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Book review: Survival to Thrival

December 12, 2019

When your startup is starting to grow from a small team to 50, 150 or even 450 people in a short period of time it’s not the same company anymore. From mere survival it’s time to start thriving with its own set of challenges.

This book is a practical and rather hands-on guide for founders, investors and executives that are in the middle of enterprise startup growth. What used to work before starts to slow things down or just break things down.

When the company grows its people need to change, shift roles, unlearn and learn new skills, and sometimes just leave if it’s too hard. None of this is obvious or easy yet it’s crucial for success.

A company CEO needs to be able to zoom between micro, macro and everything in between while having a mindset of confident optimism and total paranoia at the same time. In the beginning the CEO resembles Captain America / Wonder Woman type of superhero that is all over the place and totally hands-on.

The next phase is Captain America and the Avengers where a team of superheroes band together to tackle the growth issues while everyone have their special superpowers. The third unlearning and transition phase for a CEO is to become the Professor X and the X-Men where the focus is on the next generation of talent and the overall big picture.

Corporate types coming to startup leadership roles might prefer to build their startup using sequencing that is linear. Unfortunately growing a company is not a straight- forward process and too much of a single thing usually causes a new set of consequences that drain resources, focus and execution at the wrong time.

An open-ended spiral is another way to see the scaling challenges with just right type of balancing act. There will always be more bottlenecks but they are the necessary pain points of growth, and overdoing may be more harmful than the trial-and-error process of finding a proper balance.

The book gives tips how to swim in lanes (hit and plan milestones) and be aware of huge signal generation that happens in executive and board functions per default. Doing, not doing and just being are each a signal to the organisation and set examples. Similarly being a ruthless decision-maker but yet sensitive of the consequences on people of these decisions is something of a must. The company must come first but not at the expense of the people who are making it to happen.

How to be motivational and emphatic as a CEO? You’re also all alone and under assault from all directions ranging from customers, board, market and the team. This is the everyday struggle of never comfortable life of a growth company CEO.

When the company grows the previous superheroes need to unlearn their previous working modes and become super-leaders for the new superheroes. This is a mental battle where ego, emotions and self-perception are at test. For someone used to do things it’s hard to let others take care of the details and re-define one’s worth for the organisation. Yet, this is exactly what is needed when the headcount becomes too big for the old organisational ways to work. Each transition point from survival to growth and finally to scale have their own peculiarities. Challenges are different whether you’re a business, engineering or financial type of a leader.

What happens when a previous superhero becomes a mere mortal along the growth of the company? Sometimes the best but a hard choice is to let some people go if they cannot unlearn they previous roles and accept new ones. Company culture becomes a crucial success factor the bigger the startup becomes. Avoiding the bozo creep by hiring too fast just to hit the numbers is as important as having a clear, consistent and strong culture where people know where their stand and what is expected of them.

Overall, the book’s message is that growth affects everyone, and everybody needs to change or be changed. Nobody can expect to have a stable or consistent career path when the requirements of the growth company change yearly if not quarterly. Unlearning becomes even more important than learning new things. Buckle up – there’s turbulence ahead.

Book review: Range

September 26, 2019

Our world is not very kind and predictable. It is full of wicked problems and outcomes where causation may not be observable for us. This makes learning from our actions difficult. There are simply too many variables and time delays may be too long.

Yet, one of our greatest gifts is our ability to adapt to new circumstances and situations. We do not need predetermined models and patterns to interact with our surroundings.

On the other hand our tech is leapfrogging in the field of pattern recognition. Machine learning with proper data can already outperform humans in narrow specialised fields. Some sports and games are examples of kind domains where the rules are clear and the surroundings are predictable.

We are using pattern recognition in our learning. Chunking data together makes our actions faster and easier no matter whether we play golf, study languages or drive a car. An amateur can be distinguished from a master by the amount of practice. The sample size is larger, or different.

Hyper-specialisation has its dangers. When reaching into depths the field of view often narrows. It’s getting harder to see the inter-linkages and solve wicked problems that require different approaches. That’s why we see outsiders solving challenges that industry insiders consider insurmountable. 

There is a tendency to prefer quick specialisation and stick to ones trade. In a way one is required to reduce uncertainty and have the answers before actually diving in. This is prevalent in science as well as other domains like business and education.

Data points are easy to understand and measure. Quantifiability gives a sense of control and security. Common sense and reasoning are fuzzier and have less contrast. They require value judgement and range of experience to be appreciated.

Range refers to wide and broad reach. Seeing connections and similar patterns in different fields help to solve problems and excel in new areas or even in one’s own field of expertise.

Very successful individuals tend to have multiple interests and activities outside of their main focus. Darwin and Einstein are good examples but you don’t need to be a genius or polymath to reap the benefits. A curious mind finds always unsolved puzzles and areas to master.

