Lecture 4
2 October 2012

I arrived early to find the classroom in a mild state of disarray.  Tables had been moved to one side, chairs were being clustered and students were taking their seats to participate in what looked to be something of a ‘fireside chat’.

Finding $1.3 million….in five days!!

David opened the evening by introducing his guest speaker Daniel May, an affable thirty-something year old, with THE most astonishing story.  To cut to the chase, Daniel’s company had just raised $1.3 million dollars on Kickstarter in only 5 days!!

Daniel recounted his breathtaking story in a very relaxed, almost matter-of-fact style.

Daniel’s beginnings, whilst somewhat more humble, were nonetheless highly entrepreneurial.  As a teenager he participated in the Young Achievement Australia program, his team finishing second in the state.  Through the program Daniel learnt first hand (‘you have to pay people!!’) that the exhilaration of ideas generation must be matched with the reality of delivery.

Following school, Daniel continued his entrepreneurial journey with ventures in hand held computing (remembering this was the early days of the internet), before moving to Denmark to commence a PhD.

In 2003, and struggling to keep many balls in the air, Daniel returned to Australia, feeling burnt out.  He felt that whilst he remained full of potential, he was flat, and resumed his ‘day job’ of management consulting.  With a sense that nothing was resonating with him, Daniel started his own business, the Australian operation of Launch48, running ‘start up’ weekends wherein budding entrepreneurs journeyed from pitch to launch over the course of a weekend.  During this time, Daniel tried to start up various businesses, including an online resume management system and project management tools.

Enter Phil. Phil came along to one of Daniel’s Launch48 Australia events, looking for a technical cofounder for a social media startup. This venture was successfully kicked off and funded: then Phil put his weekend project of wifi controlled lightbulbs onto Kickstarter … aiming for $100,000 over 60 days. To their astonishment, the team raised $1.3 million in 5 days. Even Mythbusters’ Adam Savage has put his hand up for these bulbs.

Hear Daniel tell a little of this remarkable story…

Take a look at Daniel’s Kickstarter page.

After a brief pause to digest what they had heard, the students hit Daniel with a barrage of questions…

Q: Why fund through Kickstarter and not traditional Venture Capitalist?

A : Kickstarter validates that you have the right product – people are essentially saying “I want this”  At this point Daniel reflects on one of his key learnings…neatly summarised as “How Low Can You Go?”  He wonders whether in the past he had overestimated the quality of the MVP (Minimum Viable Product).  The big learning for him – get it out there, get people trying it, then refine it.

Q : You clearly have many ideas, is there a challenge to deliver?

A : Yes, delivery is a real challenge, a challenge which is managed by working with like minded people who have also ridden the wave of life, and who look out for one another.

Q: How do you choose between multiple opportunities?

A : There is a ‘feeling’ component to the process.  It’s a bit like when you are interviewing someone, you ask yourself whether he feels like he fits.  So too must an opportunity feel like it fits.  Daniel explains it beautifully…

Q: How will you use the $1.3 million?

A : There will be a lot of learning, a lot of figuring stuff out.  There is some calculated risk, but you need to have a go.  And with smart, trustworthy people on board.

Q: What have been your biggest learnings to date?

A: The importance of backing yourself has to be amongst them.  Sometimes you can be way too consultative, and you need to be careful of listening to others who may not be so forward thinking.

Q : How important are mentors and advisors?

A: You want an investor to have a stake in the initiative.  You want someone who says ‘Here’s how you might want to think about your life’.  It’s not just about making money.

Q: How do you separate the focus on your business from playing with your young son?

A: It’s a struggle and it’s important to be present and to grapple with the question ‘what legacy will we leave our children?’.

Q: Why are you doing this?

A: It offers a platform from where I can provide for my family, and it gives me the flexibility I want.  The money is not so important, and whilst it can remove some unhappiness, it cannot buy happiness. My family is what counts.

A remarkable story from a warm and engaging guy.

And as I listen to Daniel’s responses to the student questions I notice an emerging pattern:  this is not a story of light globes.  Rather, this is a multi faceted story about a man of quiet confidence, about commitment to family, about the importance of relationships and about a willingness to fail.  And I wonder whether this unlikely mix of confidence and humility may be fuelling Daniel’s success?

