Here are the things I have always kept
in mind in continually working to evolve the companies I've run.
There is a long
simmering, rather interesting argument around the notion of "nurture vs.
nature" as it relates to human beings and their abilities. The Eddie
Murphy film Trading Places was
actually based on it, with a bet revolving around whether he could learn the
commodities business without being born a blue blood.
I’m often asked whether
entrepreneurs are born or made, and I firmly believe that entrepreneurs are
born. Why? Because the mark of a good entrepreneur is that you’re never
satisfied, you’re not OK with the status quo and you’re out to change the
world no matter how large or small. Even looking back to my youth, I was always
the kid in school to ask “why?” and I’m sure that rings true for many of us.
It’s that energy -- the
unwillingness to stand pat and let that “why” vanish from the back of your mind
-- that drives successful entrepreneurs
as they tirelessly work to improve their product or company. This is not
excessively challenging. In fact, the approach is rather simple. Here are three
things I have always kept in mind in continually working to evolve the
companies I’ve run.
Find the operational
bottleneck.
In his management book The Goal, author
Eliyahu Goldratt argues that in every operational system there’s a bottleneck,
or “the herbie” as Goldratt calls it, of some kind. Entrepreneurs are naturally
hard-wired to find the fix. No matter where I am or what I’m involved with, I’m
always looking for the herbie.
At the advice of a
friend, I once took a joke writing class on a whim. Not long after, I was doing
amateur standup nearly five nights a week, so needless to say I took a strong
liking to comedy. As I began to learn more, I became focused on researching the
greatest comics: Richard Pryor, Robin Williams, Jackie Mason. Through this
process, it became clear to me pretty quickly that distribution channels for
standup comedy did not evolve as they did in the music industry. Once upon a
time, I could go to any record store in the country and find standup comedy
albums to purchase, but the exact same albums were virtually non-existent on
iTunes. What’s more, there are plenty of streaming services like Pandora or
Spotify when it comes to music, but the same can’t be said for comedy.
So, my desire to learn
more about standup comedy led me to discover the “herbie” in regards to comedy
content distribution. Armed with this insight, I launched Laughly -- the first
and only streaming comedy app solely dedicated to standup.
Focus on your minimum
viable product.
Too often, entrepreneurs
focus on developing the best possible product when they should be focusing on
developing what author Eric Ries refers to in his book, The
Lean Startup, as a
minimum viable product (MVP.) Now, that may sound counter-intuitive to many,
but ask yourself this: If I want to bring a product to fruition, what is the
least amount of functionality required to test its viability? Often, that MVP
is less complicated than you think, and you can almost always build an MVP
yourself, without the need for major seed funding. In Laughly’s case, we
launched with a fully developed application, when we likely could have just
launched a simple comedy media player at the outset.
In essence, start small.
If you’re a new
entrepreneur worried that you’ve bitten off more than you can
chew, become obsessed with thinking through what your minimum viable product is
and how to bring it to reality. All it takes to prove your idea has value is to
offer a minimally viable product; if you’ve focused on that, then
expansions and improvements will naturally come in due course.
Never forget: You
are not your customer.
It’s a simple thought,
but I’ll never forget what a professor told me over and over in business
school: You are not your customer, so stop acting like it.
Whether it’s a new mobile app, a new fashion line or something in
between, just because you think you know what an end consumer needs
doesn’t always mean they’ll use the product in the way you envisioned. Although
it’s tempting, you can’t rely solely on your own experiences when developing a product to
bring to market. It’s a simple idea, but one that’s easy to lose sight of, especially
among entrepreneurs.
I learned this lesson
the hard way. In the beginning, I’d often get personally frustrated when, for
example, 100 people downloaded the app, but only 50 people actually used it
regularly to stream comedy. In times like this, it’s tempting to retreat
inwards and think, What am I doing
wrong? But, the clouds begin to clear once you place yourself in the
users’ shoes. What makes them tick? What makes them want to share this with
their friends? Your ego is often one of the biggest obstacles when it
comes to product development, so it’s important to actively practice getting
out of your own head and into the mindset of your customers.
By doing so, we found we
had thousands of diehard users who were using the app for thousands of minutes.
They were going to use it hell or high water. We found these people were
actually really good at giving us feedback; they weren’t afraid to tell us
what they liked and disliked about the product. So, we turned those men and
women into influencers -- we gave them free accounts as long as they
continued to give us honest feedback. By taking this approach, I always feel
like our best users are being taken care of, while providing us with valuable
insights into how we can improve the future user experience.
-Dave Scott