The more intimate the venue – the better the knowledge sharing – so says Hristo Boyadzhiev, MD of Despark, an International Digital Specialist helping tech startups and global businesses to develop their brands and products.
Despark with offices in London and Sofia, are tapping into the local knowledge well, which any Londoner will tell you runs pretty deep, thanks to the capital’s international, multi-cultural flavour, melting pot of ideas, founders, entrepreneurs and investors, generous tax breaks and R&D subsidies, and the ease with which a company can be set up.
But London and Europe are still searching for the big one – the Facebook, Airbnb, or Uber – a bona fide game changer. Last night in Soho, Despark’s marketing Manager Lauren Goodenough hosted another instalment of the Ignyte Event series she has co-founded on behalf of Despark; this time the theme was:
SparkUp; Driving Products to Market
The panel consisted of Chris Chabot, so anxious to be introduced he interrupted Hristo’s opening soliloquy on the process of nurturing a good idea into a game changing one…much hilarity ensued. Chabot is an ex-Twitter and Google employee, and an evangelist dedicated to achieving “societal change through technological innovation”, who has founded and advised numerous startups. Effervescent throughout.
Emmanuel Nataf and his startup Reedsy, a platform for introducing writers to freelance publishers, editors, and literary types, giving them all the tools they need to self-publish, won Seedcamp Berlin; Reedsy has continued to flourish, raising a small seed funding round and winning “Best Publishing Startup of 2015” at the BookTech awards.
Finally, David Atkinson is a software creative who brings passion and expertise to projects, having cut his teeth at Apple Computer’s Industrial Design team in San Francisco. He has worked on design projects for Honda, Dyson and Infiniti, leaving his position of Creative Director at Saddington Baynes to become Head of Product and Design at The Foundry.
All the ingredients for a lively discussion then, and so it proved. Here are some potted highlights. The networking was pretty good too – half of the audience stayed on to neck prosecco, beer and wine until 11pm when the turfing out began. A great night with something for everyone.
Disclaimer – quotes aren’t verbatim and whilst every effort has been made to record what was said accurately, may not precisely represent speaker’s views on the subject.
How do we find (and grow) ideas that matter, and ideas that stick?
According to Chris: at Google, everyone can spend 20% of their time on anything they find interesting. If they come up with something, and get 3 other Googlers interested enough to invest their 20% time — Leadership is willing to make it a full time project for all involved. In other words, if you can convince others your idea is worth their time — it’s probably not a total crap idea.
But Emmanuel didn’t fully agree; some founders who have gone on to be very successful had to fight hard to persuade anybody their idea was either interesting or workable. Being a founder means having such a passion for something, it can easily be misinterpreted for a form of autism; should you give up on something just because people don’t like it straightaway? If that was case would Facebook have ever got off the ground (Zuck was reportedly not terribly easy to work with in his early years).
How do you know when your luck is in and you’ve spotted a potential “Unicorn” asks Chris – take an idea like WhatsApp – they waited until the infrastructure had been put in place at somebody else’s cost – the laying of the cables that make connectivity possible – and pounced – with barely any overheads, they built something slick and it spread like wildfire – they were competing against trillion-dollar companies and yet they nailed it! That is the genius of the startup founder model personified.
David: it’s about creating ideas that resonate yet can be succinctly communicated – without th eneed for lengthy preambles, caveats or context. It’s about telling the story so that people understand what your product is and what problem it solves. In reality, everything we do is about problem solving so that itself is not going to cut much ice with peers, and definitely not with investors. You have to get to your core proposition – it has to be sticky – if it’s sticky, its good. Simple.
Ok, so let’s say we have found ourselves a great, “sticky” game changer of an idea – how do we execute?
Chris: the thing that kills startups more often than anything else is growing too fast. Winning funding does not represent success, getting customers to like your product does. So before you release your product to market, or even start to build it in the first place, have you checked that people actually want it. Because if you don’t…your product is not much good to anyone packed up and stored in a warehouse, right?
