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11 minutes | 2 days ago
What Is A Workshop? And Why Do I Need One?
What is a Workshop Episode Summary I’m thinking Spring today, I don’t know about you guys. It’s sunny and all the snow is melting and I’m here for it. I’m also here for this next episode of AAI which is all about workshops. What is a workshop? How can they help us deduce the product that will work for you? We get a lot more answers when we spend time digging and a workshop gives us the space to do that. From activities through to questions, we truly want you to think about your business and where you want it to go. How will this product fit into your business, how will you go-to-market with it? If these are questions you’re asking, going through a workshop may be beneficial to you. As always, listen in, and fill out the form here to ask questions or Schedule a Workshop! Full Transcript Erin Srebinski: [00:00:16] At City Innovation Labs, we run a bunch of workshops to help people figure out what they’re doing, what they need to build, if they’re even ready for custom software. Josh, what exactly does a workshop entail and why would anyone want to do this? Josh Barker: [00:00:47] Yes. Great questions. So a workshop really helps our clients take a step back and really analyze something before proceeding forward with the next steps of software engineering or prototyping or whatever it is. It allows us to really take focus on what we’re trying to accomplish. It brings crystallization to the path we’re headed towards. Oftentimes it leads to pivoting within that conversation in terms of strategy, go to market strategy, how they’re about to do something. It’s crucially important because it is that compass moment where you take out your compass and you go, which direction am I headed? And so if you don’t have that compass moment, you could actually be going in the complete wrong direction. That’s really what we want to help avoid . Go in the right direction. So it’s your GPS, if you’re a younger generation that’s like, what the heck is a compass? Oftentimes someone will come to us and say, this is what we’re trying to accomplish. No, one’s coming to us saying we want a workshop, right. Because that’s not the result of what people want. Erin Srebinski: [00:01:49] No, they’re not looking for that. Josh Barker: [00:01:51] They’re not looking for a workshop, but we offer that compass GPS. Right? They’ll say, here’s what we want to do, here’s what we want to build, here’s what we’re trying to achieve. And so then it’s our jobs, in that pre consulting, pre-workshop moment, to help them understand. Going back to our Product Validation Funnel, helping them understand where they’re at in the Product Validation Funnel and why. That’s where we’ll spend time pre consulting and pre-workshop, helping them understand where they’re at. We’ll ask a series of questions of how have you validated this? What experiments have you run? And sometimes they’ll say, I don’t even know what an experiment is and we can help educate them on assumptions and our process. Then once we get a standard of where is that company and the product validation funnel. The nice thing is with our workshops we definitely are believers in meeting them where they’re at to get you where you need to go. So for us, we definitely don’t take a one size fits all. It is completely custom. And so what that looks like is we actually have hundreds of exercises. I always like to use the analogy of, we go to a pantry and we take out the ones that make the most sense and how we know which ones make the most sense is based on a lot of our pre-workshop calls and discussions. And so understanding where they’re at in the funnel, and then moving forward with that and saying, okay, out of our workshop pantry, we’re going to pull out these exercises and assemble it. And so that’s how usually that workshop is done. Erin Srebinski: [00:03:20] Okay. When you’re going through and picking out some of those exercises, what does that look like? What do those entail or are we doing these long winded exercises? Are they bite sized chunks that we’re trying to figure out information? What does that process look like? Josh Barker: [00:03:32] Yeah, very good question. So it really depends again, based on where they’re at in the funnel. If we’ve determined you’re in that top of funnel, Minimum Viable Tests, that’s often early, a lot of assumptions are made. We’ll take that workshop number one to educate on the lean startup, you know, build, measure, learn cycle of how do you create experiments, which we call the Minimum Viable Tests. How do you create these minimum viable tests? How do you do that? A lot of it is assumption based. We’ll map out all the assumptions made. And then once we do that, we’ll actually go take inventory and go through a prioritization exercise to say there are key assumptions. You’ll find key assumptions. A lot of assumptions are hinged on a primary assumption. So if you can validate a primary assumption, it will either validate all of those around it, or it’ll actually give merit to well then now let’s go validate all these other assumptions . If you can’t validate this assumption, none of the other assumptions matter. Oftentimes there’s actually not that many, usually one to five primary assumptions. And then what we’ll do in that workshop is we’ll really focus on how can you create a minimum viable test or an experiment to validate or invalidate quickly these key assumptions? Without building anything. We’ve talked about creating a test and what that might look like of, if it’s a B to C app understanding your target market. That is an assumption and we can send out an ad set on Facebook to measure the click-through rate. To measure the engagement before you actually go build the things. Should you? You’re measuring quantitatively . That is the first part. If they were in the Minimum Viable Test part of the funnel. That’s what it would look like. If they’re further down and they’re the Minimum Viable Product, which would state that a lot of the assumptions have been validated that we should build this. In that case, it looks far different. How that looks of building a Minimum Viable Product is we’ll actually sit down and we’ll do design thinking exercises, like persona creation, persona mapping. We’ll do journey mapping. We’ll do story mapping. We just went through a pre-workshop and a workshop this last week. We realize they’ve really crystallized their vision statement. They’ve got a clear vision. The strategy is there. It’s an existing business. They have personas created, but the gaps that we saw are in the tactical side of let’s go ahead and create the journeys, create the story map and narrow down the focus of what we need to build in our MVP. So that’s what we do in that MVP stage. As we do an inventory, we’ll do that no matter which stage, on what you currently have. A lot of times you’ll have data, you’ll have assumptions, you’ll have validations, validated assumptions and we’ll do that analysis and figure out which ones out of the pantry to select. Then in that last stage, if you’re an MMP stage, really what that means is you validated all your assumptions, you actually have a prototype. A very small number of people actually say, ‘I’ve got a prototype I’ve been validated in the market.” I just need to go and build this thing. Right. What we do down here is we really help narrow what does MMP mean? A lot of people get confused and say, “I want to load up all of this functionality.” That’s where we kind of help them whittle it way down and scale down and have roadmapping conversations to say, let’s talk and focus on go to market strategy. How do you step into existing traffic? How can you release this? What are some partnerships that might be good to go to market? It’s a lot of go to market conversations and how can you get to the market quickly? So you can kind of feel all of those stages are very different in what the workshop might look like. And they’re very different in exercises because if we’re doing an inventory combined with where you are in the funnel, every single workshop we’ve ever done has been different based on those couple of facts. Erin Srebinski: [00:07:41] That makes sense. Every business is a little bit different. They should be relatively custom and differentiated in what you guys go through. I remember talking to a client and they said, I had no idea what lean startup was. It totally changed my entire mind about what my business should be like, was completely wrong. It’s great to hear that because then he’s like, I have to go back to the drawing board. There’s so much stuff to consider. You take this outside approach of poking holes and you do all these assumptions, but When you go through this workshop, let’s say you’re at the beginning of the stage and you go through all these assumptions. Do they have to go through the next workshop? What happens next? Do they go out and test and come back and say, this is what we learned? How does that usually play out? Josh Barker: [00:08:18] It depends on where they’re at in the funnel. So if they’re at the top of the funnel, if we’re talking about MVT, we’ve poked holes in the assumptions, like you said, we’ve talked about those, prioritized those, created some experiments. Then what we do is we offer them, if they so desire, a coaching engagement. We offer on ongoing coaching anywhere from four times a month down to one time a month. We use that as like a meeting and a touchpoint is to help. Guide them in that experiment creation process. That’s one way we do it in that top of the funnel. Another couple of ways we do it in the top of the funnel is oftentimes we’ll say here’s an experiment that needs to be run. They’re often very inexpensive, but sometimes do require engineering or guidance. So in the workshop, we’ll help think of things like what open source tools can you use to quickly glue together an experiment. Sometimes we’re able to actually put together the experiment for them. To say, here are all the different pieces. Maybe it’s a WordPress website mixed with a explainer video. We have a rolodex of a bunch of people that we work with. Obviously we don’t make videos, but we have people that make explainer videos. So we can actually help refer to how do you put this experiment together? That way we can kind of hand that off and we can contribute to some pieces as well to help create those experiments. For the customer, we help act as that guide as they’re putting together the experiments and moving forward. The next part is the MVP. So once we’ve assembled the MVP, what does that look like? We understand what needs to be built. We’re going through design thinking exercises, like journey mapping and story mapping. It’s a natural progression of, “Hey, we can actually build a prototype for you.” Let’s also talk about how you can pilot this. Maybe even pre-sell it. A lot of the conversation is on pre-sales if you’re business to business, especially. So if we can do that , oftentimes we’ll go and create a prototype. The neat thing we’ve seen as we assemble the prototype within a week or two plug it into a sales presentation and immediately go to a target market, get feedback, but not only get feedback, but get pre-sales. That’s been actually very successful in helping do that. So that’s one way we help out with the MVP stage and how we help out on the MMP stage obviously is now that we have a prototype, we can obviously do a lot of the development work on your behalf. So we can kind of talk about we’ve got a prototype and it’s like, really clear what we’re trying to build and accomplish, and then we can kind of go into engineering. The post What Is A Workshop? And Why Do I Need One? appeared first on City Innovation Labs.
9 minutes | 10 days ago
How to Build an App the Right Way
Episode Summary Getting ready to build an app can be a lengthy and expensive experience. So how do you do it the right way? Last week we talked about the Product Validation Funnel. Testing, validating, and understanding your target market are essential before building anything. How do you know when you’re ready? When you’ve done the legwork to secure validation for your app or feature. You’ve tested it with consumers, you’ve created an MVP, and you know with little doubt that this app will take hold in your market. Below you’ll find some handy tools to help you on your journey, but as always – we’re here to help and can walk you through some of these exercises. Tune into this weeks episode! Handy Tools To Help You Build an App (a working list) Business Model CanvasProduct Vision Board Full Transcript Erin Srebinski: [00:00:00] Today we’re talking about if you’re ready to build an app. How do you know? What questions do you need to ask? What prep should you do ahead of time? There’s a lot that goes into it. It’s usually a relatively big investment. Josh, how do you know if you’re ready to build an app? Josh Barker: [00:00:26] Every custom software development project is really understanding the why. What are they trying to achieve? That’s the first question we ask. Very much a sub question under the why is, should you build an app? We asked that question with such kind hearted intentions to make sure you’re investing your money in the right spot. That’s where we truly act like a good partner of helping them go through that Product Validation Funnel. Validating their product idea prior to just going out and building the thing. A lot of times when we meet with people, what we’ll do is we’ll analyze where are they in the funnel? We meet you where you’re at and then we help you get where you want to go. If you come to the table with, this is an idea or a concept, you can look at what kind of assumptions they’re making, but what kind of validation have they received? So a good example of not starting at the top would be if you have a website for a proven organization. There’s a lot of innovation behind just a website. So for us, when we go through a website project, if it’s a client that has an existing business, it’s more of an innovation optimization and writing out the assumptions and then narrowing that down. So they’re actually further down. Should you build this website? The answer is almost an obvious. Yes. Right? I think everyone could say, well, you’re an existing business. You don’t have to prove whether or not you should have a website. If you’re talking about a product that has an unknown track record in the marketplace , a lot of people will come to the table and say, ” I want to build this thing.” And here’s some proof that the market needs it and they’ll point to other products in the market. That’s an area where we’ll sit down and we’ll go through the assumptions again and make sure they understand when you’re building this thing, you’re making the assumptions that there is room in the market for another player. There is enough differentiator to carve out enough for that market space for you and the product that you’re proposing to the market. We like to go through all of those things and call out those assumptions. A lot of people don’t like to call them that because obviously it’s their idea or it’s their company’s idea. They want to just proceed forward. And for us, we want to rewind that a little bit and help them through that. Erin Srebinski: [00:02:33] When they’re going through this, we kind of help them along this process, like a validating these assumptions. Is there any prep they need to do ahead of time? They could do these assumptions by themselves. Right? They could do these tests by themselves. It’s just giving them the tools to do so. Josh Barker: [00:02:46] Yes, that’s right. We have a lot of exercises we go through in some of our workshops. So if we identify you’re up at the top of the minimum viable tests bucket within the funnel, we can offer our workshop. We can also offer a lot of the materials the workshop goes through. One example is, if you are familiar with the Business Model Canvas. If you’re not go Google it, it’s free and open source. Find it, print it out. It’s just this business plan on a page that’s very visual. It’s a very good tool to use if you’re talking about any new product or business venture. That’s one activity in the workshop that we’ll actually go through quadrant by quadrant. There’s a bunch of different pieces on that Business Model Canvas. We’ll write out the concept of what they’re speaking about. But we’ll also grab our sticky notes, which we love so dearly. I have one right here and you see them behind me all on the wall. So take the sticky notes and then we’ll help think through with our client. W What are the assumptions we’re making? Sometimes it’s really hard. Even if we’re not doing it with you, I would encourage someone to do it with someone else. Having another person there to be a sounding board, because sometimes it’s really hard. You have this confidence in you of like, this is going to work and having someone be a little bit more objective there to say, “Well, have you thought about?” Calling out the assumptions and just being really honest with the process. Collect all those assumptions and you’ll be very surprised on how many assumptions you make. And then you can start to think of the next step after that is how can I create a test to validate this assumption? There’s a lot of documentation we have that we walk through. How do you create a good test? What makes a good test? How do I do that? Erin Srebinski: [00:04:33] Yeah, going back, like you said, you need someone else in the room and I think that’s true. When you have just you and a business partner, you are both on the same page, you’re riffing on the same thing. Someone that isn’t invested in the product is like, “Whoa, Whoa, no, you can’t do that.” So I think you’re right, having a third party is essential to poking holes in it. Right? Josh Barker: [00:04:52] Yeah. That’s right. Erin Srebinski: [00:04:54] Some of these exercises, what other ones do we do to like help clients go through and like give me an example of a test, I guess, like what kind of things have we done before? Josh Barker: [00:05:05] Absolutely. Good question. When you’re in the MVT stage, the key word is assumptions, right? Making sure we have a focus on that. Whether we’re going through a Business Model Canvas. We’re talking about the perceived personas and their target market. We’re talking about journey mapping because we’ll often do journey mapping. We’ve been approached by people that have successful software businesses that are earning revenue and they’re wondering about things like, should I add this new feature? If you have an existing SaaS product, it doesn’t mean that everything you build is going to turn to gold. Right? The value of a piece of software, if you have it built, is also in not only the features you put in, but the features you leave out. Giving it an extreme focus. What we did with one of our customers was we actually outlined a proposition of a new product offering our new feature, a sub feature under their core product offering. We helped them get to the question of, should we build this? So a very small minimum viable test could be, if you have an existing product: put in a click, put in a page, put in something to go perform this action that you would normally kind of wire up to the real product offering. When they click on it, it would just bring them to a screen that says coming soon and we’re measuring for engagement to see if this is something that’s worth building. The nice thing is, is if you wire up analytics behind how many clicks you receive and further when they go to that next screen click to request or add comments. You can start to get this feedback and this data of how many people visited this page and how many people actually clicked on this thing. Then you start to gather quantitative data on whether or not you should build an app or feature. There’s a lot of these small tests you can run. If you don’t have an existing product, often a very simple thing is to ask yourself, “Where are a potential set of users?” If you have assumptions you’re making about a target market. Oftentimes if it’s a consumer app it’s on Facebook, or if it’s a business to business service or app, or a product , you can do it through LinkedIn. It’s asking yourself, where are my customers or the potential target market? And then you’ll have an idea on what the value proposition is. It is a very simple exercise. For a consumer driven app, create a quick Facebook ad that is very targeted to explain what it is and a quick value proposition. Cast that out to the target market on Facebook. And then you can measure again, based on clicks, or if you decide to do a landing page based on how many people to stay on the landing page, bounce rates, you’ll start to gather a lot of data about whether or not you should. That’s such a fast way of knowing whether or not you should proceed to the next step versus going out and building the thing right away. You’re just analyzing, should you? Erin Srebinski: [00:08:00] Yeah. I mean, that makes sense. So essentially, before you engage, you should have some of these tests done, or you can do them with us obviously, but it’s basically testing your assumptions. That’s the focus before you build software, is there any other things like questions you should consider or things that you just need to take into account before you do this? Josh Barker: [00:08:22] Yeah, I think the biggest thing is asking yourself if you validated those assumptions, then the next step as you go through the funnel go down to the MVP stage, build a rapid prototype that might include code. It might not. It can be a quick prototype in terms of pictures strewn together and gathering feedback. Once you validate those two parts of the funnel, if you’re asking yourself when you should go build an app or feature, I always say, wait to the very last minute until you’ve received enough validation. I’ve learned this enough in my career. And what’s so funny is this is coming from an engineer too, right. As an engineer, as we want to go build something right away. So it’s taken everything in me to retrain that brain pattern to say, no, I’m not going to go build something. I’m going to go and validate that first. Once I have the appropriate amount of validation, I’ll go build it. The post How to Build an App the Right Way appeared first on City Innovation Labs.
8 minutes | 16 days ago
What is the Product Validation Funnel?
Episode Summary On the podcast today, Josh and I discuss the Product Validation Funnel, a term we coined here at CIL. It is a method of building software, a way to discover where clients are in their process and help them to the next part of the funnel. Product validation is inherent to how we build software, it guides us to help clients make the best decisions not only about their product but about their business. We want to help them (and you!) avoid costly mistakes and build something no one uses. Software should be a perfect solution to the product you’re solving, and YOUR customer should be delighted when they use it. How do you do that? Well, with the Product Validation Funnel, of course. What else can you tell me about Product Validation? Why is Using a Lean Startup Methodology Important?5 Ways to Apply Lean StartupWhy We Created a Validation Process – the origin storyWhat is an MVP?There’s a lot more to read, listen to, etc at this link! Full Transcript Erin Srebinski: [00:00:18] Today we are talking about Product Validation Funnel. Josh, why don’t you tell us what the Product Validation Funnel is? Josh Barker: [00:00:25] Absolutely. We developed the Product Validation Funnel because it really is our key differentiator in the marketplace. And we want to kind of give people that secret sauce, you know, we want to give back and we want to say, this is how you should build software. These were key learnings from being out in Silicon Valley and working with a ton of smarter people than myself, and being able to take all that information and package it together. And we created the Product Validation Funnel. So that’s a little bit of the history behind it. The Product Validation Funnel, what it is in a simple form, is all products go through this funnel, whether or not you acknowledge it they go through this funnel. So there are a couple of different stages within the funnel. So if you envision a funnel and at the top of the funnel, the broader side, you’ve got an MVT: Minimum Viable Tests. And then down the funnel a little further, you’ve got Minimum Viable Product. And then down at the bottom, you have a Minimum Marketable Product. So each of these stages, all products go through this. The biggest mistake that companies make when they’re developing products is they go through this funnel too quickly. They’ll skip over steps. They’ll go down right to the bottom. Normally, that’s the biggest problem, they’ll go right through the funnel to the MMP and they’ll say, what do we need to build? What we do is encourage people to go and think through it a lot more systematically. Make sure you go from MVT to MVP, to MMP. A lot of abbreviations. The thought is, is when you go from the top, it’s reducing your risk the further you get down the funnel if you take the time to appropriately go through each stage. And so that’s what we really try and do. Each part of that funnel is reducing risk and giving an example at the top of the funnel, the minimum viable test that’s simply doing market tests, lean startup calls it experimentation. Doing experiments to prove whether or not your idea, your product idea will actually have legs in the market. So do that before you do anything. And that means hardly any engineering. Quick and rapid. An example of this that I give all the time, as you know, is Dropbox. Right? What Dropbox did instead of going out and building the thing and going through the funnel too quickly, they said, “We’re going to build a two-minute explainer video, send that out, and see what kind of traction this gets in terms of pre-sign ups.” And of course, the rest is history where they got tons of pre-sign ups. And so a lot of Silicon Valley principles up here of rapid experimentation and lean startup. We try and apply that to all of our projects. So you’re not getting down to the funnel and wasting tremendous amounts of software engineering costs. When really you could have stopped at the top and said, “Hey, we tested this out in the marketplace and it really did doesn’t work”. Erin Srebinski: [00:03:09] Yeah. So once they do that, the next stage is MVP. Josh Barker: [00:03:14] Yup. MVP after that. And so all of the learnings we learned out of that MVT stage, we apply to the MVP stage. What we’ll do is we’ll sit down and through these rapid experimentations what we can do is we can actually determine who best is the target market? What’s the value proposition? If you imagine like a Business Model Canvas, we kind of go through that canvas and try and reduce the number of assumptions we’re making through these experiments and the MVT stage. Then when we get down to the MVP stage, we have a fairly clear idea of how to create some wireframes and some quick, rapid prototypes so that we can actually get it in the hands of potential users of it and get feedback. And we’ll iterate on that feedback, just continuing to wireframe and rapidly prototype. So still very little engineering effort. And we do that so that we can add a further validation step. So that the folks that we’re marketing to are equally giving us this feedback and getting excited. Honestly, they’re getting excited about it and saying, “Oh my gosh, this will solve my problems so much.” And so that is the MVT, and then the MVP stages. And then you want me to go through and talk about the MMP stage to the bottom? Erin Srebinski: [00:04:21] Absolutely. Josh Barker: [00:04:23] I mean, it’s kind of an obvious progression of you doing rapid experimentation, doing a quick and rapid prototype. Well, now you pretty much have the validation and the blueprint to know exactly what to build. And when we say MMP, the caveat here is a lot of people get caught up, not only going through the funnel too quickly but also in that MVP stage, it’s critical that we validate what is the Minimum Viable Product. In other words, what is the minimum amount of value you can package up for your target audience and ship that out to them, to where they would actually want to download it and use it? Too many people add on bells and whistles, of developing this huge scaling app. When it’s like, no start really small. You can get to market faster, you can get people using it. And at that bottom stage, you actually develop the software, but it’s a very slimmed-down product. So Minimum Marketable Product. There are increasing costs as you go through the funnel, but if you do it right, you’re going to reduce your risk substantially and build the right thing. Erin Srebinski: [00:05:23] Right. Because you’re taking the most risk at the beginning when you’re not spending that much money. You’re essentially narrowing your scope all the way down at the bottom so that you have a very clear idea of what to do. So you’re not just doing something and spending a ton of money. That’s the benefit. Josh Barker: [00:05:36] That’s the benefit. Exactly. Erin Srebinski: [00:05:37] This is kind of also similar to the build measure, learn cycle, right? You’re learning along the way, you’re getting input. So is there a difference or you just going through the build measure, learn, cycle in each step? Josh Barker: [00:05:48] That. You’re exactly right. So it’s that where you’re going through build, measure, learn through every part of the funnel. It’s a perfect convergence and one doesn’t negate the other, they work really well in complement. An example of this is at the top of the MVT stage, if you run a rapid experiment, oftentimes you’ll find out, which is just as valuable, you’ll find out what doesn’t work. So then you’ll tweak your experiment and then you’ll say, “Well, would this work instead?” You kind of build, measure, learn, right? Send it out to the market, get the feedback and say that didn’t work, what did we learn out of this and what can we keep doing to iterate on that build, measure, learn cycle? Erin Srebinski: [00:06:25] That makes sense. So you’re taking this funnel and you’re analyzing it, you’re getting data, you’re getting feedback, you’re getting customer input, and all of that equals out to one final thing. Josh Barker: [00:06:35] Yes. Erin Srebinski: [00:06:35] That’s essentially the goal. What are the benefits of doing it this way? You mentioned saving money is one, you’re building the right thing, which is obviously pretty important. You’re testing it with your consumers, so you already know how they feel about it. If they like it, what they do and don’t like, what features you need. Is there anything else or did I just take it all right there? Josh Barker: [00:06:55] You nailed on all of them, mostly. I mean, that’s a very good synopsis of the benefits of it. Far, too often it prevents someone from having an idea, whether it’s a singular person, like an entrepreneur, or someone within a large enterprise business or a team of board members saying this is a good idea. Oftentimes they have the best of intentions. Right? And they have, somewhat of a pulse on the market. It’s not to say their assumptions are wrong. It’s just to say, let’s take a little bit more scientific approach validating and refining a concept that someone might have. When we’re approached oftentimes we’ll help them rewind a little bit and say, well, wait a minute, let’s make sure you validated this before we move forward. I think that the value proposition could be summed up by saying what would happen if you spent a quarter million to half a million to over a million dollars, but you ended up building the wrong thing that no one actually wants to use? The post What is the Product Validation Funnel? appeared first on City Innovation Labs.
