Laughter & Catharsis Second Social Entrepreneur Failure Wake

Laughter and Catharsis Second Social Entrepreneur Failure Wake

After having seen the first Failure Wake in September, I knew that it would hard to improve on the event. The emotional punch of the stories combined with the energy of the room to give the entrepreneurs just the right level of support and cheer.

Donalda Weaver. Photo by Julia Doro.

Last Monday night, RADIUS held its second Social Entrepreneur Failure Wake, and it was just as good as the first. Although each speaker had a very different style and type of business, they each embodied the spirit of the Wake, sharing openly and candidly about their mistakes and lessons learned. They either had us in stitches and almost in tears—and sometimes both—as theirs stories unfolded on the stage before the crowd of 180 people.

Donalda Weaver was the first to go. She shared the story of how she and her sister started East of Main Café on East Georgia Street in Chinatown. The Café was intended to support their nonprofit Project Limelight, a very worthy cause that works with disadvantaged children on performing arts. Donalda shared how the Café overcame a series of hurtles just to open. Once open they faced new challenges with staffing and nearby construction on the street made it nearly impossible to get to their restaurant.

Despite their best attempts and much more time and resources sunk into it, they ultimately decided to close the Café when they concluded it was no longer helping to fund Project Limelight. They are currently looking for the right partner to take over the location.

Brieanna Ingram. Photo by Julia Doro.

Brieanna Ingram spoke next. Brieanna grew up very close to her younger sister, who she recognized as exceptionally gifted. When she learned that her sister had ADHD (or Attention Deficit Hyperactive Disorder), Brieanna discovered her personal passion. She pursued a degree in special education and founded a tutoring company specializing in providing her customized curriculum to children with ADHD. Brieanna acknowledges that her strength in tutoring and working with children with ADHD was not matched by her strength with accounting. She was forced to close the business in April as her costs outweighed her income.

What I loved about Brieanna’s story was that she involved everyone in the room through simple and disarming activities. For example, she asked the audience to recount their day in 30 seconds in pairs, back to back. This was, in effect, a simulation of what it feels like to have ADHD. As she said, it should be called Attention Abundance Disorder because “everything is so interesting at the same time.” Ten to 12 percent of children are being diagnosed and nearly 30 percent of high school drop-outs have been diagnosed. Extrapolating that out, one can see the scale of the social problem if it is not addressed. While Brieanna’s business has failed, she has not. She has consulting work lined up and plans are under way for what the future holds for her to continue to work with children who have ADHD.

After the break, Preet Marhawa humbly took the microphone and recounted his story about why he started the food company Organic Lives. Preet’s story begins with his vision about how the world could be a better place through fairly traded, organic foods. Preet’s business gave quickly from a simple buy club for organic foods to a multimillion dollar business in just a few years. Yet, he admits when tragedy stuck, and his primary location burned in a fire, he could have been better prepared.

Preet Marwaha. Photo by Julia Doro.

What struck me about Preet was his sincerity and vulnerability. He was not looking for excuses. He was not bitter that he had to live on borrowed money. Rather, he looked across the room and admitted that his own responsibility in the closing of his social business. In his particular lesson, I heard the general lesson for all of us: let us accept our responsibility for what can go wrong and yet, not be paralyzed by our fear. It’s a tricky, and yet, very important lesson for entrepreneurs and others alike.

Finally, Mike Tippett took the stage. He paused for a moment, looking like he might not know what to say and then he said that he did not know what to say. It was our first taste of his deadpan humor. Yet, Mike was not all jokes. Together with his founding team, he had dreamed of a mobile enabled service that would supercharge local economies through allowing anyone to request and find local products and service providers on their phones. They called it Ayoudo and in one 30-minute meeting with venture capitalists they were able to raise half a million dollars to fund their early exploration of the idea.

Mike Tippett. Photo by Julia Doro.

Mike and his team followed Lean Startup methods, researching their market, talking to customers, and eventually building out an early working prototype. At first, usage seemed positive, and then people just stopped using it. They would have to spend more time and money on research to understand their customers. They would need more VC money to fund this next stage of growth. And with each new round, they would have to argue that they would be worth even more money. Rather than dig a deeper hole, Mike and his team paused and reflected whether it would be worth it. To their credit, they knew when to call it a day.

