Entrepreneurship

Entrepreneurship

How Does the Lean Startup Impact the Chances of Startup Success? By Albert C. Mikkelsen.

‘Lean’ is and has been The Collider’s guiding thread through the processes of validation and venture building. Previously on this Blog, we touched upon the origins of this methodology to better understand it’s core values. Now, we’d like to follow-up on the matter with a guest post from ‘Lean’ connoisseur, researcher, entrepreneur and The Collider star moderator Albert C. Mikkelsen. In his article “How Does the Lean Startup Impact the Chances of Startup Success?”, originally posted on Medium, Mikkelsen suggests applying a ‘Lean’ approach to ‘Lean’ itself; that is, as a hypothesis bound to be validated.

Enjoy the read:


 

There are plenty of cases that illustrate how the Lean Startup methodology has helped successful startups in their first steps: Intuit, zipCar, Dropbox, IMVU, Wealthfront or Grockit are just a first brief list. Since Eric Ries published The Lean Startup, the main ideas contained in it such as minimum viable product or pivot have spread like fire across every group of stakeholders concerned with innovation and entrepreneurship, from actual entrepreneurs to venture capitalists through incubators, academics and, specially, corporate innovation departments. The method is so clear, logical and even intuitive in the way it frames new venture ideas as hypotheses to be validated, that many could in fact ask how did we even ever manage entrepreneurship in any other way that wasn’t Lean.

Nevertheless, seven years after the book was published — and ten after the coining of the term — it is strikingly hard to find any statistical evidence that the methodology increases the chances of success of those who use it. It’s true that this is a problem with many management tools and methodologies — as promising as they are they are rarely statistically tested to whether they truly help accomplish the goals they were designed for. As a community we have to be aware of the fact that the methodology helped the startups mentioned in the previous paragraph achieve success doesn’t necessarily mean that it does so always, and perhaps not even in a majority of cases. By focusing solely on a series of selected success cases that illustrate the Lean Startup’s contribution to success we are likely missing the whole picture and falling prey of an availability bias to defend our own passion for a method that promises to increase our chances of success as entrepreneurs.

In fact, it is only fair that we look at the Lean Startup methodology as a hypothesis of a methodology to help startups succeed. In the past years we have built the method — far beyond a minimum viable product — tried it with countless startups and perhaps now, although a little late, we should take a step back to measure and learn by looking at the big picture to inquire into its track record: are startups applying the Lean Startup methodology more or less likely to succeed than startups that don’t? Can we predict success based on the lean mindset of a certain team? In summary, does the application of Lean Startup principles by a team of entrepreneurs cause an increase in their probabilities of success compared to those that don’t?

Of course there are countless factors impacting the chances of success of a startup: timing, team, network, location, access to funding, actual funding and market are just a few. Nonetheless, if the Lean Startup truly helps make startups more successful it should show in the total aggregate data.

There seems to be only one study looking at the question in detail using statistics. It is a dissertation written by Gaute Terland Nilsen and Nicolai Arguillere Ramm during their MSc in Innovation and Entrepreneurship at the University of Oslo titled “Lean Startup: A Success Factor?”. In the study, the students plotted 47 startups to compare their use of Lean Startup with a Success Score.

At first glance the result certainly looks disappointing for Lean Startup fans. Where most expected to see a straight line (or even perhaps a curved exponential one) from bottom left to upper right indicating that the more a team of entrepreneurs uses the Lean Startup the more successful their business is, the plot shows a rather scattered 47 points in the matrix, showing no significant correlation between the use of the methodology and the success of the teams and businesses using it.

But a second look at the scatter leads to another insight. Imagine that we divided the quadrant of the plot into two triangles by drawing a line from the lower left corner to the upper right corner; then, the upper left triangle would barely have any points representing each of the 47 startups plotted, whereas the lower right triangle would include practically all of them. In other words, although many startups using the methodology fail, there is barely a single startup that doesn’t use it that succeeds. Thus, using the Lean Startup is no guarantee of success, but not using it is almost a guarantee of failure.

To this insight we must add a caveat indicated by the authors regarding the way in which each startups’ use of the methodology has been quantified: “informants that say they are familiar with Lean Startup and believe they use it in practice, actually don’t know what the framework is about — and therefore do not use it in practice […] informants who know about Lean Startup choose not to use it in practice, or only practice some aspects of the framework and not others […] many of the informants who are not familiar with the Lean Startup framework are using it without being aware of it”.

