Entrepreneurial learning journey: The Lean Startup Conference, San Francisco

The Lean Startup Conference 2015, was a gathering for entrepreneurs, innovators and thought leaders from across sectors in a fast paced, highly curated program featuring the best of the Lean Startup community.

Held on November 16-19 in San Francisco, over 2,000 diverse Lean Startup thinkers and practitioners shared ideas that are shaping the future of the approach to startups, at the 6th Annual Lean Startup Conference.

Renowned speakers – including founder Eric Reis – collaborative workshops and interactive discussions created an unforgettable collective experience at the historic Fort Mason campus. It was a place to pick up knowledge on a variety of aspects and topics, providing some informative research into specific elements of the methodology, and insights and learnings from practitioners’ implementation experience.

The Fort Mason venue was a former U.S. Army post located in the northern Marina District. During World War II, Fort Mason was a key location, with 1.6m military passengers and 24m tons of supplies moved from the port into the Pacific theatre. Today, you still get a sense of the endeavour, enterprise and effort of those times in the fabric of the buildings, making it an iconic location for a conference focused on guiding and growing startup businesses under conditions of extreme uncertainty.

What is the Lean Startup approach? Simply, the Lean Startup methodology is a proven technique to help you achieve and sustain startup success – making fewer mistakes, burning less cash, getting there quicker and proven to deliver more success.

Instead of executing business plans and releasing fully functional prototypes, the Lean Startup advocates testing hypotheses, gathering early and frequent customer feedback and showing ‘minimum viable products’ – early prototypes of your product idea with a minimum feature set – to prospects.

Business plans rarely survive first contact with a customer. As boxer Mike Tyson said, everyone has a plan until they get punched in the head. Forecasting three years revenues ahead is a step into the great unknown – and based on what assumptions?

The Lean Startup approach thus requires a founder to establish and test a series of hypotheses underpinning their business model, and to ‘get out of the building’ and meet prospects to validate their business model by quickly iterating and assessing potential customers’ feedback. This customer discovery process recognises that searching for a business model is the primary task facing a startup.

Fundamentally, you’re trying to determine the problem you’re solving, not what the product is. Validating customers’ interest through early adopters and product usage provides feedback, from which the startup can ‘pivot’ by changing one or more assumptions in its business model. This ‘Customer Development’ process underpins the entire approach – a business model is all about the customer, not the product.

After customer validation, the product is refined enough to go to market. The startup creates customers, using its proven hypotheses to build demand and ramps up marketing and sales resources to scale up the business.

Why the Lean Start-up Changes Everything, an article in the Harvard Business Review by Steve Blank, makes the compelling argument that mainstream adoption of the Lean Start-up is not only attainable, but would provide the basis for a newer innovation based economy. During the conference, the key messages showed how this methodology breaks down the barriers to traditional innovation approaches:

  • The high cash cost of getting the first customer and the even higher cost of getting the product wrong are significantly reduced
  • Long technology development cycles are shortened, based on the MVP approach to product development
  • The risks inherent in founding or working at a start-up are lessened by reference to the customer development process

The lean approach reduces the first two constraints by helping new ventures launch products that customers actually want, far more quickly and cheaply than traditional methods, and the third by making start-ups less risky. The combination of all these forces is altering the entrepreneurial landscape.

Lean start-up approaches and methods have mostly been applied to software and Internet businesses – but it’s interesting to look at other businesses through the lean start-up lens – for example food trucks – especially as they fed the conference delegates!

  • Food trucks are much cheaper to start and can get to market much faster than brick and mortar restaurants.  In many ways, food trucks fit the Lean concept of the minimally viable product.
  • Food trucks can quickly and easily test new concepts, menus and recipes.  In many cases food trucks are being used as lean start-up-like laboratories to test potential brick and mortar restaurant ideas.
  • Food trucks take an iterative approach to their menus and even location based on customer feedback. ‘Build-measure-learn’ is a daily occurrence with food trucks.
  • Food trucks are tightly focused on their customers and interact with them every day.

So, a good practical example on our doorstep every dinnertime.