Each speaker generously and graciously agreed to participate in the Social Entrepreneur Failure Wake. As he did in the first Failure Wake, Mike Rowlands, the MC, offered lyrical toasts to each of the speakers in his hilarious sometimes Irish, sometimes Scottish, and sometimes Newfie accent. It was a touching and fun way to put the past behind them and allow the speakers a way to move on to their next venture.

 

3 Ways Innovation Projects Go Wrong

At the end of projects, it is common to conduct a retrospective meeting to learn what could be done better next time. While this is certainly good practice, it does not help those who are beginning a new innovation project for the first time. What lessons learned will hindsight reveal with painful accuracy only at the end of the project?

In the spirit of trying to avoid learning things the hard way, I queried the members of the LinkedIn group Innovation Management: How do innovation projects go wrong? Four members shared their insights from many years as innovation consultants. This informal survey yielded some familiar responses that I have organized below.

Internal alignment

A lack of internal alignment is often talked about as groups look back over failed projects. While this term is often used, it’s not a single issue. A lack of alignment, or disagreements, latent or expressed, can occur at a number of different places within an organization that will harm project outcomes.

Cross-functional teams might never gel or overcome organizational silos. A skunk works team might be so separate from the internal politics of an organization that they fail to get the management support that they need when they attempt a full scale pilot within the larger organization. Still worst, an outside consultant might encourage wild ideas to foment disruptive change projects only to discover that the ideas are far from the firm’s corporate strategy. These examples illustrate just a few of the ways that a lack of alignment can harm a project.

Crossed Incentives

Sometimes poor alignment is not simply caused by poor communication. Individual and organizational incentives play a role in subtly undermining internal alignment on a project. When I was working on a new product development project within a large software vendor, I learned that the team was very concerned about the appeal of the product for both prospective customers and a group within the company that would do the promotions and trainings of sales teams on new products. They needed the latter in order to get out of the building with a new product.

Unfortunately, even with strong customer interest for the new product (and executive support of the underlining technology), they failed to get the intermediary group aligned. This group saw the product as a threat because it involved tying together two separate divisions within the organization—two divisions that were not accustomed to collaborating and were accountable to separate VPs. It was unclear how individuals would be compensated for a product that was not wholly from within their division. Thus, the project failed to find traction and support to exit the R&D phase.

Need for Market Information

Another strong tendency on the part of organizations that are developing new product or technologies is to want to keep them secret for as long as possible. Organizations are motivated by the understandable desire to prevent their competition from commercializing their new ideas before you can. While there are some differing opinions on the frequency with which trade secrets are actually successfully exploited by outsiders, the practice of maintaining confidentiality is very common within enterprise R&D departments.

The challenge to innovation execution arises from the need to understand the customer segment, test prototypes, and clear any other market or regulatory barriers before spending a lot of time and money on an innovation project. I imagine the new product development process like building a bridge where work must done from both sides at the same time. One side is the product or technology side and the other is the market and regulatory context.

It’s no wonder that many products fail. New product development and innovation projects in general are hard work that for medium- to large-sized companies involve the active collaboration of many people and the strong support of the executives or upper management.

Tim Brown Inspires, But Doesn’t Instruct

Since 2010, I have been involved with the use of Design Thinking to solve problems and develop new products and services. I have heard much about the famed consultancy that started it all: IDEO. As head of IDEO, Tim Brown is certainly in a good place to describe what Design Thinking is all about and how its promise to help change the world for the better could be realized.

Change By Design is his 2009 ‘guide’ to Design Thinking, yet any novices looking for a step-by-step instruction book will be disappointed by Change by Design. However, for those open to the complexity and promise of Design Thinking, Brown makes the case for its broad application.

Brown approaches the organization of the book with the same mental process that he might handle a design project. Neither is very linear and so, he does not feel the need for a table of contents to organize the information. Instead, the inside cover contains his own hand drawn mind map. Topics stream out in all directions from the box labeled ‘Design Thinking’ in the center of the page. I found this ‘map’ challenging at first and chose to ignore it and get right into the text.

I suppose that this behavior reveals some of my own bias at the outset of the book. A certain part of me was looking for clear, utilitarian instructions on making my design process more effective. I have been challenged recently to apply the set of methods to a new topic—social entrepreneurship—and this drove me to search for answers in Brown’s book.

