The fallacy of secrecy

Excerpt from Founder Institute blogpost by Joe Garza on 9/24 2014  

While it is common among founders to be hesitant about divulging their startup secrets, the truth of the matter is that your company can benefit greatly from telling people what your idea is about and what you hope to achieve. Read on to find out why.

In this exclusive video, Adeo Ressi, Founder and CEO of the Founder Institute, explains why "Nobody is Going to Steal Your Stupid Startup Idea".

Myth #1: “I Should Save My Startup Idea Until It’s Refined”

Reality: You should share your idea with everyone you meet. If you plan on pitching your idea to potential investors, why not practice beforehand? By sharing your idea with as many people as possible, you can get feedback early on to prevent wasting time on an idea that won’t sell. In a Courtney Seiter-penned article titled Why No One Will Steal Your Startup Idea, Buffer CEO and Co-Founder Joel Gascoigne says:

When you build a startup, you’re basically creating something that doesn't exist already. In order to figure out if your idea is actually going to work, it’s essential that you share it with people. You’re going to have to do it sooner or later. The longer you leave it, the more risk there is that you spend a long time working on it, and then eventually you put it out there and find out it’s not something that resonates.

Myth #2: “My Startup Idea Is Too Unique To Be Shared”

Reality: No, it’s not. Just look at the countless companies that offer the same product. If you have an idea for a startup, there’s a very good chance that there are a multitude of other entrepreneurs working on the exact same concept. But don’t let that deter you, as you should focus less on the idea itself and more on how you plan to execute it. Here’s what Cory Levy, Co-Founder at One, Inc., has to say in a Linkedin article titled Startup Secrets: Should I Hide My Business Idea?:

Ideas are a dime a dozen; it’s the execution that will set you apart from the rest. Chances are that there are people developing the same thing that you’re working on now. We plan to compete not by keeping our idea secret, but by building the best possible team and by creating the best solution to the problem we are solving.

Myth #3: “People Will Steal My Startup Idea If I Tell Them What It Is”

Reality: Most likely not. The chances of someone stealing your idea are pretty slim. In fact, sharing your idea with others is a great way to drum up interest in your company and makes getting help easier. Still not convinced? Here’s what serial entrepreneur Alexander Muse has to say in a Startup Muse article titled Should you share your idea?:

If you keep your ideas a secret it will be impossible for anyone to actually help you. Could someone steal your idea? Of course, but as I’ve said before your potential competitors are more likely to become partners. You’re far more passionate about your idea that anyone else – and most people want to partner with people with passion.

If you’re still reticent about sharing your idea with others, take into account the multitude of opportunities that your company can benefit from by simply divulging what it is you do and how you’re going to do it. And remember:

If someone does take your idea, they will never have the passion you have for it because they didn’t come up with it.” - Joel Gascoigne

University Spin back powered by Lean Startup and BMC

By Thomas Klem Andersen, Published on July 10 2014

At Scion DTU I am involved in the facilitation of 20 collaborative development projects beteween technical researchers and high tech companies in the science park environment.

The aim is to ’spin back’ technology based companies to the Technical University of Denmark (DTU).

The companies ranges from dealing with metal spinding to drones and Laser based skin treatment and they are now colaborating with eight different departments at the University: Space, Photonics, Chemistry, Management, Chemical and biochemical Engineering, Compute, Civil engineering and Mechanical engineering.

However the initiative is not just about  knowledge and tech-transfer but is integrated with business development (provided by Keystones & 1st Mile) and process facilitation (provided by Scion DTU).

In this context we just hosted a master class about the Lean Startup framework and the Business Model Canvas tool in collaboration with the Copenhagen Lean Startup Circle represented by Andreas Cleve Lohmann (@andreascleve) and Sebastian Schwermer (@schwermer).

Many entrepreneurs break their neck and waste vast amounts of time and money in the process. The reason is that product innovation is incredibly hard because you are navigating in a field characterized by limited knowledge, extreme uncertainty and high risk.

For this reason the Lean Startup framework focuses on how systematically to mitigate risk when bringing a new product to the market. This approach is increadibly valuable for the 20 development projects we are facilitating, as they need to focus on the market as well to make sure that the value of the collaborations is also realized outside the laboratory.

What is required from the Lean Startup perspective is systematic learning.  The Lean Startup methodology is all about maximizing learning to develop a sustainable and scalable business model as fast as possible with the least amount of effort in order to save time and money.

