Jurgen Appelo – TALKS WITH PETRI
Jurgen Appelo talks about failing to find a product/market fit, how you pivot, adapt and move on in turmoil as well as shifting up to an experience mindset. He also warns about dangers in Canada.
Jurgen Appelo calls himself a creative networker. But sometimes he’s a writer, speaker, trainer, entrepreneur, illustrator, manager, blogger, reader, dreamer, leader, freethinker, or… Dutch guy. Inc.com has called him a Top 50 Leadership Expert and a Top 100 Leadership Speaker. Since 2008, Jurgen writes a popular blog at NOOP.NL, offering ideas on the creative economy, agile management, organizational change, and personal development. He is the author of the book Management 3.0, which describes the role of the manager in agile organizations; How to Change the World, which describes a supermodel for change management; Managing for Happiness, which offers you practical ideas to engage workers, improve work, and delight clients; and most recently, Startup, Scaleup, Screwup, which contains 50% inspiring stories and 50% practices to follow and dives into the major topics that business leaders and entrepreneurs are confronted with throughout the business lifecycle.
(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)
Petri: Hey Jurgen! How are you doing in Rotterdam?
Jurgen: Hey Petri. I am doing well here. Thank you!
Petri: You started the corona experience a bit earlier than others. Last year you were on a summer holiday and a lot of things happened.
Petri: Can you explain how this drama started and then just like the Corona thing it never ended? I guess it’s still going on, but maybe you can explain what’s going on?
Jurgen: You’re well-informed. Last year, I went on a big vacation to Canada that was to celebrate my 50th birthday. I look like 23, of course, but I’m actually 50 years old. I invited friends and family to join me on parts of that trip because it was two months that I was in Canada touring all over the Eastern part of the country.
And right at the beginning, I think that at the end of the first week I had my first accident. I fell at the end of a hike in a forest on my face. I broke my teeth, I tore my lip. I broke a finger and it was a ghastly experience. I can tell you but I decided in the car on the way to the hospital, no, I’m not going back home, this is my vacation. I stay here, whatever happens, they can’t kick me out.
Petri: How many weeks were you in your experience?
Jurgen: That was the end of the first week and I still had eight weeks ago.
Petri: Did you already turn 50 or it was like, okay, this was still in the first 50 years?
Jurgen: No, I turned 50 2 weeks later with my hand in the cast. So that was the first accident. And then I had another one later, I broke a toe at the end of the vacation.
Petri: But you resisted. You were just going on, no turning back now!
Jurgen: Yeah, exactly. The funny thing is I had been reading about Canada, of course, upfront and they warned me about the bears and the other dangers in the country. But nobody warned me about the rocks. They are much more dangerous apparently.
Petri: I bet they are fighting back.
Jurgen: Right. Exactly. Well, Canada was not able to kick me out and I had a super enjoyable vacation. But that was just two of the things that happened to me in 2019. I also had a bit of a problem with my startup that sort of failed temporarily last year. I say you only fail when you give up and I haven’t given up. It’s more or less in a hibernation state and you could say at this moment and ready to reboot. I lost a lot of money on that. And other things happened. I fell off my bike in Brussels and I fell while running and I had all these accidents all year long. Basically, I prepared for 2020 when the rest of the world had entered into a state of suffering.
Petri: I wonder what you had been eating in Canada if you haven’t been to falling in all the possible places and ways before.
Jurgen: To be honest, there’s a lot of french fries in Canada, a lot of fatty food I was not very impressed with. I was impressed with the scenery and impressed with the people. Very nice. I was not impressed with Canadian cuisine. There’s a reason why there are no Canadian restaurants in the world because why bother.
Petri: You’ve been writing many books and it seems that at least every 10 years you write a book about the experience for you’ve been learning that the previous decade and the one which came out last year, it was called Startup, Scaleup, Screwup. And the company you were just describing, Agility Scales, that was pretty much on the works while you were writing the book. So what happened? So is this just like another pivot or can you walk through a bit how it gets started and what about the reasons that you needed to sack the team and, and put the company in hibernation?
Jurgen: The idea for that company was, and still is, that I believe we need more gamification, more intrinsic motivation to achieve organisational change. I was inspired by all these apps that we have on our phones that use gamification to motivate us to change things in our personal lives like mindfulness apps and I use running apps and, and all these personal apps that we use.
And I thought, okay, how about extending that to organisations? We want people to change behaviours on teams and in their companies to either be more agile or to initiate a digital transformation or whatever. The idea was let’s try gamification with an app. I hired a team and put a lot of work in it, put a lot of effort in it. I did crowdfunding and everything.
And in the meantime, I wrote a book Startup, Scaleup, Screwup, which was fun. There’s no better way to learn something than to write a book about it is what authors often say. I did a lot of research into starting up and preparing to scale up, but things didn’t work out. That’s something you know as a startup founder that there is only a small chance of succeeding and you start against all odds believing that you are the one who will beat the odds. Of course, because if founders we’re not delusional like that, nobody would start a new company. We all believe that we are the ones who are going to beat the odds and apparently, obviously I didn’t. Things failed and didn’t work out.
We did not achieve product/market fit. People said nice idea, a nice app, but they were not using it. And the whole point of the app is that people have to use it, of course. While we ran out of money, I said, okay, I need time to rethink this whole thing. I had to say goodbye to the team. They fully understood that we had failed together. I had to focus on other ways of earning my daily income. And in the meantime, rethink the idea for Agility Scales. The company still exists. It just doesn’t do anything at the moment but everyone still has their shares and everything.
