bad artists do it on their own Good artists copy Great artists steal
  24. 24. My New Book A joint project with accelerators / Experts around the world The ABCs of Innovation A = Alignment How to build organizational alignment B = Build How to build better ideas quicker C = Communicate / Check How to clearly communicate and check your ideas S = Systems How to set up the right systems to lead and get better over time
  25. 25. HOW CYCLES CONTRIBUTES TO THE STATE OF THE ART A new bit on alignment. It is important to know what to build or design. And how to instructions for B, C and S C Y C L E S Alignment (what to build) Build Communciate & Check Systematically Improve CYCLES OF LEARNING L E A N S T A R T - U P  Build Measure Learn VALIDATED LEARNING S T R A T E G Y Z E R  Design Test Execute VALIDATED BUSINESS MODELS 
  26. 26. SNARC Case study 40
  27. 27. SNARC A Semantic Social News Aggregator SNARC, When you want to know more SNARC helps discovering content by highlighting what is meaningful in a quick, smart and personalized manner. SNARC finds relevant content by learning from the content, the social web and you! 3 people with PHDs in Semantic Search / 2 start up experts and 500K to build their business
  28. 28. We are best in class We have 15,000 downloads this week Our server response time is down to .8 seconds We were listed in TechCrunch last week Success is on the way An “Oh so typical” scale-up We build something great, profits will follow. 80% product development 10% getting new users 5% finding a business model 5% other ________________________ 100%
  29. 29. 2 types of entrepreneurs 1. Risk takers (they like the macho bit) 2. Risk reducers (they like getting house odds) • A risk reducing entrepreneur will build a strategy that increases odds of success from • 10% • to 20% • to 50%
  30. 30. How… by asking again and again “If this business fails, why would it fail ?” “If this business fails, why would it fail ?” “If this business fails, why would it fail ?” Then finding answers
  31. 31. Working in your business Working on your business We build something great, profits will follow. 80% product development 10% getting new users 5% finding a business model 5% other ________________________ 100% How will be make a business. 5% product development 10% getting new users 80% finding a business model 5% other ________________________ 100%
  32. 32. SNARCAlignment
  33. 33. Stop saying everything is fine! It is time to stand naked in front of your team and partners and tell them the truth… “I need your help to solve the following issues..”
  34. 34. 5 Whys Why is no one paying for our service ? We never asked anyone to pay Why have we never asked anyone ? We haven’t found a pain someone is willing to pay to resolve Why no pain to resolve ? We haven’t focused on a specific segment yet Why no segment yet We have spent too much time at our desk Why too much time at our desk We are scared to meet clients because we don’t have ideas to sell We need ideas for things we can sell
  35. 35. Personally, I find nothing sadder than a CEO with a big team working alone on all the big problems…
  36. 36. TRUE Truly Simple Let's get paid N Narrative. Why it is important (the story) If we can't find a way to get people to pay for our service, we have no business regardless of how great our technology is, how many people download our product or how useful it is. O Objective 3 ideas to make money that we can test R Restrictions : We are not interested in A fee for use of the plug-in People will not pay T Tactical Constraints: We have around 250 K to grow the business, so the solutions need to be low cost. AND we need to work with partners H Here is the place to start Look at areas where the of Information value is high and searching takes time (eg Job applicants, News stories, etc° Make it a story Be honest Be specific Ask for help TRUE N.O.R.T.H = A way to ask for help..
  37. 37. Building Ideas
  38. 38. Meaningfully Unique Ideas! Leverage Diversity Drive out Fear = Explore Stimulus MU = S F D
  39. 39. 1. Define your needs to build direction and remove fear (already done) 2. Make sure you have a diverse team (Probably OK) ------------------------------------------------------------ 3. Get stimulus (Stimulus mining) 4. Mix and match (Association) Best practices
  40. 40. Stimulus Available # of practical ideas invented Low Stimulus Medium Stimulus High Stimulus 22 38 47 Value of Stimulus Stimulus Feeds The Brain Source: Jump Start your Business Brain
  41. 41. Traditional Model Individual Brainstorming Draining Before After Suck Method Uses your brain like a librarySource: Jump Start your Business Brain
  42. 42. Idea #1 Brain Operating System Idea #2 Idea #3 Idea #4 Stimuli Stimuli Stimuli Stimuli Stimulus sets off a CHAIN Reaction!!! Source: Jump Start your Business Brain
  43. 43. At their most basic, IDEAS are feats of association and constraints Source: Jump Start your Business Brain
  44. 44. You can use tools and systems to force new associations (there are hundreds of tools)
  45. 45. 666: Forced Associations • 8 Min: Random combinations (look for ideas) • 2 Min: Pick top ideas and write them up.. The simplest way to write up ideas • Headline • Problem • Promise • Proof • Payoff
  46. 46. Let’s look for ideas.