Great sessions from a number of contributors can be accessed here, click on the name to go to the Lean Conference web site and access the details of their talks and twitter accounts:

Aditya Agarwal Dropbox – managing through hyper growth

David Binetti Dinadesa – lean startup finance through innovation accounting

Gagan Biyani Sprig – focused on product-market fit

Chris Dixon Andreessen Horowitz – an interesting 121 conversation session with Eric Reid

Amy Jo Kim Shufflebrain – focus on early product development

Laura Klein Users Know – great insight in UX

Dan Olsen The Lean Product Playbook – practical guide to product-market fit

Alexander Osterwalder Strategyzer – how to design a startup culture

Frank Rimalovski New York University – insights ion the customer development process

James Warren Share More Stories & Johnson – using stories to share innovation

So over the four days of the Conference, here are my top ten takeaways for startup founders to embrace:

1. Have an open-minded experiment based culture. The Lean Startup describes the startup as an experiment for building companies that are creating new products and services in situations of extreme uncertainty. The key is experimenting and testing assumptions to then use that feedback to evolve your product and ‘fail fast’ if there is no product-market fit.

2. Focus on understanding exactly what your customer values. The customer rarely buys what the company thinks it sells. Many entrepreneurs focus on building their product without engaging the world. You need focus on understanding your market more than building your product. Validate and talk to customers. Also, make sure you are targeting the right audience so as not to skew your observations.

3. Think metrics, not pixels. There is so much emphasis on design (thanks to Apple!), however sometimes the things that work aren’t the obvious choices from a design perspective, so don’t over-do it. Test everything. Figure out what needs to be measured, then come up with experiments to improve those most critical items.

4. No excuses. Many founders shared some of their amazing MVP stories. My takeaway was that there really are no excuses, you can build an MVP to prove your idea and you can test it on any budget– they were just testing the viability of the idea. As the idea of experimentation matures, there’s a growing swell around the idea that evolution trumps intelligent design. That is, if you can run more experiments to test more hypotheses, and let data decide the winner, you stand a higher chance of being successful with your startup.

5. Eat your own dog food. Use what you are building often and uncover issues before your customers do.  If you don’t use it, why should your customers?  You will quickly identify and fix usability and functionality issues, thus enabling you to show a more polished product to your target end users. Be clear on the problem you are solving, that’s the key fundamental to take from the approach. For me, the Lean Startup is basically the scientific method applied to startups.

6. Nothing is cast in stone. Be willing to change. No emotional attachment to anything you build and no bruised egos when changing a previously stated direction. It is better to change direction early and be successful than to stay the course that leads to a dead-end. Most successful startups end up releasing a product that is vastly different than what they set out to build.

7. Avoid endless debates. Build-Measure-Learn. Try, test, measure, then pivot or persevere. It does not help to spend hours discussing if you should place a button here or there, so try it one way and measure your customer’s engagement. No one decision is ever perfect. This is Reis’ key mantra, the core practice of Lean Startup is to hypothesise, experiment, analyse results (focus on data) and iterate to success.

8. Embrace failure. If we do not want to fall down on the slopes, then we will never learn to ski.  Failures gives us valuable lessons on our quest for improvement. As an inventor, Edison made 1,000 unsuccessful attempts at inventing the light bulb. When a reporter asked, How did it feel to fail 1,000 times? Edison replied, I didn’t fail 1,000 times. The light bulb was an invention with 1,000 steps.

9. Set realistic but challenging milestones. Nothing rallies the team like the challenge of meeting a difficult but attainable deadline, be it an advisor demo date or a set of features in a mini release required to close a potential customer deal. Make it a habit to set challenging deadlines and always reward your team by celebrating these milestones no matter how small.

10. Have a vision and plan ahead. Do not make the mistake of thinking the experimental based approach to hypothesis testing implies Lean doesn’t require you to have a vision. Pivot on the strategy but always maintain your vision. Without a guiding north star, a ship will be lost in the endless sea. What makes a startup unique is the vision of its founders.

With the Lean approach, you get iterative early in the lifecycle of your startup business. You need to be agile in understanding your requirements and even who your customer might be – not so much sell what you can build, but build what you can sell.

The Conference was epic. Sessions ran from 8am to 9pm and there was just too much for me to summarise here. During the Conference I took lots of notes, asked tons of questions during the after-hours 1-on-1 sessions with experts, and received direct feedback from Eric Ries on the final day of the conference.