And that’s perfectly normal and this happens all the time that startups fail and they flounder a bit and then they reboot with another way of trying to achieve the same thing. And that would be a pivot if you try it again but differently. And I’m in the middle of that.
Petri: Just a bit of tongue in cheek, so did you not follow your own advice or the advice in the book is not correct or it is just so damn hard to make all things work for a product/ market fit?
Jurgen: Well, it’s damn hard, indeed. And nobody says that a book will give you a guarantee of succeeding if only that were the case. You can give a tremendous amount of tips and suggestions and follow them yourself, but that might increase your odds a little bit. But still, there’s a huge chance of failing because there are so many odds against you.
Things happen in the environment that nobody or very few people predicted as we see this year with the coronavirus crisis. There were very few people who predicted that but everyone else has to suffer the consequences. These things are just part of business life.
Petri: Did you follow the design thinking and lean startup methods in your own development in the company?
Jurgen: Yes. At least, to the extent that we could but never enough as it turns out later. The whole idea of design thinking on startup is that you need to have short feedback cycles with your customers and you show them experiments and prototypes and see how they respond to what you come up with.
And we did that well in the sense that we had continuous releases. And, we had so many interviews, so many conversations with our early users. That was good. What we did not do well was the idea of just observing how people behave in their natural environment.
Just seeing what their problems are and where your solution could be used to overcome certain obstacles. That is what we did not do. We basically had a backlog of suggestions and requests from users and then we implement the suggestions and then they were not using the features. That’s super frustrating when people ask you for stuff and you make it, and then they’re not using it because it turns out not to be motivating for them.
In hindsight, we listened too much to what people wanted and we were not focused enough on what they needed given the environment in which they worked. Because perhaps an app was not an obvious choice. Maybe we should have looked better at how people work with each other in their environments.
And maybe we could have come to the conclusion that using an app with team members that would not be an obvious way to go about it given what we wanted to achieve. We were stuck in this direction of having an app and trying to make that work and then soliciting for ideas. Lots of people had lots of great suggestions and then we implemented them and then they didn’t work.
We did well in terms of feedback cycle and getting input, but we did not do it well in terms of just looking, just observing people. I think that’s not just for me but for many other people a great learning opportunity that you sometimes just need to shut out the conversations and just use your eyes and observe what is happening here.
Petri: Sounds to me that you were having some assumptions. One of the assumptions was that you need an app. And from there you started to take the input.
Petri: Another way would have been to do it by you just go in there like Kadri Tuisk, just a few episodes back, was talking about that she was in the 500 Startups at the time, in the West Coast, and she just went to a lot of offices. Sometimes she was pretending to be a co-worker or with some other cover story. She was just observing people what they were doing and that was a way to get a lot of information. And not having that it needs to be an app. Maybe it could be a desktop thing or something else it would work. But it’s hard, isn’t it? It’s quite hard to actually infiltrate offices and go to the people and knock on the doors and say, Hey, can I come in? I don’t bother you but I will stare at you intensively for hours.
Jurgen: Sure. Yeah. Everything is hard. Entrepreneurship is hard. Nobody ever said that it was easy, it’s fun and it’s exciting. And because it is difficult, if it was easy, it would be boring. It’s something that is fun to try and fun to do, but indeed, as you said some avenues that might be the better ones could be the hardest, and then it’s easy to take another road that seems easier.
But that actually gives you false information or false positives, but you thought you could get the same information only in an easier way. In hindsight, everything is obvious. They call that retrospective coherence in complexity science terms. Looking back, everything is always obvious, but then when you’re in the middle of things, things are not obvious.
Even with six, seven people on a team, you make decisions together which in hindsight you think, well, that was stupid. It was totally the wrong thing. We had six, seven smart people on team we discussed for hours and none of us saw this and saw this coming. You feel like an idiot all the time as an entrepreneur.
Petri: That’s a great learning experience as well, and I think this is the way to also to succeed, being humble and always open to the signals. And they are usually not the strong signals. It’s like weak signals coming. And another thing, what you say is that you were listening to a lot of signals and wishes from the customers.
But I think there’s a difference that if you ask would you like to have this or would you buy to get this. A huge difference there, it’s easy to say that, yeah, probably I would like that thing, but to hand over the money and say that I desperately need this thing. Is there a way to actually get to the latter one?
When you’re testing things that could you somehow get the sort of revealed preferences from people in a way that this is more actionable and they have to commit a bit more to the whatever they’re requesting?
Jurgen: Well, I wish I had the perfect answer to that. And, I don’t. I realised and I wrote a blog post about that that something we did wrong was we had something small that didn’t work. And, based on our own assumptions and our ideas and some input from customers and then we added things in the hope that that would make the app work. Usually suggestions from users and then it still didn’t work.
And then we kept adding things in the hope that one of these new things would finally make things work. And then ultimately we had a big thing that didn’t work. You keep adding stuff hoping the next feature is going to be the one that’s going to be the killer feature that everyone was waiting for.
And then, nope. Nope. This one didn’t do it. Nope. This one didn’t do it. That’s the wrong approach, evidently. I learned from that you just have to keep trying things until you have one thing small that works and only when you have one thing small that works, then start adding stuff, making it bit bigger while keeping it working.
And as long as you have not something small that works, don’t even bother adding stuff. You should just replace stuff, throw things out and replace with something else until you have something small that works.
Petri: In Startup, Scaleup, Screwup you also state that lean start method has things which are missing in the beginning. And then the design thinking it’s cutting corners at the end and you have some ideas on how to improve this process. And you have your own name for that as well. Can you elaborate a bit about that?