26 minutes | 4 months ago
What is the True Cost of Software Development?
Episode Summary We build software. Great, so what is the actual cost of software development? There are plenty of reasons you may want to build custom software, but you probably have some questions about how much money you’re going to have to throw in to get exactly what you want. We go through how we estimate software costs and what the final numbers will look like. Visit cityinnovationlabs.com/ask-an-innovator for some helpful links and the full transcript. If you have questions about what an app may cost or if you have a concept you’re looking to get some help with – schedule a free consultation with us! Schedule a Conversation With Us! We’ve written a few things about Software Development How to Contract the Right Software Development CompanyLearn more about Agile Software DevelopmentLearn more about Lean DevelopmentWe reference this podcast a lot in this episode Timestamps How do you give estimations for software – 00:32What does the estimation process look like? – 02:32How do changes to scope affect the cost? – 07:22How do we stay within budget – 09:41How do I ensure my investment – 11:19Isn’t there a way to build software cheaper? – 14:32What questions should a customer ask about cost? – 15:46What costs will I run into after the project is completed?– 18:40Give me a dollar amount – 21:41 Full Podcast Transcript Erin Srebinski: [00:00:00] Hi and welcome to Ask an Innovator. We’re here to talk about innovation in the software development space. Sometimes us, and sometimes others. This podcast is brought to you by City Innovation Labs. Hey, this is Erin and Josh from City Innovation Labs. We’re here today to talk about software development costs. I have no idea what I’m doing. So Josh is going to kind of walk me through what it costs. Here we go. So Josh, how do we do estimations for software development? What does that entail? How do you get there? What do you give the customer when you’re finished? How do you give Estimations for Software? Josh Barker: [00:00:32] Yeah, it’s a great set of loaded questions you’re asking right now. usually we’ll get that right away from customers that say what is software costs. And so a lot of people have preconceived notions that come in and if you’re a startup bright eyed, bushy tailed, you’re a young person saying I’ve got an idea and they come to the table. And I think that way discouraged a little bit because software is expensive. Being frank, software is a very expensive endeavor. It’s not a $500 endeavor, add a few zeros and you’re looking at that sort of endeavor. That’s where we help customers understand the why’s behind software costing so much. It definitely is a loaded subject that has so many different avenues of helping customers discover how much does this cost The analogy I like to use a lot is actually the one of building a house. You can imagine if you go out and you build a house, you don’t go out and build a house. You don’t go out and ask a builder, “How much does it cost to build a house?” Like, that’s just like, right. It’s like, that’s what you’re asking. How much does it go? The builder’s going to ask back, well, does it have a basement? Does it have two double stall garage? Does it have, two-story like, why give me details? And that’s what we are talking about? Is it a shed? You know, like if it’s a shed, it’s a lot less, you know? That’s exactly the type of tension that we deal with when people ask, well, how much does software cost? Generally speaking, if they want early kind of numbers, I’ll give them ranges of costs that says it could cost anywhere between here to here for this sort of thing. But, it’s really difficult unless you start to really dive in with the customer about what is it you’re exactly trying to build. Software is a very custom thing. And so when we’re building it, just like a house just like spec houses, there is such a thing as we could set up open-source software that we kind of have some ranges of how much that would cost better dialed in, but a lot of it is just going to be completely custom. What does the estimation process look like? Erin Srebinski: [00:02:32] Okay. When we’re working through that and trying to give an estimation and tell them what it is, what process do we go through to get a better picture of what that actually means? Josh Barker: [00:02:43] That’s good. So what we do is we first we have an initial conversation with customers and we say, “What is it, give us the high-level executive summary of what you’re trying to accomplish. Generally speaking, that’s a 30-minute conversation. Usually in that meeting, we schedule a lightweight product strategy workshop. We offer a full strategy workshop and an innovation workshop, two different types of workshops, but we offer a very lightweight workshop to those types of customers that we say, “Hey, what we really need is about an hour or two of your time,” to guide them through some exercises to understand what needs to be built. Right? So orders of magnitude, what are we talking about? In that workshop, we do three different exercises. We do persona creation and mapping. I group that under one exercise, we’re very human-centered in our software development. You know, we, Erin and I talked about lean startup, listen to that podcast on how we do software differently, but we effectively start with the market and the end-user. And so who is that? What are their core needs, their fears, their wants their desires, how are they going to use it? And so we create these personas and even put names to them. You know, we’re creating software for Bill, but we’re also, secondarily, creating it for Mary and Joe. And so we create this map and we map out the customer and then that helps us inform, as we’re talking about. The second thing we do is we go through a journey mapping session. So these are all design thinking exercises of helping our customers understand kind of the process of what they’re asking to build. And so we go through and we map out if there’s a current process, some manual process, we map out the current journey and then identify friction points. And if there is a future, you know, we’re taught, it was a future process, right? What would it be with the app or the thing we’re building? We map that out. We mapped that all out and we can kind of visually see it. And then the last thing we do, each one of these kind of lead to another, is story mapping. Story mapping is the process of kind of mapping out. We map out the high level, what I would call Epic level features, the large buckets. So for example, we know that the app you’re asking for needs a login, that needs this other thing. We map out a lot of those different large bucket features and then we even move them and dial them in too. We talked about it in the lean startup podcast: the skateboard, scooter, motorcycle, car, and we divide them into these different phases. Red is a typical Software Development project, Green is how CIL runs a project! Then we can come to, this is what our MVP would be, delivering a skateboard to the marketplace. Generally, that’s the process. We have a D4 Innovation Model and what that model is, is it’s a very structured way of how we build. The first step is we try and map to the cone of uncertainty. So that’s something that you could literally Google. It’s not something I came up with it’s a project management concept. The amount of time that you’re estimating what are the ranges? So estimation versus variability and the estimation ranges. So earlier on, for example, if someone would come up to me and say, “Hey, I want to build an app. How much is that going to cost?” Well, I’m going to give you terrible estimates because I have no idea what you’re talking about. Right? The more information I have, it’s a simple cone. The more information should I have, the more conversations I have with you, the more documentation I make, the more prototypes we make, we can narrow that down. Our D4 Innovation Model maps over that perfectly where we first have a discovery. Sometimes that’s in the form of a workshop. Other times for larger projects, we might need a discovery engagement. Once we have that information that moves into where we’ll interview customers, your customer’s customers. We’ll map everything out in a lot greater detail that allows us then to create a prototype. CIL’s D4 Innovation Model We create a prototype and the way I phrase it, using the house analogy like a blueprint for a house, right? You contact an architect and then you’re like, Hey I want a two story with a basement. And so we go through and rapidly prototype much faster than when we build the app. We rapidly prototype what you’re asking or thing that you want to bring to market. And then after we build that, we’ve got a nice blueprint to know how much development costs will be, which is deliver. That’s the next D4. So you’ve got Discover, Draft, Deliver. And then after that you’ve got Disrupt, which is largely when we do a lot of continuing innovation and adding to the product. those are the high levels of how we would go about the estimation process. How do changes to scope effect the cost of software development? Erin Srebinski: [00:07:10] I’m kind of putting my customer shoes on here and that sounds great. So you’re going to give me a large range, right? I’m going to get a range of what it might cost depending on what this prototype looks like. And if I want to make changes, when do I do that? And do I make it in the prototyping phase? Do I make it in development? Because I imagine that could change the cost depending on how we do that. So can you go into that a little bit? Josh Barker: [00:07:30] Yeah, absolutely. Generally speaking, our cost model is we’ll give you ranges, but we’ll also give an estimated spend. We’ll say this is what we recommend for what you’re suggesting you spend. That model is a fixed-cost, variable scope. What we mean by that is it allows some flexibility in both directions too. Usually we’ll have it be very hands-on in the prototyping stage. Let’s say in the prototyping stage, we gave you an estimate of how much that will cost ahead of time. We’ve got a budget, right? And then in that process, we learn new things because we get feedback from customers. This is what happens. All the time. Technically, if it doesn’t happen, there’s a little bit of nervousness of like, “Oh man, no one is really engaged in this process.” What’s wrong. Right. We try and bake that into the process of knowing it’s an iterative process of getting in front of customers. They’re going to tweak it a little bit. So in our estimate, we do try and include that in addition, because it’s fixed cost, variable scope. Oftentimes whether it’s prototyping or software development, we work with the customer to prioritize what is the most important thing in what we’re delivering. We focus on those things most important, as well as the highest risk items. And we prioritize those towards the top. And so we say we have to nail these things. Then we kind of get into this after the top four, five, six, seven, 10 things you get into this. Well, these are in the “nice to have” category. And so because of that fixed cost variable scope, if we have enough time, we can add those nice to haves, but generally we really try and help the customer or identify the cutoff of what I need and we estimate that way. How do we stay within budget? Erin Srebinski: [00:09:14] Okay. Yeah, that makes sense. So when we’re working with a customer, I imagine they sometimes have a tight budget, so how do we ensure that we stay within that budget? I know you kind of just went over that, but how do you prioritize features? Do you do that with the customer or do you do it internally? How does that work? Josh Barker: [00:09:30] Oh, great question. So oftentimes, especially in the prototyping phase where costs can go haywire with any custom software development company is really when you start the actual engineering process. You start coding and oftentimes you run into unforeseen things. Or if you get it in the hands of users and you get feedback. So that thing we planned for, yeah, no one wants that anymore. Okay. Well, great. Well, we can chop that. That works in the customer’s favor to reduce costs, but what about the other direction? What if we get it in the hands of users and they say you’re missing a huge component of that, right? That’s where the customer’s involved. Typically what we’ll say is because we’re focused on an MVP to market as fast as possible, we’ll try and put ourselves in their shoes and help them with the compromised process of like, “Hey, here’s some features we said were important. Here’s one that the customer came back and said that we have to do.” We can look at this list and exchange, right, and say, well, instead of doing this one, let’s do this. What do you think of doing this one, instead? It’s a very collaborative process. One of the things that I sometimes customers come back and they’re like, “Well, I don’t want to do that.” You committed to doing this whole thing. And what people have to understand is with the house analogy is the fact that you’re building the house, not for yourself, but other people. Right? So you’re inviting them into the process. And so if you get an estimate and a quote from some architect to say, here’s how much it’ll cost. Builder’s like, “Yup, this is how much it’s going to cost.” You start to iterate as you’re developing it and you realize that the people that live there don’t want some of the stuff that you suggested to put in there. Cost obviously has to change. You have to play this game of, well, we can keep this fixed cost as long as we can. You know you wanted three bathrooms, as long as we knock off one of the bathrooms we can get the rest of it. How do I ensure my investment? Erin Srebinski: [00:11:19] Got it. Yeah. That seems to make sense, you wouldn’t buy a house and not want to pick the cabinets. If you’re building it, you want to pick all those things. I imagine picking features and being part of that process is really important to the customer. And that helps you kind of gauge cost as you go along because you find out what’s important and what matters to them and how they, we really want to do this. But to poke holes in this, I’m going to spend all this money, how do I know that it’s worth it? How do I know that I’m going to get something that works for me? How do you ensure that when we’re building software and when we’re spending all this money? Josh Barker: [00:11:52] This is the Holy grail of questions. Isn’t it? It’s like Josh, what’s your crystal ball say about my idea. Right? It’s a great question. So what I, what I tell people is this is, this is why City Innovation Labs exists. Most custom software development firms, what will end up happening is they’ll build the thing that you asked for, which is not a bad thing if you really want that thing. But if you don’t know the market and there’s some risks, which sounds like Erin, loaded in this question, which I’ve heard from customers is there is some uncertainty, there’s some risk involved. How do I know I’m going to get the return and how do I know it’s going be used? This is why in our process, we have baked in taking small bets. Taking small risks and testing. So we talked about in the lean startup episode of this, about MVT, right? Minimum viable tests. We talked about MVP, and then we talked about MMP. So Minimum Marketable Products. When we build software, we don’t go for the minimum marketable product. First, we help them build, really educate them on what MVTs would be useful, and help them run the MVTs. when they come to us, we help them say, okay, Here’s what we can do to build an MVP and we’ll build a rapid prototype very, very quickly. Usually, that’s a lot lower cost, like I was mentioning before, and faster than building the actual software. We encourage them, take it to the market, get feedback, and let’s iterate on it together. And the nice thing is, is you can also use these prototypes that we build for. If you have an investor or you need to sell this up in your company, we have this as a piece that you can get buy-in, or we’ve even seen it where customers get pre signups, which is almost the best-case scenario. Get some pre-sign ups. Put together a landing page. Sell this thing. Listen to the lean startup episode. We talked about Dropbox. Yeah. Effectively you can get pre-sign ups and have that even generating revenue before we even touch a line of code. Generally, that’s a much smaller spend creating a prototype. And then once we start that process and we can get some level of confidence, that’s why this is so important that you bring it to users and you even see if you can get pre-sign ups, then we can start to talk about what’s important, what’s not important, what’s the feedback? We can iterate on that and start developing a skateboard version of this, to release to the market. And by that time you’ve got market validation, you’ve maybe even had some pre signups. We’re doing it incrementally, versus if you go to another firm, they’re gonna want to do a big bang. Instead of spending all this tremendous quarter million dollar plus funds, you’re spending a very small fraction of that first testing the market and seeing if there’s actual traction before investing more dollars. Can’t I do it cheaper than this? Erin Srebinski: [00:14:32] That makes total sense. When I’m thinking about this, and I’m shopping around. There’s things where you can build your own app, right? Where you could build it for cheap and you could do that. So what’s the benefit of using someone like CIL or a software development company versus doing it that way? Besides the intense learning curve that I imagine exists? Josh Barker: [00:14:50] What you just articulated of, why wouldn’t you build one with a low code, no code solution that already exists in the market? I think that’s a great idea. The first thing you should do is do that. Like I’m being straight with everyone that’s listening. Do that first and then after you get feedback and you iterate in the marketplace, that’s the MVT. That’s a minimum viable test, a great way to test your market. Have us help you test the real thing. And then say, now that you’ve got interest in the value. Let’s go and see if we can make this thing really awesome and do a custom build. Just like Groupon’s story, they use WordPress, they didn’t go out and build something super custom. What’s hilarious is I almost un-sell people as my first objective to us to go, have you done this low code? No code? And I preach from the mountain tops, like do this first. And if they say I’ve already done all that, here are the results, it’s like, great, let’s go to the next step. So oftentimes I encourage that. What questions should a customer ask about cost? Erin Srebinski: [00:15:46] Okay. That’s great. when they are shopping, they come to you and they’re ready. What kind of questions should a customer ask to really get feedback about why it costs what it does? Are there good questions that they should come into the conversation with? Josh Barker: [00:15:56] Yeah. That’s a great question too. I would say if you’re going to engage any custom software development firm is, “Help me understand how this is related to a go-to-market strategy.” Right? So, because a go-to-market strategy, meaning we just talked about getting pre-sign ups and then stepping into finding out where existing traffic is and who you’re going to market to. And so these are all great questions that I believe makes us a huge differentiator in the marketplace. we don’t just go build it and then say good luck, have fun, see you later. Thanks for the hundred thousand plus dollars. We don’t do that. We literally put ourselves in the shoes of our customers and say, here’s what I would do. I’d do a Kickstarter campaign. Here’s some options let’s brainstorm together. And we have this brainstorming process where it’s very collaborative, where we’ll come out and that person should ask us what is the go to market strategy? Like how would I go about doing that? Josh Barker: [00:16:54] If they’re not willing to have a conversation about that, that in my mind is a red flag if you’re talking about costs. You mentioned a couple of questions ago, Erin, you want to know that you will get a return and you’re not going to spend a quarter million dollars on something that’s a flop. Instead, you’re going to want to spend a fraction of that discovering, Hey, this might not be a great thing or discovering a pivot you need to make to make it a great thing. That would probably be the number one question. you can also ask the question of, “Is this a minimum viable product?” That would be a great question to ask any software development firm. Most software development firms in this industry make their money by upselling and selling larger projects. Now, I feel actually bad about that and convicted to be like, I don’t want to charge people for something that users probably wouldn’t be using. I would feel bad about that. And so that’s the thing is asking that question too, “Is what we’re creating a minimum viable product?” How can we make it more minimum viable? How can we trim this down? Ideally, you’d work with a firm that has already done the legwork to pare that down to the value that they can go to market minimally with instead of baking in every single thing they can think of under the sun of like, yeah, let’s use AR VR. Do you really need that for like a banking app? Like logging into my bank? You know? Erin Srebinski: [00:18:17] That makes sense. They should know what an MVP is, essentially. Most people know what that is. And if you don’t please listen to our other podcasts, obviously, but they should know what that is. They should know how to make that version for you across the board. Or just certain firms? Josh Barker: [00:18:31] I would say, across the board. And that would even be a red flag, right. If they’re like, “What’s an MVP?” You’re like, “Oh no!” What are software development costs I could run into after the project? Erin Srebinski: [00:18:40] Oh, that’s perfect. Okay. So. We’ve built the project. We’re good. We’re in development. Are there costs after that? Do we run into other things? What if I want to add features at the end? What other ongoing costs could there be afterwards that maybe we didn’t factor in at the beginning? Josh Barker: [00:18:58] Good question. So, the answer to that is very complicated, but I will sum it up in a very short thing. When you build a software product, if you want to make it successful, there is a cost of ownership for that software product. An ongoing cost of ownership. People that I say this to they’re like, what do you mean, you build it and you’re done? We can just leave. You can do that. I’m not stopping you from doing that. However, here’s some things you should know , I’ll just list off a few. If we’re building a mobile app on iOS, Apple releases a new version of iOS and all of a sudden your app doesn’t work. Well, it’s not the apps fault. Right? We built it in the right way with the way that Apple asked us to. However, now that there’s a new version with new things in it, we need to tweak some things. That would be a classic case. Another thing is, it’s a fallacy that you’re going to build it, get it in the hands of the users and they’re like, this is perfect. We really are on cloud nine, there’s nothing else we want from this thing, it is amazing. Especially if you’re doing an MVP to market, it’s to get feedback to build the next iteration. Because of that, you’re going to get feedback. The users will use it in unintended ways. For example we’ve released many an app that when we release it, they’ll say, yes, I love this thing. Then you get it in their hands and they start using it. You realize through the data, no one is using the set of features they said they would use. And then you’re like, why did we even build that? Right. If you put in the right analytics tools, you’ll be able to see what features are used more than others and what features are not used at all. And our user’s even getting confused within the app. We can actually see data in those analytics. And when you do that, you then have this powerful , I don’t want to say crystal ball, but you have this powerful insight right? Into the mind of the user to where then you can see wow, we do need to make changes because people are getting confused here. They’re using this more than this, and they’re not using these things at all. Then when you even start talking to users, you get more information. When you start building a product you’re in for the long haul, you’re in for a longer period of time to where you’re iterating, you’re building on it. there is going to be upkeep, even if it’s just what we call lights on, which is that first example of Apple flipping a switch and releasing a new iOS version. That’s going to happen. There’s a significant cost of ownership, even users, as I said, using in unintended ways. If they use it in unintended ways, sometimes the programmers don’t program it right since they’re human and they don’t think of those ways. They end up finding bugs and then we have to fix those. That is all of the different things wrapped up in what might be after you launch. Not even might, has a high likelihood to happen. Yes. Give me dollar amount – what is the cost of software development? Erin Srebinski: [00:21:41] When you were talking about that, I was thinking we were talking about early adopters and how they go nuts and say, well, we want all these features. This is how we use it. You take all that information. You’re like, whoa, we need to make this way more robust, we can pare this down. It’s so interesting, one point of view is your narrow focus and then you see all these people and you’re like, I didn’t even think to use it that way, that’s genius. So that makes a lot of sense. So I’m going to ask this really direct question that customers might ask you. Like, give me a ballpark range. What does it really cost? Am I spending $400? $5,000? Am I spending $8 million? What am I going to spend on this software? Josh Barker: [00:22:18] Again, complicated answer, but I’ll actually give some definitive numbers. If you went to another firm and you were to lay out your vision for the app, they’re going to try and slam that all into one huge, big bang release. Generally speaking, that could be in the millions of dollars, like a very large software project. So mobile, even a web portal component. It could be a very expensive endeavor. So that’s a huge reason why we pare it down to these phases in our D4 innovation model . And so with the Discover, Draft, Deliver, Disrupt – they each have their own, I would call them ranges that we’ve generated generally seen. So I can give usually when a customer comes to me and says, give me a swag. I usually give these ranges of like, “Hey, this might be a gut check for you. Is this really where you want to put your money?” Because at this point, I think there’s probably some people listening saying, is this an endeavor that I actually want to even begin to entertain and go down? Generally, that’s why I throw out these numbers. So to remind everyone we’re doing a lot of end-user discovery, doing customer interviews, doing user interviews. If it’s a larger project, generally speaking, we’ll have a separate discovery phase. In that discovery phase, that can be anywhere between $25,000 to $50,000. So it’s expensive, but your goal is to really narrow in on: are you building the right thing? And so for us, the Discovery and the Draft phases are so important too, to narrow that down, to make sure you are building that right thing. You could go the complete opposite direction and build the completely wrong thing. That’s why it’s so important. The next phase after that is Draft. Other times we crammed the Discover and Draft phases together, depending on how much information we have, how large is the project? Generally speaking, the Draft phase ranges anywhere between 35K up to 60K for a prototype. That’s in a general sense, we’ve seen it be higher. There are some outliers there because of how large-scale the project is. How many people? That’s also a huge factor because we’re getting iterative feedback. If we need to involve 30 people, it’s going to be a more expensive prototype because we need to get feedback and incorporate feedback from so many people. That’s the prototyping stage. And then when you move into development, it’s about 4-6x of what the prototype would be for an MVP. If it’s 25,000 for a prototype. I know I said 35, but just for easy numbers, I like easy numbers. It’d be 100K for the app build and it could be up to 150K. We’ve seen lower and we’ve seen higher. The encouragement here would be, if you’re considering, should I build an app or shouldn’t I? We would actually be happy to talk with you on that point. Like I said earlier in this podcast, I have no problem of telling people now’s not the time to build something, now’s the time to run MVTs. I love talking to people. So I’d be happy to give you some advice to say, “Hey, yes, we can help you do that or, you really need some more information.” We offer workshops to help people think through what could be some Minimum Viable Tests we could run. Those are the kinds of things we would love to talk with you about. And because software is so custom, while I throw out all those numbers, the best way to do it would be to get in touch, and just say, “Hey, this is what we’re thinking, this is what we want to build.” I’d be happy to have a conversation with you about paring those numbers down and maybe some advice about some next steps. Erin Srebinski: [00:25:38] I think that’s great. If I had an idea and I talk it through with someone they’re like, well, you’re not even close to being near ready to do this. It’s super helpful. And you have another direction to go. I feel like I know exactly what software costs at this point. Thanks for joining me today and talking about it. Josh Barker: [00:25:53] Absolutely. Well, thanks for putting me on the spot with a really hard question that I get asked all the time. Erin Srebinski: [00:25:59] So you got it. All right, bye. Josh Barker: [00:26:02] See ya. Erin Srebinski: [00:26:03] Thank you for listening to ask an innovator please visit us at www.cityinnovationlabs.com/askaninnovator for the full transcript and subscribe wherever you listen to podcasts. Contact Us! The post What is the True Cost of Software Development? appeared first on City Innovation Labs.
