As always after my three-month rotation, I’d like to reflect on the learnings I had in San Francisco. This kind of format is super helpful for me to give my learnings a more structured framework and to reiterate on the results. Have fun reading them!
1 — People hate to get soled. They love to buy!
This is the reason why you should only build products which solve a very specific problem for a very specific target group. People don’t like advertisement and education why they need the product. It’s easier for them to “hire” a product to solve a specific “job-to-be-done”. If the product or service is doing well in its job customers love to hire it again.
2 — A product is having a social, emotional and functional dimension.
Every target customer group has a unique setting for there social, emotional and functional dimension. This is important to consider when you design a product. Let’s take enterprise software as an example. An accountant might want to move up the career ladder (social dimension) and wants to impress his boss. For that, he wants to deliver results fast and the software should support him with this. He gets frustrated (emotional dimension) when the software is not working properly and he can’t deliver results on time. Additionally, he could save a lot of time if the software could provide an interface to the internal system as such he doesn’t have to copy manual data between his accountancy software and the company software (functional dimension).
3 — Technology is only a building block to solve problems.
I confess I’m a techie. I love technology but to be honest: In business, nobody cares about technology. Customers just want a problem to be solved. I definitely focused too much on new technologies like artificial intelligence to come up with product ideas. But to build a successful product or start-up its the other way around. You have to focus on the problem first. Only when you understood the root causes and the customer group well enough you can start searching for technologies. And then don’t pick the currently most discussed but rather the best fitting and easiest to implement a solution. No mainstream customer cares about the technology which is used in the product or service. They just want to get a specific job done and they don’t care if it’s done by artificial intelligence, excel spreadsheets or witchcraft.
4 — Talk to as many people as possible with a start-up idea.
To get better ideas and better perspectives about your product talk to as many people as possible about your product. There is no value in keeping the idea or MVP hidden. This is a major problem I see in Germany where most engineers are scared that the “breakthrough” idea might get stolen and copied. The only thing that counts in building a start-up is moving forward with execution. And a very important part of this execution formula is feedback. If you keep your idea hidden you break the loop of building, testing and measuring. This can lead to products nobody wants.
It’s better to have a customer and no product as a product and no customer
5 — Density > Proximity when it comes to networking.
Proximity to the industry and people you want to work with is an enabler when it comes to networking and speed of feedback. But density is the powerful lever for building a network. It’s simple math. City A with a population of 1Mio and city B with a population of 10M are hubs for software. 100.000 of software experts live in both cities. Where would you move to build a network? Definitely city A because the density with 10% of software experts is much bigger than the 1% of experts in city B.
6 — Teams that have fun together, stay together and perform better.
“Wow, Sherlock that’s obvious!” you might say. And it’s true, but let’s take a look at factors which enable the fun in teams. Every team I was part of and that had a strong bonding, and I still have contact with, had some kind of container event to just have fun together. It could be a beer after work, a presentation of whatever you like or just hackathons to build crazy ideas. It’s an opportunity to get to know each other better and create trust. This trust is enabling ultimatly speed at work. It might be an investment of one hour every week to get a team together but it’s having a big return-on-investment in the long run.
7 — What is your unfair advantage? As a company and as a person.
As a start-up to shift the odds of success towards you, it’s important to have an unfair advantage. Otherwise, it will be hard to compete with new entrants in the market. But this is true for yourself as a person. Where is your unfair advantage? Your strength nobody else is having? You can use it for your career as well as start-ups are using it to become a market leader. For example, one unfair advantage I have within my company is the network I’ve built over the past rotations in several departments and countries. I can find quicker the relevant information and people and connect them to get things done.
8 — Beeing the first in one category is not always an advantage.
The first-mover advantage is a lie. I was totally convinced that a start-up has to have a completely new product to become a market leader in this new category. What got me thinking is that a colleague explained to me: Google, was not the first internet search engine, Facebook not the first social network. But they had an unfair advantage. For Google, it was the better search algorithm which could provide a better job in answering questions for the internet. Facebook had the advantage of slowly building a network in colleges and then expanding to create a network effect. In general, they did one job exceptionally good, built a platform around that, and created network effects.
9 — Hire on a constant basis and have a pool of candidates.
Startups need employees to be successful. But the growth and hiring are not linear or exponential. It is a step-function. Your team grows from 3 to 4 to 6 to 21 to 46, because you need different structures at each step of your company growth. To succeed with this you need an ongoing process of hiring and creating a pool of candidates which can be activated when you hit the next step. Additionally, this is also necessary for established corporates. Hiring and getting the right people in the right position is one of the most critical tasks for senior positions. It’s more likely to find the right one with a bigger pool of candidates. First Skill-wise and second cultural-wise.
10 — Step 1: Collect underpants. Step 2: . Step 3: Profit.
No there is nothing missing in step 2. It’s referring to a south park episode, to be more precise Season 2 Episode 17. The problem is that 95% of start-up and 99% of my own ideas operate like this. You have a big vision of profit or making the world better (Step 3) and you assume you know which resources you need (Step 1). But step 2 how to get there is totally missing. You can avoid this when you start with a problem first (Step 1), build a solution (Step 2) and then sell it (Step 3). People want pain killers, not vitamins. Maybe the only guy which was ever successful by starting with a vision and working backward is Elon Musk with his Tesla Masterplan. I don’t say it’s impossible to work backward, but for the average Joe, like me, it’s better to start with a problem first.
Bonus — You have to stay patiently aggressive.
What I mean with this is that I tried to work in San Francisco for four years but I failed several times. I stayed patient and tried it for every new rotation again. And finally, it worked because I got more skills, a better network, and the right attitude. I’m also going to write probably a blog post about that journey.