Jurgen: Sure. Well, first of all, the way you phrase the question implies that lean startup and design thinking have a beginning and an end. And, I would disagree with that because they are iterative approaches. There’s not really a beginning and an end. They are circles, basically iterative approaches of things that you would need to do to make things work, to run experiments and try things out and show prototypes.
But indeed there’s stuff missing, in my opinion, in the famous picture that says build, measure, learn. It starts with “build”. Well, what do you build? Where do the ideas come from? The lean startupers say get out of the building, go and see where your customers are trying to get their jobs done and observe what they do.
Same as design thinkers do and they call it empathising. But it’s not in the picture. The picture just has build, measure, learn. I think half is missing, which is that whole part of design thinking is great at. Design thinking says empathise and then synthesise and then come up with ideas, hypothesise.
Or they sometimes they do use different words like ideate whatever. There are different design thinking models but that’s great. Design thinking models explicitly mention those steps from getting out of the building and empathising with customers. But then they take a shortcut at the end, which is the learn thing in the startup build, measure, learn.
In design thinking that is not specifically mentioned that step. It’s sort of meant implicitly, but I appreciate that it is an explicit step in the startup. What I did, I merged the ideas. I said, well, it’s 90-95% the same thing that they’re talking about, only they come from different parts of the world.
Lean startup is obviously from Silicon Valley and the startup scene with Eric Reese and Steve Blank and other famous people. Then others came up with design thinking stuff. It came more from the corporate world where companies want to create new products that would be innovative and successful.
And they turned that into something defined as design thinking, closely related to service design, which is very similar. They mean the same thing. An iterative process, lots of prototypes, minimal viable products, look at how people behave. What is their job to be done? And then you run tests and experiments. All the same thing.
I turned that into a new picture. I said, well, I don’t like the word circle because that makes it a bit like a discrete step by step thing, which innovation isn’t. I know from experience that it is a messy process. It is anarchy. You can do things of various steps on the same day just depending on constraints and which people are available, et cetera. In the morning, you could be observing customers. In the afternoon, you could be checking the results of the latest test, and so on. I said, okay, I’m going to call it vortex because I found that as a synonym for circle.
And I thought that’s a great word. Vortex is nonlinear dynamics. That sounds powerful, turbines, whirlwinds and tornadoes. Those are vortexes. So vortex is a better word. I called it the innovation vortex.
I mean exactly the same thing as design thinking and lean startup. I have no disagreements with what the methods are meant to be. I just don’t really like the pictures that they usually come up with. And in particular, the design thinking pictures, they often look very sequential with five steps after each other. And that’s just very wrong because then it looks like a waterfall process and that’s not what you want.
Petri: What comes after lean and agile?
Jurgen: What comes after lean and agile? Yeah. That’s, that’s a question that people ask me sometimes. I’ve always said that maybe at some point we’re not going to call it agile anymore, but it’s…
Petri: …business as usual, you mean?
Jurgen: Yeah. It’s just business as usual. Yeah. It’s just the way we run things nowadays. Like fish have no word for water. That’s a part of life.
There’s no way back. A few people use the word cyber nowadays. That’s a word we use in the eighties for cyberspace because that was special. But now the Internet is everywhere. It doesn’t have the word cyber around us anymore. We have it now that thing that we predicted in the eighties.
I think with agile is the same thing. The word might go away. But, I do think, and that’s a realisation I had just recently in the last couple of weeks, the next problem to solve is the holistic experience of users and customers. What I mean by that is we made a switch in agile and lean thinking from projects to products, which is a good thing. You don’t hand off something to another department when you’re done or you are responsible for a product across its lifetime from start to end. End-to-end responsibility is something that everyone is being taught in the agile world, but the word product is everywhere.
Product backlog, product roadmap, product owner, et cetera. Everything is about the product. Actually, the product is only part of the entire experience of a user and a customer. They have more experiences, touchpoints, with the company. I’ve been asking this week on Twitter and Facebook of my followers: do you have examples of products that are great, but overall the experience sucked after all? And then usually it is where customer service disappoints you or marketing is a huge pain or whatever. There are reasons for people quitting their association with companies or not using products anymore. Even though the products are great, they just don’t like the business, the company as a whole, because of other parts in the organisation. Vice versa is also possible. I had people say that some products were mediocre at best, but still, they love the company as a whole, because of its philosophy, of its purpose, of great customer service or the marketing is awesome or they add free lifetime upgrades or whatever.
We have to realise that the product is just one part of the entire experience that we offer to customers and users. And even when we switch from project to product, we are still sub-optimising. We are still basically handing off something and say, well, this is the product, good luck with it. This is what we are responsible for. All the rest, service, marketing, finance, et cetera, you need to be with other people. That’s not our stuff. Well ,then that could lead to still dysfunctional results in the company. For the customer, for me, it doesn’t matter to me, which part of the experience is product and which part is service and which part is marketing. It’s all one company that I am paying to get my job done. I think that’s the next step that we should make in agile.
Petri: Have you already coined a term like experience design? You start from the experience and then you build that first and then you put the other blocks in there, like the physical or the intangible digital products in there and the solutions. But you start with the feeling.
Jurgen: Well, the word journey is often used by marketers, the user journey.
Petri: But that has an end and beginning already, it’s from A to B.
