Startup Reflections 1 | Customers, Etc.
Musings from the first class for the capstone project in the Management of Technology program at Georgia Tech
This post is a bit of a departure from the usual programming of this newsletter—chalk a tally mark for the “Etc.” column. In the Georgia Tech Executive MBA program, there are two tracks: Global Business and Management of Technology (MoT). I’m on the MoT track. In MoT, our capstone project is focused on starting a business, or put another way, learning about and executing the activities that are required to discover unmet customer needs in a way that become the foundation for a new business model.
We had our first lecture for the capstone class several weeks ago and it was packed with content. My usual approach to writing in this newsletter is to piece together one cohesive narrative about a specific topic. I’m going to depart from that this week as I share observations and reflections from the first hour of the first class. You’ll see me reference slides that aren’t visible here but hopefully the reflections themselves are still insightful to the reader.
I have no idea if this type of post is interesting, helpful, or otherwise insightful. Would you mind sending me a quick reply to let me know?
The opening slide is a gauntlet thrown. Paraphrasing, “Education alone won’t cut it. You have to get out there and do the work.” Well, fine. No doubt a stiff MBA with no practical experience is of no use in starting a business. And yet the classroom must have its place. How? I’m interested to find out because, after all, that’s in large part why I’m here at Georgia Tech getting my MBA.
The following reflection courtesy of the “Disrupt” slide:
Fun fact: I worked for Fog Creek Software back in 2011 when Joel Spolsky launched Trello on stage at Tech Crunch Disrupt. Fog Creek was, famously (among software developers), a bootstrapped company. Joel prided himself on not needing to take venture capital in order to grow a profitable business. And it worked! Sort of. For about a decade in the 2000s, Fog Creek generated gobs of revenue per employee and made a tiny little lifestyle business based on being a great place for developers to work and building great tools for software developers.
Then in 2010, Atlassian, Fog Creek’s biggest rival in the bug tracker space, took $60M in funding and proceeded to eat Fog Creek’s lunch as Atlassian developed a more attractive pricing model for cash-strapped development teams than Fog Creek was willing to offer. From our perspective at Fog Creek, it wasn’t “fair” that Atlassian was able to throw their VC money at acquiring customers, but those are the breaks.
Fog Creek’s answer was to create Trello, “a team workflow platform and list manager,” which launched at Disrupt in September 2011. Joel articulated the business strategy as something like, “Pour the entire marketing budget into making Trello an amazing free tool anyone can use, grow to 100 million users, then convince 1% of those users to pay us $100 per year.” Arguably, it worked, as Atlassian acquired Trello for $425M in January of 2017.
I share this story for a couple of reasons. One, it’s in my head because of the Disrupt slide. But also because I’m not sure Fog Creek followed either of the paths outlined in class. On one extreme, you had the caricature of the typical Silicon Valley Startup with ping pong tables and exotic vacations. Fog Creek was not that1. But on the other hand, I’m not sure Fog Creek strictly followed the Lean Startup methodology either. It was certainly more of the Lean Startup model, but I never once saw the Business Model Canvas referenced. (Thinking back, I actually think it could have provided some clarity). I’ll plan to circle back to this throughout the rest of this reflection.
You have a typo on slide 73. “measur” should be “measure”. Also, Richard Feynman and Neil Diamond kinda look alike, yeah?
I love the slide about becoming an expert in the customer. I mean, of course, right? Yet so many businesses lose focus on the customer. Maybe that’s why we’re comparing startups to quote-unquote “corporations”. They get so big they forget who pays the bills. So some new business comes along and will actually listen to their needs and starts taking away market share.
Jobs. To. Be. Done. So glad to see this referenced in the slide deck. I guess this is easy when you don’t have a product. “What should we do? I dunno, let’s ask some people what they need done.” But once you have a product it’s so easy to get locked into your own head. “What should we do? Let’s tell people about our product and its features.” JTBD is helpful for getting out of our own head.
Being purposefully direct is great. Honestly I wish we covered this and practiced it in EMBA immersion week.
“Startups Search. Companies Execute”. Okay, real talk. What about companies that continue searching, that aren’t content to have said they’ve finally arrived? I’ve heard it’s still Day One over at Amazon. There must exist a narrative where we tell the stories of large companies who remain in “Search” mode and aren’t content with being mere corporations taking rent from their customers.
I mean, it was a little bit. It had free lunch, beautiful offices, and fun holiday parties. But it was measured relative to what was happening in Silicon Valley.