22 minutes | 5 months ago
What does Digital Transformation Look Like Right Now?
Episode Summary After COVID-19 hit, we ran a webinar about how companies could accelerate digital transformation. Now we’ve seen a ton of companies do just that. From small retailers hopping online to everyone moving to the cloud – digital is here to stay and here to reign. How can your business stay abreast of these changes and adapt to digital even more? Well, that’s what this podcast covers. Tune in and let us know what you think has been the most incredible digital transformation that you’ve seen. Visit cityinnovationlabs.com/ask-an-innovator for some helpful links and the full transcript. Helpful Reading on Digital Transformation Our Webinar at the Beginning of COVID-19Digital Transformation Is Not About TechnologyWhy is Digital Transformation Important? Timestamps Digital Transformation in the World – 00:40Digital Adaptation & Acceleration – 01:53Obviously we have to throw Amazon into the convo – 05:50Death of Commercial Real Estate – 07:04Adding a Human Element to Digital – 08:59The Cloud and Chatbots – 10:56Let’s talk about specific industries – 12:00Making a case for analytics – 15:20But, what about security? – 18:01How can we help? – 19:57 Full Transcript Erin Srebinski: [00:00:00] Hi everyone. We’re back. We’re here to talk about digital transformation. We did a webinar back in April about innovating in uncertain times back when COVID-19 was just at the beginning. And so now we’re into it. We’re six months in, we’ve seen companies pivot, we’ve seen companies change, we’ve seen them break through a bunch of different challenges. There’s been a bunch of weird and interesting things coming out of this. So Josh take it away. What do you think has been interesting that’s come out of this? What have you seen in the marketplace and what changes have you seen? And what still needs to change? Let’s go through all of that. Digital Transformation in the World Josh Barker: [00:00:35] Yeah. Hate to say it, I don’t remember what I said in the webinar. I don’t know if I’m gonna cover similar ground. I always go with this, I’ve read this book from a great consultant of like talking about times of crisis going through the 2008 recession. And he was saying, think of your business like a house, right? You go in your backyard and revenue is the river stream that flows and when the stream or the river dries up in your backyard and you go, where did the water go? The revenue go? You have two options. One, you can go stay and kind of gather up all the stream trickles, and say, Hey, I’m going to save all these and, you know, ration them out. Rivers don’t just dry up they actually just defer course. You can go find where the river diverted course. And so If we’re talking in terms of digital transformation, I think that might be a good frame door conversation of like, what are people doing from a technology digital sense in this landscape? And what have we seen, like you said, the last six months. One thing I can say we haven’t seen, is we haven’t seen companies reduce the amount of money they’re devoting to digital transformation and digital efforts. We’ve actually just seen an increase. Which is obvious, right? We’re all remote. Like you and I are socially distanced, across long lands. Erin Srebinski: [00:01:53] We should be wearing out masks. Digital Transformation, Adaptation & Acceleration Josh Barker: [00:01:53] We should be wearing our masks, yeah, exactly. So, we’re not seeing a decrease. we’re really seeing two things. One is what I would call digital adaptation or digital acceleration. the way I would define each of these is like digital adaptation is more of like a small pivot. versus digital acceleration, an example might be a moon shoot of an opportunity. We wanted to be here in 10 years, and now we’re kind of in a corner where we really need to accelerate all of our efforts. So what’s amazing is I think talking about digital acceleration for a minute is there are so many instances you can look around and say, how long is your digital transformation strategy? They’re like, 10 years. Well, people are accomplishing things that had 10 year timelines in literally, like we’re talking months, right? Because they have to. Do or die. Erin Srebinski: [00:02:44] Yep. No choice. Josh Barker: [00:02:45] Exactly. So it’s interesting to see. That’s what I would call digital acceleration. It’s also interesting to see digital adaptation and giving you some simple examples, I think you’ve seen these too, Erin, I’m all about efficiency. I don’t know about you. My wife knows this about me is, I go to a restaurant, I go through a drive-through I’m like the most impatient person known to mankind, like in some contexts. What I love seeing an increase in efficiency in a lot of these areas. So taking restaurants, for example, my wife and I, we ended up traveling to Alabama and we were, being very careful using our masks and six feet of distance. And when we did that, one of the things we found is we went to her restaurant in the airport and it was great to see, I’ve always envisioned, I’ve told my wife was tired of me telling these envisions of the future of sitting at a table and seeing it QR code to be like, scan this and just order your food right from the table. And we’ll just bring it out to you. So yeah. Genius. Genius, Right? And a lot of restaurants saw that future like five, 10 years from now, but like to see it now, that wasn’t there just months ago. And now it’s like, that’s where we’re at is QR code scanning delivery services, obviously significant delivery services now. Right. Everything’s being delivered. So, Uber eats. I talked to an Uber driver. I Ubered as well. And I know it sounds risky, but masks again, the six feet, if I don’t know how you do six feet of distance at a car, but flash shields my backpack in front of them. But, talking to the Uber driver, I was like, how has this affected you? And what interesting their response was? It actually hasn’t affected me very much because I just switched over to Uber eats and I just became an Uber delivery driver. which was interesting to hear, you know? It’s like delivering food rather than delivering people. I don’t know if you’ve watched any movies during this time of like, COVID-19 like, like you would normally go to the movies? Erin Srebinski: [00:04:44] Yeah, we bought the Trolls movie, cause kids. And so we got the Trolls and then we have this huge thing on our calendar because Mulan is going to be releasing on Disney plus on like September 4th. We have plans to buy that and watch it at home. Josh Barker: [00:05:01] See that’s where it’s at. And it’s funny, we did the Trolls thing too. You can tell we both have children, right? Erin Srebinski: [00:05:07] I know it’s so not exciting. Josh Barker: [00:05:12] But I mean, that’s an innovation. You think about the decrease in amount of people because of all the closures of the movie theaters. Well, they just pivoted very quickly and just said, we’re gonna offer live streaming of all these different movies in the comfort of your own home. That’s definitely some what I would call a digital adaptation of okay, we’re going to allow it kind of digitally streaming. They already have the avenues Disney plus, you know, with Mulan, they already had the ability to do that. They just kind of pivoted slightly. So, the other thing that I’m seeing is when you look at Amazon, you know, obviously tons of people ordering food online. Amazon orders were behind. I don’t know if you tried ordering Amazon. I mean, it was like a week or two to get stuff. Talking about Amazon Erin Srebinski: [00:05:50] Amazon was behind. And Whole Foods, which is obviously owned by Amazon was like completely out of stock at grocery stores and everything , they were struggling. Josh Barker: [00:05:58] That was strange. It was a huge struggle. I was reading an article about a week ago that was talking about how small companies are talking about selling their goods online for curb pickup or delivery, but they had never been online before. And so they’re using technologies like Shopify, which kind of compete against Amazon, where instead of centralizing everything in Amazon, they’re creating their own storefronts kind of all the way around. So that’s definitely some other things we’re seeing as well, as I mentioned, you know, a lot of this can be bundled under contactless, right? Contactless technologies, you see a lot more scheduling? Right. I was going to get my haircut or go to the grocery store or like go to my church and it’s like sign up for a spot. Right. And we have limited spots and certain times, and so you’re seeing a lot more curbside pickup delivery, but also scheduling appointments of like being certain places physically cause they’re limiting capacity. So it’s, it’s interesting to see that these are all things I would call digital adaptation. and obviously remote work. Yeah. We were working remotely. The Death of Commercial Real Estate Erin Srebinski: [00:07:04] We’re all working remotely. But I was talking to a friend and her company is literally remote until August 2021. No one’s allowed in the office. They’re downscaling all their buildings. They are completely changing the way that they do business. Their huge headquarters in San Francisco, it’s not even on the table anymore because everyone’s only coming into the office at the most two days a week. And like you said, you have to sign up ahead of time. So is this the way the world is going to work? are all these gigantic companies going to take a smaller commercial real estate imprint, but move everyone more to like a remote or almost like a coworking space, right? Like you have to sign up for room in the office. So I thought that was a really interesting thing to see if other companies are going to move that way. Josh Barker: [00:07:46] Yes. Oh, totally. I was talking with someone about how, it was actually a law firm , how their specific industry has changed because remote work with lawyers, it’s interesting because some of their sales technique is, he let me in on a secret, is to schmooze people by bringing them in to see their fancy offices. I feel like it’s leveling the playing field for like these new, smaller players coming in where it’s like, no one cares as much about how nice your office is. They care about the value they’re being delivered, which is the direction we were heading anyway it’s just accelerating. Erin Srebinski: [00:08:18] Yeah. It’s just so much faster. Yeah, I think that you’re right. But I think that we still have, I think there’s still opportunity there. I think there’s still room for companies to do it better. And what freaks me out a little is like how, how digital everything is. Like, you don’t have to talk to anyone. You can literally have all these services done for you. And it’s like, Whoa, wait, I miss having people. So you still have to figure out ways to do that, which is strange because it’s just this time. It’s weird. But yeah. Sorry for the segue, but like going further, what else can companies do? where do you see technology going? What other things can companies implement that are going to be important going into 2021? Adding a Human Element to Digital Josh Barker: [00:08:59] You know, it’s interesting. I mean, playing off of what you just said. They ran a survey by a bunch of people. A lot of people that said, what is the biggest problem with working remotely? And 20% of what they surveyed said it was loneliness. So we’re all off in our own world. And you said digital is really moving us kind of almost wedging us, sometimes unintentionally, of like away from people and humanity. And I think there’s a huge opportunity of how do you use digital technologies to bring a human element versus like, I want to just talk to people. That’s where people are at right now. They’re going crazy climbing the walls. my wife is like, let me go to the grocery store before it was like, please go to the grocery store. Now, it’s like, let me go somewhere. So it’s okay. I will do anything to get out of the house. Yeah, so, I mean, I think that’s a huge opportunity and differentiator if you’re in any industry is thinking about how can you provide that human element? Because that’s what people are craving. They’re craving it. And that’s why Erin and I, you and I are here because we’re sick of talking to ourselves. Right? So we’re talking to each other here. I mean, moving into what I would call digital acceleration from digital adaptation, digital acceleration is kind of taking the next leap. So I think you can swing the pendulum too far, as far as what you’re talking about of going digital, where you’re like. Everything digital, contactless, I don’t want to touch, talk or see anyone in my peripheral. Right? And it’s like, wait a minute, it’s all about people. You know, this is people centered, technologies should be here to help people. So talking a little bit about the moon shoots of a digital acceleration cause where else, you asked, can we go and where are companies going? And it really is interesting to see what digital acceleration is doing in the industry. I’m just listing some stuff off. You’re seeing cloud migrations that people have said getting to the cloud is going to take us years. And it’s like, boom, overnight. They’re like on the cloud. And it’s so funny to see that happen. The Cloud & Chat Bots Erin Srebinski: [00:10:56] Yeah. I read an article this week that was two huge cloud companies are IPO’ing for these insane amounts that no one expected. Literally everyone had to move to the cloud. So it’s, it’s crazy. Yeah. That’s the business to be in right now. Josh Barker: [00:11:10] It is. And another thing is speaking with a human element. You and I just talked about this AI chat bots. So it’s interesting, I don’t know about you, one of the more annoying things about like being locked in your house besides being lonely and not talking to people, is just little things like, I want to go talk to someone at my bank. I could not get someone at my bank for months. And so I would end up getting this chat bot, I mean, bless its heart. You know, this technology is supposed to be great, but I want to talk to a person. Right? So there’s a lot of evolution in the AI chat bot, a lot of how do we add a human element? Making it better, connecting to a human! Talking about specific industries You also see the human element in health. Like telehealth. Explosive, you know, so it’s just like blowing up and all these regulations were around telehealth and I remember President Trump announcing he was alleviating some of those regulations with telehealth for this time. Therefore, people could get the healthcare they needed, even if it was remotely. Going industry by industry from healthcare, look at the auto industry. no one was buying cars. it was weird to drive by, right. You drive by these lots empty. You’re just like, Oh man, like all these cars are just doing nothing. Like they’re just. No one’s buying. Erin Srebinski: [00:12:32] we were looking for a car and you cannot buy one because the car manufacturers weren’t making any new cars. So everyone bought up all the used cars and now they’re not getting any new cars, so there’s literally no cars to buy. So it was crazy. And so now people are turning to Carvana having cars delivered. I’m like, what is this world that we live in? Josh Barker: [00:12:49] Yes. You hit it right on the head. Like we were just talking with, we have a customer of ours in the auto industry and their moonshot is buying cars online, like Carvana. They’re like, we need to help our people be able to buy cars online. That was the moon shoot. So they’re working on that now that was a 10 year goal. So yeah, it is nuts. Yeah. And I think you’re also speaking to something interesting about not producing certain items during this time. There’s something to be said about that too, because I know that one of the things we’re also learning about is how do you and I talked to a lot of different people. One of them is in sanitizing wipes and cleaning materials. And so they’re saying obviously if you think about them. Skyrocket of growth. And I said, “Oh , this must be a great time for you guys.” And so they’re like, Yes, on one hand. On the other, they’re saying it’s nuts because every time we scale and we add people it’s consumed. And so it almost seems like you scale indefinitely, but the danger is as you go we’re playing a little bit with fire. They’re having to figure out a model of how do we scale up really as high as we can, and then scale down when the things start to stabilize? That’s tricky and tangentially related to that is even supply chain, you know? So our supply chain interruptions of, how do you deliver items to here to here or items not being delivered here to here or people stop driving on the road. And so there’s just all these different interruptions , they can’t get supply fast enough for these sanitation wipes. So how do you do it faster? And it’s like, the exact words were, “Josh, we deliver a pallet of wet wipes to clean off your surfaces and the wet wipes are gone within two hours of delivering them to the store. And so he’s like, I don’t know how we can deliver it fast enough. So a lot of logistic problems too. So a lot of crazy things happening in the world. Erin Srebinski: [00:14:47] And so in that situation in supply chain, in some of these areas, is there an opportunity for more digital to help them just be more efficient, like do that in a way where you’re not necessarily having to hire a bunch of people, but there’s a digital solution? Josh Barker: [00:15:05] Yeah. Yeah. I was talking with someone at one of our large connections here in grocery store chains and they said that the Holy grail for them, talking about that problem for a second, that they’ve had to do. They had it on their digital roadmap for a long time was they had to implement really predictive analytics and put predictive modeling over a lot of this, using their data and using industry trends to help them understand supply and demand. Making a case for analytics Now, there’s a lot of technologies out there that help with that. And they’re all digital. And so before he was saying, they kind of did, I call it on our team, Kentucky windage. They do like Kentucky windage of, Oh, I think based on last year it was this and we could ship this. It didn’t take into account external factors like coronavirus and the current demand of what’s the current political climate and all these different external factors. I mean, I would call that like supply chain 4.0. The future of that is using data and using not just the data you own historically and empirically, but data all around you of external data to make decisions on your supply chain. Using digital technologies is really the only way to do that. And if you’re still doing it by hand and you’re still doing it by a Kentucky windage, you’re definitely in the danger zone of scaling too high too quickly, or scaling down, not timing it well enough. Like I said, at the very beginning, if you’re not investing in digital technologies right now, You’re definitely destined for a world of pain. A world of pain. there’s no deceleration, there’s no ignoring or putting digital innovation strategy off. this is the lifeline. Honestly, digital innovation is the lifeline of how people are getting through this time. So, yeah, don’t put it on the back burner. Definitely a time to be innovating. Erin Srebinski: [00:17:01] Yeah going back to that, before all of this, you were seeing an increase in data science and all these analytics-based companies popping up. And now it’s just more than ever that’s necessary. At City Innovation Labs we’re even doing that, like really concerned about what the analytics look like for our customers, so that they can keep track of it and we can keep track of it. That’s super important. It’s funny how some things were starting, but they just had to explode because we’re stuck and we’re all hoping that digital saves us, which as you said if you don’t do it bye. But it’s just interesting to you. Interesting to think about how we were headed that way, it’s just put this, as you sat in a huge acceleration on it. but I had a question kind of the antithesis to that. I feel like some people are holding out in a digital solution because they’re nervous about security. They’re nervous about all this information, not being secure, I guess I’m saying this in a bunch of different ways. But what are your thoughts on that? But, what about security? Josh Barker: [00:18:01] Yeah, it’s a good question. Holding off because of security reasons. What I will say is, I think what makes all the difference in the world is partnering together with some people that have gone through security breaches and through security problems and been able to help with those things. Because People are nervous about cloud, right? And I’ve been in large organizations where they’re nervous because their data is in the cloud now. And they can’t go to a physical data center and unplug their server because they’re nervous that they’re under attack by some outside force. I think we’re at the point where being in the cloud, there is so much progress being made . I mean, you look at Amazon and they’ve got gov cloud and they’ve got a very secure mechanism for putting your data securely into the cloud. And it all depends on again, I go back to the partner too, because while the technologies are there to secure your data, what opens you up is that human element of there’s actual people implementing these security measures. And what gets companies into trouble is if they forget to implement a certain security measure or don’t know it exists. So encrypting your data while in transit you know encrypting it at rest. what we’re seeing here is not only people moving to the cloud, they’re having to get over their fears of the security implications of moving to the cloud and moving a lot more quickly to somewhere, they might be a little bit nervous about, but what I’ve seen and what I encourage my clients in is saying, this has been vetted for a long time. COVID-19 has closed that gap of making that decision a lot easier due to outside forces saying, we have to do this. Erin Srebinski: [00:19:41] Yeah, well, no longer an option. You just take the risk, get on board. if the right people are doing it, you’ll have that security. Alright, well, Josh is there anything that you want to dig into a little bit more? How can we help? Josh Barker: [00:19:57] The biggest thing would be is if anyone needs any help from a digital perspective, Give us a ring. We’re happy to talk with you about where your business can go and how digital can really help during this time of COVID-19. even if we aren’t the ones selling you any services we’re here to help. We’re a custom software development company make no mistake, but when we look at solving a problem, another thing that’s been exploding has been open source solutions and off the shelf software, because there has to be a need for rapid deployment for this stuff, stuff that already exists. For us, as we meet with clients, I’m often even not selling our services by saying, “Hey, during COVID-19, this makes a lot more sense.” Go buy this piece of software, implement it, and run with it. That would be what I would say is if there’s anyone that, during this time, who’s just want someone to talk with about digital strategy. I’m happy to talk with them about that. Erin Srebinski: [00:20:54] Yeah. You love doing that. Helping people vet ideas, helping them walk through what they need to do. I think that’s something we do really well here. we’ll keep doing these videos and webinars and hopefully people learn a lot and they can take stuff away and obviously if they have questions they should keep in touch. Josh Barker: [00:21:11] Awesome. Cool. What was great chatting, Erin. Erin Srebinski: [00:21:14] Great chatting Josh. I’ll talk to you soon. Get in Touch Have an idea or questions you want to talk through with someone? Give us a shout, we’re happy to help you with your software needs in any way we can! The post What does Digital Transformation Look Like Right Now? appeared first on City Innovation Labs.
31 minutes | 6 months ago
Why is Using a Lean Startup Methodology Important?