This is done through a build-measure-learn cycle, where you break down the initial assumptions underlying your vision to testable hypotheses and build the absolute minimum you need in order to test them.

The Business Model Canvas (BMC) is very useful for this particular purpose as it organizes the crucial elements of your business model and (ideally) lets you see them for what they are: Hypotheses that should be tested and addapted to reach optimal market-fit.

We look forward to be working with the canvas and the Lean Startup framework together with the 20 companies in the spin-back program!

For more on Lean Startup: Lean reinvented? Pretotyping –leaner than Lean? A secret sauce for Running Lean?

Open Innovation and strategic incentive management

By Thomas Klem Andersen, Published on April 7 2014

On March 18th the Swedish Science & Technology Park IDEON hosted a one-day seminar focusing on practical experience in the area of Open Innovation. 

Here’s a few statements from the event to chant as morning prayer if you want to build a motivation for opening up your innovation activities:

-          An insignificant number of the world’s talents work within your company

-          Change will happen

-          Commodification creeps up on you and reduces margins

-          Customers expect you to improve

-          Competitors work hard to improve faster than you

-          Your product or service will eventually decline

Accordingly in Roy Sandbach’s words: Innovation is the key to growth and indeed even survival. As the world looks today you better not lock your innovation initiatives away in your R&D department behind blinded windows for the sake of secrecy. The same goes for new ventures not opening up for partners and partnerships fearing for the safety of their supposed original ideas. Chances are that competition and technology will be far ahead of you and opportunity windows long gone before you pick up momentum on your own.

Lessons learned:

-          Don’t think of your venture or established company as an independent entity capable of reaching commercial succes in and of itself.

-          Build strategic relationships and partnerships to enhance your innovation capability.

-          Design for complementarity in your partnerships to remove trust barriers and align incentives.

-          Focusing on complementarity enables you to further strengthen your core competencies and core IP letting you maintain your competetive edge.

-          Hence ’opening up’ is all about strategic incentive management and win win scenarios. 

10 Myths About Creativity that obstruct Innovation

Adapted excerpt from Entrepreneur blog post by By Martin Zwilling | October 25, 2013

Many people think creativity is divinely-inspired, unpredictable and bestowed on only a lucky few. There are a lot of popular myths about business creativity, yet none of them have much scientific evidence. A new study based on the latest research-- "The Myths of Creativity," by David Burkus -- helps demystify what's behind the forces and processes that drive innovation.

 Burkus' research suggests that with the proper training, anyone with a common-sense mindset grounded in reality can deliver creative and innovative new ideas, projects, processes, and programs.

The first step is to not limit your thinking. That means not following these ten long-standing myths about creative thinking:

1. Eureka myth. New ideas sometimes seem to appear as a flash of insight. But research shows that such insights are actually the culminating result of prior hard work on a problem. This thinking is then given time to incubate in the subconscious mind as we connect threads before the ideas pop out as new eureka-like innovations.

2. Breed myth. Many people believe creative ability is a trait inherent in one’s heritage or genes. In fact, the evidence supports just the opposite. There is no such thing as a creative breed. People who have confidence in themselves and work the hardest on a problem are the ones most likely to come up with a creative solution.

3. Originality myth. There's a long-standing myth about intellectual property -- the idea that a creative idea is proprietary to the person who thought of it. But history and empirical research show more evidence that new ideas are actually combinations of older ideas and that sharing those helps generate more innovation.

4. Expert myth. Many companies rely on a technical expert or team of experts to generate a stream of creative ideas. Harder problems call for even more knowledgeable experts. Instead, research suggests that particularly tough problems often require the perspective of an outsider or someone not limited by the knowledge of why something can’t be done.

5. Incentive myth. The expert myth often leads to another myth, which argues that bigger incentives, monetary or otherwise, will increase motivation and hence increase innovation productivity. Incentives can help, but often they do more harm than good, as people learn to game the system.

6. Lone Creator myth. This reflects our tendency to rewrite history to attribute breakthrough inventions and striking creative works to a sole person, ignoring supportive work and collaborative preliminary efforts. Creativity is often a team effort, and recent research into creative teams can help leaders build the perfect creative troupe.

7. Brainstorming myth. Many consultants today preach the concept of brainstorming, or spontaneous group discussions to explore every possible approach, no matter how far-out, to yield creative breakthroughs. Unfortunately, there is no evidence that just "throwing ideas around" consistently produces innovative breakthroughs.