To close, my ‘top ten quotes’ that captured the essence of the Lean Startup approach that I noted at the Conference, were as follows:

‘Don’t jump from zero to Picasso. You have to go through the reality stage first’ @cdixon

‘Keep the business plan & spreadsheets, leave the fiction writing behind’ @EricRies

‘Your job is not to validate the product, but to validate the problem & how best to solve it’@rimalovski

‘A common trap for startups is convincing yourself there is a market when there actually isn’t’ @ericries

‘It’s like hand-to-hand combat, just run the experiment (see if it works)’ @EricRies

‘Eliminate your ego for product-market fit, it’s the idea you end up with that counts’. @gaganbiyani

‘Put hypotheses into every story to learn what customer wants. No shortcuts. It is hard’. @ericries

‘Innovate your product by getting stories from customers. Hear 100 stories in 100 days’ @warrenjwric

‘Innovation done right = idea -> hypotheses -> experiment -> learn -> act -> repeat!’ @alexosterwalder

‘Innovation is an insurance policy on your company’s relevance’ @dbinetti

Lean thinking defines value as providing benefit to the customer, anything else is waste, so the goal of a Lean Startup is to learn what is valuable to the customer. Learning is the essential unit of progress for startups, testing assumptions you’ve made about your business, its customers and how you’re serving them.  Your job is to find a synthesis between your vision and what customers want and recognise you’re providing a solution to a problem.  Just trying to make customers happy does not produce a sustainable business model.

 

 

10 books about Startups to take to a desert island

What’s your favourite holiday? I’m a beach lover, the more deserted the better, trudging slowly over wet sand, sit on the promenade, write a postcard. There’s nothing I’d rather do than live on a desert island someday, it wouldn’t take much to convince me to give it all up and live in a beach hut. Perfect beaches, perfect water, your own space, all the seclusion you could want.

When hearing desert island, you think of a tropical island, with sandy beaches and swaying palm trees. And what are palm trees known to be good for? Hanging up a hammock of course! That’s all I’d need, with music and books, a life of Robinson Crusoe would suit me.

This is what was in the mind late one evening in 1941, of broadcaster Roy Plomley, at home in his pyjamas, when an idea came to him. He sat down and wrote to the BBC. That letter reached the BBC’s Head of Popular Record Programmes, Leslie Perowne. The pitch was successful and a broadcasting institution was born.

Desert Island Discs is a biographical radio programme, broadcast on BBC Radio 4. It was first broadcast on the BBC Home Service on 29 January 1942. Each week a guest, called a ‘castaway’ during the program, is asked to choose eight pieces of music, a book and a luxury item, that they would take if they were to be cast away on a desert island, whilst discussing their lives and the reasons for their choices. More than 3,000 episodes have been recorded.

Plomley’s first castaway was the Viennese entertainer, Vic Oliver. The first piece of music chosen by Vic Oliver, and therefore by any castaway, was Chopin’s Étude No.12 in C minor. The most popular piece of music requested is Beethoven’s Symphony number 9 in D minor, ‘Ode to Joy’.

Plomley continued to present the programme until his death in May 1985, and was replaced by Michael Parkinson. Parkinson presented the last of his 96 programmes on 13 March 1988, when Sue Lawley became the first female presenter. Over the following 18 years, she interviewed 750 people, leaving in August 2006 and replaced by Kirsty Young, the current presenter.

Plomley originally wanted the sounds of ‘surf breaking on a shore and the cries of sea birds’ to open and close each programme, but it was refused as it lack definition. Instead, By The Sleepy Lagoon, composed by Eric Coates was chosen for the first show and has remained the signature opening and closing theme of the programme since. The sound of herring gulls also accompanies the tune to put emphasis on the desert island. A listener pointed out that herring gulls live in the northern hemisphere – therefore it would not have been a tropical island as intended!

The instantly recognisable tune of By the Sleepy Lagoon sounded for the 3000th time in 2014, as Desert Island Discs reached a magnificent milestone, when Royal Navy test pilot Eric Winkle Brown was the landmark guest. The 96-year-old is the Fleet Air Arm’s most decorated pilot, holding the record for the highest number of flight-deck landings, and was the first man to fly a jet on and off an aircraft carrier. He also interrogated leading Nazis, including Hermann Goering and plane designers Willy Messerschmitt and Ernst Heinkel. He was a spritely and entertaining guest.