But that takes time, right, you can’t always know from the beginning how popular a product is going to be?
David: execution is the thing – it’s what distinguishes a good startup from a great one. Take Uber and Lyft – same business proposition, but one acts like a whirling dervish whilst the other, relatively, just kind of plods along. One talks about global domination and the other – meh – the dominant partner is always the one that executes the best.
Chris: it’s not always so easy to execute straight away; look at the Airbnb story – they tried a lot of different things – they tried selling cereal boxes because they didn’t think couch surfing would take off – they went to SXSW and the penny dropped – this could work – then they executed! But they couldn’t do it until they had found their product market fit.
Emmanuel: you know what’s tough about executing – heads will roll! Firing staff is the toughest thing you can do. I hired teenagers with top grades coming out of their ears – they couldn’t do the work. I hired an ex-googler who thought he was a genius – he had to go.
Chris; yeah and the longer you leave it, the worse it gets. The person you’re firing has seen it coming, they’ve detected the change in mood – so you have to act fast before it all starts to go off.
Emmanuel: and you know what, it’s not the lazy ones, or the incapable ones you most need to get rid of, it’s the proactive ones, the ones who can do real damage to your business or take it in a completely new direction that you really have to remove if you want to maintain control of the business that you have created.
And what about picking up those first customers – what strategies would you recommend – how do you create the snowball effect?
Chris: you find a way – Dropbox sent a prototype to 2 million people and said “try it out”, and they got 200k signups. You have to be honest because if you believe you can’t fail – you will fail! But here’s a simple tip – share your idea on Facebook, find groups and post about it because you can measure the engagement – who’s your idea or product appealing to? Nobody? Shelve it! But you might learn about which demographics you should be marketing to, and which you shouldn’t – it keeps your acquisition costs low.
Audience: but if your product is expensive, or subscription based, i.e. its lifetime value is high, then its ok to spend more on customer acquisition, right?
Chris: yeah you can have a high customer acquisition cost but that doesn’t mean you should be wasting money – you still have to find the most effective strategy for your product. You need to try to shave off every last penny because in the end those pennies add up.
And when we talk about concepts like “innovative”, or the d-word, “disruptive”, what do they look like? How do we create one?
Chris: I’ve been talking too much so I will let somebody else answer this one!
David: I have a problem with the phrase “disruption” – it’s not always a good thing –you’d be very concerned if the pilot on the plane you were on decided to “disrupt” the normal way of flying by trying something new.. Change only for change sake risks discarding potential existing value.
A lot of early stage companies that go on to be successful are say apps that have happened in another space and the company has simply deployed them into a new industry and leveraged existing technology so a lot of that kind of activity you can’t call it disruption.
Chris: my definition is different – disruption is about jumping from one cycle of innovation to the next one. Take ice; we used to have to go to Antartica to load ships full of ice to sell back into the US and that was innovative but then somebody invented the refrigerator and we didn’t have to go to Antarctica any more. Another example; I spoke with Tony Conrad and he told me before pre-Uber all the good restaurants in San Francisco used to be in the downtown region but now they are moving further downtown because people know they can get transport there and back even if there are no taxi ranks nearby – Uber has changed the makeup of a city and that’s obviously disruptive.
David: in a way, but you could also see that as being disruptive after the fact; with hindsight we can see that what happened needed to happen so it did – that’s progress not disruption”.
Chris: the moment you believe life is as it should be you stop innovating – disruption is about saying “that’s a stupid way of doing things”.
Emmanuel: not everything is about disruption!
Chris: you also have social disruption, look at a company like Snapchat; it’s a social product that relies on tech.
Audience: Snapchat was a coming together in a cultural sense; can you give examples of companies that keep innovating?
David: Nike! they are very switched on. Nike have been innovating since the 80’s; recently they have made the serious push into wearables. No one’s surprised because they’ve made product innovation the heart of their brand identity.