Jurgen: Yes. The beginning is becoming aware that a company exists without paying them yet, but there’s already a relationship. That’s where your journey starts. You arrive at the website or you download an app from Play Store or App Store or whatever. The journey starts off before there is even a customer relationship. It starts earlier. And the journey ends when the customer or the user says, okay, that’s done. I don’t need this product anymore. Or they don’t like it anymore. Then the journey is over. That entire journey from beginning to end that is one experience. Now, the word user-experience sadly is already used for something smaller, which is the actual interaction of a user with the product. But I think a bit more holistically here.
The word practice of journey mapping is well known in service design and design thinking. We need to do more of that. There’s something that I myself also need to do more of. To give you a very practical example. I have been impacted by the coronacrisis myself.
I did a lot of speaking engagements in the past. There’re so many invites I got that. I could accept only half, maybe less. And that maybe makes you a bit arrogant at some point. You say, well, this is the product that I have take it or leave it. I have others if you don’t like it.
I was so busy I turned it into something that was somewhat standard. This is the offering that I have. I’m happy to come over, but I cannot customise endlessly because I have no time for that. But now, I don’t have that luxury anymore. The world has changed. There are basically almost no events.
I am doing other things now, but I am trying to customise the experience more. Last week I was in Southern Germany and the organisers also had to adapt their approach because normally they would have invited hundreds of people to an event location. But of course, that didn’t happen. They just invited me and a couple of other speakers and they did live-streaming from a studio. That was awesome. That was a new experience for me.
Petri: And it looked awesome! There are some tweets the audience can check in your Twitter. He was there, an impressive setup!
Jurgen: That was super cool. It was also for me a new experience. It is good for organisers that they come up with new ways of organising it because people still want events. They just cannot be at traditional events anymore. But that makes me rethink my role as a speaker.
Instead of offering something that is a standard package, well-defined, these are the benefits that I offer. I have to be more of an interactive element in that experience and just check with the organiser. Okay. What is the experience that you’re trying to offer to your customers and what can be my contribution here?
That’s exciting. I’m trying to apply it to myself as well. To get rid of the product mindset and then switch to a more experience mindset.
Petri: I think this is actually a really good opportunity now because we cannot do it live and the live also sets some limits. You need to be somewhere in the stage and there’s a lot of people, not everybody can talk at the same time, ask questions. It doesn’t really work. Now we have the digital ways of doing things. We can take a lot of questions in. People can join from their own side of the world and speak directly and even have a video picture there as well. This is a great opportunity to enlarge the circle in a way to make it more engaging.
Obviously, the tools are not exactly there yet. We already have some ideas about how we can get more people involved in these activities. I think the live is going to be the new gold in a way that people want to have this like previously before in the physical but really interactive sessions, even with their peers.
Jurgen: Yeah, for sure. There will be a lot of innovation. Never waste a good crisis is an old saying. It’s cliche, but it’s true. Event organizers and speakers and others are scrambling to come up with new ways of solving people’s problems because the needs are still there.
Companies still want to transform or they have to transform now more than ever, and they need some help, but traditional conferences is not an option at this moment. What else can we do? It’s a great moment to live actually. It’s difficult from a financial perspective for some of us, but it is exciting that some of this disruption is taking place and we have to figure out our own role in that.
Petri: Some six months ago or last year, you needed to let the team go. And you were like, okay, the company goes to hibernation and then corona hit. But that was a new opportunity for you as well. You started to actually double down on the things you were already building. You had a following. You had a business model going on for the last decade.
And I think now you’ve been starting to get traction as well. So how have you been adapting and pivoting to the new model? Can you explain a bit, how do you build a community and how do you see the future?
Jurgen: What I’m trying not to do is something that I have never done before because I don’t like it. And that’s coaching and consultancy. I am in awe of people who do coaching and consultancy because they have a very important job. But it never resonated with me. I have always said tongue in cheek way I’m more interested in my own problems and other people’s problems that are much more interesting to solve.
Petri: Much more personal!
Jurgen: Exactly. Yes. I have always tried to come up with other ways of generating revenue while working with coaches and consultants who are doing an amazing job and maybe helping them to get their jobs done.
So that’s why I have created workshops and workshop licensing successfully. And I still do that with my new Shiftup brand. I did that with Management 3.0 in the last 10 years. That company is still going strong. It’s amazing to see what the team is doing but I’m not directly involved anymore because I just wanted something else.
And so I started a new brand called Shiftup. Also doing licensing there, but also doing webinars, for example. Because I wanted to try something new. A new format, a new approach, at least new to me, of course, webinars already existed. Just this week, for example, I did a webinar with live streaming on Facebook and that was super cool.
I will definitely try more things there and part of my new business is that I’m trying to aim for membership because I believe that membership of the community with exclusive access to certain types of content, to my time, to each other’s time, are the benefits some people, a portion of users are willing to pay for. I am a member of several other communities because apparently, I find it beneficial to have that exclusive access. I pay for that because it adds something to what I already can find for free. There’s a ton of stuff available for free on the Internet, of course.
What is most precious now is people’s time. And that means that needs to be charged for at some point if you want access to somebody else’s time. You cannot just demand that for free that somehow someway that needs to come with payment. And that applies to coaches and consultants.
That also applies to me. I’m trying to do that with a different business model, which is membership and that is taking off. It’s not like my income from speaking a couple of years ago, but it looks good. I’m going to run many more experiments in that area.
Petri: For the book, Startup, Scaleup, Screwup, you were interviewing a lot of people. In the book, there’re a lot of stories as well. Can you describe some of the stories? Maybe they’re not even in the book or something, which is memorable after two years after writing the book and hearing the stories. What is really well done in the Nordics and Northern Europe considering other places and something to the mention and maybe give some tips for entrepreneurs building their company at the moment?