Episode Summary Today on Ask an Innovator we discuss the Lean Startup Methodology. We get into what is is, how to use it, and why it’s so dang important to us here at CIL. We talk through company examples – who has used it and why? And what role the customer plays, how it could save you money, and how it ties into the way software should be developed. Visit cityinnovationlabs.com/ask-an-innovator for some helpful links and the full transcript. Helpful Reading on Lean Startup Lean Startup by Eric RiesThe Startup Owner’s Manual4 Steps to EphiphanyA Guide to Lean Development5 Ways You Can Use Lean Startup in Your BizThe Skateboard Methodology – we discuss at 03:07 Software shouldn’t be built in one huge push, it should be built in iterations to gather feedback and move to collect revenue for the client faster. Timestamps Brief Overview of Lean Startup – 00:23Why Lean Startup is important to us – 01:40 Why use Lean Startup to build software? – 02:59What are all these acronyms? What is a product validation cone? – 04:37Can we implement the Lean Startup Methodology? Rewire your brain! – 09:54Real-life companies that built an MVP – 12:22We don’t want to waste your money – 16:22How does customer discovery play into it? – 18:59Is there a reason not to build software this way? – 20:30What and WHO are early adopters? – 22:045 Things to Learn – 23:29 Lean Startup Methodology Full Transcript Erin Srebinski: [00:00:16] Hi, I’m Erin Josh Barker: [00:00:18] and I’m Josh. Erin Srebinski: [00:00:19] We’re from City Innovation Labs. Today we’re discussing Lean Startup. The methodology created by Eric Ries. We as a company, use it all the time. We’ve read the book. We swear by it internally and externally. So today that’s what we’re going to be talking about. So Josh, can you give me a brief overview of what the Lean Startup methodology is? What is the Lean Startup Methodology? Josh Barker: [00:00:37] Yeah, that’s a great question. Lean Startup, like you said, when I was out in Silicon Valley, they almost referred to it as their Bible. They constantly reference it. They constantly talk about it. Everything is in the context of Lean Startup. And so a lot of people say they’ve read lean startup or they know Lean Startup. I can kind of differentiate who has and who hasn’t because the Lean Startup methodology provides a very scientific approach to creating and managing startups. A lot of people think, “Hey, it’s all luck.” There’s a huge portion of luck in there of hitting the right time at the right market fit. But, there is a very scientific way about going about how do you know if your product is going to be successful in the market without investing tons of time and energy ahead of time of building out fully your concept. So it’s a way of figuring out if, you know, if there’s a product there, this is a term that lean startup uses a product-market fit (PMF). If there’s a product-market fit before it even enters into the market before you’re done with the product. Why We Use Lean Startup Erin Srebinski: [00:01:40] So why did we start using this at CIL? Like why do you feel like it’s important to our process? Why do you feel like it’s important to build software this way? Dig into that a little bit. Josh Barker: [00:01:49] Yeah. Yeah, absolutely. It’s a great question. It’s really what differentiates us, I would say from our competition, because, if you look in the marketplace of custom software development firms, they’re going to largely just do what you ask them to do. So if you come to them and say, “Hey, I want you to build this piece of software,” they’re just going to go out and execute on it. Versus if you were to come to us, we’re very much collaborative, work with a lot of market enterprise companies that their problem is they have a lot of money to spend, but how do they spend it the most effective way? So what we do is we help them go through the Lean Startup process and very incrementally take very small risks with them. Because building software is a risky endeavor. Taking very small risks and then testing it out. I’m using another term in Lean Startup, experiment. So we help run these rapid small experiments to see if there’s traction in the marketplace or traction within their target market and see how well they respond to it. And then we’re able to, you know, actually move forward with coding, that particular thing. So it really reduces the risk of building software by quite a bit. Erin Srebinski: [00:02:59] Okay. So going through Lean Startup building software, what does that process actually look like? How does that change the process from beginning to end? Building Software with Lean Startup Josh Barker: [00:03:07] Yeah. Yeah. We use a Lean Startup methodology in conjunction with agile methodologies. A lot of custom software development firms will do that, but it looks different. They might go out and just build it. So what it’ll look like is them saying, “Hey, I want to go build this thing,” and they go build that thing for us. We say, how can we narrow this down to the very minimum viable product? There’s another term from Lean Startup, a minimum viable product. How do we pare it down and deliver that piece to the market and get it in the hands of users as fast as possible? That’s something we help our customers understand and do rather than doing for example a six-month project. A Customer says, “Build this.” We tell them it’s going to take six months. Instead of delivering the entire thing in six months, we divide it into small pieces where we say how can we deliver this? Another analogy we use is if you think in terms of transportation, a skateboard, scooter, motorcycle car analogy of dividing it down into very manageable pieces and delivering the core primary value to the market as fast as possible. That way they can test the marketplace, it can even start capturing revenue faster. that’s how we kind of work with our clients on the Lean Startup. Erin Srebinski: [00:04:20] Yeah. Generating revenue, usually a pretty important thing. Josh Barker: [00:04:23] It is. MVP Explained Erin Srebinski: [00:04:23] Cool. So, okay. You mentioned MVP and we talked about MVT yesterday. Can you explain MVT, MVP, and what that process is, what that means? Dig into that too. Josh Barker: [00:04:35] Yeah. Yeah, absolutely. I call this the product validation cone. This is kind of my own creation, but these terms are industry standards. So at the, at the top, you’ve got kind of this minimum viable test. So if you think about this, I use the word experiment before, when I was talking about the Lean Startup methodology. In the book, go out and buy it. It’s highly recommended Eric Ries, but you talks about right running these experiments. And so what is an experiment? I equate that to an MVT and the minimum viable test. How do you run these experiments and what do they look like? So an example of one, I’m going to use it for my past. So, I was involved with a fitness startup. We were trying to solve the problem of 66% of gym memberships go unused. That’s a ridiculous amount, right? I mean, trying to get people into the gym. Yeah. That’s ridiculous. How do you, how do you do that and how do you go about solving that problem? Lean startup would stipulate, you go and form a bunch of hypothesis first. So, for us, one of the examples was. Well, I’m wondering if it’s a commitment issue or I’m wondering if it’s a convenience issue. So if you start going down these roads you then could formulate these ideas of saying, well, how can we test if it’s a convenience idea or how can we test if it’s a commitment idea. So one example we did, we ran as an MVT was, we said, well, if it’s a convenience issue what if we were to offer online live streaming classes, where we connect a trainer with people that are in a class and rather than going out and spending this time building all this software, some core tenants of an MVT is little to no code really, really fast. We’re talking in terms of days to implement, not weeks or months . Fast to validate, fast to invalidate. So we said, why don’t we just create a Google hangout and invite people that want to see the trainer and do the exercise together and test it with existing technologies. So that would be an example of like an MVT, cause we’re testing a concept without building anything down the validation cone. I said that was at the top of the validation cone, MVT. Is an MVP. So what is an MVP? A lot of people, if you look across the internet, you can search these terms. They’re going to have very wildly different opinions on what an MVP is. In my opinion, like what an MVP is. So MVT proves the value of what you’re trying to propose. An MVP proves the product. So in other words, the implementation of the delivery mechanism of the value. So when you’re looking at an MVP that sometimes the lines are blurred, but mostly you’re trying to say you’ve got a better idea on the value that needs to be delivered and the people you’re delivering it to in an MVT. Now you’re trying to think of what is the exact product idea. And so rather than going out and spending all this time, actually building the software, we there’s a little bit more to implementing an MVP than an MVT. But we do things like an example would be creating a rapid prototype. At CIL we create prototypes. We would create wireframes, prototypes that actually are semi-functional. They somewhat work with conditional logic and you can bring that in front of a target market and get feedback and rapidly do that. Instead of building software in 12 months, we can build a prototype in a month or two, you know? So that’s the example of the orders of magnitude simpler. That’s something like that. It’s so MVP. So an example of that is giving some different ranges of you have a prototype, like we talked about. But Dropbox giving some real world scenarios. They even created a simple video of a fake product that they said, this is what we think is going to work in the market. And they throw it in front of users and users were like, sign me up. That’s how they got beta. Right. So they’re like, Hey, I want them to do that. So, Kickstarter campaigns, those are MVPs testing out like is my product idea even before you build it, testing it. There’s one more, what I would call minimum marketable product, an MMP. So if you do a Google search on MMP, that’s where you actually code it. So you’ve gone through the stages of creating multiple MVTs, minimum viable tests to figure out what your MVP should look like. And you may have run one to three MVPs and figured out then, what is the MMP? In other words, what is the thing you’re actually coding? And that’s where you heard the analogy of a scooter and a motorcycle and a car. So we help organizations say let’s first deliver the skateboard, the very basics of like getting it to market. And it doesn’t mean worse quality, that’s a fallacy. It means delivering the core value first and saving the bells and whistles for future versions. So we help organizations get an MMP out to market as fast as possible, and that’s using actual code. So you can kind of see reducing risk along the way. As we talked about MVT MVP, and MMP so kind of down that funnel. Erin Srebinski: [00:09:37] Right. And you’re able to constantly iterate and you’re able to constantly test and get validation from the market. And so that way customers can save money and save time, because they’re constantly doing that instead of throwing it right into a coded product that no one wants to use. Josh Barker: [00:09:51] That’s right. That’s exactly right. How To Implement Lean Startup Methodology Erin Srebinski: [00:09:54] If a company wants to implement Lean Startup and they want to experiment, how do they get started with that? How do they come up with the right experiments? How do they come up with an MVT or an MVP? Do they need to go to the marketplace? How do they start doing that? Josh Barker: [00:10:08] Yeah, it’s a great, great thought. So the other thing I’ll mention is that a core tenant, like you mentioned, Erin of Lean Startup is a build, measure, learn cycle. So you asked me how do companies implement this? Well, the easiest way is rather than taking these large bets that we normally would as humans, we have this idea. And the first thing we want to do is go build it. That’s such a knee jerk reaction. Like, I don’t know about you, Erin. It is. Isn’t it? As an engineer, it’s so hard for me to go and hit the marketplace with an idea. I’m going to go build it. Instead of holding myself back and being like, okay, not a good idea to build it, but I could test it. How can I test it simpler than I could build it? Really the first step, I would say, is education. Because to get a Lean Startup mindset, you need to rewire your brain. That’s why I wanted to hit on that of like, you kind of need to rethink things rather than saying, going build it knee jerk reaction. It would be, how do I test this without code? How do I validate and invalidate this very, very quickly. I would encourage people to get started. Go read the book, go read lean startup, go learn information about lean startup. We’d be happy to talk with you about lean startup. If you want to just run us by any ideas, we do a lot of pre project consulting. Rewiring your brain is a big task, as you know. It’s hard to carve out this new path that you have to rethink through how you build software. So a lot of people it’s this build it and they will come approach and it’s very incremental and that’s not at all true. You’re shaking your head. We know that at CIL, like that is not how you build software. So for us, it’s thinking through how do you build things in a small way? And I want to give some examples in the real world because I think it’s sometimes it’s hard to grasp without real examples. I want to use some real-world examples to help people think, how did other companies do this? MVP Examples Companies that we know. One company, you know, we talked about Dropbox, right? So Dropbox ran that beta. Another company that comes to mind is Groupon. So. Love Groupon. Have you used Groupon, Erin? I’ve used Groupon all the time. Erin Srebinski: [00:12:20] I’m in Chicago, everyone used Groupon. Josh Barker: [00:12:22] Everyone uses Groupon. Yeah, exactly. So it’s a big thing now, but how Groupon started if you think about how would you start creating Groupon? Well, I think a lot of us would go, well, we got to like create this site and they have dinner coupons. They’ve got experiences, products, I mean, you name it. Groupon now has it. You can buy coupons. You can buy deals for buying certain items or experiences. So there’s a lot in Groupon if you take a look at the product itself today. Now, if you zoom out and you go, how do they start? How they started was actually very, very simple, they’re MVT or MVP they had multiple MVTs even before the MVP). What their MVP was they said, “Okay, well, what’s existing that we can utilize that we don’t have to spend very much engineering time.” So they chose WordPress, just a blog that everyone knows. So they created a WordPress blog and what they did was they said, let’s start in our current area and let’s just go and put a deal a day. Like let’s go partner with local companies and that’s it. And so they just started a deal a day and it started to get traction. So then they expanded to other areas and there were still using their WordPress blog. So. That’s how they very simply started. A lot of people are like, they think it’s so elaborate and there’s this secret sauce they had a huge engineering team and it’s like, no, they were a startup. You know? And another example I like to tell people about is Airbnb. Erin Srebinski: [00:13:50] Oh my gosh, I was going to jump in and say that one. I love this story. Josh Barker: [00:13:53] The Airbnb, I mean, all these startup stories, it gives me encouragement because I’m like, Oh man, that’s so you look at these companies are so successful and versus you go back and you’re like, wow they were really scrappy. Kind of like when we first started, you know, like they’re, it’s so encouraging. Yeah. Bootstrapped. And so you look at Airbnb and Airbnb was just some guys that one day, they said, you know what? I wonder if there’d be people that would be interested in renting out people’s spaces in their apartments, and rather than going out and saying, let’s build this elaborate system that connects these people and it’s also to add to the complexity of this situation. It’s an idea that has something called the network effect of the value of the product itself is actually in the fact that there’s so many different options of renters connecting with like the people wanting to rent. If there’s nothing there there’s no value. So that was another problem. But how they started was they said, “Okay, we’re going to incrementally think of this first thing we’re going to do. We’re just going to rent out our own space and see if we can fill our own room, spare room and see if anyone wants it.” Erin Srebinski: [00:15:00] They used Craigslist. Josh Barker: [00:15:01] Yeah. They used Craigslist. It was crazy. And then on top of that, they then said, instead of going, “Hey, that works, let’s go build something.” They said, “Well, let’s incrementally build, measure, learn. Let’s incrementally do this to the next step. So let’s go and just recruit five, 10 other of our friends and see if they would rent out a spare room in their place.” We’ll manage everything. Like you said. we’ll put it on Craigslist, we’ll do the whole thing and they did it. They rented it out to those people. So then they just kind of kept expanding their circle. Behind the scenes, they’re managing an MVP. They’re doing the concierge service of they’re managing everything on spreadsheets and all sorts of stuff. And I think people think that they had all this elaborate technology from the start when really it’s very rudimentary at the beginning. it’s not very sophisticated at all. And so they just wanted to test the idea. Fail fast, that’s a core tenant. They wanted to fail fast and learn as fast as they could. And so when they started to explain it, spend their circle, they added technology where it made sense. They incrementally grew rather than trying to build this elaborate system all at once. Erin Srebinski: [00:16:13] Right. And you spend money a little smarter that way. Like you’re spending it on things that you actually need at this moment instead of throwing a bunch of money at it and praying that it works. Saving Money with Lean Startip Josh Barker: [00:16:22] Yes. That’s why our customers really resonate when we talk with them about Lean Startup and how we do software, because I always say to them, “We don’t want to waste your money.” Software’s expensive, we could take your money and be like, “Hey, we’ll build anything you want.” We’re going to put ourselves in the shoes of our customers and go, how do we make sure we’re building things that people want and people will use? That’s something that custom software development companies don’t really care about because they’re getting paid anyway. They’re like, Hey, we’ll build it. You are responsible for making it work. We look at this as a partnership, your success is our success. When you’re testing and validating, like getting into hands of customers, is there any other way to gather feedback? Like how do you, when you’re doing a project gather feedback for the client or are they responsible for that? Like I said, it’s a partnership, so we do both. When we’re working with a company, we’ll work with them, or we have a product team that will actually work together and do customer interviews. And this is part of Eric Ries, as well as just customer discovery. If you were to look at Steve blank has a lot of good stuff on that. So maybe we can add some links Steve Blank and Eric Ries’ stuff. Customer discovery of doing customer interviews and iterating on the product by bringing a prototype in the hands of users as early as possible. So when we get started, for example, when we go prototype something, we don’t just go and say, “Hey, it’s going to take us one, two, three months to prototype this” then go show users. It’s a very weekly thing. It’s like week one, we’ll prototype. We’ll say, “Hey, here’s the plan, we’re going to prototype this core value.” You, customer, partner with us and helping us connect with who you believe your target market is. Let’s put it in front of them and get rapid, real time feedback that literally the next sprint, the next week worth of work, all of that feedback can be incorporated and that’s as early as possible. Versus the old way of billing software was you’d get feedback at the end of a project, which is like 12 months later, sometimes the market’s changed people’s opinions change, and it’s like, It’s not even relevant anymore. Erin Srebinski: [00:18:26] Now everyone has COVID-19. Josh Barker: [00:18:28] That’s right, exactly. And the world has changed. So for us, it’s very important that we are in lock sync with our customers. So our customers are very integrated and involved in that process of getting feedback and we help guide them through that. Erin Srebinski: [00:18:43] What I’m hearing is there’s a ton of work that goes into things before we even test, before we even build a prototype. We’re talking to customers, we’re talking to anyone and hoping to get some nuggets of information so that we can build the right thing, essentially. Talking to Customers Josh Barker: [00:18:59] And a lot of times when we talk with customers, we’ll just be very honest with them because we get a lot of people that come up and say, I’ve got an idea, right? And ideas. People put a lot of stock in like ideas. They’re so protective over ideas, right? They’re like, this is my idea and you’re going to sign 10 NDAs. You’re gonna steal it. Yeah. the value is all in the execution in that learning process and that’s where we educate customers to say, the idea is great, but now go to the market and get out of the building. That’s a core concept of Steve Blank. Get out of the building and go talk to users, go talk to customers. And so even before you build the thing, go talk to who you think would be a user, right? So spend a lot of your time talking to them and getting really close to their needs. That’s how we build software. As you said, upfront, there’s a lot of that discovery and understanding of what the market looks like. And another concept I want to hit on again with Lean Startup methodology is product-market fit. We’re very market-driven in our approach to building software. So product market is where the needs of the market intersect with the product perfectly to where you have that fit, that alignment, that PMF that’s the shorthand term. You hear all the time they use as well as in Silicon Valley. They’re like, have you hit PMF? That’s what they’re talking about. PMF. It’s like, it’s a big thing. So many acronyms, so, EIEIO right? Should we Always Build Software this Way? Erin Srebinski: [00:20:30] All right. So this might be a loaded question, but is there ever a reason to not build software this way? To completely throw lean startup out the window and say, you know what, we’re just going to build it right now. Josh Barker: [00:20:42] Yeah. Great question. From our opinion at CIL, there is absolutely no reasonable circumstance in which you would throw lean startup out the window. I mean the old way of building, it was like the field of dreams. Right? Like build it and they’ll come. And it’s like, from a marketing perspective, from a market perspective, from all different perspectives, it’s way better to involve your customers, your future customers as early in the process as possible. Early on in the process, we’ll even say, if you can find those early adopters. That’s really what you also want to do is find those early adopters. You can partner with them to create a pilot for them. And so what’s cool as we’ve experienced this, where we’re a month into software, like really in the development process going through lean startup, doing a prototype. And even in that prototyping stage, we’ve identified some of the early adopters and even getting them to pay early in the process where it’s like a prepayment or a sign up to say, would you be willing to pay an offering that value early on? kind of like a Kickstarter campaign. You get a discount maybe for, if you pay up front now. We were able to do that with some customers. And that works really, really well. that’s lean startup. And that’s part of the process that you’re not gonna see anywhere else, unless you employ lean startup techniques. What is an Early Adopter? Erin Srebinski: [00:22:04] Yeah. Eric Ries goes into how important early adopters are to your product, how they can influence everything and you want to get them on your side real fast. So can you explain what an early adopter is? Just for people who might not know what that means? Josh Barker: [00:22:18] Yes. Yes. Early adopters are those people that are on the cusp of technology on the cusp of what you’re wanting to offer. They’re the people that, I’m an early adopter, for sure. It’s like you get those people that are just like, give me that early beta even if it’s a mess, I’m going to give you early feedback cause I’m so excited on the value you’re about to deliver . They’re even okay with mistakes in your software. That that’s the beautiful thing about early adopters. Erin Srebinski: [00:22:43] They like pointing out all the things. This is wrong, this is wrong. Josh Barker: [00:22:47] Because they feel ownership. Yeah, that’s right. Yeah. They’re, they’re like, Oh, this is wrong. This is wrong. I will change this. They’re going to be your most active voices in the whole thing. And so you don’t want to hit the mainstream folks first, you find your early adopters and build it for them. The rest eventually falls into place where you start to get this graph of early adopters. And then you’ll get that large swath of broad market that comes later after early adopters. 5 Takeaways from this Podcast Erin Srebinski: [00:23:16] I love that. So if you had to break it down into five things that people should do to start Lean Startup, there’s five things. These are the most important five things. What would those be? Josh Barker: [00:23:29] Oh man. I know right on the spot, I’ll say a couple of them in it. The first step I talked about to kind of summarize some of our conversation was I would definitely say rewire your brain. That’s going to be the first one and to do that through education. So read up on Lean Startup, read up on Steve Blank. A lot of the stuff they have to offer. Do Google searches on lean startup and even minimum viable product, minimum viable test, lean startup experiments. Do your own research and own your own research on this. But I mean, at the minimum I would read lean startup. Rewire your brain through education. Number two is, as you’re rewiring your brain, you’re gonna learn a lot of things. I think some key takeaways to have are if you ask yourself, how do I have a lean startup mentality really? I would say to break things into smaller pieces. That’s a big core concept to say, break them into smaller pieces and start thinking about how can I test something prior to doing this? Right? So, one of the things we do at CIL is we’ve got this mantra of, I don’t know where this even came from either. Erin knows this term, this phrase I use is “throw bad ideas at the wall.” I have no idea. We use that all the time. We’re like, I’m just gonna throw bad ideas at the wall. And so one of the things we value is experimentation in our organization. So instead of debating the merits of, well we should do this. Oh, we should do that. And we have these healthy debates, but at the same time, a lot of times we’ll just end it on conversation by saying, let’s just try it. Let’s just go out and try it and see how it works. And if it doesn’t work, we’ll just pivot, we’ll change. That’s another term pivot. So we’ll just change and we’ll learn a lot. We’ll do a retrospective. That’s another core tenant is make sure you’re learning. another thing is to rewire your brain in terms of what is success. I would say that’s another one to think about is what is success look like ? A lot of people think success is in terms of revenue and while that is the ultimate metric earlier on, that’s a bad metric, right? So like, because if you’re a startup you’re not going to have revenue for a while. Like that’s going to be the honest truth. So like, how do you measure success and it’s speed of learnings. So how fast are you learning? And so if you can increase that by doing these rapid experiments over and over and over again, these MVTs to learn and validate, and invalidate hypothesis and identify assumptions. That’s something to do early on identifying assumptions and what you’re proposing to the marketplace. That is extremely important in order to run MVTs, to validate or invalidate assumptions. That’s where all the risks are. So if you can get really systematic about saying, here are all my assumptions . In other words, here are all the risks let’s de risk this entire thing by running MVTs. And then when you get to the point where you’ve de-risked a lot of it, because you’ve learned this works, this doesn’t, this works, this doesn’t, you then can start to form an MVP, which then ultimately leads to an MMP. So to recap, I mean, I would say rewire your brain, think in smaller pieces, right? Star thinking about things you can do to invalidate and validate prior to building anything. Um, start thinking about how can I de-risk, listing out my assumptions and starting to create hypothesis and experiments to validate invalidate them. then just think in terms of speed, how fast can I run these? Right. Let’s run them very, very, very quickly. So, those are a couple of core tenants I would say you could implement very, very quickly. So Erin Srebinski: [00:27:06] yeah. The other theme that I’m hearing throughout that is like, you need to be willing to embrace change. Yes. It doesn’t look like I thought it would, so we’re going to have to go over here and be willing to have the mindset where you can quickly shift your perspective. Cause sometimes it’s hard to let go of the thing that you really wanted to do, but it just doesn’t resonate with the market. Josh Barker: [00:27:25] Yes. Oh man. You just hit on something that’s huge and near and dear to my heart too, is don’t marry yourself to the solution. Marry yourself to solving the problem. So like, what is the problem you want to solve? Yes. So, I mean, I’m guilty of that, of marrying myself to the solution versus like, “Hey, this is, yeah. I mean, it’s so hard not to, especially when it’s your idea. You’re like, this is my brainchild. And then, you know, you’re like, well, my brainchild was wrong. Erin Srebinski: [00:27:52] I’m 10 steps down that way. Josh Barker: [00:27:55] Yes. Yes. that’s another thing is don’t be afraid. redefining not only redefining success in terms of how fast you learn redefining failure, because people think that like, Hey, if you have this idea and you go down the road and you invalidate it, and like you said, you’re 10 steps down the road. People would view that as failure normally, right outside of lean startup, they’d be like, “Oh, you failed.” And it’s like, no, the concept of lean startup is actually, you want to fail faster. So you want to fail as fast as possible. And so that you can learn faster. So it’s actually redefining failure. If speed of learnings is success, failure would then look like you’re not learning at all. So if you’re not learning, you’re failing. Okay, well, I’m officially out of questions. So you got anything else? This has been a lot of fun. it’s been a lot of fun talking about Lean Startup, it’s definitely near and dear to my heart and if you’re ever going to reach out, I would highly recommend you reach out to City Innovation Labs. We would love to talk with you. Yes, we want to help you with software. We want to help you with that next project, but we want to just help you in general. so, reach out. I love talking with people, meeting new people. So if you are wondering about lean startup and you just want to have a conversation, feel free to reach out, and we would love to talk to you about your project, lean startup, how you can employ techniques. We’ll give it to you straight too. I know I’ve talked to a lot of people that have reached out that have said, “Josh, here’s where I’m at. I’ve got this product idea.” And I don’t have any qualms or fears of guiding them and directing them away from Citi innovation labs if we’re not a good fit yet, or we’re not a good fit period. So we’re here to help. We’re not here to milk money out of people. We’re here to forge relationships. that’s where I really want to help people understand this concept. It is a pillar concept of our company. and building software the right way. So that’s our big mantra is how do you build the right software. that’s the thing that we want to hit on. So the tech CIO, they’re all be links. I know Erin’s gonna do her marketing magic and post all the links to Eric Ries and the Lean Startup methodology. And, you know, I’m sure we’ll have some Steve Blank links in there, too. So we’ll provide all these links again. If you’ve got any questions or comments, feel free to reach out. We’d love to talk with you. Erin Srebinski: [00:30:12] Awesome. Thanks, Josh. A super fun conversation. Josh Barker: [00:30:15] Yes. Likewise. Thanks Erin, for sparring with me and we can have this cool dialogue. The post Why is Using a Lean Startup Methodology Important? appeared first on City Innovation Labs.