The path to great discoveries and success is not always paved with grit and specialisation. Generalist may be slower in life to bloom but more weird and wicked their world become the better they tend to perform compared to specialist. They simply have more varied repertoire of experience and data points to match for the new circumstances.

Everybody’s path is different and specialisation is just one way to reach to your destination.

A Finnish review published in Talouselämä.

Book review: Loops

September 9, 2019

There are two ways to build a product. Either you start with a solution in mind and launch it to the market or you start with a group of people with a problem and then solve it for them.

The latter approach uses market/product –fit as J Cornelius flips the regular expression to emphasize the importance of focusing on actual needs in the market. Problem solving venturing is the older way of doing things prior the Internet-age but it takes some adjusting and convincing to switch to the problem-seeking way of starting companies.

Loops is about the iterative processes of human-centered business design where you turn ideas into reality with a systematic approach.

After having an idea it’s good to validate whether it’s actually something that is inevitable, solvable, recognisable and verifiable. An idea is just a hunch before it is validated with actual market research and responses.

First you have to understand the needs, wants and fears of your customers.

Successful products have found the right balance and excellence between customer centricity, product quality and operational efficiency with the respective attributes of responsiveness, differentiation and competence. Usually mastering all of them makes you the category leader and the biggest revenue generator in the industry.

The problem discovery process starts with a problem safari. You hunt the market for information by any means necessary and continue by building a research framework. The usual persona creation can be replaced by using actors (who are they) and roles (what group they belong in) based on perceived user pain points.

It takes empathy to recognise and map users thoughts, pains and gains to visualise the problem area. Understanding users decision making require often in person interviews in order to get the psychographics and demographics right.

Prototyping is to validate your approach to solving the market need in a right way and not to green light your urge to build a certain solution. Therefore the focus is on solution design instead of product design. The process can start from user journey map and continue in creating wireframes, paper prototypes and finally by building digital prototypes.

The process goes in loops and you refine the prototype till it starts to resemble in detail the actual final end product based on testing and user feedback. A hypothesis canvas helps to structure assumptions and hypothesis with experiments and results to validate your hunches.

The final stages of Loops are building a brand and products with speed and scale. Branding is needed for consistency and it cannot be established without the understanding gained in the prior stages.

The best minimum viable products are not just viable but they capture already aspects of the full product: useful, usable and delightful. A better way to describe MVP would be to call it a minimum delightful product in order not to forget that products should be fun and enjoyable, too?

Loops is a practical guide to discover problems worth solving and building your product in steps. The iterative process uses common tested lean and agile tools which should make it easy to start looping in no time.

Book review: Startup Scaleup Screwup

September 1, 2019

Startups are fast learning laboratories where too many variables are at work in any given moment. The failure rate is high but success will be more favourable for those that use some systematic methods and processes along the way.

Serial entrepreneur Jurgen Appelo has put together a practical guide that gives you the latest tools and practical knowledge for a high growth venture. The book is packed with agile and lean community techniques and best practices.

You can build your business from an idea onwards by following the ten stages of growth. These stages are independent for each business model so in a larger company there can be more than just one business lifecycle simultaneously in different stages of maturity.

Initiation stage is the stating point where you have an idea that you develop further.

In Expedition stage you start to validate the hypothesis and formulate the business into an entity with bootstrap funding. Customer discovery and minimum viable product methods become relevant here in order to confirm a possible problem/solution fit.

Formation stage makes things official and it’s the time for a full time commitment for founders and initial team. Shareholder agreements, compensations and other growth structures become apparent. Vision/founder fit has been found and your team is ready to commit for the long journey.

Validation stage is the beginning for the product/market fit validation that usually takes minimum of three years. It’s the make it or break it for the next stages. Business model assumptions need to be validated and everything is geared towards proper traction.

Stabilation stage comes after the product/market fit issue has been somewhat solved. Scale too early and you may fail due to lack of traction. Scale too late and you may miss the market. Business/market fit becomes the focus and it’s more about the various business relationships around the product itself. Here the idea is fix things that did not scale before.

Acceleration stage defines your venture as a scaleup after the startup phase. Customer creation becomes the theme and it’s time to execute since things are working now after experimentation. Focus is on revenue and market share growth and trying to outsmart copycats and other competitors. As the organisation increases its size the complexity require more attention and different methods of management.

Crystallisation stage makes running the business more a “biz as usual” routine and it’s a sign of lifecycle maturity. This can take the form of an IPO or M&A trade sale for the founders.

Expansion stage is about trying to make most of the opportunity left and keeping the business model fresh with new initiatives and renewals.

Conservation stage is the cash cow moment where the end of the line is at sight.

Finish stage ends the business model and decisions need to be made about its existence.

The book is beefed up with interviews from various startup ecosystem players around the Northern Europe. These insights give a fresh and authentic touch for the multitude of ways to build and experience the startup growth.

Startup, Scaleup, Screwup is the best startup handbook I have seen for a long time.