I quickly discovered—or was reminded really—that for Brown and the experts at IDEO, there is no fixed process. Each assignment, it seemed, brought a new challenge and a seemingly new way to approach the problem. I had been working with a five step process out of Stanford’s d.school. I had taught this in a mostly linear fashion with an allowance for iterating at some point along the path. However, Brown’s description makes clear that IDEO does not share the same mental model when it comes to process, although there are very similar phases.

‘Inspiration, Ideation, and Implementation’ might be the closest Brown comes to identifying a process. He elaborates further by drawing the initial phases as ‘divergent’ and the later phases as ‘convergent,’ explaining that each project team must actively create many options and then decide how to evaluate them and reduce them down to only a handful of the best.

Brown’s stories start with a team going on site and directly observing the people who would be using the service or product that the client has in mind. Observation is key to gaining empathy with them and ‘seeing the ordinary.’ Sharing the stories of the field research becomes a key step in itself. Here Brown finds many stories to share about the ways that IDEO teams discovered some previously overlooked human need or insight.

While the observation and storytelling steps were quite familiar to me, I found a twist here that surprised me. Brown suggested that prototyping, in its many forms, could make an appearance in this early stage of divergent thinking. Cheap and quick prototypes could be used to further understand the problem or the mental space of the users.

Throughout the book, Brown demonstrates his own optimism and humble intelligence. Brown’s style reflects IDEO’s own ‘serious play’ culture. Again and again, Brown’s shares success stories and collaborations from IDEO’s past. No doubt that IDEO is a great consultancy and responsible for inspiring a whole generation of good design work.

While I finished the book feeling very inspired to try more crazy Design Thinking projects, I also felt that the true challenge of leading and managing Design Thinking projects was not addressed. Often design projects yield only emotional messiness and incremental solutions. Brown admits how IDEO has sometimes struggled to teach others their process. Change by Design also struggles to truly enable those aspiring to follow in their footsteps.

In the end, as I returned to the mind map on the inside cover of the book, I found that the non-linear illustration of the topics and their connections to the others started to make sense. I just had to experience it first. The lesson, it appears, holds true for Design Thinking itself.

Entrepreneurship Education Gets Leaner not Meaner

When I completed my MBA at UBC just two years ago, the entrepreneurship program looked different than it does today. The courses focused on the classic elements of entrepreneurship, like identifying a target customer segment and writing a business plan. The project work typically culminated in a mock presentation to a panel of Venture Capitalists. Classmates told tales of crushing embarrassment and humiliation before the VC judges.

Now, just two years later and the entrepreneurship program at UBC has changed. A lot. More impressive still is the pace of change at other schools and accelerator programs in the Lower Mainland. Almost everywhere I turn these days, I see the influence of Lean Startup, Lean Launchpad and Design Thinking on entrepreneurship education.

Paul Cubbon

UBC marketing professor Paul Cubbon likes to challenge the status quo. Upon reading Eric Ries and Steve Blank, Cubbon set out to implement their ideas in the new Sauder School of Business MBA ‘Innovation and Entrepreneurship’ track. The focus on lean practices in this entrepreneurship program adds significant rigor to the curriculum.

But Cubbon did not stop there. He took his enthusiasm out to the full university and joined up with the folks over at e@UBC, or Entrepreneurship at UBC. Their Lean LaunchPad Accelerator Program aims to teach alumni, faculty, and students how to commercialize their ideas using a crash course on lean. Participants learn lean entrepreneurship with regular ready-or-not presentations on what they have learned over the previous two weeks.

Their site explains what a typical week will look like: “you and your team will spend 20-30 hours/week between seminars conducting 20-30+ interviews as you progress through business hypothesis testing and customer discovery, mapping out the web of relationships in your industry ecosystem.” Clearly, this is not your grandmother’s entrepreneurship program, with such an emphasis on ‘getting out of the building’ and regular iteration of your ideas.

Meanwhile, over at Simon Fraser University, Design Thinking and Lean Startup are the cutting edge management practice that every participant must master when they sign up for the Radius Ventures programs (four- and six-month options available). Professors David Dunn and Shawn Smith use Design Thinking and Lean Startup practices as a core part of their curricula for social entrepreneurs.