8. Cohesive myth. Believers in this myth want everyone to get along and work happily together to foster innovations. That's why we see so many "zany" companies where employees play foosball and enjoy free lunches together. In fact, many of the most creative companies have found ways to structure dissent and conflict into their process to better push their employees' creative limits.

9. Constraints myth. Another popular notion is that constraints hinder our creativity and the most innovative results come from people who have "unlimited" resources. Research shows, however, that creativity loves constraints. Perhaps companies should do just the opposite -- intentionally apply limits to leverage the creative potential of their people.

10. Mousetrap myth. Others falsely believe that once we have a new idea, the work is done. But the world won’t beat a path to our door or even find the door to an idea for a better mousetrap, unless we communicate it, market it and find the right customers. We all know of at least one "better mousetrap" that is still hidden.

If these are indeed the myths of business creativity, what then are the true components? According to Teresa Amabile, director of research at Harvard, creativity is really driven by four separate components: domain expertise, a defined creativity methodology, people willing to engage and company acceptance of new ideas. Where these components overlap is where real creativity happens.

If you believe your startup's success depends on your company being more creative and innovative then avoid thinking along the lines of these 10 myths and instead spend the time needed to understand and nurture the components of creativity in your environment.

Pretotyping – leaner than lean?

By Thomas Klem Andersen, Published on october 18th 2013

The Copenhagen Lean Startup Circle threw an inspiring event on Pretotyping yesterday, hosted at Founders House, delivered by Tim Vang CEO of pretotyping.dk.

The Pretotyping concept is developed by Alberto Savoia, former Google Director of Engineering. The concept was initially coined pretendotype because the most unique aspect of this approach is to pretend or imagine the intended functionality.
Pretotyping is essentially about testing the initial appeal and actual usage of a potential new product by simulating its core experience with the smallest possible investment of time and money." (see pretotyping.org)

At Founders House Tim Vang argued that Pretotyping is a tool even more Lean than the Lean startup. It is an in depth supplement to the Lean Startup Movement concepts of the Minimum Viable Product (MVP) and concierge testing. The pretotyping tool focusses only on the very early phases of innovation – therefore as Tim Vang emphasized it is a hammer and not a Swiss knife as the Lean Startup concept is.

Market testing > product testing
The pretotyping concept emphazises that market testing should precede product testing. In other words it’s all about finding the right it before you build it right. Quickly testing the commercial value  of an idea will let you invest money in a mature way and live up to the Pretotyping tagline: 

 “Invent Like a startup, invest Like a grown up”

Practical testing vs. Abstract analysis

According to Tim Vang focus groups and market analysis are an abstract practice. Desk top research and board room talks can lead you to whatever conclusion. Practical testing and data from the moment of purchase however will prove you right or wrong.


Founders House and its inhabitant Iconfinder

The lively environment at Founders House

Pretend you have a product even before your first prototype and see if customers will buy it. “Fake it ‘till you validate it” could be the mantra until you feel confident that there is a commercial potential for your product.

Pretotyping might be a hammer compared to the Swiss knife of The Lean Startup but in the end it is not an either or, rather as Tim Vang emphasized pretotyping is a part of thinking as a lean startup!

A free PDF copy of the Pretotyping book is available here: http://www.pretotyping.org/pretotype-it---the-book

The discipline of Innovation

By Thomas Klem Andersen, published on october 10th 2013

Managing Innovation

Last week I was so lucky to be offered participation in and innovation management course hosted by 1^st Mile as part of their certification as trainers in a program called Managing Innovation^TM developed by Barnes & Conti Associates in association with the University of Brighton, Center for Research in Innovation Management.

Transforming opportunities into value

In the perspective of the program, innovation is about transforming opportunities into value -extracting the value of creativity so to speak. Thus it emphasizes that there is an intimate connection between innovation and exploitation, where exploitation has to do with seeing opportunities and making the very most of them.

Innovation is a journey that can be managed

The program considers an innovation process as a journey which requires certain specific skillsets and mindsets. Even though the program stresses that an innovation journey is never linear, certain phases are necessary to go through at some point along the way. These phases can both be consciously recognized and planned for in the project design or lived through as a habituated way of doing things that has proven itself to work well. It makes a lot of sense however to break these phases down and treat them analytically on an abstract level to raise ones awareness of which kinds of attitudes and skills are conducive for each phase.  Doing that will make it possible to design a project plan accordingly, systematically train the skills needed to move through these phases and repeat the processes that proves to be successful. This is exactly what the program of Managing Innovation aims to do.