So let’s say I was castaway on my desert island, and that I could swap the music, and take books instead. I think I’d take the books that I’ve enjoyed cover-to-cover, and those I’ve read in small portions but ordinarily have not had the patience or time to read cover-to-cover. Perhaps on a deserted island with little to do and few distractions, I’d enjoy going through them carefully line by line, hanging on every word. A good book has no ending, it opens your mind.

To me, the world of books is the most remarkable creation of man. Nothing else that we build ever lasts. Monuments fall, nations perish, civilisations grow old and die out, but the world of words and books are volumes that live on. I have been a voracious reader all of my life and the older I get, the more I love to open a book and let it take me where it wants me to go.

I have always seen reading as a spiritual activity that stirs my curiosity. When I read a book I conduct a private conversation with the author with scribbles in the margins by the passages that impress or challenge me. E. P. Whipple once wrote, books are lighthouses erected in the great sea of time, which I think is a great summary of how I feel.

So, which books to take? I’d focus on books on startups, entrepreneurship and innovation, on the basis I was going to be rescued from my isolation, so I’d use the time to plan a cracking new business idea. So in no particular order, my desert island bookshelf would have these great books:

The Innovators Dilemma: Clayton M. Christensen.Authored by Harvard Professor Clayton Christensen, this is one of the most respected and useful books for entrepreneurs. His theory of ‘disruptive innovation’ has changed the way we think about innovation, showing how most companies miss out on new waves of innovation.

The Lean Startup: Eric Ries. Reis’ mantra is Vision-Steer-Accelerate, following a process of continuous innovation to create radically successful businesses. Most new businesses fail, but most of those failures are preventable. The Lean Startup is a new approach that is changing the way companies are built and new products are launched, it’s about learning what your customers really want, testing your vision continuously, adapting and adjusting before it’s too late.

The Four Steps to the Epiphany: Steve Blank. When the tech boom began in Silicon Valley in 1978, Steven Blank was on the scene. Although he retired in 1999, Blank had accumulated a wealth of knowledge that he shares in The Four Steps to the Epiphany. It’s a must-read for those launching tech startups, Blank clearly outlined how to organise sales and marketing, discover product flaws and test assumptions.

Thinking Fast & Slow: Daniel Kahneman. A psychologist and Nobel Prize winner in economics, Kahneman provided this bestselling explanation of how people think, describing the fast, intuitive and emotional ‘System 1’ and the slower, more deliberative and more logical ‘System 2’. By understanding these systems, you can learn to think things out more slowly, instead of acting on an impulse – a good discipline when excited about your startup.

The Startup of You: Reid Hoffman & Ben Casnocha. Co-written by LinkedIn co-founder Reid Hoffman, this book gives entrepreneurial hopefuls advice on how to thrive in the fast-paced and changing networked world. The most important lesson from Hoffman and Casnocha, however, is how to take control of yourself to make the most out of your life, career and business.

The Art of the Start: Guy Kawasaki. The one question to ask yourself before starting a venture is: Do I want to make meaning? The two questions that should underlie your business model: Who has your money in their pockets, and how are you going to get it into your pocket? Few books about startups are this clear.

Blue Ocean Strategy: Renée Mauborgne & W. Chan Kim. How to make your own market space and make the competition irrelevant? The authors argue that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. The authors argue that lasting success comes not from battling competitors but from creating ‘blue oceans’ – untapped new market spaces ripe for growth. A landmark work that upends traditional thinking about strategy.

Business Model Generation: Alexander Osterwalder. This is the first book that allows you to answer What’s your business model? Intelligently and with precision. I’ll be cheeky here and add in Osterwalders follow-on book Value Proposition Design, describing how to get product/market fit right is another must have for your bookshelf.

The Hard Thing About Hard Things: Ben Horowitz. Building a business when there are no easy answers, this series of essays about what CEO face in the ‘Build phase’ – the transition from searching for a business model into a company. More than any book I’ve rad, this gives an insider’s perspective on what it’s like to lead and scale a startup.