And it is more than just the public universities that are making the shift to lean. The folks over at the Launch Academy have taken their best practices and guest speakers and compiled a new Lean Entrepreneur Program. Beginning next week, this eight week crash course has two tracks—business and technical—with a third design track in the works.

Spiced throughout their curriculum is an overarching emphasis on lean principals. Right in week 1 of the program, aspiring entrepreneurs are introduced to Lean practices, such as how to build a minimum viable product and how to measure their progress using innovation accounting.

These programs represent an exciting and welcome shift in the way that entrepreneurship is taught in Vancouver. My hope is that these new programs and curricula will start to generate the valuable and scalable enterprises that they are designed to help foment.

Whiskey & Inspiration at Radius’ Failure Wake

SFU’s Radius had a sold-out crowd at the Portside Pub in Gastown for their first ever Social Entrepreneur Failure Wake last night. When I first heard about it, I thought that the idea of sharing stories about failed social ventures would be a good source of leads for the blog. I had no idea how educational and inspiring it would be. It was also a lot of fun.

The idea was simple. They would take over a pub, sell tickets, get brand name sponsorship from Vancity, and find some entrepreneurs to tell their stories about how their social ventures had reached their untimely ends.

At the heart of the event was the idea to embrace failure and with it, the rich learning and practical experience that will bring later success. I felt that this mindset aligns well with the practices of Design Thinking and Lean Startup that I have been chronicling in this blog.

Everyone loves a good story and perhaps more than success, a story about failure makes a compelling tale. Tragedy, it seems, captures our attention, but also serves a larger point. The stories contained salient, often emotional, messages about wrong turns and missed opportunities.

First up was a story about Ecotrust Canada’s efforts to build the local economy on the west coast of Vancouver Island. Satnam Manhas told the story of how there was no shellfish processing facilities in the Clayoquot Sound area when Ecotrust began their project to get local processing of shellfish for area residents and resorts. New federal food safety rules resulted in additional expenses for the recently up and running facility, yet the original equity owners were not able to pitch in to cover the unforeseen costs. Other problems mounted and the plant had to close soon thereafter.

Chantelle Buffie and Sonam Swarup

Young entrepreneurs Chantelle Buffie and Sonam Swarup of Fusion Kitchen traded the microphone back and forth as they told their touching story of a classroom project turned social venture. Their idea was to create community and connections for recent immigrants through cooking classes. The cooking classes were a platform for immigrant women to gain work experience, develop their transferable skillsets, and build their self-confidence to increase their employment opportunities in Canada. They had a great series of lessons learned that I only wish I had a pen to note down.

Finally, Grace Sai, founder of Hub Singapore gave a talk about an early mistake she made in her choice of who to partner with. She also spoke movingly of the challenge of balancing vulnerability with showing strength in leadership. I had to laugh when she confessed to the audience that her therapist had asked her, ‘don’t you think that Obama cries sometimes?’

At the conclusion of each presentation, Mike Rowlands of Junxion Strategy threw an Irish accent and delivered elegant toasts as the speakers were offered Jameson Irish Whiskey. It was a playful, yet thoughtful, way to show appreciation to the entrepreneurs for their courage, passion, and reflection.

As I rode my bike home, surprisingly I felt full of inspiration—not despair. Here was a community that would support you, in both your successes and in your failures. What more could you ask for as a social entrepreneur?

Successful and Accidental Lean Entrepreneurs

In my search for entrepreneurs in Vancouver who have used Lean Startup practices, I am finding that there is a class of entrepreneurs who are accidentally lean. They came to the same conclusions about the need for validating assumptions with a rigorous experimental process and iterating with low cost trials because they discovered these best practices on their own. Their approach is more unintentional lean startup.

Take Sean Clark, for example, who started Shoeme.ca in the basement of his parents’ house in Vancouver. Sean and his team have emerged as a Canadian e-commerce success story, but his early days were anything but glamorous. He tested his model with what Eric Ries would call a “concierge minimum viable product.”

This is a fancy way of saying that he put up a $60 website and through a few hundred more in pay per click advertising, tested his site’s flow and landing pages. When someone would buy something from this sandbox in the very early days, he would have to run out and buy it from the shoe store down the street and ship it himself at the post office. This practice matches perfectly the definition of the MVP, yet Clark was not aware of Eric Ries or Steve Blank.