1st Mile introducing the Innovation Management Meta-model

The characteristics of innovative organizations and the phases of innovation

The program suggests that the shared characteristics of organizations that travel successfully through the phases of an innovation journey are: Focused leadership, deep competency, facilitative culture, active learning, enabling structures and processes and intelligent decision making.

The five distinct but interdependent phases that an innovation journey essentially can be divided into according to the program are: Searching, exploring, deciding, realising and optimizing. Distinguishing between these phases does not mean that one phase calls for creative thinking and the others do not. Rather it’s a matter of which kind of creativity is called for in each specific phase, and which kinds of objectives to invest ones creative thinking in.

One of the many exercises during the course

The discipline of innovation

The course taught by 1^st Mile did a good job highlighting the different kinds of skills and attitudes that are needed to successfully manage an innovation journey. But the essential lesson that I felt it taught me - largely due to the high exercise density of the course - was that these skills and attitudes can be acquired, learned and cultivated.

Setting out on an innovation journey is not just a matter of setting loose the chaotic and creative energies that sometimes seem to be the cause and cradle of new ideas. Raising your awareness of the skills needed in different phases of such a journey, you can benefit from applying a certain discipline to the way you travel through them. With such an increased awareness you do not have to let the success or failure of innovation initiatives be completely up to chance. Instead you can manage the process in a skillful way. As David Francis emphasized towards the end of the course: “Innovation is a result of a marriage between creativity and discipline”. In fact innovation is not just a result of chaos and should not be – a certain discipline is required.

At Scion DTU we are now lucky to have 1st Mile certified to teach us the basics of such a discipline and evaluate our innovation skills according to the standards of Managing Innovation^TM.

Creativity or Innovation? The case of Apple.

Excerpt from a Havard Business Review blog by Alan Iny and Luc de Brabandere | 8:00 AM September 10, 2013

Every idea, no matter how ingenious or successful, will eventually need to be replaced with a new one. But business leaders, as human beings above all, tend to cling to their existing ideas, beliefs, and other mental models — or what we call boxes — longer than they should.

When Apple first created its highly disruptive, history-making iPhone, the company unleashed years of innovation not just in its phone offerings, but in a seemingly infinite stream of related accessories and applications. The release this week of Apple's long-awaited iPhone 5C and 5S should offer business leaders everywhere a vivid reminder of the distinction between paradigm-shifting "creativity" and the "innovation" that often follows. Creativity and innovation are two separate processes — both important, but not identical.

Creativity can be defined as people's ability to change their perception of reality; by doing so, they can then create new ideas, hypotheses, approaches, and other "boxes." Apple couldn't come up with the original iPod, for example, until its leaders changed their mental boxes regarding what a portable music player was — from the Sony Walkman to one associated with a broader ecosystem. The iPhone was not the first mobile phone, but it fundamentally changed the box of what a mobile phone could be (as Apple also did with the iPad and mouse).

Innovation can be defined as a change in reality. In other words, innovation means taking an existing idea or box, such as the idea for a new product, service, or business model, and turning it into reality (for example, by manufacturing the product or implementing the business model). Once the first iPhone was developed, Apple was free to create all sorts of new features for and iterations of the iPhone and iPad — encouraging customers to change their own understanding of the products' possibilities.

Incremental innovations — think of BIC introducing double-bladed or triple-bladed razors once they were already in the razor business — do not require the creation of a new box. But transformational innovations — such as when BIC transformed itself from a pen manufacturer to a company that makes all sorts of disposable plastic objects, including pens, razors, lighters, calling cards — do require a new box.

The development of the earliest lanterns and light bulbs was based on the assumption that "light is created by burning something." Once this box was established, engineers innovated by trying different materials, such as various wicks or oils, to improve the quality and duration of the light. Only when Thomas Edison shifted his, and the world's, perception to embrace a new box — that light is created by preventing something (the filament) from burning — could he then create the first incandescent light bulb.

In creating the new iPhone 5C and 5S, did leaders at Apple have to change some of their most fundamental perceptions of the company and the products and services it provides? Put differently, did Apple create a whole new box or did it use its legendary R&D skills to innovate further?

One thing is clear: no matter how robust and dominant this technology is today, eventually the iPhone and its ecosystem, and the ideas and assumptions underlying them, will need to be reexamined and replaced.