– laser focused on product releasing new products every 6 months or so. And look at IBM who have moved from being a hardware supplier to services company with such confidence it belies the fact that was a completely new industry for them. What you want to avoid is becoming a Kodak!
Audience: how do you differentiate between innovation and iteration?
Emmanuel: a good illustration of the challenge of innovating is the Red Queen theory from Alice in Wonderland, you know the one – where she is running from the red queen but the faster her legs are moving the closer her pursuers get – it’s a good metaphor for having to be innovating all the time but still not feeling like you are getting ahead of the competition. An iteration is something you try to try and improve a product or service.
Hristo: And how about communicating you brand values – any advice on that?
David: The first hurdle you have to overcome from a design perspective is definitely how to communicate your idea to the general public. Therefore, you should be trying to keep everyone informed about what you are doing, with regular updates – make sure it’s a communicable idea.
Some companies are actually too arrogant to think they can be outsold or outthought but these days’ subscription models effectively force companies into innovation on a cycle not uncommon in the fashion industry. 6 month development cycles are now normal (or even shorter in the case of fast fashion).
A 6-month old product is out of date, you have to be releasing something brand new every 6 months and pursue an aggressive product development strategy. One way to do that that effectively is by using a subscription model.
Emmanuel: target customers, preferably by email and offer your customers’ something for free, a service or a free month’s subscription – show your customers the value add your business can give them. When we started Reedsy we went to see some of the biggest publishers and they liked what we were doing and encouraged us – they wanted to work with us.
Chris: it’s difficult to choose which are the best marketing channels for your business but ultimately you have to get inside people’s heads and get people on board with you. An evangelist, Guy Kawasaki at Apple is a good example can make a real difference because they are passionate and they will find other passionate people who will also start to love your business and evangelise about it.
I get scared when people talk about “going viral” because it doesn’t ever really happen. Besides some company founders are introverted, highly educated people, and people who read a lot of books don’t socialise well! (laughter)
Hristo – what about building up relationships of trust with your clients?
Emmanuel: it’s very important – but that’s not to say we haven’t pissed a lot of people off within our industry – we certainly have! But we have made a lot of friends also.
Chris: It’s the first pillar – do I trust this company? Followed by do I like this company? If somebody likes a company or trusts a company they are more likely to accept it if that company makes a small mistake and they will respect your honesty rather than pulling out of a deal. Trust is good!
Hristo: And financing? How do you allocate costs to a marketing push? How much?
Emmanuel: try Basecamp
David: start out by bootstrapping – that’s the best route. I’m currently advising a Series A company which fingers crossed will get its funding soon, and there is a natural progression path that any startup can follow which becomes clearer over time. Bootstrapping is the best way to retain control of the company vision (it’s certainly not easy!).
Chris: There is a phenomenon known as survivorship bias which happened a lot during the Second World War in the Air Force where people would try to identify points of weakness by talking to the surviving pilots – but there was a reason why they had returned alive – because they didn’t get caught out by whatever felled their comrades.
When we read Tech Crunch we are almost exclusively reading about the success stories but it’s the failed ones you need to study unless you want to make the same mistakes. Investors are hard to deal with and the reality is overwhelmingly a startup still doesn’t get funded. It’s hard but not everyone gets the money to accelerate the growth of the business.
Emmanuel: with funding you can accelerate growth but you can also accelerate death – we raised financing because we had to – I haven’t disclosed the amount but it was not a large sum.
And how to pick the right employees – who’s right for a startup business?
David: if it’s a creative it has to be somebody you feel comfortable around and someone who brings an energy and presence and some different ideas.
A great engineer will want to build a project even if they don’t know how – if you give them a project and an idea and they haven’t done it before, the best starting thinking about how it can be accomplished. The best are intrigued and up for the challenge!
Emmanuel: don’t hire on what they know – you can always teach them. Hire on what they can do.