Daryl Hatton learned the value of Lean Startup practices, but only through the hard way of nearly running out of money first and then, by necessity, pivoting the customer segment under the urging of a new partner, PayPal.

His Fundrazr crowd funding platform started as a tool for community groups and sports teams to raise money together. This plan met initial success through a partnership with Facebook that allowed their app to post to the users’ feed. For unrelated reasons, Facebook clamped down on apps’ ability to do this, just as Fundrazr began to see traction.

PayPal approached Hatton with a proposal. They said ‘partner with us and we will drive traffic through your platform.’ The approach was a shift in their original strategy. Instead of community groups, they focused on personal fundraising. He knew that they had made the right decision when they had the first campaigns starting within a few hours of going live.

“At the time of the pivot we were aware of Lean Startup practices, but not using them,” reflects Hatton. “The pivot set us on the path but it still took a long time to sink in.”

Tom Kineshanko started Habitat Enterprises in 2008 in his garage with cofounder Rob Drapala. In the first 24 months after founding they had done over $1.5M in revenue through their software and services business that helped turn reductions in carbon into carbon credits for the European Carbon market.

When this market started to dry up, and with a little cash in the bank left over, Kineshanko and his team began the search for another business. They employed the Business Model Canvas from Business Model Generation and the Minimum Viable Product from The Lean Startup to apply what they learned about the energy markets to create a product that answered a real customer pain point. Their work became Gridbid, an online auction to get multiple offers from solar installers and save on rooftop solar.

While shoeme.ca, Fundrazr, and Gridbid share little in terms of their business models, their founders all approached the process by iterating their way towards a successful product/market fit. As Eric Ries concludes The Lean Startup, the best way to learn these techniques is to embed oneself within a community of practice. I feel that Tom Kineshanko, Daryl Hatton, and Sean Clark have done just that.

Perch Gets Emotional with Third Build

Danny Robinson at his perch

Danny Robinson knows the value of listening to his product’s early users. While this might sound like a familiar trait for an entrepreneur, what separates him from many founders is his determination to dramatically change the product direction based on early feedback. Danny and his team re-wrote the complete code from the ground up, not once, but three times in their search to get product/market fit right for his latest venture, Perch.

In his easy smile and relaxed shoulders, something told me that Danny would not let his desire to see his ideas get built lead him to be stuck on a rigid path. While not as textbook as some Lean entrepreneurs, Danny’s approach is certainly modeled on the principals that Eric Ries writes about in The Lean Startup.

Perch is the unlikely result of his wondering about the uses for older hardware, in this case iPads. What could be done with older generation devices as progress inevitably moves on? At first, he and his team thought that it might be an easy way to do home security. They built an iOS app that would use the motion sensor in the device to turn the camera on and start recording when someone moved by it. This first generation product was called Redhand and would often produce little clips of family pets and kids running by.

Parents loved it and talked about how it helped remind them to go home and spend time with their families. What was absent was any feedback about the security features and feeling safer because they installed the product. So, Danny and the team decided to run with the emotional feedback that he heard from his early testers. He thought ‘let’s position the product as a communication device for friends and family.’ With this new idea, the team built out a new product that included the option to exchange “2-way asynchronous communications” by recording short videos and passing them between devices.

Again, early testers of the product revealed another use from what Danny and his team had envisioned when they built the second product. Business users loved the 2-way asynchronous communication option. After carefully observing users and asking them about their experience, they discovered the real value was not simply another way for employees to communicate, but rather the potential to overcome cultural gaps. The face-to-face messaging contained rich non-verbal information for the recipient. Much of that non-verbal information helped to reinforce workplace norms and shared values that are the basis for culture.

Pivoting a second time to produce their third code rewrite, the team came up with Perch, an ‘always-on,’ ‘frictionless,’ iPad-sized window into another location. Finally, Danny got the positive “emotional response from the naysayers” that he was looking for.

In total, it took some 40 iterations, but in the end, they produced a product that would require such minimal behavior change that new users might not even know that they were using it. The video is always on, but the audio only turns on when someone makes eye contact with the iPad. They can quickly communicate with another location without pushing any buttons.

If you have an iPad, download Perch for free from iTunes and share your feedback with Danny and the team. I am sure that they would love to hear it.