Thus, if an entrepreneur is not familiar with the Lean Startup framework but uses it, this entrepreneur would be marked as not using the approach in Nilsen and Arguillere’s study. Some of the points in the plot may be considered as “not using Lean Startup” albeit actually applying it unconsciously. The fact is that Lean Startup is the theoretical formalisation of an approach to problems and project management that many entrepreneurs carried intuitively before it was a methodology at all. As the authors point the same applies today, where there may be entrepreneurs applying it intuitively regardless of their awareness of its existence.

This leads us to a follow-up question: how can we discern whether entrepreneurs and innovators have the right mindset, what we could call a lean mindset when approaching ideas and problems, beyond their theoretical knowledge of the method? If we could define and, to a certain extent, quantify this mindset, we will be much closer to evaluating its impact on the potential success outcomes of a startup team. If we can quantify this mindset and it shows a correlation with a team’s probabilities of success we will have an immensely powerful tool to help guide a wide range of investments, from training at corporates and all the way to seed investment decisions or the choice of CEOs at Venture Builders or corporate innovation projects.

We will follow up on this in the coming months.

Reference: TERLAND, Gaute N. RAMM, Nicolay A (2015) Lean Startup: A Success Factor? A quantitive study of how use of the Lean Startup framework affects the success of Norwegian high-tech startups University of Oslo. Oslo.

Entrepreneurship

Making a Great Impression: Tips for Interview Success

As the talent scouting for the new The Collider edition reaches an end, we would like to share a quick checklist from our learnings throughout the interviewing process. These are just a few tips to guide anyone in their quest for new challenges and prove their value at the short distance, be it for a job or any purpose set upon.

 

But first, we would like to share a few numbers on The Collider ‘18 open call to give a hint of what to expect this year. And admittedly, the expectations are set to be high. On the one hand, we’ve welcomed over a thousand entrepreneurial applications; that is candidates to become either CEO (chief executive officer) or COO (chief operations officer) for one of the 10 research projects selected. However, the major increase has been on the scientific ground where we have multiplied by 300% researcher applications as compared to last year. From the whole number of candidacies, half of them come from European countries, among which the top places of origin are Spain, the United Kingdom, Italy, France and Germany. If we look at the worldwide picture, the United States, India, Russia and Argentina lead the list.

 

The successful candidates in this edition are the ones who have mostly fulfilled The Collider standards of professional experience, dedication and, importantly, soft skills. This last factor is a key indicator that can tip the balance in that one final interview but other contextual aspects make a surprising influence, too. Taking all considerations into account, here’s our rank of top tips for job seekers:

 

  1. Dress for success

Research the organization’s etiquette and think beforehand of an outfit that suits both the employer and your own self. Aim for comfortable clothes, since you don’t want your mind to be set on your own uneasiness. And remember: it is always better to come overdressed than the opposite.

 

  1. Arrive on time and prepared

Arriving early is not only a matter of politeness and professionality but also a great opportunity for you to grasp an insightful impression of the space, the staff and overall office dynamics. Bring along your CV – plus portfolio if applicable- and have your responses ready; plan them focused and concise, no chance to ramble. Although you never know the exact lot of questions from the hiring manager, most are preset and easy to deduce.

 

  1. Be genuine

In the end, truthfulness comes over many other indicators. Do not pretend to be someone else, because this can easily backfire. Aim to be confident of your full potential without sounding arrogant and keep the energy upbeat. Finally, make sure to make your case, provide solid accomplishments relevant to the position and sell yourself. The winning candidate isn’t necessarily the most qualified but the best at responding and showcasing his or her fit with the job.

 

  1. Ask meaningful questions

Even if all details have been clearly stated by the employer, it is extremely recommendable that you ask questions. Many interviewees judge your interest in the job over the questions you ask, so do your research and prove your curiosity. Think of the company’s working culture, the department’s undercover ambitions, your co-workers, etc.

 

After all, any piece of advice for job interviews converges in making a great first impression. The whole verbal and non-verbal language is determining for your overall success. Therefore, be polite and firm, arrive early and thank your interviewer. And always remain authentic.

Entrepreneurship

The origins of Lean, The Collider methodology

It is the rising star in business methodologies, the go-to word to improve performance in a “startup style”. Welcome to ‘Lean’, the customer-centric approach to innovation that promises to save a great deal of time and costs. It is also the methodology behind The Collider, particularly throughout the process of opportunity validation, where participants define and refine their business proposition.

A lot has been written about the ‘Lean’ methodology ever since Eric Ries published the book that propelled the trend, ‘The Lean Startup” (2011) with a clear, blunt foretitle: “How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses“. If you’re curious to learn about the principles, the case studies and procedures in the book, you’ll find all the answers here.