Jurgen: First of all, I suggested to the publisher that I wanted to do interviews with European startups and scaleups because there are plenty of books on the market for startups, and they usually come up with the examples of Silicon Valley. It would be a bit too expensive for me to travel up and down to Silicon Valley all the time, me living in Rotterdam, the Netherlands.
Then it was Brussels in Belgium. But also because I think there are lots of companies that we can be proud of here in Europe. So I said, let’s reach out to my friends. I have people that I know everywhere in Europe because of all my travels. My followers eagerly invited me when I asked them to come to their offices.
I ended up at Spotify in Stockholm. Booking.com in Amsterdam and plenty of other organizations. What’s cool is, maybe not that they are so fascinating in their own right but that everyone struggles with the same problems.
It doesn’t matter which company you come to. It’s like, Oh, they have exactly the same problems that I have only at a much bigger scale.
Petri: Somehow that’s comforting to know.
Jurgen: Yes, it is comforting, but still they do some things, a few things really well, and that then stands out. Like I was at N26 in Berlin. The company that does payments, a mobile bank. They had a super cool way of running experiments. They had virtualised the entire technical architecture, and it was for then much easier to run experiments with new software than it was for a traditional bank, which is exactly the reason why they were able to grow so fast. Because they were able to try things out without harming the existing infrastructure and platform that was already in place for a couple of decades. They had no legacy to protect that gave them an advantage over traditional banks. That was super cool to watch.
Petri: A quick question. Did that come for them out of the necessity of scarcity or some other constraints or was it something they were building on purpose from the beginning?
Jurgen: I think they were building it from the beginning. I’m not sure, but they are very smart people. Patrick, the CIO I spoke with, I’ve known him for a while, and he was already in the agile community before I was there. He knew the principles of what it means to be in an agile business.
They knew what they were doing. It was not like they stumbled on it by accident. I’m pretty sure. I was in Tallinn at Pipedrive and TransferWise. TransferWise is a tool that I use myself super convenient for people in need to do financial transactions across the world.
And the idea is very simple, but implementation is quite a challenge for them. The nightmarish part of their business is all the interactions that they have with local governments or local compliance because they deal with financial systems in many countries in the world.
And they need a local player who knows the local way of sending and receiving money and then virtualise their own system on top of that. Very fascinating to talk about the issues that they ran into.
Petri: Also how they started their business. They were studying in London and they needed to send money over and that’s how it started. There are some podcasts where their story has been told. I really can recommend it. It’s really fascinating. This is the typical way that the problem finds the founders and not the other way around.
Jurgen: Yeah, exactly. One that I should mention is one from Finland. I was at Rovio, of Angry Birds fame. What was the most interesting there in my opinion or from my perspective, at least, was this whole idea, a concept of having lots of ideas for games, but only a few ultimately make it to become a successful game.
And they have like the whole startup world that exists within the ecosystem of Rovio itself. Lots of employees and people come up with ideas and then they run experiments and then they go through a number of stages where more and more drop out until they have some that really work. And then they have trials and beta testers, et cetera. I don’t know the percentages of the top of my head, but maybe out of all the ideas that they have for games, maybe only 10% ultimately make it onto the app stores. And then only a small percentage of that actually is able to make money. Because it’s like with movies and music, there’s a small percentage that has a high return on investment and that pays for the entire business.
The other 95% or whatever is either losing money or just barely profitable. I saw that as a mini-ecosystem that reflects how the whole startup world is working. Only the interesting thing is much faster because they have these turn around times, these cycle times, that are just a couple of years that whole cycle of startups, scale-ups, screwups that I described in my book for products. At games company like Rovio they have that in just sometimes a few months or not more than a year or two. And then the game is done. It’s over. Nobody wants to play it anymore because people want the next game.
Petri: The same is happening also in Supercell that has been hugely successful. And, also with Rovio’s beginnings, I think Angry Birds was plus 50th game. So 50 trials before you’ll get something that really works and you obviously are in dire straits before that. We should somehow more emphasise that failure is the normal thing. That’s sort of the normal and it’s exceptional to succeed and it’s so difficult to remember with biases on all those successes which are really rare.
Jurgen: Exactly. And thank you for the encouraging words, Petri. That makes me feel, at least, not embarrassed. It’s part of the business and many entrepreneurs, as I said, have to be delusional thinking that they will be the ones who will beat the odds while there is a huge chance that they won’t. But we have to not feel embarrassed about not having made it, not having reached that pinnacle of success. Okay. I’ll try again with another idea. I don’t really feel embarrassed. I feel pity. I sometimes feel stupid for having made wrong decisions, maybe in hindsight.
But as I said, that’s always obvious in hindsight, but never when you’re in the middle of things. But you should never feel embarrassed for having tried and not having succeeded. As long as you learned what you did wrong, you can do better next time. And they did that with Rovio and took them 50 iterations, apparently, before they stumble upon on Angry Birds. I hope it doesn’t take me 50 iterations, to be honest, for my next success. At least it is okay to fail nine out of 10 times.
Petri: Actually, the statistics are on your side. It’s a myth or it’s that confirmation bias for who succeeded that when you were young, you hit gold. It’s when you’re in your thirties, forties, fifties, and you have a lot of experience it’s more likely that you will actually make it big.
Jurgen: That makes a lot of sense.