27 minutes | 7 months ago
How to Leverage Consumer Insights for Innovation
SUMMARY WITH ANDY RENAUD Andy Renaud from Ferrara Candy is on AAI today and a common theme that comes up is what do we do with consumer insights? How do we use them to fill our innovation pipeline? How can we use them to engage our customer on social media and beyond? Andy talks to Josh about how they’re doing this in the candy space, from Crunchy Crawlers to a specific Wonder Woman candy – Ferrara is engaging customers in so many different ways. The discussion loops around to COVID-19 and how Ferrara has remained agile through it all. From setting up employees to do R&D at home to understanding what the best tech tools are to use for collaboration. As consumer behavior changes, how does Ferrara change with it and keep innovating despite limitations? Connect with Ask an Innovator. More about Andy & Ferrara Connect with AndyFerrara Candy CompanyFerrara Candy Company Innovation Full Transcript with Andy Renaud Erin Srebinski: [00:13] Hi, and welcome to Ask an Innovator. This morning we have Andy Renaud from Ferrara Candy Company talking with us about innovations in the confection space. He talks about the innovation practice at Ferrara and how knowing your key strengths is essential for growth and launching new products. The podcast was recorded during COVID-19, so Andy and Josh also cover how Ferrara has remained agile and is continuing to deliver sweet delights to customers. For more, keep on listening and for the full transcript check us out at cityinnovationlabs.com/ask-an-innovator Josh Barker: [00:42] Andy, I really appreciate you coming on. I’d love for you to give just a little intro to yourself. Andy Renaud: [00:47] Yeah, of course. So I’m Andy Renaud. I’ve been in the confections category for my entire career. So I have an undergrad from UW Madison. In food science and so that’s just a study of all of the know-how in engineering, chemistry, even regulations, the marketing behind food, and how things are made for our food industry. So I got that back in 2009, I graduated and I had an internship in Chicago, which actually led to a full-time position at my prior company. Work they’re doing a lot of in the lab at the factory scale-up of product development, both on gum and candy and confectionery sugar, confections. As of last year, January of ’19, I moved over to my current employer for our candy company in Chicago. And so since then, I’ve been doing a lot. My title is senior manager of innovation, growth management. Really, what that entails is looking at how Ferrara is doing innovation and what roles do we need in place? What process do we need to implement and deploy? What capabilities do we need to develop? But also from a strategic standpoint? What should we be having in our innovation pipeline to deliver growth not only for the company but also for the category? But also, what insights from consumers are we leveraging to develop that pipeline. It’s been a really interesting opportunity over the last year and a half just because I’ve been able to really leverage my knowledge and experience doing the hands-on product development and translating that with strategic partnerships within different functions to deliver growth and so it’s been exciting. Ferrara as you know, we might get into later, is really in a time of rapid growth and change and really exciting to see our innovations help deliver that and actually get a lot of great feedback from the consumers themselves. So yeah, that’s kind of my background. I’ve been in Chicago since I graduated in ’09 and really love it. I think it’s a hub of CPG and just a lot of history with food manufacturers. And so just so a lot of great opportunities. Josh Barker: [03:08] Awesome, Ferrara is a candy company, right? What does your day to day look like? You know, you mentioned gathering insights and bringing that to talk about how you might apply those to get more growth. What does that look like for you? Andy Renaud: [03:25] Yeah, I mean, candy is a fun category. But realistically, I’m in a lot of meetings, a lot of conversations all day. But it’s working with our technical teams to understand how we’re going to be developing ideas, but then also working with marketing and our sales teams to pull together the right stories and make sure that our retailers and our distribution partners are really going to be excited and help drive the innovation. So it’s a lot of partnership, a lot of defining, what do we need to do to deliver? It’s kind of interesting too. A lot of our innovations are launched at a similar time each year, which I don’t think a consumer, day to day, might not recognize. End of the year is when we launch all of our new items. And then we’re trying to do it on an annual basis. So depending on the time of the year, different shift. Right now, we’re in a lot of ideation, exercises, and activities to build out ideas for future innovation. And so we’re looking at what do we want to be? What are insights we can leverage today to really help create novel and unique ideas for the consumer in 2023, and 2024? So it’s been, you know, a lot of further out looking, creative mindset implementation right now. So today we’re actually, you know, in a lot of discussions about who needs to be helping us create ideas, how are we creating ideas? And then also, how are we going to refine those ideas over time, so a lot of planning for project timelines. So, yeah, it kind of shifts a lot. But right now we’re building out future ideas first, then technical teams go and develop. Josh Barker: [05:10] Sure. You know, would you say you’re mostly inward-facing, mostly outward-facing? Or is it a kind of a marriage of both of those? Meaning like employee-focused, or customer-focused? Andy Renaud: [05:23] Yeah, I mean, it’s definitely, I would say a combination. I think, starting wise at the start of where we want to start generating ideas, it’s definitely outward-looking. Where we’re engaging with our retailers, we actually have typically once to twice a year we’ll have innovation-focused conversations and summits with major retailers to discuss what does the future look like and how do we build that together? How can we provide new exciting products for you and for their customers? But then also, how do we leverage what Ferrara is really good at. So looking inward? What capabilities and knowledge do we have in-house to really develop things synergistically that is beneficial for our retailers and for the customers. I think a lot of folks on this podcast have mentioned to if you don’t understand the consumer and the customer looking outward, your innovations aren’t really going to deliver. Josh Barker: [06:27] Right. Well, and what got you interested in the innovation space? What do you like most about it? Andy Renaud: [06:33] Yeah, I mean, to put it simply, it’s fun. Who doesn’t love coming up with a new idea? I think all of us come up with ideas every day. Yeah, it can be very simple. It can be grand, and it’s a lot of those ideas you never think would happen. For example, Uber, it’s something that, who would have thought we would get into strangers’ cars and let them drive us places and now it is just ubiquitous for traveling. And so it’s all about the excitement of coming up with new ideas, but really inspire me. I had a really great opportunity in my undergrad to do an internship with a Candy Company, and who doesn’t love candy too? So it’s like, ultimately, you know, what gets me out of the bed each day is just, you know, working with great people, but ultimately, we’re working on a fun and loved to category. And so ultimately, to me, it just gives me something fun to do with my day. Josh Barker: [07:31] You know, I was reading – are you familiar with 23 and Me, the genetic testing company? They actually said that women are, they genetically proved this, are 1.2 times more likely to like candy. So I remember that, you know, going into this, which I thought is so I’m assuming that’s is that some of your I mean, obviously, broadly, everyone loves candy, but right, but is there a specific target that most you know if you’re guiding a lot of your decisions of the target market? Andy Renaud: [07:57] Good question, I think I hate to say it depends but really, Ferr has a large portfolio of brands. And so each of those brands really speaks to different audiences. And so depending really on I would say who the consumer is you can innovate in different ways. So yeah, you know, our Trolli brand really speaks to the weird the awesome nature of fun and candy and just being able to live in a different world for a moment. We actually have a lot of gamers love truly, that does provide just this weird kind of brand and perspective on the world. Then we also speak to with sweet tarts are “Be Both” campaign and just marketing about you can have sweet and tart so combination and you’re allowed to do both within your worlds you know, and as you identify, could be a football player, but also be a chemist for your day job. So candy, really, I mean, as much as maybe I’m so embedded in a category, but you really can identify with it in a different way. So depending back to your question, who we’re innovating for, that’s kind of the mindset and the frame that we’ll use to ground ourselves when we think of new ideas. Josh Barker: [09:14] Yeah, that makes sense. There’s kind of a it’s diverse, but it sounds like there is somewhat of a home base for maybe different brands and different types of candy. What would you say your greatest challenges are in the space to innovation? Andy Renaud: [09:29] Good question. I mean, a few come to my mind, I think. The first one just being such a saturated category. If you don’t go down the category aisle, just think of the number of packages that are in that aisle, and how many options you have. So just the plethora of variety that the consumers seek. So it’s challenging in a sense of continuously wanting to create new news, but also, depending on your time of day, consumers might not be 100% loyal to you at all times. And so just kind of capturing that, but then also delivering the same quality product each time is a really big challenge. The other challenge, I would say too, is just with innovation in general, I would say even outside the category is thinking long-term and being able to keep momentum internally and put that lens of like I said, we’re thinking 2023 and beyond. We also have to continue our base business of today. And so it’s just a challenge, I would say, to keep excitement and momentum. And organizationally, we can create org structures that help us think that way. But of course, as I think any company has, you know, fires that need to be put out. So it can be a challenge of thinking, How do I keep my day today, but also think about three years out is a big challenge too. Luckily, like I said, going back to innovation just being fun, you can kind of help sell in really having to be good at selling ideas has been a good challenge, I would say just working in the innovation space. Josh Barker: [11:11] What do you see in the candy industry is what do you see as trends? You know because you can you just list you said Uber right you can kind of see there are trends to more of this as a service type concept right for on-demand type transportation, but what do you see is and then we look into autonomous vehicles but what do you see is kind of trending for candy? Andy Renaud: [11:35] Yeah, there’s a few I think one that maybe isn’t so new but people look to candy really as just an escape to mindlessly daybreak and have a snack or it could be we also have a portfolio of cookie brands in our business. And you know, it could be an afternoon snack or it could be a way to connect with your children by offering them something maybe a treat that you had in your childhood. And so it’s an exciting moment for that child, but then also a nostalgic feeling. So I would say just the trend of emotional meaning that we kind of call sweets snacking as our category can offer. I think another really interesting trend that I’ve, you know, we’ve started to think about what we how we can capitalize on or just start innovating on is the way people identify with products and not even just sweet snacking or candy. But for example, Black Forest, our organic and better ingredient line of gummies really provides you know, a way to identify and feel good about a product that you’re consuming. Not only is it using better ingredients but also this year we’ve been donating to a plant a tree foundation to plant trees and so with that purchase you’re able to kind of identify as a, you know, healthy for you but also healthy for the world. And really, we’ve had a lot of celebrities who organically will resonate with that and start posting on it. So it’s just been a really exciting way to think about how do we innovate not only with maybe flavors or the product itself, but innovate with a social connection and being able to really engage consumers beyond that pack of gummies that they ate. So those are a few that come to my mind within just the sweet snacking or candy, category, and trends. And it’s really interesting to see how social media has played into just consumer feedback loops as well. And that’s something as far as building out our culture of innovation. How can we utilize that to inspire innovation is something I’ve been questioning too and thinking about? Because it is such a rapid feedback loop and very quick, how do you capture and react to it is something that I think is a behavior companies really need to be reliant on. Josh Barker: [14:04] Very interesting. I mean, have you applied anything so far? Are you just in the preliminary stages of kind of that? Taking what’s on social and getting feedback, the closing the feedback loop, per se, is that still kind of a new thing for you guys? Or is there are some learnings you guys have learned from that to say, Hey, this is changing the way we do things. And here’s how. Andy Renaud: [14:23] Yeah, I mean, it’s, it’s definitely new. I wouldn’t say there’s, I’m sure a lot of companies do it differently. We’ve been utilizing that a lot to promote our new innovations. But also just capitalize on way s to engage, we know movie campaigns will be opportunities to engage socially with consumers. We launched a Sweetarts Golden Rope for the Wonder Woman movie release. Being able to allow consumers to utilize a golden rope as they’re enjoying a movie and identify again with that. That’s just kind of allowed us to predict ahead of knowing how consumers will engage online and in social. Wanting to engage with a movie that just synergistically has created opportunities for us. Such as our Sweetarts Golden Rope. And so we’re obviously can’t divulge too much, but utilizing that to think about future ways we can engage. I think other companies do it, such as Lays with feedback on how do consumers vote for new flavors. What’s been really interesting to me in the CPG category is companies are really good at utilizing those insights and predictive behavior to engage socially about vote or flavor campaign. Ultimately, you can use research and insights to predict ahead of time, for example. Like I said, each company will do it differently. But it’s just been interesting learning for me to think about. There’s a lot of research and work for two to three years leading up to a campaign like that. So it’s kind of almost using that social portal to create news and awareness for products. That’s been really interesting and something that Ferrara is doing a lot of. It’s just been really exciting to work on those sorts of innovations and engage in different ways with consumers. Josh Barker: [16:27] Sure. You know, going back to something you said a little earlier. You said that consumers use this candy as essentially, at times an escape? Right? So then a question I have for you is, shifting topics for a minute. How is that really affected you guys during COVID-19? Is there a correlation where it’s like, as their a mindset or process shifts or due to the current climate, what has changed for you guys? Andy Renaud: [16:53] Yeah, good question. I mean, it’s definitely been an interesting time. I think, luckily for our own were one of our values is agility and just being able to adapt quickly. And I would say our teams have really showcased that. So two things. One is some of our technical developers, short of not being able to go into labs, have utilized their own home kitchens to prototype and test out different recipes. I mean, candy and cookies can be made at home. And so, just even procuring equipment to test out prototypes at home has been one way that we’ve adapted quickly. The other really is a capability we’ve been building out and investing in is our industrial design capabilities. And so ideation exercises, how do we put ideas and thoughts to paper and prototype? So those sort of exercises have gone virtual. Instead of being in a day-long ideation activity, teams or industrial design leads have been breaking those sessions into multi-day exercises. Using platforms such as Miro to really help us collaborate together in unique ways. And so it’s just been an adaption of taking day to day behaviors and really doing it remotely. AIt’s still leveraging technology to ensure that we can collaborate together and still interface as best we can. So it’s been an interesting way to see those. But I would say we’ve had to definitely prioritize. We’ve also had to think about creative ways that we can continue our process. Those two come to my mind. Equipping ourselves to do it individually at home, and also just how do we leverage technology? Josh Barker: [18:40] Sure. Sounds like you’ve guys have adapted quite quickly. That’s good. Now, what about consumer habits? Have you guys seen any of those change during this time of COVID-19, Andy Renaud: [18:49] We’ve definitely seen them change, I would say, shopping behavior as consumers have a pantry stocked. And so I would say it’s probably less impactful necessarily on Are innovations. We’re still figuring out the trends to really see an over the last three months. Yes. And so it’s kind of parceling out what is gonna have longevity. Yeah. But didn’t really it’s kind of more about how people are consuming or shopping and what maybe larger bulk packaging. I personally have been going to Costco a lot more than I did in the past. And so we’ve definitely witnessed it. I would say just time to innovation, it’s still over. We need to figure out Josh Barker: [19:31] Sure how long I mean, you’ve been in the CPG space for a while. More broadly, what are the greatest things you’ve learned in the CPG space? Andy Renaud: [19:40] I think within CPG, one of the biggest things I’ve learned are just witnesses. Some of the simplest things can have, you know, biggest impacts. So I kind of just as I think about innovation, keeping it simple. You know, for example, the car cup for gum was a huge packaging innovation. It was just a simple observation of people are spending a lot of time in cars. How we place products there as a category was one big innovation. Also, just going back to the excitement for candy. Multi-texture is a simple way to deliver excitement and new mindless ways for consumers to engage. We’ve leveraged that to launch our Trolli Crunchy Crawlers last year. It’s a simple notion of, okay, it’s often hard as multi-texture, but it has been performing really well with consumers. But also it was an award winner at the Sweets and Snacks Expo. It’s the largest showcase of new consumer trends and products in the category for sweets and snacks. And one most innovative new products last year, awesome. So it’s just those simple kind of instant. Then getting creative, is what I think CPG has taught me is ways to really think about it. But also has been helpful just to not put so much pressure on having to find the best new thing. That does take time. Josh Barker: [21:14] Yep. And it sounds like to, to that point, I think a lot of people think things like, hey, what is it for our category? There’s often the analogy of what is the iPhone, right? And versus saying, hey, it doesn’t have to be this massive thing to win all these awards or to be innovative. It’s switching the packaging, like you said, observing your environment of people using the product and getting something they want. You know, they don’t know. They didn’t know they want it. Yeah, Andy Renaud: [21:44] Exactly. Exactly. And don’t get me wrong. I definitely want to find that next school bus. Yes. But it’s not every day. Yes. Josh Barker: [21:51] Yep. small incremental wins and finding out what the consumer wants. What have you learned about or found out about innovation that listeners can take back and apply to their businesses? As people are listening to this podcast? Andy Renaud: [22:04] Yeah, I think for me, I would say definitely just knowing your basics and what you know you’re capably strong of. And so for example, Ferrara has a lot of capabilities with coating and panning of candy. If you think about the crunchy gummies, the Trolli crunchy crawlers utilize our strength in panning and being able to put a candy shell on something. Believe it or not a worm-shaped gummy is not the easiest to coat. So I would say knowing your basics in your industry and what your company is itself really strong at doing. For us, as historically started out as a painting company in 1908. Through time we’ve developed that and now we’re continuously thinking about how do we utilize that strength to keep innovating and providing new news? That’s some advice that I keep in the back of my mind. Know your basics and utilize that in the best way and continue to own it and develop. Josh Barker: [23:13] So it sounds like somewhat to staying true to who you are, you know. Andy Renaud: [23:17] Yeah, exactly. Josh Barker: [23:18] That’s good. Anything else that you would cover you’d like to kind of cover ground on that hasn’t been talked about? Or think you think it’d be a good question or topic for us to hit on? Andy Renaud: [23:29] I think, beyond kind of what I’ve already said, I would just say, innovation just isn’t really a “me and myself” process. You really need to engage internally and externally. Getting feedback as much as you can on things, you’re not going to get it perfect day one. Nor is it, Andy, you’re going to walk in the door and have the best next idea and do it all by myself. It doesn’t work that way. So I would say just continuously not being afraid to come up with crazy ideas or come up with prototypes. They might not be what goes out of the door ultimately. But leveraging partnerships and collaborating is going to be really critical. Josh Barker: [24:15] Yeah, I think there are many times there’s a fallacy of when we when we speak of innovation. And you, you, you and I, working in the innovation space saying, Oh, my job is innovation. It doesn’t mean hey, I’m, I’m the next Steve Jobs in our organization. That’s not actually it’s almost the opposite, right? It means that we’re not the sole flag bearers of innovation. We’re cultivating that in the organizations. We’re in right where we want you to thrive. We have others come around us and, like you said, partner with inside the company outside the company. Really, the sum is greater than the one right so bring them all together. Andy Renaud: [24:56] Exactly. And I think even going back to earlier. What I’ve learned in CPG, in my career is, it’s really outstanding, how much resources go behind things. So if you think about a pack of gummies on the shelf. There are dozens, if not hundreds of people employed and working on it. And then also, a lot of innovations can take quite some time. So I’ve, you know, I’ve witnessed launches of products that have taken five to 10 years. The amount of collaboration and resources and energy that go behind new innovations is not as simple as consumers think when they go down the candy aisle. Josh Barker: [25:39] Yeah, that’s it’s amazing to see, as consumers we just look at a package or look at something on the shelf and we’re like, you just see it for what it is, right? This is a pack of gummies. Versus you have a unique insight to look at that and go, there are so many people and so much innovation involved in this small thing. Well, Andy, I really appreciate your time, it’s been a fun conversation. And you know, selfishly I did interview you so I could get a sample of candy. No, I’m just kidding. But Andy Renaud: [26:11] Well let me know Josh. Oh, I can coordinate it. Josh Barker: [26:15] I’m kidding. But no, I really appreciate your time. And it’s been great. Andy Renaud: [26:18] Of course. Great. Thanks for the opportunity. Great chatting. Josh Barker: [26:21] Yeah. Likewise The post How to Leverage Consumer Insights for Innovation appeared first on City Innovation Labs.
32 minutes | 7 months ago
Is Look At The Future of Tourism?