Reflecting on Reflecting

After a short break the lecture resumed with a reminder to students that they are about to start reviewing one another’s weekly reflections.  David presented a “U Curve” diagram that depicts a hierarchy of thinking, starting with the “fast mind” which has quick and easy access to a series of standard, almost automatic responses.

 

David’s challenge to the students when considering the reflections of their peers is to engage in deep listening, to understand what is happening emotionally for the other, in order to prepare a worthy response.

And I am reminded of the Warren Warwick story (Lecture 2) and indeed of Daniel May’s presentation this evening – two individuals who were able to see past the superficial in order to get to the essence of what they were hearing.

And if I happen to be a clock?

A quick transition into group discussion and David posed what I had assumed to be a trick question.  ‘Which way do the hands of a clock move?’.  Of course we all know this is clockwise.  Don’t we?  No responses.  David asked again and one student tentatively ventured ‘Clockwise’.  Well of course.

So what’s the catch? Well may you ask.

A dramatic pause preceded David’s next question.  ‘And what if you happen to be a clock?’  Hmmm.  A very visual reminder to engage with the world from the customer perspective!!

Are you a few tools short?

Continuing his (repetitive?) theme of understanding the customer world, David makes a somewhat provocative statement : many of the tools of the MBA actively disable your capacity to think creatively!  (Wow!)

The MBA equips you well to be custodians of the current asset, but the entrepreneurial process is not like this.  It is a journey of search, of discovering what the customer really wants.  It is about deeply understanding the customer world.

And once you have understood this, of creating an appropriate business model.  David’s advice to the student syndicates felt equally challenging : stay in a place of ‘not yet knowing’.  Do not be tempted to make assumptions prematurely.  Get out there and fail!  But most importantly, trust that you will be sufficient to the task.

My guess is that this may well be counterintuitive – and perhaps unpalatable – advice to a group of highly intelligent, high achieving students who are accustomed to ‘knowing the answer’.

I ponder our education system and wonder whether we are indeed too focused on acquiring the ‘one right answer’ at the expense of encouraging creative thought.  And I suspect that revisiting this question as a tertiary student may be just a little unsettling.

Why the MBA Tools Can Lead You Astray

Continuing his (highly repetitive?) theme of understanding the customer world, David recounts the story of a financial institution that was offering loans for prestige cars on the showroom floor.  The company conducted not one but two focus groups and determined that rate mattered above all else – the customer simply wanted to access the most competitive rate.

So the process was designed, and junior staff were on hand to complete loan application documentation. And it was a dismal failure.

Ethnographic interviewing followed and it seemed that what the customer really wanted was to access his car without obstacle.  And to be intercepted by a young person interrogating his financial position was an obstacle of such magnitude that the customer aborted the purchase.

An interesting story that demonstrates that perhaps we are not always in touch with our needs.  Sometimes the greater clues may be found in our behaviours.

(Not) Getting to the Heart of the Matter

Responding to David’s message on ‘listening’, Raj took to the floor and told a wonderful story of a heart monitor that he had been involved with.  It seems that Raj and his engineering colleagues had designed and developed what they believed to be a highly desirable portable heart monitor for use in India.

I shall let Raj tell the story, a salutary reminder of the importance of listening…

How are the students traveling?

Student presentations followed, with a few interesting twists, including rebranding of the offering, emergence of new hypotheses, unexpected learnings arising from customer interviews and the discomfort of being in the unfamiliar place of ‘not knowing’.

This week the teams seemed ‘slicker’ in their presentations with impressive graphics, animations and videos.

As I watched I reminded my self of my insight of last week – ponder all content, no matter how it is packaged.  And as I did, team “Blue Ocean Energy” took to the floor explaining that they had just encountered the MBA equivalent of ‘the dog ate my homework’.  It seemed their laptop had died.  A little thrown, but not deterred, the team delivered a most compelling presentation – unaided by the obligatory PowerPoint deck.  (As a highly visual person, I have no problem with PowerPoint, but just sometimes…..)  It was a timely reminder of the importance of communicating with genuine passion.

I have posted the student videos on the Start Ups pages, be sure to take a look.

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