In this post, though, we’d like to focus on the actual birth of this methodology and draw a very brief history of ‘Lean’, its origins, core values and early protagonists. And to do so, we shall travel two centuries back to the manufacturing factory in the USA.

Up till the late 1890s, the processes in any American factory worked as individual units; products were moving from one to another without much concern of what happened in between or how the chain functioned as a system. By the end of the century, a few industrial engineers started to address this matter with different approaches. Frederick W. Taylor’s Scientific Management was a valid science-based redefinition of standardized work but it ignored behavioural sciences. Meanwhile, Frank and Lillian Gilbreth invented Process Charting, which took into account the off-value elements in the production line. All of these theories originated the idea of “eliminating waste” that seeded ‘Lean Manufacturing’ shortly after.

It was Henry Ford in the 1910s who coined the concept of “flow production” to manufacture the renowned Model T automobile. Ford speeded the whole assembly process by incorporating special-purpose machines that produced perfectly fitting parts. With his right-hand man Charles E. Sorensen, they arranged all elements – workers, tools, machines and products- in a continuous and effective system, which has transcended as the first true practice of ‘Lean Manufacturing’.

Despite Ford being a pacifist, once he was forced to succumb his plants to war production, the Ford system reached its maximum scale with the “a bomber an hour” plant during World War II. This mass production system caught the attention of Japanese industrialists, that also brought together Quality Control practices from theorists like Edward Deming or Joseph Juran.

The Toyota Motor Company incorporated effectively the production flow to its factories and paired it with an added value that supposed Ford’s downfall: variety. As Ford refused to adapt to the changing times and other automakers were struggling to handle a quick turnaround, Toyota relied its manufacturing system on a series of revolutionary simple innovations. This included right-sizing machines for the actual volume needed, introducing self-monitoring machines to ensure quality and having each process step notify the previous step of its current needs for materials, among others. All of these changes made information management simpler, more accurate and the whole process quicker and adaptable to changing customer desires. This is how the Toyota Production System was born for success.

Most early attempts to emulate Toyota failed because they were not integrated into a complete system and because few understood the underlying principles. However, by the 1980’s some American manufacturers, such as Omark Industries, General Electric and Kawasaki were achieving success.

The final turning point into the contemporary era of ‘Lean’ as we know it today was the publication of ‘The Machine That Changed the World’ (1990) by James P. Womack, Daniel Roos, and Daniel T. Jones, which described thoroughly the thought process of ‘Lean methodology’. Eric Ries and other authors would follow catching the imagination of not only manufacturers but practically any kind of business.

Entrepreneurship, Technology

Barcelona consolidates as European tech hub

The Collider has been cradled in one of the TOP European tech hubs by the number of startups: Barcelona. That is the 5th in Europe and the 1st in Spain, holding around 1,100 tech startups and the 34% of total startups in the country according to Crunchbase, last year. Barcelona also holds the silver medal for co-working spaces in Europe with 129 and only advantaged by London. Besides, Spain is also the 3rd European country attracting top tech talent from other EU locations. Barcelona is clearly an attractive spot for founders-to-be and serial entrepreneurs but do investors feel the same? Let’s look at the numbers.

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Entrepreneurship, Program

Ideas are cheap and abundant. Execution is everything.

The Collider was born to lead change through tech-transfer, building bridges between science and business. As discussed in our previous post “Why does scientific research in Spain excel so much and return so low?“, it seems the research world is still reluctant to embrace entrepreneurship, but there is one aspect where Business should still learn from Science and that is, obviously and simply put, “experimentation”.

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Entrepreneurship, Technology

Why does scientific research in Spain excel so much and return so low?

In science, a collider accelerates two beams of protons in opposite directions to make them collide with each other producing very high energies.

This is the essence of The Collider translated to the venture building field: clashing science and entrepreneurship to create highly innovative technological startups. As brilliant as it may seem, this pursuit is born as an answer to a pain too long ignored in this country.

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Entrepreneurship, Program, Technology

Meet our ‘afterwork’ experts

The Collider’s roadmap is clearly organized in a series of milestones, deep-rooted in the design-thinking model and lean startup methodology, with the utmost goal to create highly innovative tech-transfer startups. The steps in the journey take the form of workshops, offered by experienced national and international speakers, which are the spinal chord of The Collider’s content programming. We’ve had the chance to share some of their valuable knowledge in previous posts, ranging from ideation to marketing or business modelling. But today, we will look into a different kind of guests who have honoured us with their presence and wisdom; here’s our little homage to our after-work talks.

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