Not All Those Who Wander Are Lost: Steve Blank. Volume One of Steve Blank s collected blog posts, features war stories and lessons from 20 years in Silicon Valley startups, how to build a successful Customer Development model, and practical advice on creating a successful venture capital pitch. Includes thoughtful ideas on balancing family and career, it’s a personal look at the life and times of a Silicon Valley veteran.

With the expertise, insight and guidance offered in these books from these practitioners, can you learn the mastery and purpose of an entrepreneur? How do entrepreneurs learn? Does entrepreneurial learning impact subsequent entrepreneurial know-how?

The practice of entrepreneurial learning is integral to understanding entrepreneurial activity and startup development. This learning is socially embedded and provides the entrepreneur with human and social knowledge resources. With an understanding of the dynamics and nuances of entrepreneurial learning, is there scope to more fully figure out how to develop entrepreneurial competencies, and thus the chances of startup success?

Entrepreneurs learn through doing, in developing and sharing stories of their ventures, and through social interactions within their ambiguous and dynamic environment – which connects the ‘knowing’ to the ‘doing’ – to create the ideal setting for the delivery and assessment of practice based action learning in the realistic context of the entrepreneurial world.

A central part of entrepreneurial learning is about constructing the ambiguous, uncertain and individualised reality of the entrepreneur. In addressing this challenge, I’ve been reflecting that the proper place to study elephants is the jungle, not the zoo as an appropriate starting point.

We know story-telling is an important practice in making sense of the startup adventure, and in sharing it with others. It is difficult to decouple learning process and content from context, where the context mirrors the equivocal, multi-faceted and multi-directional nature of the challenges encountered by the startup environment.

Furthermore, the evidence from each of the ten books in my list suggests a preference for a continuous entrepreneurial learning processes, consisting of multiple practice learning tasks, rooted in related social learning mechanisms, including peer and reflective learning. These seem to resonate with entrepreneurial learning in real life – let’s remember that not all learning experiences of the entrepreneur are positive, and dealing with failures or problems are an important source of learning.

For many entrepreneurs in the creative sector, a challenge in learning about entrepreneurship can be their difficult relationship with their own entrepreneurial identity. The creative industries are structured such that artists often need to become entrepreneurs to support their creative practice, but some struggle with the tag. There are parallels here with specialist in many technical fields, who may identify more strongly with their specialism than entrepreneurship.

In a series of startup workshops I delivered with a group of artists seeking to set up businesses such as galleries, workshops and their own outlets (online, at events and permanent venues), this reluctance to see themselves as entrepreneurs was evident, particularly in the early days. I noted a pragmatic and a tactical entrepreneurship – pragmatic because they set up businesses to create opportunities to show their work, and tactical as they moved in and out of different formats to best sustain their practice.

None had a burning desire to becoming business owners, but instead saw this as a way of supporting their artistic activity. Of course, in doing that, they had opportunities to learn a great deal from experience about setting up new ventures, but to do so they needed to reflect on their entrepreneurial actions and for that to happen, they needed to see themselves as entrepreneurs.

My biggest takeaways were about the stop-start nature of entrepreneurial learning regarding experimentation and reflection. The reflective process and the learning this supported was enhanced as some of the artists began to develop their entrepreneurial flair and confidence around proposition development, negotiation skills, and customer development, on their way to create a self-sustaining enterprise built around their passion, purpose and skills.

I think I’d enjoy my time on the desert island, reading and thinking about entrepreneurial learning, and taking the lessons from each of the books, although maybe I should also take a book about ‘How to build a boat…’

Cake Invest – a recipe for technology start-up success

One of the companies I’m working with, Cake Solutions, has a passion for software development and working with start-ups. Start-ups are ideas rich, cash poor, so we’ve devised a business model that works for everyone – Cake Invest is the brand, the model we call ‘The Catalyst Process’. Check out the web site, and apologies, I’m not quite in the Daniel Craig class and no Oscars shortlist this year, but maybe next year… http://www.cakesolutions.net/cake-invest.html#.UIagoIVt0gM The goal at Cake Invest is simple: help great people with great ideas build great software.