Petri: It makes sense because there’s pattern recognition, there is experience. You have the network. You already know what’s working, what’s not working and have a sense of these things, but obviously, it’s hard still. It’s a lot of timing, luck. Things which are not under your control. You try enough times and you will succeed. Just the regular VC model as well. Out of 10, there’s only maybe one which pays the whole fund. And, that’s accepted in the financial model already there, but still, I think is it’s never nice as an entrepreneur to understand your chances are not exactly on your side. Maybe you have to knock 20 doors and then you get the real hit.
Startups, Scaleups, Screwups, it’s a really good book, so that’s why I’m talking so much about it as well. One thing you mentioned there which I haven’t seen too often described is that within your business, your products or your business lines, if you have a bit more of them, they can be in different cycles and you should treat them as sort of separate businesses.
That’s something that might be also hard to understand. Usually, we just think like in a startup you have just one line of business, one business, one product. But if you’re doing different things, their revenue models, the business models might be different and they may be actually in different stages.
And I think that’s quite important to understand as well. And that’s what’s really nicely put in the book.
Jurgen: That is one of the core ideas in the book that I believe distinguishes itself from other literature in most particularly in the agile world, where we often assume that a company is in a lifecycle stage or a company needs to be transformed in a certain way. While I say, well, actually you need to look at the level of the individual business units, individual types of products. Just take the famous example of Apple. Apple has a number of ways in which it earns money. It has the iPhone and other physical products, but it also has Apple Plus TV or whatever they call it. They have their App store. They have different ways of making money at different income streams.
And there are different business models that need to be treated in different ways with other architectures and technologies and maturity of the ideas behind them. When you look at them as a family of business units, then suddenly things start to make sense in the way you go about digital or agile transformation.
Because as I often use the metaphor, the analogy of a human family. We do not treat our children the same as we do our grandparents. I hope we do not treat babies the same as teenagers the same as adults. There need to be different rules and different kinds of behaviours for people depending on where they are in their life-cycle stages. And kids, we allow them to play and experiment because they will need all the experience for when they achieve adulthood. It’s the same with startups. They’re mostly in discovery mode and not in delivery mode. Hopefully, at some point in the future, they will be profitable then they will mature.
And then they have to be like the parents who raise new kids who create new products. Apple does that quite well. There was a time when the iPhone was 70% of Apple’s income and that worried investors. If your business is dependent on just one type of product then that could be dangerous, but that has gone down to below 50, maybe even lower by now because other income streams have become more important for Apple. That is crucial because there will be a time when the iPhone will have started up, scaled up and screwed up. It’s done. iPod is not being sold anymore. It had it lifecycle. It saved the company. It did its job. But it’s gone.
That family member has gone through its entire life-cycle. The same will happen to the iPhone. The company has to continuously reinvent itself as games companies do by always coming up with new games and they go through their own life-cycle stages and they need to be treated differently. That is a mistake that we sometimes make in the agile world where we see an entire company as one thing and then we go in with an agile transformation or whatever. But you need to go step deeper and look at individual business models and then have different approaches. Because the kids, the immature ones among the business models, they will probably need a different approach from the adults. And maybe the ones that we could call senior citizens among the business models maybe we should just leave them alone. They had most of their life behind them. They paid for the whole business. Maybe we should just be respectful and say, well, thank you so much for having led this family. You can just enjoy the last year that you still have. We’re not going to make you do new things. I think that is a healthy approach.
Petri: I was just thinking that in gaming companies, also in Hollywood productions, usually even these huge products they put out, they called projects, which sort of implies that there’s a beginning and end, but it’s like a project. But when we have a regular startup or company, they are products. They have a sense and feel like it’s permanent.
But if you treat them like projects and you understand that this is now what we do but it’s not us. It’s the company what we are having, the culture, the problems we’re solving for the customers. There are different approaches and it’s okay to start new projects and some projects will end.
And that’s a good thing as well. And in games and movies and TV-series, there’s an evident life-cycle. But pretty much, probably the same if you think about software products as well. They don’t last that long nowadays anymore, maybe three to five years. And then it’s obsolete for whatever reason.
Jurgen: Right. Exactly. And I think it’s different for different kinds of products, of course, because you can’t really compare a movie with a software product in terms of how we go about the management of their development and their release. Because obviously with the movie, there is an obvious endpoint that’s the end of the project.
The movie is done, then it’s released and nobody touches it anymore. It’s just being distributed. With software, it’s very different. That’s why agile is preferred to switch from project mode to product mode, keeping the company responsible for the product until the end of its lifetime. But indeed there is an end.
We just should just embrace that and say, well, nothing lives forever, not even our software. Let’s just prepare for that and just accept that the company has to keep reinventing itself.
Petri: You love lists or at least top hundred things. At one time, I think your website was really hitting the limits. Maybe 20 years back, you had the most traffic, at least in the Netherlands. Well, you can just briefly explain what was that about, just for the curious ones. And then I have another lead-on question, but let’s start by how did you actually make through the .com boom and what happened there?
Jurgen: It’s one of my favourite stories. So some people may have already heard it. In the nineties, I had this hobby project going and that was from 1994 until the end of the nineties. I had this top 100 list of the most popular PC-games in the world. I started that before there was the World Wide Web. That was on Usenet.
Some people may remember that, newsgroups on the internet. I was in university then, and I just collected votes from people in the newsgroups for their favuorite games. And then that turned that into a top 100 list. And that turned out to be super popular because people just wanted to know what games to play.
I sent that over email to people once per week, the news list. And then when the World Wide Web became a thing I turned that into a website. A fairly simple HTML and everything that I hand-coded. That became very popular as well. I was one of the first to get an account at the first internet provider in the Netherlands, the first commercial one, Access for all.