SUMMARY WITH LUKA VUKOVIC OF LOOK AT Episode 41 highlights Luka Vukovic and his awesome company, Look At. He talks with Josh about how he plans to disrupt the lucrative tourist industry with his selfie sculptures. No longer do you have to ask awkwardly for someone to take your picture or snap one yourself, this sculpture will do it for you. We discuss the impact of Covid-19 on Luka’s business and how they are planning to work around any restrictions that come with travel this year. He has a plan for the future of Look At with an amazing web app, new AR features, and an awesome user experience. Visit Look At’s website for more information about this brilliant venture. Connect with Ask an Innovator. About Look At Check out Look@Look@ FacebookLook@ Instagram Full Transcript with Luka Vukovic Josh Barker: [00:00:46] How long have you been working from home for? Luka Vukovic: [00:00:48] I came from Madrid like three weeks ago and I haven’t been outside for like 20 days. I put myself in isolation because I was in Spain , so I haven’t been outside in like 20 days. Josh Barker: [00:01:01] Oh my goodness. Wow. Are you staying healthy you and your family and your loved ones? Luka Vukovic: [00:01:07] Yeah, we are all healthy. Thank God. But there’s few people around my house who got infected. Actually our mayor is from my street and he got infected and also a few more people. And so the place around my houses kind of being smaller and smaller. Josh Barker: [00:01:27] Oh man. Yikes. well at least you and your loved ones are okay, but, hopefully those around you will get through it quickly, huh? Luka Vukovic: [00:01:35] Yeah, I read in the United States. It’s a hard times, especially in New York, in Chicago, you’re in Chicago, right? Josh Barker: [00:01:44] Yeah, we’re in Chicago, in West Michigan. Both areas are locked down pretty tightly. It’s definitely a ghost town, being outside. There are a few people outside here and there, but for the most part, everyone’s in their houses, not really going outside. It’s a different world, it’s crazy. Luka Vukovic: [00:02:02] It’s scary times. Josh Barker: [00:02:04] Yes. Yeah, it is. Everything’s kind of changing or there’s a new sense of normal. I mean, you, like you said, you’ve been doing this for three weeks. We’ve been probably doing it for the similar amount. So we’re getting kind of used to working from home and, yeah, it’s interesting times. Luka Vukovic: [00:02:20] Yeah. I’ve been talking with some people in China and everything seems to be okay there now, so hopefully in two months, everything will be okay here too. So I like to think. Josh Barker: [00:02:32] Yes, exactly. As long as we can keep the social distancing up kind of distance ourselves from one another for awhile. Luka Vukovic: [00:02:40] Yeah. The bigger problem is going to be the economy after this. We are definitely heading to recession. I pray to God that there’s not going to be a depression like the one in the United States in 1929. Josh Barker: [00:02:55] 1930s. Yeah, exactly. hopefully we’re not headed in that direction. I mean, the nice thing is, I know the government in the United States is just doing everything they can to keep businesses afloat by offering grants and small business loans. A lot of loans and money that doesn’t need to be paid back. They’re trying to really do what they can, which is good. it feels like they’re trying to react somewhat quickly to it. Luka Vukovic: [00:03:18] Yeah. That’s positive. same thing here. So hopefully, we’ll get through this. It’s going to be interesting. Josh Barker: [00:03:24] Oh yeah, for sure. Well Luka, tell me a little bit about yourself and tell me a little bit about Look At.? Luka Vukovic: [00:03:31] Yeah. I’m from Croatia. It’s a small country in the EU. I’m 35 years old, married, and a father of two girls and a boy. I’m an industrial engineer. I was a top student in my class. So before starting my own business, I worked as a project manager for nearly 10 years for one company that was into mechanical constructions. And soon after coming up with the idea for selfie sculpture or Look At, I’ve quit my job started my own company and went all-in with Look At. So this was three years ago and now we are here. So, my company is still alive and that makes me happy. Josh Barker: [00:04:05] When did you start Look At? Luka Vukovic: [00:04:07] So look at has three years. Look At is a startup company, building next-generation products for tourists. We built the first selfie column sculpture that gets tourists the best possible photo of them in front of an attraction. It also enables them to have an augmented reality photo to educate themselves about the attraction and also to send the photo. They just snap as an actual postcard worldwide. We installed the first units last year and had great traction. Additionally, we learned a lot from watching people use our product. We raised 100K from the U-fund to improve our product based on what they learned. And this is what we were doing in the last eight months. So. It all started with the sculpture. And now we are building a platform around it. A platform that connects all of our sculptures in a smart city tourist guide that by making it the game for tourists, guides them through a city. And at the same time, by doing this, it regulates the movement. This is basically what we are doing and where we were in three years and where we stand now. Basically I was walking one day back in my hometown, when I saw a couple of tourists, trying to get a selfie in front of one of the city attractions and they were struggling so much. I remember I was laughing at them, trying to get a good angle. They nearly fell into the sea, looking for a perfect picture. They so badly want it. I thought to myself, there’s got to be a better way for people in the 21st century to get a picture in front of an attraction when traveling. But there wasn’t because what are the options tourists have? They can ask a passer-by, to take the picture for them. Nine out of 10 times, you won’t be satisfied with that picture because the top of the Eiffel tower is cut off. You need to thank that person that took the picture in the first place. Already you are looking for another person to take another picture for you. There’s always a selfie, which two of these tourists are doing, but when they selfie in front of an attraction, there is always a head in the picture front and there’s little or no attraction in the back. The only thing they want to have in the picture is the attraction. They’re going to have a memory from that city. And there’s this third option, and this is choosing someone out of your group to take the picture, but then this person gets left out of it. And this is always an awkward moment. There are a few other options, like using certain gadgets like drones or something like tripods. People can have a personal photographer, but this all takes time. And the thing we want to do is to, help people connect with a city. We want them to enjoy the attraction and not worry about how they’re going to get this picture. So I was looking at these people and I thought to myself, there has to be an easier way. So I said, what if there was kiosk, like a sculpture or a column or something with a camera already getting the perfect angle so they could connect to this camera. They could have a preview on their own mobile phone and pressing just one button they could have their picture saved to their mobile phone. This seems like a good idea to me. So I send a blurb to my wife and when got back home, she was like, what was this all about? What did you send me in that message? And I was like, remember when we were in Paris on our honeymoon and how we don’t have a single decent picture from our honeymoon. There are only pictures with you separated or with me and there’s not a single picture with the two of us together. And this is really it. And I presented the idea to her and she was like, yeah, this idea seems good. This is definitely something that I would use. So we call a few more people. We call my brother, presented the idea to a few more people and everyone seemed to like it. Than I Googled a lot, trying to find out if there’s something similar already in the world. I didn’t find anything. Then I wanted to make sure the numbers match. I wrote the business plan and the numbers seemed good. And then I said to myself, okay, I’m going to build this device, why not? It’s going to be fun. And this is I get how it all started. Josh Barker: [00:08:06] Yeah, that’s good. I mean, I’m definitely in your target audience. My wife and I went on our honeymoon to Hawaii. And it is very similar, right? I mean it’s just the two of us you have to kind of awkwardly ask people, ” Hey, can you take a picture of us” or my wife and I trying to get a selfie and I remember on our honeymoon there was like almost a cliff and I always felt like I was going to fall off the cliff trying to take a picture of us both. So it’s definitely very valuable, and it reminds me of too, when you’re at an amusement park, right? You go on a rollercoaster, you can go buy your photos. Like, it kind of reminds me of that too. A little bit. Luka Vukovic: [00:08:36] Yeah. So there are solutions that are kind of similar, but the problem we are solving is we are first of a kind addressing the problem this way. And you mentioned the cliff, did you know that more than 300 people accidentally kill themselves while trying to take a selfie? People are willing to die for a like on social media or for a perfect picture. Josh Barker: [00:08:56] Wow. Crazy. I’ve got a look at one of your photos. It’s a castle and there’s a guy standing there. It looks like augmented reality with some dragons over the top. That’s kind of cool. So it sounds like there’s a statue with a camera in it. And then, you know, augmented reality is kind of putting the dragons overhead. Is that right? Luka Vukovic: [00:09:14] So we have a column and we have a tree, we call it a sculpture. So the one that you saw is, installed in one of the Game of Thrones locations with the dragons as part of our augmented reality because we are trying to add more and more features because we want to separate ourselves from the mobile form. We want to say, this is the kind of picture that you cannot get with a mobile phone. People like this the most It was a funny thing, the picture with the dragons, we had like 10% of the people that enter this location, this fortress to have a picture. And after we put the dragons and we put a sign in our sculpture that you can have this picture with the dragons, the number of people to take the picture jumped from 10% to 40%. This was amazing. and one thing that we learned along the way. Josh Barker: [00:10:05] That’s really cool. Yeah, you’re adding value on top of something. not only is it a perfect angle now it’s an actual feature, like adding the dragons, something you couldn’t get before. So that’s cool. Luka Vukovic: [00:10:15] Yeah. It’s not just the dragons you can add various historical persons. People from local community, you can add famous persons, you can add sports figures. For example in Chicago, we could put one of our sculptures in front of the Chicago Bulls arena and people could take a picture with Michael Jordan. This will be cool and this is something that adds value to our product. Oh, for sure. And speaking of Chicago, what cities are you guys currently in or, you know, testing out? we are a lean startup, so we’ve installed seven units in Croatia, in Europe , last year. ut being lean startup, we wanted to completely understand how our product works in order to scale after because we wanted to know what our customer wants before we decided to move forward. And this is why we didn’t do any selling activity whatsoever after we installed this first seven units. For example, we are testing how people react to the product we were watching. We were observing. One time, I just sat in a coffee shop next to one of our columns and I just watched the people, you know, going by the whole day. And the thing that I realized was that 80% of the people didn’t even realize that it was there because they mistook it for something else. They think of it as the next thing in the street, as part of the environment. But for the other 20% of the people who actually saw it, 10% of the people actually took the picture. This was important to know for us because now we knew we need to make this 80% of people who didn’t notice it to notice it and to make this 10% of people who noticed it but didn’t use it, to learn why they didn’t use it and to make them use it. And what we learned is that people have problems downloading the app because in our product first version people needed to download the mobile app in order to use it. And this is sometimes a process that took them three or four minutes if the connection was slow. We had this signup process that they needed to fill in, and this was all hassle for them. In our product improved version of which we are building at this moment, we are not going to use a mobile app. We are going to use a web app because web apps now are so developed. They look almost like the mobile app. So people are just going to have to connect on wifi and that’s it. They’re going to have a live preview of their picture on their mobile phone and they’re going to be able to snap a photo and move forward. Josh Barker: [00:12:55] Very cool. That’s awesome. Now, you mentioned lean startup. I’m a huge proponent of lean startup. So one of the things that I’m curious about is a lot of times you’ll think of an idea and if you’re a lean startup advocate like myself, you always think, well, what can I do to test out the idea before I go full throttle building out something that’s sophisticated? Right? So tell me a little bit about your guys is lean startup process of even your first one and how it’s evolved since then? Luka Vukovic: [00:13:24] Yeah, so this is the thing I was talking about. We built the first product version, like an MVP, and decided to install first time sculptures in four cities in Croatia. I didn’t want to sell any more sculptures. I just wanted to look to observe how people interact with it. We had this camera and this product that you can take a picture with it. However, it wasn’t a top-notch product. That didn’t bother us. We wanted to learn how people interacted with it. We wanted to do surveys to ask people, what are the features you do like? What are the features you don’t like? Tell me about it. Is there something we could add to the product? We were doing a lot of surveys, doing a lot of questioning, observing how people interacted with it. And based on that, we are now building our new product and we are going to present it. We wanted to present it, in April, but due to coronavirus, I think we need to postpone it. This is something that we do as a lean startup. We put a product on the market, even if it’s not finished, we learn and then we pivot, or we don’t pivot based on the feedback from the customers. Yeah. How long did it take you to build kind of the first version? Just out of curiosity. I think it was like a year or a year and two months. The problem was, being industrial with a mechanical engineering background, [I needed help with] the construction part, the kiosk. So I need someone to help me with the electrical part. Therefore, I find a cofounder. I remember a friend of mine who worked as one of the first engineers in Bella Beat. They are a Y Combinator alumni. I presented the idea to him and he agreed to start working part-time at Look At. So he designed all the electrical components, the camera, and the solar system. we both knew some programming, so we made a proof of concept that worked. Then I started to sell the product even before it was done. we’ve had first orders, so we needed to speed things up. I raised money from family in France, and then I hired two developers to make our mobile app MVP. So this was the process that actually took us a year or something. We’ve had a lot of problems with hardware at that time. Josh Barker: [00:15:43] That’s quite the startup story, huh? What’s your business plan of how to make money is that from the locations and the areas themselves, maybe like the cities or is it the municipalities? Who’s actually buying it or are you actually selling the photos as people are looking at them? Luka Vukovic: [00:15:58] It’s a great question. We have two models, so we have selling sculptures and we have inner purchases. In first, we sell sculptures to our customers which are city municipalities, tourist boards, tourist offices, but also hotels, stadiums, kids’ parks. With buying a sculpture, they are getting also the whole backend platform behind it, supporting it. And of course, our web app, which people use to take pictures. The exciting part is that we let them keep half of the inner purchase profits so they can make a return on their investment. The second option is where we don’t sell sculptures to a city, but we install it with their permission. In that case, we don’t split the purchase profits with them, but we keep it to ourselves. So these are the two models that we are using. Josh Barker: [00:16:43] Okay, cool. And what are some examples of Luka Vukovic: [00:16:46] like the in-app purchases? Yeah. The in-app purchases are for selling the postcard. There’s an option for people to send natural paper postcards worldwide through our app. From the photo, they just snap. We sell special augmented reality photos. We have some photos for free, but some photos that are much more advanced. For example, you can take a photo with Steph Curry for free, but you pay for the Michael Jordan photo, something like that. And we have these other options where we sell marketing space in our app. There are three purchase areas. We do it to make money. Josh Barker: [00:17:28] Awesome. And so you guys are now in the phase where you’ve tested it out, Croatia and things. You’ve kind of been able to take a look and observe and learn really rapidly and figure out what the next iteration is. And then it sounds like you tentatively were going to go to the market in April with the updated version, but obviously, coronavirus hit and now that’s kind of pushed back a little bit, but then are you looking to release the new version back into Croatia, like in your general area? Or are you looking to continue to rapidly learn in your area or are you looking to more scale and go out to different areas? Luka Vukovic: [00:18:01] I think that we are close to the perfect market fit. We’ve learned through the last six months, and we’ve learned a lot, to be able to improve our next version, to be close to the market fit, and as you said we wanted to present it this April. But due to coronavirus. I don’t know when we are going to be able to present it. Maybe we’ll present it just on our web page or something. We want to scale outside Croatia. We’ve already signed a contract with a German distributor, so we are exploring German territory. And also we have a partner, in Dubai. Actually the idea was to present the product in Dubai, but we’ll see what will happen now. We are working on what we can from home and hoping this ends soon, so we can present our product and move forward. One thing that we wanted to do because we haven’t done any marketing whatsoever, we wanted to film our product’s video to be able to present the product to people. The biggest problem with this product is people are not aware of it. We need people aware of this product. They need to know there’s something waiting for them at the attraction that can help them have this photo because 80% of people didn’t even realize there was something there. Which is just different marketing putting this dragon picture, we’ve raised the number of people to use the product from 10 to 50%. And these are the things we want to explore and work out. Josh Barker: [00:19:31] I’m curious, one question, have you guys tried putting like an LCD screen, that’s more of a live preview where when people are walking by, they kind of go, “Hmm, what’s that?” Since it’s live, they can see the dragon or they can see what’s happening and while they might not be in the photo, they can see, “Hey, it’s actually live.” Have you guys tried something like that? I’m just curious. Luka Vukovic: [00:19:51] We’ve been thinking about it very much. But the problem with the LCD screen is that it consumes a lot of energy and our product is fully autonomous. It works on solar energy. We need to be careful about how much energy does it spend. These are the restrictions we are facing now. And we are trying to decide whether we are going to put the LCD or we are not going to put the LCD. So I don’t know. We’ll see what will happen. We are thinking now about the idea of the product being half on solar energy and half connected to the grid, especially in the areas where there’s less solar energy. For example, in Amsterdam, we are talking with people there. There are times in Amsterdam where there’s no sun for like a month or something. Our product is able to be fully autonomous without the sun’s energy for seven days. And the new product will be able to stand without the sun for 21 days. And they’ll see the time is getting smaller. Josh Barker: [00:21:01] Yeah. That makes perfect sense. Luka Vukovic: [00:21:03] LCD is a great idea. Yeah. But the problem is the energy it consumes. Josh Barker: [00:21:10] What a fun problem to solve. I always like to think of all these ideas and that’s a fun problem to try and solve. That’ll be interesting to see how you guys solve it. That’s cool. Luka Vukovic: [00:21:20] Definitely. Josh Barker: [00:21:22] Awesome. So, a general question I like to ask everyone too is, what does innovation mean to you, Luka? Like what does that word mean to you? Luka Vukovic: [00:21:32] I think the innovation can have different meanings because you can take innovation to mean that someone made the wheel. This is like a huge innovation, but innovation can also be that you built a product that solves a problem in a different way than was the situation before. I think our product is innovative in a way where it addresses the problem in a way that no one did before us. And I think this is the definition of innovation for us. For me. Josh Barker: [00:22:05] Oh, for sure. I think you guys have drawn a lot of tried and true concepts from it. Like I was saying before about roller coasters or different things like that. It seems like there’s a lot of people, there’s a lot of market for buying those postcards. It sounds like it’s very new and innovative. I’ve never seen it to where, you know, you can do that somewhere like the Eiffel Tower, big landmarks, so to speak or the Empire State Building or whatever. Luka Vukovic: [00:22:33] Definitely. Josh Barker: [00:22:33] Very cool. Well, I’m really excited. I’m sure this is a question everyone asks you, when is it going to come to our city? When is it going to come to Chicago? That’s probably hard to answer with the Coronavirus, but if you were to spitball when are you guys hoping to go a lot bigger with this? Luka Vukovic: [00:22:49] As soon as possible. I don’t know how to answer this because, given the situation where we stand now with the coronavirus, I don’t know how things are going to evolve. When will the tourists start to be tourists again, when will the airports open again? When real things get back to normal, I would like to get there as soon as possible. I don’t know how to answer this question because we have the product ready to scale. We just need to bring it there. I think this is the only thing. Josh Barker: [00:23:23] Now on your original plan, if the coronavirus hadn’t happened, what was your original plan to kind of scale-out? Luka Vukovic: [00:23:29] So, the plan was the first scale in Europe. So Germany was obviously our first country to scale. Then some other countries in Europe, around Croatia and the United States and the South American market, which is also very interesting for us was the second market to expand to. So, if things were normal, I think maybe by the end of this year or beginning of the next year, we will have these sculptures in your city, but now we’ll see how things are gonna move. Josh Barker: [00:24:07] Yeah. Things are a little bit crazy. They’re a little different now. Luka Vukovic: [00:24:11] Yeah, definitely. Josh Barker: [00:24:14] I love your product idea. I would definitely be a customer of yours. Anything else you would want to talk about or navigate the conversation towards? Luka Vukovic: [00:24:23] We can talk about the platform we are working on now because the sculpture is just part of what we are trying to achieve. We are trying to build a next-generation tourist guide. So we want to connect all of our sculptures in one city so they can make a tourist guide that drives tourists through the city, which educates tourists. We’re giving them interesting information about a city that they couldn’t easily learn in Google, but the information only a local would know. We want to connect the city and tourists on a whole deeper level. There’s this problem that we also try to solve and that we realize along the way. This problem is that cities have huge issues with tourists blocking the most iconic tourist attractions. There are so many beautiful places in a city that no one knows and the city wants to promote these places. We want to make a game for tourists so we can move them from these crowded locations, these iconic locations to the ones that people don’t know, but city wants to promote them. We want to do that by making it a game for tourists by using a gamification process. So for example, after they take a picture at one of the locations, they can take our mobile app and they can choose from the different routes we suggest to them. Because we know at this part of the day you need to take this route because there are fewer people here or you need to take this route at this time of the day. And so people could explore the city, take pictures, posting them on social media along the way. And while doing this, they are blocking you the most visited attractions and at the same time posting the pictures, they are promoting them. Cities have huge problems with this. There are some cities, they were thinking about doing a ticketing system for entering certain parts of the city. For example, Venice tried to do that and this is a problem. No one knows, but it’s very real. Josh Barker: [00:26:34] Oh, I bet. I mean, that makes a lot of sense. that’s fascinating actually because when I go into a new place, I want to know, and I want to go to these different places, but I’m not super savvy on the area. And obviously it would be great to have an app that not only can guide me, but I can take great pictures. we’ve played this like a game as a team, we have what’s called team week. We’d have to kind of run to different locations and take pictures. And, who could take the most pictures wins. And you’re almost gamifying that process. Luka Vukovic: [00:27:02] Yeah. This is what we are trying to do. So take pictures here, collect points or hearts or something. And if you get 50 hearts, you get a discount at the final location, or you can enter, they find a location, without waiting in the line or something like that. What we are trying to do. We are still thinking about it, but we started to build this because we already have a backend platform. We own the only thing we need to connect. All of our sculptures, check the data from every unit number of people that take pictures. And by doing this, we can create patterns. According to these patterns, we can make estimates and offer the best routes to tourists. Josh Barker: [00:27:44] That sounds like a great idea. And I bet you, a person in a segment that’s going to just love your idea is going to be those local businesses by those landmarks that maybe aren’t as well known because it’s going to drive more traffic to their businesses. That’ll be a good thing for them. Luka Vukovic: [00:28:02] we then can leverage from solving this problem because moving people from this most visited locations and moving them towards this locations that are almost as beautiful, but no one knows about and the city wants to promote them. We are also promoting these, as you said, businesses that are aside from the most crowded areas. So we can also have them pay us to do that. This is also one of the models how we can make money out of it. Josh Barker: [00:28:35] Yeah, that’s awesome. it reminds me of the app , it was really popular at one point. I think it’s still out there as a four square. Is that right? Like four square checking into different locations except you’re literally getting your picture taken. Luka Vukovic: [00:28:46] Yeah. Yeah. So we are adding another feature. Go to these locations, have a great pictures, pictures in augmented reality, learn about the location, and post your picture on the social media with the hashtag the city wants to do that with. move forward to the another location. And along the way, you are collecting points, which you can use for entering another location or entering the city museum or whatever, you know? Josh Barker: [00:29:14] Yeah. And I’d love that app, not even fully from a sense of getting points and stuff and being able to redeem them in that specific location. Like if I was in Mexico or wherever I was, I love it from a standpoint of when I left Mexico or wherever I left, I could still catalog all my pictures that I could go back to. is that some of the ideas as well to say, “Oh, we went here and here and here.” And I can log back in and see all those memories. Luka Vukovic: [00:29:40] The idea is, although we haven’t started to work on this yet, is to make a social network for tourists, like LinkedIn for tourists. So you can log to your account and see all the places you’ve been, see all the places where other people have been, your friends. You can compare the places, compare the pictures. You can like the pictures. And this is some, idea we are moving towards. Josh Barker: [00:30:09] Very cool. Awesome. Luka Vukovic: [00:30:13] Thank you. Josh Barker: [00:30:14] Well Luka anything else? That was a great addition. I appreciate you making sure you hit on that because that is a bunch of value you guys are adding on top of your service itself or on top of the actual physical devices. Anything else you want to add or highlight? Luka Vukovic: [00:30:29] Yeah. During the summer, we plan to raise our seed round, which makes us very excited. All the proceeds we plan to spend on marketing and sales. So we can hit our goal of selling 100 units in the next 18 months and the reaching 2 million in revenue. This would set us a perfect foundation for the A round and bigger expansion. We have a product that tourists love and that gives an extra value to the location, and I believe we’ve upgraded it to be a perfect market fit. So, if you want to disrupt the selfie industry with us, or be a part of our journey in anyway, let’s connect. Josh Barker: [00:31:01] Very cool. That’s awesome. Some great traction you guys have got there. Yeah. Thank you. Luca, it’s been a real pleasure. I really appreciate you coming on and talking about, look at. It’s a very cool thing. I’m excited for it to come to Chicago. I really want to start using it. Luka Vukovic: [00:31:15] I can’t wait. I want to install one of the first sculpture in front of the Chicago Bean or in front of the Chicago Bulls Arena would be Such an accomplishment for us to go to Chicago, to Chicago and to, you know, install one of our sculptures there. Josh Barker: [00:31:31] Awesome. Very cool. Well, thanks again for, for coming on, ask an innovator. It’s been a pleasure. Thanks for your time, Luca. Luka Vukovic: [00:31:39] Thanks for having me. Thanks for having me. It was pleasure talking to you. The post Is Look At The Future of Tourism? appeared first on City Innovation Labs.
27 minutes | 7 months ago
What Will the Future Look Like for Innovations in Science?