Despite a promising idea, many technology start-ups are doomed from day one and it’s often because they don’t have the right processes needed to turn technology insights into a great product. Success isn’t just about a twist of fate, timing or a game-changing new idea, start-up success can be engineered by following the right processes from both a business model and software development perspective, and that’s what we nurture at Cake.

A start-up by definition, demands innovative cutting edge solutions that fulfils the vision of the founders, and provides a competitive and commercial edge (faster, cheaper, scalable). They cannot be limited to a narrow scope of technologies, they need the right tools for the job. Cake is experienced in developing new software that is scalable, enterprise level and innovative. Cake is not limited to a specific number of technologies, our expertise is broad enabling us to choose exactly the right technology for the project.

So what’s special about how we work with start-ups? Well, it’s Cake’s start-up process and technology product development model, ‘The Catalyst Process’. The three-stage Catalyst process puts passion building great technology applications at the heart of the product innovation, but also stresses the importance of business thinking and business functions inside the same box. The Catalyst model seeks to systematically reduce risk to technical start-ups for both entrepreneurs and investors, and thereby improves the success rate of innovative technology product start-up businesses.

This three-stage process is as follows:

  • Stage One: We evaluate the opportunity, impartially determine the best technical stack and architecture using the latest and most appropriate technologies and techniques, and offer an early indication of resource requirements.
  • Stage Two: Cake’s own development team build a proof of concept model, which confirms the technical solution and provides a very basic application to begin the customer feedback process.
  • Stage Three: This stage sees the completion of the application to v1.0 and its on-going development with frequent releases. The agile development process adopted requires daily integration with our clients and demos every two weeks.

But it’s not just about the technology behind a start-up, Cake Invest provides an intensive mentoring and business support experience to help super-charge software innovators with their start-up product ideas.

Throughout the period start-ups work with Cake Invest, we provide the following support:

  • Access to a team of experienced and highly regarded software developers
  • One-on-one mentoring from start-up mentors
  • Legal support services
  • Collaborative office space in our office to work alongside the Cake team
  • Exposure to seed investors

I’ve found that out that over the course of working with Cake, participating entrepreneurs hone their business thinking alongside the technology thinking – working on product-market fit, pacing development milestones in tandem with their customer acquisition strategies, understanding their financial model and those vital cashflow dynamics.

In addition, the entrepreneurs will discuss business strategy and share lessons with some of our other start-up client ventures, while really ramping their networks – and sharing a beer, – the core emphasis is building great software, learning and the expansion of a network of peers, advisors and financiers, but it doesn’t hurt to have some fun too. We designed Cake Invest to be the start-up accelerator program we wish existed when folks in the Cake team started on their own venture.

New start-ups today need only a little funding, but they need more help and support than ever before. They need a community of inspirational technologists and business mentors who have the badges and scars, having struggled on their way to a big success, legal and accounting services that don’t cost precious cash, and opportunities to meet and pitch investors.

Besides the business and technology conversations and insights into new ideas, we’ve also learned about the folks themselves, their experiences and how they think, how they’re finding life in start-up land, the psychology of entrepreneurship. It’s early days, but experience and success to date auger well. Of course we’ve had a failure too.

At Cake, I’ve learned about agile, Scala, spring frameworks and functional programming, but most of all I’ve seen what tech entrepreneurship looks like at the coalface. We keep moving forward, opening new doors, and doing new things because we’re curious and curiosity keeps leading us down new paths. Here are my 10 thoughts and reflections after living with the Cake Invest team and the start-up folks:

1. You can start a business without first having an idea. Just go into a market and observe the gaps and the points of customer pain. In that gap or pain, you will spot an opportunity, come up with an idea, and launch a product. Don’t jump onto a bandwagon thinking you can do something better than is currently being done, find open, uncontested market space.

2. The only thing that matters in the first phase of setting up a business is taking an idea into a proof of concept, getting customers, and then getting customers to pay. This means you don’t need a logo, a website, or a finished product. You need the capability to craft your proposition into a prototype with a story. Storytelling is your key weapon when starting out, build a following, and talk with them.