Start-Up or Stop: When Innovation Means Knowing How to Let Go

Excerpts from a conversation with Dan Levinthal professor of corporate management at Wharton, University of Pennsylvania and Phil Morle CEO of Pollenizer Global in Knowledge@AustralianSchool of Business July 23, 2013

To survive, companies need to innovate; they need to update their products, develop new ones and push their way into new markets. A strong research and development program is essential. But arguably equally important is the ability to cull those projects that aren’t working.

Letting projects go on for too long drains manpower and cash as well as management focus, and can erode a company’s profitability. Witness the Newton, a hand-held computer developed by Apple that was one of the factors that contributed to its loss of profitability in the 1990s. Despite strong indications it was not appealing to consumers, the company stuck with the project for more than a decade until founder Steve Jobs re-joined Apple and canned the project.

The Renewal Process
Levinthal argues that companies cannot rely on a sustained competitive advantage – the idea that a company will better its competition and continue to be profitable thanks to a single piece of technology it owns, or to its location, or to some other single factor. Rapid advances in technology and the dismantling of trade barriers mean that any competitive advantage a company has will likely last only five to 10 years.

“The world is changing, competitive contexts are changing, perhaps a different way to look at the question of competitive advantage is: how does the firm manage this renewal process?” Levinthal says.

“On the one hand you need the tough love of saying 'we’ll try these things and we’ll do the culling', but at the same time we can’t figuratively shoot the actors involved; failure has to become a little bit safe,” says Levinthal. “So it’s this difficult balance of being tough on resource allocation, but at the same time you can’t make it stigmatising and career-ending that you were ‘the guy who was in charge of that initiative in China that didn’t quite get any traction’.”

‘Failure’ as the way to success
Sillicon Valley does well with its mixture of high failure rate and occasional success and Levinthal says a challenge for strategic management is to try to replicate that renewal process within an individual organisation.

“There’s a high rate of failure, but the engineers and the money reassemble with the creation of a new entity,” he says. “So you’re getting a quite rapid cycle and occasionally you’re getting a dramatic Google or Facebook kind of success.”

Failure doesn’t attract the same sort of stigma in the tech sector as it does elsewhere in the corporate world. Indeed, when some investors in Silicon Valley assess the credentials of entrepreneurs they look for a couple of failures in the past, reasoning that they will have been informative experiences which better equip the entrepreneurs for future success.

Controlled Micro-Failures
The managers at Pollenizer have also tried to de-stigmatise failure, instead coining the word “flearning” – a combination of failure and learning.

“This term failure is just rubbish, because it does suggest something bad has happened,” says Morle, “and actually the learning that’s necessary to discover a sustainable business model comes through as many failures as possible. The process of creating a start-up is as many controlled micro-failures, or flearnings, as you can do in as short a period of time.”

What can Danish tech-entrepreneurs learn from Israel and cherry picking?

By Thomas Klem Andersen, Published on June 17th 2013

Some notes from a master class on Lean Entrepreneurship by Jeff Snider June 13th

Let’s consider innovation, entrepreneurship and growth as distinct challenges and what is required for them respectively.

·         Innovation needs knowledge and we have a good tech talent environment in Denmark

·         Entrepreneurship is the commercializing innovation and it needs knowledge (although a different kind), a big market economy and risk willing capital

·         Growth companies are companies that increase their revenue or number of employees by 60% over two years.

Considered as distinct activities, they need different environments to thrive.

DK is a strong technological lab and test bed for new ideas, with highly educated and loyal employees.

Silicon Valley on the other hand offers a huge market, lots of capital and entrepreneurial know how which is needed to develop an innovative idea into a sustainable product.

However lots of start-ups waste time and money going to the US when it is not necessary or timely.

Therefore Danish entrepreneurs can learn from the ‘Israeli model’ and ‘cherry pick’ their way to success. That is placing the founding team, early funding and tech-development in the home country and then when time is right moving the company to the US, hiring an American CEO, sales and marketing staff, scaling, growing and funding the company in an environment and an market-economy that can really accelerate it. The original company then becomes a R&D department in a larger company and the technology is developed in a safe environment with loyal competent engineers.

Thinking in these terms you will be taking advantage of national comparative strengths and leveraging Silicon Valley for what it can do when the time is right. And that requires that you think of innovating, starting up and growing your business as distinct challenges that require different environments of cultivation.

The cherry picking model