SUMMARY Tim Lavengood is on Ask an Innovator today talking with us about innovations in science. We talk about how the Technology Innovation Center will provide a place for scientists to truly own their own intellectual property and what that means for inventing and the world at large. We talk about the importance of mentorship in the startup space. Tim and Josh discuss how this surge of scientists creating and innovating will mirror the technology revolution of the ’80s. Check it out – full transcript below! Connect with Ask an Innovator. About Technology Innovation Center After 30 years incubating hundreds of digital startups in Chicago, Technology Innovation Center is shifting its model to serve the hard sciences. Like the digital revolution of the 1980s, energy, materials, medical devices, agriculture, genetics and other sciences are entering a phase of entrepreneurial revolution. The toolkit for science is becoming faster, cheaper and smarter by the day, drastically reducing the barrier to entry for young, independent scientists to create IP of their own. Moore’s Law has come to the sciences and Technology Innovation Center is in on the ground floor supporting the first generation of true scientist entrepreneurs. Connect with Tim Email HimHabilisThe Incubator Full Transcript with Tim Lavengood Josh Barker: [00:00:13] Welcome to Ask an Innovator. Today I’ve got with me at Tim Lavengood. Welcome, Tim. Really appreciate you being here. Tim Lavengood: [00:00:18] Glad to be here! Josh Barker: [00:00:20] Awesome. So Tim is the Executive Director at Technology Innovation Center, is that right? Tim Lavengood: [00:00:26] That is correct. Josh Barker: [00:00:28] Can you give a little bit of background of yourself and a little background about Technology Innovation Center? Tim Lavengood: [00:00:33] Well, I’ve been working as the Executive Director for quite a few years, so those are kind of the same thing. We are a technology-based business incubator that’s actually been in operation since the eighties for about 30 years. 31 years. And we have worked with several hundred different kinds of startups over the years providing space and services and networking to help innovation-based companies get off the ground. Josh Barker: [00:01:03] Awesome. And I’m reading on here, 25,000 square feet. That’s quite a bit for 30 to 50 technology-based startups. Is that right? Tim Lavengood: [00:01:13] That was the case. We’re in the process now of making the transition to the hard sciences. There were reasons for that and we are working on a build-out of laboratory space in Northbrook, one of the other suburbs here. Josh Barker: [00:01:35] I’d love to hear a little bit more about that. Can you give a little bit more details about your transition to the hard sciences? Tim Lavengood: [00:01:40] Yes. We’ve been around since the eighties and we came in right around the same time as, you know, the beginning of the, uh, original.com boom. I think because of that perspective, I am seeing very similar circumstances now in the hard sciences: in new materials, in life science, in energy that we saw in the eighties in information technology. And I think it is now time for us, I think we’re most valuable in dealing with now this just emerging generation of scientist entrepreneurs. To me, the key is the tools. And just as in the eighties the tools for information technology got dramatically and rapidly, cheaper, smaller and smaller, and that results in entrepreneurship. As opposed to people who, because of the expense and the expertise required to use the tools, have to go to work for larger organizations. And I think we are now seeing just emerging the dawn of an age of the independent entrepreneurial scientist. And I think the implications of that actually make the information technology revolution seem small by comparison. Josh Barker: [00:03:07] Yeah, that makes sense. So before you’d have all these scientists really not able to afford the equipment, the space, all of the different things needed for true innovation to really happen. And now, you’re essentially providing that space, you’re providing the equipment, loaning it out to them, so to speak, for kind of a monthly cost. Tim Lavengood: [00:03:27] Yes. We’re redesigning, we’re creating what we’re calling a workstation for a wet laboratory, and what we’re basically trying to do is allow scientists to generate valid data. That proves their concept in circumstances where they’re not working for a big corporation that’s going to own everything. Approximately, now more than 95% of all scientific intellectual property by economic value, is owned by organizations with valuations over a billion dollars. So it’s the most concentrated asset class in the developed world and that is just about to break wide open now, in my view. It’s a profound trend that I think we’re in the forefront of. Josh Barker: [00:04:19] Sure. Awesome. I’d love to hear some examples of the different companies that are doing innovative things that might not otherwise be doing that if they weren’t in the position they’re in now. Tim Lavengood: [00:04:32] A company that started with us in 2015 called Hazel Technologies. They came to us, graduate students at Northwestern, with $6,000 they got from a business plan competition. They were working on producing a material, a nanoscale powder that actually controls the ethylene, the gas concentration that causes fruits and vegetables to ripen and then to spoil. By controlling this without additives, without GMO, they’re able to extend the shelf life of produce. That company was able, because of the tools, because of our environment, to get started and generate data that proved the effectiveness of that material with $6,000 upfront to pay rent for six months. This meant that as this data was generated, they owned it as opposed to what would have happened if they were at a large company. Now that company is worth, as I understand it, about $30 million and they’re doing great. Last year, they handled over 200 million tons of fresh produce. And so they were able to do this because they had the training, they had the skills, but they were able to do this as entrepreneurs. Josh Barker: [00:06:00] That’s amazing. Tim Lavengood: [00:06:01] Another company was designing a peritoneal kidney dialysis device, and again, was able to get into our facilities and generate the data necessary to raise, I believe, a million dollars to complete the protocol and under conditions where they owned it. Josh Barker: [00:06:21] That’s awesome. Yeah, it’s a lot like when software became more approachable, right? When you started to get this whole new wave of software’s the thing and software engineering became a discipline and a practice because it was the personalized computers. Right? It sounds like the equipment was a lot more accessible, and that’s what it sounds like you’re really doing for the hard sciences is you’re really making it so that the equipment is a lot more accessible versus only at huge facilities. Tim Lavengood: [00:06:48] It’s cheaper and it’s smarter. There’s a pipette robot that can run some of your wet chemistry that costs $5,000. There is a device for producing a pharmaceutical that sits on a desk. There are gene sequencers now that are desktop and cost $20,000. 10 years ago, there were five places on earth that could do gene sequencing and they were all giant research institutions. Those are the kinds of things. It’s basically, Moore’s law has come to the science. And fundamentally what Moore’s law is, is better, cheaper, smarter tools, and that equals entrepreneurship, Josh Barker: [00:07:31] That’s amazing. That’s awesome. How does one join this facility and how many people do you have in it? How many startups? Tim Lavengood: [00:07:37] Well, we’re in a flux, we can’t have the same number of startups that you can have in some of those WeWork type spaces, obviously, because the equipment still is much more extensive. But we’re working now with about four companies, and as I say, we’re building out space. As we speak. As a matter of fact, I’m going out there tomorrow, and so we’re really in a launch mode right now for this new version of incubation that we’re about to set out. Josh Barker: [00:08:05] Okay. Now, when is this? When are you guys looking to launch it? Tim Lavengood: [00:08:08] Well, we hope to be able to open the doors this spring, and I’m in discussions right now with Northwestern. One of the differences also with the sciences is that because science is so bound to large institutions and organizations, in a way, it means scientists only come from a few large companies and they come from universities. They come from hospitals, they come from federal laboratories. So actually the marketing and outreach to find these people are in a lot of ways, much easier because in the whole Chicago area, there are really only seven, eight places where scientists congregate. And, so right now, I think our main focus is Northwestern medical school and the engineering and science schools up here in Evanston. Josh Barker: [00:09:01] So one of the things I’m really curious about is a little bit of a background of it. How did you end up coming to this thought? Obviousl y, you have to have been in this space, you have to have had some kind of background to recognize a problem in the industry. How did you come to this idea or discovery of this problem? Tim Lavengood: [00:09:20] Well, there are two reasons, two basic things. One is that because we’ve been dealing with innovation-based startups for so long, we were able to recognize, I think a bit of this pattern that what was happening now in the sciences was so much like what was happening going back to the IBM two 86 or 86 computers for $4,000 then there were $2,000 and now, the device I’m talking with you on right now, it’s $200 and so when I started seeing, and I had learned, at least my perspective is that, again, for me, that toolkit is critical in what made the IP boom of entrepreneurship possible. Then as the entrepreneurs come in, of course, they bring a totally different perspective and then the larger organizations that have all their preexisting operating procedures, goals, and objectives. Once you have these tools, you can have, rather than have an organization use innovation to promote its goals, you have, the innovation itself promotes the creation of the organization. And fundamentally that’s the difference. I think that’s what entrepreneurship brings to the table. When it’s enabled by the tools. I have learned that as a younger guy watching these software people and the HTML people in the early days, and even, you know, Archie and Veronica in the days before the world wide web. Gradually, I noticed this consistent pattern was that these were people who have perfected the use of tools that hadn’t existed 10 years before, and they, therefore, were creating all these new possibilities to take information technology in a direction that IBM never would have done. That enabled me to see among the scientists and see going into laboratories and seeing what they’re able to do and seeing data being put online in real-time as opposed to the two years it took to go through peer review. I was able to put those trends of how science is done and how science is enabled by the new equipment. To recognize that this is a lot the same, and to realize that it’s no longer in the sciences where you have to start out by assuming a million dollars, which until recently was the case, it’s just beginning to be not the case anymore. I don’t want to exaggerate. This is very early days, but as I say, Moore’s Law has arrived and five years from now, everything’s going to be smaller and cheaper and smarter. And you’re going to be able to generate valid data by yourself. And I just think that’s because we’ve lived it before. We recognized it, I think, before other people, before even most scientists. Josh Barker: [00:12:28] Sure. Now, going back to that, that refrigeration, keeping fruits and vegetables fresh for longer. Without that facility without the equipment, without all the stuff that’s provided, like what would you say that would cost? Obviously it would cost a lot more because of the fact that they would have to be embedded in a larger organization. I mean, in terms of cost and timeline, is that double, triple, quadruple? What factor are we talking about of savings here for someone in the hard sciences? Tim Lavengood: [00:12:57] Well, the savings financially is actually, again, because we have, and we’re still in the process of redesigning the lab to create these very small workspaces. They have a hood and a bench and a shared water supply, deionized water, maybe a freezer to enable scientists to come in real cheaply because the space is so much smaller. Laboratories typically are designed with one large user in mind. And so actually the lab, that’s one of the reasons we’re engaged in this build out. The laboratory we’re creating is very different and it’s going to be much more dense. There’s a lot more hoods per square foot, and so we’re going to try and enable people to come into a small workstation for a thousand dollars a month. $1,200 a month. We’re not quite sure yet, but in that neighborhood, uh, that makes it possible for people to generate the data for a beta customer, a regulator, or an investor. And that’s going to be our jobs to produce that intellectual property. It’s columns of numbers. That’s what we’re all about. And so we’re taking away all of the other standard operating procedures, all of the fixed operating costs that characterize a large organization so that you’re able to move faster and you are able to move more cheaply because you’re not covering an accounting department. That Hazel Technologies that you were mentioning again, is a little unusual because they’re actually out there building a brand. A lot of what the scientists are doing, I think it should be proving their concept, and once they prove their concept, they create a liquidity event, they now have an asset. And that asset can go to investors. And so many of them are not seeking to build the product and to market that product. The they are seeking to do basically the R&D for the larger players. Josh Barker: [00:15:08] Sure. That makes sense. Tim Lavengood: [00:15:10] Get their pay off when they sell it. Josh Barker: [00:15:12] And speaking of that, a lot of times in coworking spaces, I know in Chicago, 1871 is a big one, is being able to take people from larger organizations and embed them alongside startups. There’s some kind of magic that happens there, right? There’s innovation and collaboration that happens between startups and large companies. They’re trying to do that by creating these innovation outposts. So one of the questions in my mind is, do you see that happening these large companies that or hard science companies putting people in this place that you’re describing as almost like an innovation outpost to partner with startups, to talk to them about what they’re doing? Tim Lavengood: [00:15:50] Yes. I think one of the big differences, and this is again a lesson that we were able to learn, is in the early days , the peer group, the network is much more difficult to assemble, and I think we’re people who have the organizational experience to be able to do it. Information technology now has a lot of what I call the been there done that mentors that people can meet and talk to. And a lot of people in large corporations also had experience in startups. And so there’s a blending there. But that took many, many years. A lot of the a, the angel investors seed fund people also do have the direct experience of knowing what it’s like to start up an IT-based company. There were very, very few experienced entrepreneurs in the sciences just as there were very few IT entrepreneurs in 1986 when this program started. Most of the money was coming from people who made their money in real estate and didn’t really understand what are the main reasons for that dot com boom. The money and the innovators didn’t really understand one another, and so a lot of mistakes were made. That is the challenge. I think right now you’re going to college with professors in biology and chemical engineering that have no experience in entrepreneurship. Their colleagues have no experience in it. Again, computer science went from being probably the single least entrepreneurial discipline in the eighties to perhaps the most entrepreneurial now. That took a generation for that mentoring and for that networking really to take root. And I think we’re one of the few organizations that knows how to do this in the early days. Josh Barker: [00:17:48] Sure. That’s awesome. Yeah, and I could definitely see how that’d be a benefit. Normally you would not get as diverse of opinions. And you know, I’ve worked in many coworking spaces. It’s always a pleasure to meet diverse people. Listen to diverse opinions. To be able to take them and apply them directly to your work. And so I could easily see how that would be a great benefit to not only having mentors but also having peers that are trying to create some hard science products and trying to get feedback or talk to people that are doing the same thing. So that seems like that would be also an added benefit. Tim Lavengood: [00:18:23] One of the things that I think characterizes this stage is that a lot of these people, some of the examples I gave earlier, actually, as individuals, scientists that are thinking in these terms tend to think they’re alone. They’re not aware yet of this emerging. Some of the networking work that we’re launching right now is to encourage these people to meet. To get together and to realize they aren’t the only ones. Some of these workspaces that you’re talking about and are able to take advantage of, we’re just in the early days of that occurring now. So I think that the networking is really crucially important. Because there are not professors, there are not colleagues. There’s not, you know, around the dinner table. There’s no family that has a scientific background and an understanding of the business building. Scientists are overwhelmingly employees at this point. Virtually 100%. And they own almost none of their work. There is no other profession right now that contributes so fundamentally and so massively to society. They own so little of what they produce. And that’s what’s going to change. And once it changes the financial opportunities and the shifts in the marketing strategies are going to be really profound. Josh Barker: [00:20:08] Yeah. Have you talked to anyone over mHUB in Chicago? It seems like they’re doing something… Tim Lavengood: [00:20:15] They are similar. Josh Barker: [00:20:16] I was just going to say, yeah, they seem pretty similar. Tim Lavengood: [00:20:19] We’re actually creating wet labs. This is going to be, in my view, a little more scientific. We had another company, for example, that produced an aluminum alloy. They were able to do the microscopy that was required and they had furnaces for preparing their sample. It ‘s my view that we are going to be much more directly focused on people in the hard sciences than even the engineering and you know, the maker space kind of thing. And it’s that basic critical role of data. We want to be the place where you can go under flexible terms of ownership and create valid scientific data. Not building things necessarily, but producing the data. Josh Barker: [00:21:11] Yeah, that makes sense. And so mHUB is more on the physical product side. Not necessarily hard science, but robotics, connected devices, sensors, that sort of thing. But yeah, you’re more on the hard science side. [Check out our interview with mHUB Founder, Bill Fienup] Tim Lavengood: [00:21:23] Yes. Yeah. And we actually have a sensor development project going on with us right now. It’s a sensor device for early detection of glaucoma. Josh Barker: [00:21:34] Oh, nice. Awesome. Tim Lavengood: [00:21:35] That’s a Northwestern spinoff. Josh Barker: [00:21:37] Yeah. Well, we’re going to take a quick break. I’m going to go into, uh, the something called the innovation hot seat. So these are some questions that are just about you and love to know a little bit more about you. So I’m gonna rattle them off one by one. We’ll go through them. Who is one person you would invite to dinner? Could be alive, could be where they’ve passed already. Tim Lavengood: [00:22:02] Well, apropos of what we’re talking about, there’s an old economist sometimes called the entrepreneur’s economist, a German named Joseph Schumpeter, and anybody who hears this, I recommend you Google that and read the first couple chapters of his book called The Theory of Economic Development. And I would really love to talk to him. I think way back in the thirties he had this figured out better than anybody has since of innovation and entrepreneurship in creating economic growth. Josh Barker: [00:22:33] Awesome. I’ll have to look him up. I’m not too familiar with him, so I’ll, I’ll look him up. Tim Lavengood: [00:22:37] Very few people have ever heard of him but he’s profoundly important. Josh Barker: [00:22:41] And then what is one thing you’d bring on a deserted Island with you? It can’t be a person. Tim Lavengood: [00:22:46] Bring on a desert Island. Is this an Island I’d like to get off of or am I happy there? Josh Barker: [00:22:57] I don’t know. You can make your own. Tim Lavengood: [00:22:59] Well, I suppose I would want a mirror or some kind of signaling device because I would probably want to get off. Josh Barker: [00:23:09] Makes sense. So what about, what’s your favorite book you’ve read? Tim Lavengood: [00:23:20] My favorite book. Okay. I was always a fan of Mark Twain. Yeah. So Huck Finn was a good book. Josh Barker: [00:23:34] Good classics. Mark Twain’s a good author back in the day. That’s good. Well, what about a favorite place you’ve traveled and why? Tim Lavengood: [00:23:43] I used to do a lot of work in Japan, and I found that to be a combination of being both very familiar and very foreign at the same time. It’s familiar because it is a very middle-class place. It’s the sort of thing that we understand. I’ve been to other countries, like Latin America where living standards are very, very different. At the same time, culturally, it is so unusual compared to the United States. I think that juxtaposition of feeling very much at home and at the same time seeing things that are so totally different, I found very interesting. Josh Barker: [00:24:23] Sure. That makes sense. I’ve never been to Japan. That seems like a nice place to go. Tim Lavengood: [00:24:27] Oh, it’s great, it’s very friendly. Culturally, they are very, very different. Their view of the world is very different. It’s fascinating to go there and try and do business. Yet, as I say, these are people who have living standards very similar to what I’ve been fortunate to enjoy. I think it’s a fascinating place. Josh Barker: [00:24:48] Yeah, it sounds fascinating. And so what can you tell listeners that they can take and apply to their business or their careers? Tim Lavengood: [00:24:56] As I say, I’ve been in the first 18 months of building a business for about 20 years. I’ve seen that over and over again. One of the most important things is that there is very little that can make someone more conservative than having been at the cutting edge a year or two earlier. There is this tendency as organizations grow, this is what Mr. Schumpeter talks about. You slip into what he called the circular economy. You get more and more conservative because that’s necessary to sustain a more and more complex organization. The most important thing to me is throughout your career and throughout the evolution of your business, is to remain an innovator. Remain innovative. Be willing to change the way you do things. Be willing to learn new things. I think that that’s the pressure to become bureaucratic is tremendous. And an old mentor of mine ran a very large company. Fate brought us together for an extended period of time. He said the biggest issue with a big company is what he called the duality of management. You’ve got to deal with 800,000 customer interactions a day. Make sure they’re all very predictable and at the same time. You have to be on the cutting edge for what happens next. He said that the biggest challenge of running a large organization is balancing those two often very contradictory and very conflicted forces at work. Creating that balance, understanding that balance is probably the one critical thing. People that can do that, are going to do greater things than the people who don’t. Josh Barker: [00:27:00] Good advice. Very good takeaway. And with that said, Tim, I really appreciate your time on this episode of Ask an Innovator. It’s been a pleasure chatting and thanks for all your wisdom. Tim Lavengood: [00:27:11] All right, well thank you. I enjoyed it. Check out our latest posts The post What Will the Future Look Like for Innovations in Science? appeared first on City Innovation Labs.
43 minutes | 8 months ago
How to Keep Innovating with IP Lawyer Daniel Shulman
SUMMARY Daniel Shulman, an IP Lawyer at Vedder Price in Chicago is on today to discuss how to make space for a robust culture of innovation. He and Josh talk through the specifics of creating a place where innovators are free to innovate – even during a pandemic. They discuss remote work and how to set your employees up for success in that environment. We hear about creating a pipeline of ideas and allowing people to view work a little differently during this unprecedented time. This interview was recorded in March 2020 at the beginning of the COVID-19 pandemic. Connect with Ask an Innovator. Connect with Daniel Daniel Shulman, IP Lawyer at Vedder Price Contact Info Connect with Daniel on LinkedInDaniel Shulman – Shareholder at VedderPriceCheck out VedderPrice Mr. Shulman is an IP lawyer whose practice focuses on turning innovation into value. Creating value from innovation requires a holistic, strategic, and flexible beginning to end approach. While most outside lawyers only specialize in the last chapter of the playbook—sending nasty letters and going to court—Mr. Shulman likes to advise his clients on how to start earlier. Turning innovation into value begins with a culture of innovation, effective intellectual property strategies designed to align a company’s intellectual property to its intellectual capital, and culminates—ideally—with a product in the market and not a product in the courtroom. Going from the drawing board to the market was his goal when he was Chief IP Counsel for a major consumer goods company for twelve years, and that knowledge and experience is unique among outside lawyers. When his clients do need to litigate to protect their innovation, or secure their own right to practice their innovation, Mr. Shulman has the experience and track record of success to lead all aspects of litigation, from trial through appeals. Today, his practice focuses on all aspects of intellectual property acquisition, monetization and enforcement, including complex patent litigation, trademark litigation, unfair competition, advertising disputes, copyright litigation, trade secret litigation and all aspects of patent and trademark prosecution and portfolio management. Mr. Shulman has experience with innovations relating to consumer packaged goods, electronic exchanges, insurance industry, telecommunications, financial products, mechanical and electrical devices, and prosecuting patent applications before the U.S. Patent and Trademark Office. He also advises clients on intellectual property transactions including technology development agreements, confidentiality and joint development agreements, licensing and mergers and acquisitions. Full Transcript with IP Lawyer Daniel Shulman Erin Srebinski: [00:00:14] Hey everyone. We’re back with another episode of Ask an Innovator. Today we have Daniel Shulman on, he’s an intellectual property attorney here in Chicago. His practice focuses on turning innovation into value. He talks with Josh about how to create a culture of innovation and they go through the impact that COVID-19 has and has had an innovation and business in general, check out cityinnovationlabs.com/askaninnovator for the full transcript. And for some more information about Daniel. Thanks for listening. Josh Barker: [00:00:44] Yeah. Blocked in our houses. You’re at home, I assume. Daniel Shulman: [00:00:47] Yeah, absolutely. Our office has been for all intents and purposes closed for a couple of weeks. So, we’re all just working from home. Josh Barker: [00:00:56] Oh man. How’s that going? Like, are you used to working from home or are you, is that a whole new world for you? Daniel Shulman: [00:01:03] No. I mean, I’ve done it on occasion, although I’m like a lot of people who, I’m making the air quotes for work from home. You know, when you say you’re working from home, it’s because you need a mental health day and just don’t feel like coming into the office. And then it’s an open question of how much work you’re actually getting done. To actually work from home and put in an eight hour day and bill for it and do the work. I’ve done it in the past, but never in a consistent consecutive fashion like this. So truth be told, what it amounts to is I eat my own snacks and drink my own coffee. Josh Barker: [00:01:49] Oh yeah. And it’s the same here. Our team is very used to being in the digital space. I mean, I think that’s probably a, a space with software engineering and, you know, designers. They’re probably a little bit more used to. When you say work from home, you actually mean, like you were saying, it’s a mental health day. They actually mean, truly, they’ve worked from home. So they’re probably a little bit more used to consistency and working remotely. Our team was probably about before all this and on any given day, anywhere between 60 to 80% work from home. Or work remotely, you know, work from anywhere I should say. Cause like it doesn’t necessarily be at home. It’s like Starbucks or something. So it’s for them, they’re like, Oh, I guess this is just everyone’s working from home now. They’re just kind of, obviously I think people are mostly climbing up the walls more than anything. Daniel Shulman: [00:02:43] It’s an interesting thing. How, a topic for another day, how this is going to affect the legal industry in particular, although there are a lot of industries that I think are in the same boat that are going to have to rethink, or will have rethought when this is over, some of their business model. You know, it’s interesting that two things contribute to big law firms basically self-destructing. And those two things are, they grow too fast and they bring in a whole bunch of people who have promised books of business and it doesn’t materialize when they become too spread out and over leveraged. And over time that really destroys a law firm. But the other thing that law firms do that contributes to them not being sustainable is they’re really dumb about real estate. And they get in, they build offices in markets that can’t really sustain the work. They spend way too much on their office space in sort of an arms race to see who can have the nicest lobby. And you’re seeing some of that now in the last week. Big name law firms that are already starting to cut partner pay and lay off employees and you look at them and you know, they’re the big ones. They’re the big ones because they have mass, but they also have massive overhead. And the irony is your wonderful, beautiful lobby with the gold plated ceilings is totally worthless to you in this economy. Firms like us are really well-positioned to be able to thrive without having to make drastic cuts that tell the market that you might need a good law firm, but who wants a business advisor that can’t run their own business? There’s so much of that that goes around. I think that the idea of, okay, wait, we’re all effective working from home and everything is equalized. Now, you know, you don’t have the fancy space and you don’t get to advertise it. You’ve got offices all over the world because everybody is equalized. There are now instead of, you know, offices in Singapore, in London and Dubai and everything. Now, you’ve got an office, in every city in which your employee works and that’s it. Everybody else has just the same. Why are you charging me $900 an hour for the same overhead that the firm is charging $400 or $500 an hour? I really do think that some of the firms like us who are the midsize firms that are really well-managed are going to see clients understand the benefit of that kind of model. It will be interesting coming out of this and see how those big-name firms that trade on their name survive. Josh Barker: [00:05:44] What I would even say is it’s interesting to hear you talk about that space because I think a lot of spaces, including digital, like I was just talking about actually are pretty similar in the fact that a lot of times it’s a dog and pony show, right? If you know, in terms of competitors or anything like that, they’re like, Hey, let’s do a walk through of our office. We’ll kind of introduce you to the partners, bring them to a corner, high rise offices versus, “hey, we’re incredibly intelligent, smart, and experienced in our industry and we can help you.” And that’s what you mean by equalize. You don’t have a dog and pony show in these types of environments. You have you, you have a person. Daniel Shulman: [00:06:23] Yep, exactly. Josh Barker: [00:06:24] It sounds like your mid-sized firm is very similar to our firm. That’s been our approach all along, even before this. We’re big proponents of giving away some free advice. So you can kind of almost test us out prior to even doing a project with us to see how we sync and how we operate and I think most of the time that’s what seals the deal. Very interesting. How have you guys adapted to this crazy environment? Daniel Shulman: [00:06:50] For the firm or for me, personally? Josh Barker: [00:06:51] Well, I mean, both, I guess, Daniel Shulman: [00:06:53] Well, I mean, like I said, the firm has really moved quickly to get people out of the office and expected people to work from home as soon as it was feasible to do so. I know they’ve been proactive. It’s about making sure that even our support staff who aren’t used to working from home, like our administrative assistants, and so