3. Entrepreneurs are confident folks, but often put off what they are most afraid of – failing. Some get their heads down, work hard and build a product for 6 months, come up for air, only to realise no one wants it. They ignore the reality that the purpose of a business is to create customers. Lose that fear of failure and put it at the beginning of your journey, think about it as an experiment. Lose fast, quick and cheaply.

This is a key point. At a business’s inception, resources are limited, and the best content for a business plan is real-world data based on testing aspects of the concept. These experiments need not be complex. You want simple, iterative tests that are easily measurable and let you know whether you are winning or not.

4. Entrepreneurs are often headstrong, yet lonely, work in isolation but thrive in a community with like-minded others. Find a place to share your setbacks, failures, and successes, and create connections. Be part of a community, get connectivity, and folks will help push and pull and reshape your idea, and make it better. Look at the impressionist painters in Montmartre. The Cafe Guerbois, near Manet’s studio became the gathering spot for Monet, Renoir, Sisley, Degas and Pissaro, and the movement was born and flourished.

5. Folks who make excuses about not getting results deflect and bury their head in the sand, but typically suffer from a lack of desire. They are kid themselves, but in reality, just don’t want it bad enough. Those that want it are endlessly resourceful in building their first business. Most hurdles are mental barriers, self-created, if you want it bad enough you’ll find a work-around and make it happen. Go back, reinvent, learn and adjust. As Edison once said, ‘I’ve not succeeded yet, because I’ve not failed enough’.

6. The most important skill for an entrepreneur is salesmanship. I’m not talking about the slick gift-of-the-gab salesman with false charm and perfect white teeth, I’m talking about people who can actually ask for money. The question ‘Would you pay for this?’ is a surprisingly difficult questions for entrepreneurs to ask, but you get feedback – you either get the deal and customers pay, or what you need to get customers’ wallets open in the future.

7. Your social and educational background, age, gender, race, and geographic location have nothing to do with being successful. I’ve worked with circus performers, French-speaking body paint artists, dog walkers, chemists, engineers, shy Serbian developers and students. All of them built their own business model and launched a company. The most successful to date was a student from Sheffield working from his parents’ garage.

8. Picking a business you are passionate about is not as important as being passionate about the process of building a business. Along with passion, it’s about graft. There’s no doubt technology entrepreneurship is becoming its own kind of celebrity – the story of Facebook was portrayed in The Social Network – but the reality is as Eric Reis said: ‘Entrepreneurship is not cool, it’s not sexy and it’s totally uncomfortable. It’s boring and gruelling, and that part is never part of the movie.’

9. Think big, and then double it, then you can go anywhere and do anything. The concept of the ‘Big Hairy, Audacious Goal’ is vital to unleash your thinking. Once you’ve made the decision to start, you’ll see dozens of new opportunities open up that never existed when you were standing still. The hardest decision is the decision to get started. Think and create your business model and how to monetize, don’t spend time working on detail that quickly becomes irrelevant as you find our what the market needs, not what you think it wants.

10. Quit talking, start doing – once your mind-set is reprogrammed to do stuff, you become unstoppable. You lose the uncertainty and reticence that ‘I don’t know how to do that’, this becomes irrelevant – I firmly believe that anyone who wants it bad enough can do this. They can work out what to do starting from scratch. Learn from others, borrow successful models and add some disruptive thinking – for example, look at iTunes and the Bit Vendor Model – how can you take this model into an existing market and create new value?

A start-up is an experiment, we need technology development practices geared to the start-up context of extreme uncertainty. The Cake approach maximises the chances of success, building a great product with enough features that increase the odds customers will want it. It avoids the handing over of a big cash sum day one and hoping a successful product will emerge.

Focusing on the user experience enables the investor to measure conversion. Everyone is aligned, collecting user metrics means investment decisions are based on measured user behaviour, and support the ‘pay as you go’ approach. Making incremental investment, proportionate to projected customer value based on releasing early, releasing often manages the technology and financial risk in tandem.

More technology start-ups fail from a lack of customers than from a failure of the technology or product. The agile investor model starts with lots of small experiences, filtering out failure and expanding investment upon success. It means stop selling start listening to your target customers – chase customers not sales revenue. It also enables the search for the right business model. At Cake I’ve found that serendipity happens, and that innovation is anything that isn’t business as usual.