At one point, they reached out to me and said that my website was going through their bandwidth limit that they had at the time. And they said yours is the first one to do that is not about porn. And I thought it was a great compliment because my simple HTML page was competing with porn in terms of traffic.
That led to the obvious conclusion, I should turn this into a startup because I was making money with advertising and sponsorship. That was ’97/98. The conclusion was obvious. I need to make this a startup. I wrote a traditional business plan of 60-70 pages.
Petri: Your first novel!
Jurgen: Yeah. In hindsight, I call that my first work of fiction. It had all these diagrams of things going up like revenue would go up according to my plan and profits would go up, everything would go up. My ego would go up, everything would look wonderful.
Petri: So it’s a classic hockey-stick!
Jurgen: Yes. I was really good at drawing hockey-stick pictures. It looked fantastic and it was convincing apparently because I became the Entrepreneur of the Year in the Netherlands with that business plan and my existing business, that was making money as a side project, as a hobby, because I had a daytime job. So, I focused on just the startup.
I got investors interested, and that was December ’99. I hired people. And then two months later, the Internet bubble burst. Now, you should play some kind of sound in your podcast or something.
Petri: Yeah, drum rolls. Oops.
Jurgen: Two months later everything came tumbling down. I just had hired five people and we were there in our little office in Rotterdam. My income from advertising decimated literally in two, three months. It decimated. There was almost nothing left. I was quite frantic. What do I do now? We had other ideas, but none of that worked because nobody had money.
All the other internet startups. They ran out of money as well. I was quite a chaos.
Petri: The crazy thing was that you still had the traffic, people were still playing games.
Jurgen: Oh yeah.
Petri: There was just no advertisement to show.
Jurgen: Exactly. I had no way to monetise it. I was trying to sell patents and whatever, but none of that worked. I just had to close the business. I was really tired after two years. What was one-half year of frantic looking for other solutions and all the money running out that I had received from the investors.
They didn’t care because they had invested in another startup just before me and that one hit the jackpot. I don’t remember which one it was. They didn’t care at all what happened to me, fortunately. That was it. I just wrapped everything up. I asked my employees in a friendly way to please find another job because in a few months I won’t be able to pay you anymore. And, and that’s it. I vacuumed the floor, literally myself of the office, closed the door and found myself a decent job.
Petri: That’s almost 20 years back. Because you could have described the spring this year.
Jurgen: Yes. That was indeed 2001 that I closed that venture. I call it now a two-year entrepreneurial workshop that I did back then. I learned a lot. It was super exciting. But I had to lick my financial wounds and become employed as a normal person. I was then software developer, development manager, chief information officer. And then that led to my first book, my role as a manager in a software company and introducing agile practices. And the rest is, as they say, history.
Petri: And the pressing question. What was the game of the decade in the nineties in the top list? Do you still remember?
Jurgen: I remember. Civilization was unbeatable. It was in the number one slot for such a long time that I got tired of it. I thought, OMG, please stop voting for Civilization. We know it already. That is a good game. Give the others a chance, but people kept voting for Civilization. That was a big one.
And the others, Descent was at the time a popular one. Doom, obviously. That was my era of playing computer games.
Petri: You have been doing lists as well in books. And I think it was 150 books you were listing in the startup field. What’s your favourite at this point?
Jurgen: I make lists all the time because I love lists. My favourite, I don’t think I have a favourite startup book, to be honest. There’s not one that comes to mind right now. Maybe I would say the obvious one is The Lean Startup.
Petri: You lean into classics.
Jurgen: Yeah, the one by Steve Blank before that The Four Steps to the Epiphany.
Petri: I think there’s a new version of it out already.
Jurgen: Right. Okay. But those were obvious. They’re really good books, so everyone should read them. But it’s a bit, yeah. Okay. Been there, done that.
It’s more interesting to talk about briefly the latest one that inspired me. That is also really good for startups. I think it is The Context Marketing Revolution by Mathew Sweezey.
It came out earlier this year and it is about the idea that traditionally in the last 10-20 years we’ve been focusing on creating content, making content, blog, posts, podcasts, whatever, to try and get people’s attention and, and to get them hooked to our stuff.
And then hopefully there’s a business model behind it that will allow me to make money. And this book basically says, well, the world has changed without us realising. There’s more content produced by people than by us content producers who see it as their profession. It has become impossible to compete with all the stuff that people put out there on TikTok, YouTube and whatever.
And that gets worse and worse. We’re drowning in content. We’re drowning in the noise. So you need a different approach. Give up the idea of creating just exclusive content and hope that people will come. You have to have a different way of getting people to sign up to your business model or whatever that is. Content will play a role, but it could be the content that users themselves create. Maybe you can see a future for yourself where you do not create the best possible blog posts, but you are a curator of what is created by others. And that role will then somehow lead to people signing up for your product, whatever the product is. It’s a different way of thinking.
That was for me an eye opener because it talked about the experience. The experience for users and customers where often customers are creating more content than you as a company are doing. And we should just use that to our advantage instead of trying to compete with the content our own users are making.
Petri: As a funny tidbit, we are recording this before the next episode is coming out on Sunday in two days. And the title of that episode is Curators are the new creators where CEO of Slush, Miika Huttunen, talks about exactly this topic. So, Jurgen didn’t have any idea. We didn’t speak about that. So that just came out spontaneously.
What is your favourite word?
Jurgen: I think that would be complexity.
Petri: What is your least favourite word?
Jurgen: Broccoli. I hate broccoli.