forth are set up to work from home. So folks that need, for example, monitors. A lot of our admins are used to working on dual screens at the office. Dual screens are a luxury at home, assuming that you even have one. Because so many people just work off a laptop. And so it was sending out additional monitors to people’s homes to make sure that they can work. We stress-tested all of our systems as people were working from home. There was like a Saturday at two o’clock. Everybody in Chicago would log onto the network at the same time. They would open a document and just make sure that everything was working up to speed. And so the IT group was very proactive about making sure that we would be able to do this when the need came. Which of course it did. And there’ve been a couple of hiccups as you would expect, but for the most part everybody’s been able to do well. They needed to do some of the things that we’re adapting, just to make sure that the trains are running on time, so to speak. Yeah, they’re really pushing. Everybody’s got to make sure they get their time in every day. Most lawyers are good about that, but there’s a significant group that don’t enter their time, like once a week or, you know, hand their time sheets to their admin on Friday or something. We need to make sure that we’re continually monitoring how the business is doing so that we can be nimble, if there’s a downturn. So getting our time in so we can have real time data on how the business is doing is really, really important. Making sure that invoices are going out via email instead of hard copy, because there’s nobody at the office in most cases to actually pick up the bills. So we’re sensitive to our clients’ needs. We’ve been talking about, from the CFO’s office on down, about things that we might need to do to accommodate clients that have cashflow issues and trying to normalize some of those activities. But we’ve been very, very proactive. We’ve had frequent conference calls,where the CEO of the firm and the CFO of the firm have updated us on what’s going on. Everything has been very transparent. We’re very transparent as a firm anyway, partners. Shareholders know everything that’s going on all the time. There’s no black box. We get reports on everybody and everything every day and every month. So it makes you really feel confident that we’re not like some firms where management tells you everything is good. Then all of a sudden, somebody calls you in your office and says, we’re de-equitizing 30% of our partners. I mean that doesn’t happen. Nobody at Vedder Price is going to get blindsided by anything. Josh Barker: [00:09:44] Great. It sounds like some great leadership. Daniel Shulman: [00:09:47] I think Barack Obama said, or maybe even Michelle Obama said it about being President. Being president doesn’t change who you are, it reveals who you are. In a crisis like this doesn’t change what a law firm is it reveals what a law firm is. And that’s been a very, very positive environment for us. Josh Barker: [00:10:06] Yeah. That’s good. This will make for an interesting podcast because I think you and I talked about how long ago? Two months? Three months ago? Something like that. I mean, it was a little while ago. Those were far different times. This may have been a blip on the radar. It wasn’t a huge topic. It wasn’t affecting our world yet. And now we’re in a completely different spot. Daniel Shulman: [00:10:29] Yeah, absolutely. Josh Barker: [00:10:30] I mean, how are you guys in terms of your clients? For us, we’ve definitely had a lot of clients. I think a lot of organizations have clients in hugely impacted industries. We have a client that runs conferences. Right. So it’s like, okay, well there are no conferences going on or restaurant delivery. We’ve got a client in there. Right. The restaurants shut down. I’m sure you guys have probably had to adapt too to different client needs as there’s been a huge impact. Daniel Shulman: [00:11:03] Yeah. We have a fairly diverse client base, as you would imagine, with a law firm of 300 lawyers. I can’t speak for everybody but I can tell you how I’m dealing with it. And my clients are interesting because, you know, I came from an in-house job as Chief IP Counsel for basically a food packaging conglomerate. There are aspects of those businesses, an example is the Reynolds consumer products business. They make Reynolds wrap and Hefty bags. Their dream come true is for more people to cook at home. They’re using more foil, they’re using more storage bags, they’re using more parchment paper. And they’re using more trash bags. This is in another environment. Their dream would be for there to be no restaurants. I think it’s great for their business. Then you look at their sister company Pactiv, which is a food service company. All of their biggest clients are foodservice distribution. So like Sysco, US Food Service, the restaurants, Starbucks, McDonald’s all that stuff. Even though there’s more takeout, the volume is still a fraction of what it was. And you know, so many of the restaurants are just flat out closed. So that business is going to really, really suffer and while I’ve got a business. that makes bottle caps for, you know, water bottles and Coke bottles and all that other kind of stuff. And everybody’s buying bottled water. The problem is nobody’s drinking more water, so it’s kind of like the toilet paper problem. Nobody’s going to the bathroom more so you can’t ramp up your capacity because nobody’s going to need more toilet paper. They’ve already bought way more than they need. And so there are businesses that flat out can’t fill orders because they’re coming too fast, but they’re not going to build up the capacity to meet those orders because reabsorption of the capital would cost more than not making the orders. And so do you think that, “Wow, this is great. The toilet paper business must be booming!” No, they’ve got real issues trying to manage their capacity in the same way that our Reynolds business, I think does. I mean they could continue to make more stuff, but eventually people are going to go back to work. And then what are you going to do with those assets that you’ve developed? And so for businesses, that’s a real challenge. What I’m doing for my clients really is, and I think about this and I’m trying to be really sensitive about it because you don’t want to be a vulture. It’s true that with every crisis comes opportunity, but you have to be empathetic and compassionate. Josh Barker: [00:13:58] It’s about people. Daniel Shulman: [00:14:00] It’s about people and people who are struggling. And I don’t want to be the one to send an email to say, “Hey, I know you’re struggling, but I’m still open for business. Let me help you.” Because that could be taken any number of ways. And even though I want to convey that message, I have to be really delicate, but I am reaching out to clients to let them know that I care about them and that I’m thinking about them. And so what I’ve been doing are really short messages that just start off by saying, you know, I hope you’re well, I’m sending my sincere best wishes for you and all of your loved ones. I’m here to help if you’re capacity constrained because of impacts on your business. But the most important thing I want you to know is that I’m here and care about you. And look, I’ve got ideas and we can sort of segue into some of the more innovative things that from an IP perspective that companies can do, but I’m careful not to send out those emails with those kinds of ideas, because it seems cold hearted and opportunistic. I’m not trying to take advantage of somebody else’s misfortune. Despite the fact that I’m a lawyer. So one of the things that occurred to me from an innovation standpoint and, you know, it’s hard being an IP lawyer in an environment like this, because you think about what you can do to help people. If you’re in the financial services world, if you’re in the employment world, even to some degree in the corporate world, you can really contribute to helping people, individuals, companies manage through this crisis. As an IP lawyer and one of the reasons I went into IP law is because it’s not life or death. It’s just about money, basically. I’m not litigating, doing anything that really is life or death. I mean, it’s important. Don’t get me wrong. It’s profoundly important, but it’s sort of a nobler area to practice law. On the other hand, when things are really life and death, like they are now. It’s really hard to make an impact as an IP lawyer. So I started to think about, let’s assume that I work still in-house, as an IP lawyer, and everybody is running around trying to figure out how are we going to survive this? And nobody’s asking me for anything. What would I be doing to try to add value in a situation like this? One of the things that I thought about was when everybody starts working remotely and you are in a, especially with bricks and mortar business, the thing that’s going to take the hit pretty significantly is your product development, right? Because there’s only so much product development you can do remotely if you’re not in a lab. If you’re not at a pilot line and if you’re not prototyping things if you can’t run trials. You can do CAD drawings and you can do computer-aided design and finite element analysis and you can come up with products and model how they would work and all that. But you can’t really get to the final step of product development, so you can physically make something. And you can’t do that from home. What’s going to happen to people’s product development pipeline, and what’s happening to companies that we’re on the cusp of launching a product, but now have put everything on hold? What does that do to the pipeline and what are those engineers doing if they can’t really develop new products? Then there is a group of companies, a lot of them, frankly, who have one or two products and we encounter this quite a bit. My clients encounter this quite a bit in my world. You know, most of my clients are big. They are number one or two in their markets, but a lot of times they compete with smaller nichey companies that have one or two products that they’ve got some IP on. And those products have succeeded in the marketplace because they got patents and exclusivity and the products were really good, but that’s a very narrow, very small business, often individually owned by the patent holder and they can survive when business is good, but they don’t have the scale or the capacity to weather a downturn. Those companies might not survive. And if you are either one of those companies or the bigger company that wants to have access to that kind of product line now would be the time to talk about buying that intellectual property or getting a license. So, if you are able to take or license that intellectual property or take an option to that intellectual property if the company goes out of business and throw them some money for the option, it could be a win-win. The company that has a couple of patents that are just sort of sustaining one or two niche-y products that they’re very, very successful in, but it’s very, very narrow. They might need that infusion of cash, just to see if they can weather the storm and survive. If they can’t, they get the cash and you get the intellectual property. Now is the time to start thinking about those kinds of things. One of the things that I’ve talked to some of my clients that have really good relationships with is, they know where I’m coming from, and I’m not coming off as opportunistic, because we’ve got that relationship. Just talking to them about, all right, who are some of these companies? Some of them are very top of mind and saying, “Is this the time to go approach company X who’s sort of been a thorn in your side and say, what can we do to partner together, because we think we’re going to survive this, but you may not.” And if you just go bankrupt, you’re going to get pennies on the dollar for that intellectual property. What can we do that’s a win-win? And, you know, and even using some of our patent analytics tools to go searching for some of that IP and find out what’s out there. Because if you’ve got a healthy balance sheet, you might be able to emerge stronger and, again it’s opportunistic and it’s predatory, so I can’t suggest that to everybody. I can’t write an article on LinkedIn without coming off as you know, as cold-hearted. But if you have a good relationship with your clients and you’re able to think outside the box and be innovative in your approach, now’s the time to do that sort of thing. Because we’re all sitting around trying to figure out how can we be useful. And so that’s one of the things that I’ve approached some of my clients about. And I think it’s on their radar. I don’t expect anybody to jump right in because they’ve got other things going on as I expect, but I know that there are certain clients on this, and that’s a sort of thing that I’m trying to bring to clients when I can. Josh Barker: [00:20:51] This climate definitely brings good opportunities, but it’s just the way I phrase it to people. I think this is just a weird time. Isn’t it? It’s just a time like no other. It’s just very interesting times. I think that’s some good advice and I think it is difficult to recommend certain things without coming across as opportunistic, because there is a lot of opportunity. And I think having a genuine heart for people and having your heart in the right spot is something which sounds like your heart is. That’s what matters the most. And trying to make sure everyone that’s where you’re coming from. Daniel Shulman: [00:21:26] I appreciate that. I’ve always said that when I forge relationships with lawyers when I was in-house when I was the client, I always hire the name on the bottom of the letter and not the top of the letterhead because I hired lawyers and not law firms. When I deal with my clients, it’s all about that personal relationship and being a trusted advisor. Trust is really important and you have to have empathy and compassion in order to earn trust. And so having the right approach is critically important to me. It annoys me, probably more than it should, when I get frequent Coronavirus updates from law firms and from businesses telling me how much they care about me when it seems transparent. And I’ll give you an example. Here’s a real-world example. You know, I was supposed to go to Berlin for a conference in February. We’re going to go for a conference. So my wife and I, we’re going to finally go on a honeymoon and we’re going to stay for an extra few days in Berlin. We booked three or four days with a big hotel chain in Berlin. Of course, the whole conference got canceled. We canceled the reservation and the hotel chain wouldn’t refund $1,200 or whatever it was, or 1200 euros that we spent on the reservation because we didn’t cancel within 30 days. Which of course, who knew, right? And you know, so that was annoying. And we called them and they said, well, we’ll waive the cancellation fee of like 250 euros. Well, great but you know, we’re still out money. And they said, you know, “we’ll credit you, just make a reservation to come back to Berlin within a year.” Who knows? Right. And it was only there for the conference, frankly. Berlin’s wonderful. It wasn’t our first choice for our honeymoon. We were going because I was going to be there for a conference already. That was annoying. And we went back and forth with their hotel manager and really got nowhere. And wouldn’t, you know, because I have loyalty rewards with this chain, I got a form email from the CEO of this hotel chain about how much they care about us as clients and customers, and they’re doing everything they can to help us and make their accommodations available and all of this. Well, that’s rich, right? I got the guy, the CEO of this hotel chain’s work email and I forwarded his note, his form letter that he sent to, you know, a million people right back to him, back to his email. And said, “Hey, I got this, you say this, except your property in Berlin, won’t refund us any of our money, which seems awfully cold-hearted and opportunistic for you to keep my money at the same time that you’re telling me how much you care. You got money for free. Plus, if you have any kind of business disruption insurance, you’re getting reimbursed anyway. I got nothing and your email’s not well-taken.” Don’t you know, within 48 hours, I got a call from their Chief Customer Officer in Europe, profusely apologizing and crediting our account. If you’re going to send those emails, letting you know how much people care and how much you care, be prepared to stand behind it and be authentic. Because the worst thing is to get one of those emails and just feel like you just got a form email because you’re on a mailing list, but nobody really cares. Josh Barker: [00:25:06] Well, that’s a great ending to the story though. I mean, it sounds like they did step up and put their money where their mouth is. It definitely is in trying times that shows the companies that actually genuinely care. And those that are just saying it to save face, right? To say, oh, we care about our people when they really don’t. Daniel Shulman: [00:25:24] It will be interesting as these companies transition back to work, how things pick up, because I can imagine that as people transition back to work, there’s going to be so much work just to catch up. And I wonder as somebody who comes at it from the perspective of an intellectual property lawyer, and thinking always about product development and innovation in particular, what do you do as an innovator? And how do you continue to innovate when you are now just playing catch up? Because one of the things that is really a killer for having a culture of innovation is just being reactive instead of proactive. And there’s going to be a lot of being reactive when folks get back to work and it seems trite but, the key to having a culture of innovation is having innovators that are empowered to innovate. And what you have to be careful of [and I’ve seen this in a lot of different contexts] but you have to be careful of is making sure as you’re playing catch up, you’re continuing to empower the innovators to innovate and not having them be reactive because your pipeline is already at a disadvantage. You’re going to need to refresh that pipeline if you’re an innovative company. From the moment that you can begin refreshing it. And the way that you have to do that is you have to create a culture that empowers your innovators to innovate. I can remember – and my beginnings were pretty humble, my first full-time job was at a fast-food place. It’s not like McDonald’s or Burger King, but one of those fast food places that, you know, when you’re in Chicago. So they have Italian beef and hot dogs and hamburgers that are made to order. There’s red and yellow linoleum on the walls. Ketchup bottles on the table. That was the kind of place that I worked at from basically my sophomore year of high school, actually through law school. I remember coming into work one day and the guy who was quote-unquote, the assistant chef, to the extent that, you know, there was such a thing at a hot dog stand, I’d say he fancied himself the assistant chef. He was sitting at one of the tables. He was writing down different combinations of ingredients for chicken sandwiches, which I don’t know what the motivation was for that. I mean, we already had a chicken sandwich. But he was just making stuff up and we sat there and we came up with these different combinations and we named them all. And, you know, by the end of the afternoon, we had 11 different chicken sandwiches. This became the ‘healthy for your heart’ menu, which was totally false advertising. I mean, other than the fact that chicken, the one smothered in bacon and cheese, wasn’t healthy for your heart, but all of a sudden, now we have this whole healthy for your heart menu, with 11 different chicken sandwiches, and it sort of launched this period of innovation. Next thing you know, the owner kind of embraced it. There were meatball sandwiches, which lasted for about a month. Freshly frozen swordfish steaks, which had no business being in a hot dog stand. I think 20 years later, and I think the original swordfish steaks are probably still in the freezer. The restaurant kind of transformed itself and it still had the hot dogs which paid the bills and the hamburgers and the fries and all that. But it was able to offer something more to people. It wasn’t driven from anything other than an employee being empowered to just do something different. And the transformation, which ended up being permanent, the chicken menu stayed as long as that guy owned the restaurant, it was very popular and it came from the transformation, came from an employee being free to innovate. And that model of employees being free to innovate, I’ve seen in different contexts. I mean, I saw it at a hotdog stand. And then when I was at Motorola, the polar opposite of a hotdog stand when it comes to technology and innovation. I remember when I was at Motorola. This was mid-two-thousands and it was at the height of 3G. 4G was still on the horizon. Hadn’t even launched yet. We were doing a lot of work. We were trying to figure out, how are we going to really succeed in 4G? Because a licensing model for 3G was a disaster. Everybody was paying way too much in royalties to very small patent holders. And we were trying to figure out how are we going to innovate and really take advantage of 4G? And we had, I remember, I convened a meeting of a bunch of engineers. I mean, these were some of the smartest, most intimidating people you’d ever be in a room with. And I was with some pretty smart people in college. But these guys were, and women were – I could barely understand some of the language that they were using. We were sitting around trying to innovate for some 4G innovation. Somebody raised their hand and started to describe a product or a process. And he was reading from his lab notebook and I had no idea what the heck he was talking about. One of the other people said, “you know, I mean, that’s so far advanced I mean you’re talking 5G. We’re just not even close to there yet.” And what occurred to me was what a culture of innovation, again, looks like. There was a guy who just had his lab notebook, had thought of something that was two generations ahead of where the world was. He did it because he was empowered to do it. Nobody told him not to. And he had that freedom to just go ahead and innovate. And that’s empowering innovators to innovate. From the bottom up, just leaving them alone and encouraging them to do it or giving them the freedom to do it. Not putting shackles on them is what creates a culture of innovation. And I saw it from the opposite end, too. I remember there was a time when I was at the consumer packaged goods company and of course, you know, a customer comes to us and says “the first company that developed this product, we’re going to guarantee trial distribution,” which, you know, unpack that for a minute, right? It’s trial distribution. It wasn’t my call as a business person. They dropped everything to develop this product for the customer because the customer asked them to. I remember sitting in product development meetings and looking over the spreadsheet. All of these projects were on hold because the resources were going to chase what the customer wanted. We dropped everything. In six months we were on the market and the customer put it on trial. You can guess what happened next. It didn’t sell quite as much as the customer wanted to, and we never got full distribution. And what you realized was this was the opposite of having a culture of innovation. This was putting the shackles on the innovators. Putting everything on hold to chase what a customer wanted at the expense of doing pure innovation. And what happened was it came down to a very, very frequent question, which is one of the worst questions an innovator ever has to encounter. But as a business, it’s critical, which is, “will the customer pay for it?” And here’s the thing, when you’re doing pure innovation for innovation’s sake, you can’t answer that question because you don’t know what the “it” is yet. And so you have to be able to balance that and you have to enable your innovators to innovate. You have to empower them to do it. I tried as an in house lawyer to really do what I could from a law department standpoint to create innovation. So a couple of things that were really important, that the law department could do, was to communicate a strategy to convert that intellectual capital to intellectual property. So to have a patent strategy where you identify what were the areas that the company needed to have exclusivity in order to be successful, identify patent filing goals and have that aligned with, and in some sense, driven by your innovation strategy. And you can show results when you do that because it immediately makes you make better decisions about your patent portfolio. You don’t pay for things you don’t need. You’re much more focused. You save money when your filing strategy is disciplined. Because you’re saving money, the management will just sign off on it. And when management signs off on it, then you go to the innovators and say, we have an innovation strategy. All of a sudden they feel empowered. They view what they’re doing as part of an overall strategy for the company. That empowering of innovators is one of the things that makes innovation happen. Going out and doing invention mining, which was periodically letting the innovators know whatever you’re working on that’s not directed to a particular project, but you’ve just jotted something down in your lab notebook twice a year or four times a year, we’re going to go mine some of that stuff and we’re going to really pay close attention to it. Maybe it turns into something. Maybe it doesn’t, but we’re going to give you an outlet to go do that sort of thing. All of a sudden they feel invested in and they feel like they are contributing. When people feel like they’re contributing, they’re empowered to continue. I needed a couple of mid-level managers to make sure that I had buy-in. Then I can get the people that reported to them free for an afternoon. I didn’t need to go to the CEO. Didn’t need to ask my General Counsel. I didn’t need to go to the presidents of the business units to get approval for this. If I can get time on people’s schedules, I can build it from the bottom up. And I wouldn’t have to ask permission, right? Because the thing is if you drive results and if people are innovating and it works, the CEO will leave it alone. I didn’t realize as a lawyer that I could build a culture of innovation from the bottom up. Really taking the time to get to know the innovators and putting things in place that would not rock the boat. That wouldn’t make the C-Suite think I was distracting from other things. We would demonstrate results after it was done. And it’s funny – people sort of at the lower end of the, you know, the bottom of the pure corporate pyramid, which are the ones that make things run, they always view the law department as an extension of management. And so when the law department comes and shows an interest, by proxy, they view that as the C-Suite showing interest, even though they don’t know that I haven’t gotten any approval from the C-Suite. But, I don’t tell them that. As an in-house IP lawyer – you are really uniquely positioned to build a culture of innovation in a way that you don’t think possible. It is one of the most valuable lessons I learned as an in house IP lawyer about building a culture of innovation. Having that be a successful model for keeping pipelines going and for keeping people engaged. I think when we all get back to work, those of us who are in the intellectual property role, especially in house IP lawyers, but even outside IP lawyers who have close relationships with their clients ought to be getting in front of the people that they can to encourage innovation. Empowering the innovators to innovate because that’s going to be critical. They’re going to be forced to chase. Let them know that it’s okay to innovate in their free time. You will benefit the company immensely. Josh Barker: [00:37:29] I agree. And you know, what’s interesting is during this time [I think you would probably agree too] is that when we get back to work and some of the things that I’m talking to my clients about, which, again, going back to your point about being opportunistic, trying not to sound like that, but honestly, What we’re talking to our clients and saying is, “What are your competitors doing right now in this current climate?” Well, everyone is hunkering down, right? Everyone is saying, “Well, we just got to weather the storm, not do anything new and just weather it.” Right? But I think if you look at it with a different lens and you look at it with opportunity, you could say, well, if everyone’s hunkering down right now, shouldn’t we be innovating? Thinking of new things so that when we do fire up for new business, we’re actually leapfrogging our competition? And we’re kind of pulling ahead? Now you kind of have to be strategic about it. You have to be in a position even financially to be able to do that. I think there is something to be said about, “Hey in this time, this is where we need innovation more than ever.” You know? We’re seeing some of that. You’re exactly right that innovation comes from the bottom. How can you empower those people even during this time? How can you empower them to bring up new ideas when it’s needed the most? Daniel Shulman: [00:38:44] 100%. And I think you’re absolutely right. And it dovetails with part of what I was talking about. Which are the engineers and the product developers and the folks that would normally spend, say, 10 to 15 hours a week in the prototyping lab, right? Or on the prototyping line or, you know, just hands-on making things, they can’t do that. So what are you doing with those 10 to 15 hours that you will no longer have that work available to you? Well, why aren’t you telling those people, “Look, I want you to use those 10 to 15 hours or five hours or two hours or 30 minutes, whatever it is that you can’t do what you would normally be doing. So white space, pull out your lab notebook. No idea is too frivolous. No idea is stupid. Use this to white space. Build your portfolio, build a backlog of things because you can’t just sit on your hands.” So this was a perfect opportunity. If people are smart, you really encourage your best and your brightest and your most creative to think outside the box. Spend time just doing innovation for innovation’s sake. If you are a manager of that business, telling people that that’s important and encouraging it and empowering innovation is the absolute key to building a culture of innovation. You have to empower the innovators to innovate, right? You should be encouraging them to do that. Not bemoaning the fact that so little is getting done. Then you’re going to have to follow up. That means that once everybody gets back to work, you’re going to have to have some sort of process for getting all of those innovations together. Having a meeting, figuring out which ones you are going to pursue and prioritize. Don’t make it a wasted effort. Because if you do that, then you get back to work and you don’t act on it, you’ll totally undermine the culture that you’re trying to build. So you have to follow up and that’s where getting your Chief IP Counsel, or if you don’t have a Chief IP Counsel, getting somebody like me involved. To help score and evaluate and prioritize some of those innovations. Do the patent searching. Make sure you can do it, all of those things, but you have to act on it. If you don’t act on it, you’ll make things worse because you’ll have a promise that you didn’t deliver on. You’re exactly right if folks are encouraging people as they should be to spend that time that they can’t do things they would otherwise do to just innovate. When they get back to work and it doesn’t really even have to wait to get back to work. You can periodically do check-ins. Have people submit things and send them to your Chief IP Counsels. Send them to me and we’ll do patent searching. We’ll do a preliminary assessment. You can hit the ground running with things and where is white space in the patent area. You’re not blocked. These are good ideas. And then get to the grid. Get to the ground running, as soon as you get back to work. I think that’s a great idea and I think it’s what smart companies ought to be doing. But the follow up is really critical. Josh Barker: [00:42:02] Awesome. Well, Dan, I really appreciate your time chatting. It’s been a lot of fun. Daniel Shulman: [00:42:06] Yeah, absolutely. I talked about not being opportunistic and cold-hearted. I’m going to do shameless self-promotion and just repeat this is Dan Shulman at Vedder Price. If you have any needs, please feel free to give me a call. My phone number is (312) 609-7530. And my email is email@example.com. And I just want to say thank you for allowing me to participate. This was really great, and I really hope you and your loved ones and everybody who’s listening is safe and healthy and emerges from this no worse for wear, that’s my sincere hope. Check out our latest posts What Is A Workshop? And Why Do I Need One? How to Build an App the Right Way What is the Product Validation Funnel? What is the True Cost of Software Development? What does Digital Transformation Look Like Right Now? Why is Using a Lean Startup Methodology Important? How to Leverage Consumer Insights for Innovation Is Look At The Future of Tourism? What Will the Future Look Like for Innovations in Science? How to Keep Innovating with IP Lawyer Daniel Shulman The post How to Keep Innovating with IP Lawyer Daniel Shulman appeared first on City Innovation Labs.
39 minutes | a year ago
How Can We Practice Innovation in Sustainability?
SUMMARY Nicole Miller is on the show today. She is the Managing Director at Biomimicry 3.8. Josh and Nicole talk about innovation in sustainability. We learn what Biomimicry is and how Nicole got started in this space. We also dig into how we can pull creative ideas from the natural world to influence how we […]
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