  47. 47. 1/ 1 / 1 Apple = design and simplicity Students love music Substitute instead of showing the internet, show things to buy A fancy music mix trial list anytime someone visits a music site with an option to buy on Itunes Problem: Music choice Promise: Easy Choice Proof: All the knowledge of Itunes Payoff: Sales of music SNARC Bryan Domi 1 sep 19
  48. 48. Payoff Dramatic difference how is their life different and better Proof Reason why should they believe you and dramatic difference Idea Format
  49. 49. Let’s look for ideas. 65
  50. 50. Communicate Check
  51. 51. Chances are … your ideas are not as good as you think …
  52. 52. Choose 1, Check your ideas with other groups Clarity Meaningful Unique 2 Golden rules If Clarity < 7  Write it again If [(Meaningful * .6 ) + (Unique * .4 )] < 6  You probably got a loser One Suggestion 80
  53. 53. Why ? Wonderful
  54. 54. How to make brilliant ideas Talk with Friends Really Ugly Meetup Event Still Ugly Speak at Conference Less Ugly Investor Presentation Good Enough
  55. 55. Re-Work Target 1 Brilliant Idea Group assignment Before the next class
  56. 56. Systems
  57. 57. 4 Characteristics of effective system thinking 1. A holistic view (The whole is often the same as the parts) 2. Thinking in loops (What causes what) 3. Focused on the big business drivers 4. Sequential not parallel problem solving
  58. 58. How systems thinking helps What did you learn ? What should you do next A hypothesis for a next learning loop Would you update the True North after this round of ideas (probably)
  59. 59. An example of world class … Objectives Process Alignment A new business / business model in 12 weeks A weekly learning cycle every week for 10 weeks A 2 day management meeting to agree «what and why» Plus basic training: How to build ideas/ the importance of systems 2 weeks 10 weeks Alignment Every Monday… what are we going to do this week Build ideas Every Friday… a brain-storming session (with new external people) Communicate Check Real-time research External experts to validate/ give feedback on all ideas Systems Identify death threats/ work on death threats Kill all weak ideas where death threats not resolved in 2 weeks Every Day A 10 minute standing meeting
  60. 60. Summary of the ABCs
  61. 61. Benefits of the ABCs method
  62. 62. The reality is the ABCs is just a an easy way to remember a process … The choice of a process/system is less important than having a process that: Increases Speed Removes risk
  63. 63. About this course … 90
  64. 64. Course Overview Learning objectives • To understand the core of Lean Start-up - Validated Learning as a way to reduce risk • How to use a method – The ABCs to increase speed • Experience using some tools • An in-depth understanding of Sprints How • As much as possible, a learn as you go course • Weekly individual and group assignments • A group presentation each week • A final exam with questions known up-front
  65. 65. Exam and Grading Exam Questions • What is your new updated definition of Innovation. Did it change ? Why, why not? • Assuming you want to, how would you make effective innovation a personal habit ? • 3 Ways to improve this class • As a group, document the stages of 1 CYCLE for a product / idea one of your group members is working on, mandatory elements True North Spark Deck Idea in 4P format, feedback, system view New True North (showing you learned something in the cycle) Grading • 25% class participation and your weekly journal • 50% your work in groups (Note ! A group grade corrected for your contribution) • 1 Class presentation • 6 assignments • 25% your final exam
  66. 66. A 5-minute Course Journal Required (for each class) Not very useful Very useful
  67. 67. Date What Group Readings Individual assignment (via google Assignment in groups 10/10/2019 Introduction Lean Start up summary or HBRarticle Your name Your personal definition of Innovation What would like to get out of this class Something Innovative to remember you Your first hypotheses Learn a bit about Sprints 14/10/2019 Alignment Group 1 CYCLES Introduction (DRAFT) Summary: Competing against luck Article: St. Gallens, business model innovation Optional: Outcome Driven Innovation 1 page personal notes Alignment Canvas Plus 2-3 TRUE NORTH Cards A few ideas 21/10/2019 Build Group 2 Problem Definition: Chapter (Draft) Create Chapter (Driving Eureka) Article Making the Difference Video lesson + PDF Making spark decks 1 page personal notes Spark Deck (what did we miss) 1 good idea 22/10/2019 Communicate / Check Group 3 Summary: Jump start your business brain Video : Pretotyping Article: What is killing Innovation Article: Cognitive Dissonance 1 page personal notes test your ideas 31/10/2019 Systems (And Culture) Group 4 An introduction to systems thinking Summary : Simplifying Innovation Video Russel Ackoff ORLearning Article 1 page personal notes A systems view Plus your case presentation 06/11/2019 Course Summary Making Innovation an organizational habit Your Case presentations Group 5 and All groups Summary : Atomic habits Summary: The Power of habits Article : Innovation as a habit (A very rough Draft) Summary : The knowing, doing gap Videos (there are 2): BJ FOGG 1 page personal notes Prepare final paper