Petri: Just the word or the actual thing?
Jurgen: The actual thing, but the word itself is already bad enough, I suppose. So. Yeah, I think, broccoli would do the job. That’s a really bad word.
Petri: What turns you on creatively, spiritually, or emotionally?
Jurgen: I think deep questions, deep conversations.
I tune out when people are just chatting about the weather or worse when people are talking about other people. That’s so uninteresting, but it seems to be what 90% of conversations are about is people talking about other people. I find that super uninteresting, but as soon as someone talks about philosophy or politics or whatever, then I’m interested, that’s going a bit deeper. That’s for some reason, then my ears pick up the conversation and I start paying attention. But otherwise, I just tune out.
Petri: What turns you off? Is that the same answer?
Jurgen: What turns me off might be shallow thinking. That’s the obvious counterpart as I said, people just talking about other people, or just complaining about things that actually are more complex problems than people make it out to be.
There’s right now going on conversation politically about the immigrants in the Mediterranean with the asylum seekers, et cetera. People have simplified things as such sad extent where they say no, we just don’t want more immigrants.
The problem is a bit more complex than that. That really turns me off, the shallow thinking that you particularly see on social media were it so easy to just post a really bad meme about something that shows that someone hasn’t really thought about what is going on. Yeah, that’s a turnoff.
Petri: What is your favourite curse word?
Jurgen: Jesus fucking Christ.
Petri: That’s almost like a musical title.
Jurgen: it’s something that I, and I have to admit my partner, use whenever something goes wrong. If you look at the words, it is bad twice because it is a curse word because of its sexual connotation and because of his religious connotation. So it’s doubly bad, but also the combination of the words makes it comical.
Jesus fucking Christ. So that’s yeah, that’s sort of stuck. And now it’s the one thing that I say when something goes wrong. Yeah. Sorry.
Petri: I’m imagining you last year in Canada really singing that tune.
Jurgen: Oh, yeah. I used it quite a lot in Canada.
Petri: What sound or noise do you love?
Jurgen: Disco beats. I love disco beats. I love dance music. I love particularly disco dance music from the eighties and nineties of the last century. That’s the main thing that I listen to. Whenever I hear a disco beat somewhere do do do do, then I think I’m interested in. Then I know, okay, which song is that? Which song is that I need to know!
Petri: I’m sure, you have a list for that one. What are the songs in your top two?
Jurgen: One of my favourites is New Order’s Blue Monday, for example. That’s such a classic.
Dead or Alive’s You Spin Me Round. That’s wow. That’s such an awesome disco song. I could go on and on, but those are among my favourites.
Petri: What sound or noise do you hate?
Jurgen: You know that sound that some people hate of crayon markers on a traditional blackboard that sends shivers down people’s spines. I don’t hate that, but I…
Petri: Good, because I’ve heard that at least twice in this show.
Jurgen: Exactly. No, that doesn’t trouble me, but I have exactly the same feeling and I have shivers down my spine right now, but just thinking of it. You know these tissue dispensers that you sometimes find at toilets in the airport? They are round and the tissue comes out at the bottom and then you have to pull it out and it’s like a string of tissue that comes out and then it has these metal grates at the bottom so you can tear off a part of the tissue.
I hate them! Just awful that tissue that scrapes along through that metal. The sound just sends shivers down. I never use them. I just keep my hands wet and let them dry. I refuse to use them.
Petri: What profession other than your own would you like to attempt?
Jurgen: I have sometimes thought when I am old, which I’m not, of course right now, still very young. When I’m old, I might be a teacher. That sounds like a difficult job that is actually fun to do if you do it well. And I have been somehow involved in education at the professional level for my entire life.
Ever since I finished my studies, the first thing I did was I went to a training company and started teaching people programming. I’ve always been somehow teaching, educating, but then for businesses. And I thought maybe at some point I should just go to either university or high school and just enjoy working with young people, teaching something.
I have no idea what but I think that will be fun. It will be difficult, for sure, but that’s something that has occurred to me a number of times.
Petri: What profession would you not like to do?
Jurgen: Acting. I hate acting. I don’t know why, but just pretending to be somebody else is just something that I have felt very uncomfortable with. I find it embarrassing, and no. I like being on stage, but as myself and doing silly things and making jokes or whatever, but then as myself. You see me. That’s the only role that I can play myself, but I cannot play somebody else. That’s just really weird.
Petri: If you could be a co-founder of any startup in any era, which one would you choose?
Jurgen: Well, from a financial perspective, I would choose Microsoft, I suppose. I think that would’ve been because that was, of course, also given the time span at the time that would have been an interesting company to join as a founder when I was still young. And I don’t know, maybe I would have done things a bit differently, but maybe not.
That is an interesting thought exercise, how I would have gone about things compared to Bill Gates and Paul Allen. That would be my choice. I would pick Microsoft.
Petri: Any final words for the audience?
Jurgen: Experiment. That’s usually what people ask me is do you have one tip, one suggestion, for managers or for anyone in any role? Don’t be afraid to try things. I try things and lots of things fail, but I have also been quite successful in ways that other people would never have been successful because they didn’t try.
I came up with a licensing program for Management 3.0 that has been very successful for me and for other people that was not done before, at least, in my part of the world. That was an experiment and it succeeded. And for that example, I have nine others that failed that I can be sad about. But as I said before, I don’t feel embarrassed for having tried. Because you need to try so many things to finally find something that works. It ties into the earlier stuff that we talked about. That’s a good word of advice for people: just try stuff. Don’t be afraid.