Death & Birth Rates of Vancouver Start Up Community

I have seen a number of articles and blogs lately where the authors attempt to persuade readers that Vancouver is the place to be when it comes to the next great startup capital after the Valley. Of course, my choice of reading material is selective and my contacts and connections lead me disproportionately to the material about Vancouver. I read and like many of the articles without thinking too much about them. I might have left it there, but something bothered me about these articles.

“6 Reasons Vancouver is Hot for Start-up” is a typical example. Among other things, the author talks about the travel time to Silicon Valley and the fact that Vancouver is ranked as a great place to live. While these are certainly true, there is a part of me that remains skeptical and bothered by the gist of these articles. They all appear to be written by folks who are based in Vancouver already. As such, they appear biased and lack credibility. (Full disclosure: The subtext of my own blog’s theme too could be subject to such a critique. I am certainly based in Vancouver and don’t want to have to move to take my career in technology to the next level.)

The fact of the matter is that there are a lot of cities that claim to be in line to become the next Silicon Valley, and Vancouver is pretty far down the list. Vancouver remains pretty much in the middle of the pack for startup cities even though external forces are driving changes.

Some charge that it is simply a reflection of Canadian modesty that Vancouver remains pretty average. However, I don’t think that it is the Canadian habit of not tooting your own horn enough. Instead, I think that it is simply just not high on the list for venture capital and entrepreneurial investments because it has yet to reach the scale and diversity of companies needed to create the talent pool based here with enough experience, credibility, and cojones. Each time those of us in the Vancouver entrepreneurial community believe that this is changing, we lose another ambitious young person to California (or you name the place where they might go).

It reminds me of a lesson in population science. If birth and death rates are equal, then nothing changes.  If the growth of another new Vancouver venture represents the potential ‘birth’ of a new set of soon-to-be-experienced founders and the move of another experienced entrepreneur out of the area represents a ‘death,’ then Vancouver might at best be just treading water. If the birth rate equals the death rate, then we are not gaining momentum. This conclusion is, of course, not a conclusion at all, but only an intuitive guess based on my conversations with individuals within the community.

What needs to change? As they say in time management classes, we need to ‘work smarter, not harder.’ I believe that Vancouver can overcome this stagnation by analyzing and celebrating the successes that we have had in the area of intelligent startup management practices. By this, I mean Lean Startup and Design Thinking practices that Eric Ries and others have argued are central to making startups work better. We need to learn faster, and over the coming weeks and months, I intend to document how the Vancouver startup community is learning these practices.

A Blog Refreshed with a New Focus

Hey, there, all of my loyal readers and the others who just stumbled upon my blog, I have decided to return to blogging, but this time with a new focus. This focus reflects what I have been hacking at over the last two years as both a graduate student and as a consultant at SAP.

I am interested in Design Thinking, but more specifically, I am interested in the application of the creative collaboration process to the building of new companies. Over the coming weeks and months, I aim to dive into Vancouver’s technology start-up scene and discover who has been using Design Thinking (in any of its forms) to grow or better their business. My interest comes from seeing how useful it can be to focus a team on a single problem and then to harness the creative potential of the group (or the individuals) to find solutions.

I first witnessed how a group of business students at UBC took to the process and the mindset when I worked as a Teaching Assistant for Moura Quayle and Ron Kellett. As a new professor in the business school, Moura was looking to shake things up. She invited a colleague from the design school to join her as they paved the way with a new pilot for the undergraduate business students. Through service learning activities and many presentations, we learned just how different business students are from design students. Yet, in the end, the pilot was a huge success and became a standard course at Sauder School of Business (COMM388).

More recently, I have been practicing applying Design Thinking techniques at SAP to develop and refine new products and services. The experience working with the product teams proved to me how effective it could be—when done well—within the enterprise. Design Thinking, I believe, helps to overcome from the huge challenges to innovation that exist within the enterprise.

Of course, there is more to be done and no solution is perfect. Often, internal forces within the enterprise still retard good products before they leave the building. This realization helped to shift my focus to start-ups. Here was an ideal proving ground, I thought. Here, within these new or small firms, the process should be much effective and pure. I took heart from examples such as the design staff that Google Ventures uses to ensure that their ventures get the Design Thinking support they need.

Let the search begin. I can’t wait to discover how Design Thinking, the Lean Start-up, and the Business Model Canvas are being applied at start-ups in Vancouver. Stay tuned for more.