Happy Birthday! The Cassette Tape’s Golden Anniversary

That today marks the 50th birthday of Philip’s cassette tape is a bit of shock for me. Has that once dominant form but now almost forgotten audio technology really been around that long ?

Philips Cassette Golden Anniversary

From Edison’s invention of the phonograph in 1877 to RCA Victor’s release of the first 45 rpm single in 1949, the cassette tape in 1963 by Philips, the Compact Disc in 1982 and finally digital file formats such as MPEG-1 Audio Layer III (MP3), the time for a technology to rise to ubiquity then fall to obscurity is becoming shorter and shorter; a stark illustration of the ever accelerating compression of the merciless cycle of disruptive innovation.

Few noticed that Apple at their iPhone 5S and 5C product launch this past Tuesday confirmed that the iPod would continue production without an update. The iPod device, first introduced in 2007 and which arguably popularized the use of digital music files which hasten the demise of the Compact Disc format, is clearly on its last legs. From nothing to the industry standard and back to nothing industry in only 6 years. It will not even reach it’s tenth birthday let alone celebrate a 50th.

The Data Has the Answers

Data_graphic_2

In a 2001 research report by META Group, Doug Laney laid the seeds of Big Data and defined data growth challenges and opportunities in a “3Vs” model. The elements of this 3Vs model include volume (the sheer, massive amount of data or the “Big” in Big Data), velocity (speed of data processed) and variety (breadth of data types and sources). Roger Magoulas of O’Reilly media popularized the term “Big Data” in 2005 by describing these challenges and opportunities. Presently Gartner defines Big Data as “high-volume, high-velocity and high-variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making.” Most recently IBM has added a fourth “V,” Veracity, as an “indication of data integrity and the ability for an organization to trust the data and be able to confidently use it to make crucial decisions.”

The volume of data being created in our world today is exploding exponentially. McKinsey’s 2012 paper “Big data: The next frontier for innovation, competition, and productivity” noted that:

• to buy a disk drive that can store all of the world’s music costs $600
• there were 5 billion mobile phones in use in 2010
• over 30 billion pieces of content shared on Facebook every month
• the projected growth in global data generated per year is 40% vs. a 5% growth in global IT spending
• 235 terabytes data was collected by the US Library of Congress by April 2011
• 15 out of 17 sectors in the United States have more data stored per company than the US Library of Congress

IBM has estimated that “Every day, we create 2.5 quintillion bytes (5 Exabyte) of data — so much that 90% of the data in the world today has been created in the last two years alone. In their book “Big Data, A Revolution That Will Transform How We Live, Work, And Think,” Viktor Mayer-Schonberger and Kenneth Cukier state that “In 2013 the amount of stored information in the world is estimated to be around 1,200 Exabytes, of which less than 2 percent is non-digital.” They describe an Exabyte of data if placed on CD-ROMs and stacked up, they would stretch to the moon in five separate piles.

This sheer volume of data presents huge challenges. For time-sensitive processes such as fraud detection, a quick response is critical. How does one find the signal in all that noise? The variety of both structured and unstructured data is ever expanding in forms: numeric file, text documents, audio, video, etc. And last, in a world where 1 in 3 business leaders lack trust in the information they use to make decisions, data veracity is a barrier to taking action.

The solution lays ever more inexpensive and accessible processing power and the nascent science of machine learning. While Abraham Kaplan (1964) principle of the drunkard’s search holds true: “There is the story of a drunkard, searching under a lamp for his house key, which he dropped some distance away. Asked why he didn’t look where he dropped it, he replied ‘It’s lighter here!’” A massive dataset that all has the same bias as a small dataset will only give you a more precise validate of a flawed answer, we are still in early days. Big Data is the opportunity to unlock answers to previously unanswerable questions and to uncover insights unseen. With it are new dangers as the NSA warrantless surveillance controversy clearly exposes.

I have had the privilege of listening to Clayton Christensen speak several times. In particular he has one common through line that stuck with me and forever embedded itself in my consciousness. “I don’t have an opinion. But I have a theory, and I think my theory has an opinion.” I believe the same for Big Data. The data has an opinion, the data has the answers.

Learn Early, Learn Often, Learn Cheap

I have not failed, I’ve just found 10,000 ways that won’t work … Edison Picture1

Many in the startup community embrace the oft quoted “‘fail early and fail often” but I really struggle with embracing failure as a badge of honour. For me, it’s not about failure but about all about learning; rethinking, regrouping, re-factoring and having another go at it.

To find the right product, service, business model before you run out of time, resources or personal energy you need should be learn early, learn often, learn cheap. “Get out of the office” as soon as you can. “Build, measure and learn” over and over. And be cheap on personal energy as you only have some much spread around, time as it only goes in one direction and money as while you might get more, you might not either.

It’s not about failure. It’s about learning. Learn early, learn often, Learn cheap.

Lean Startup On Centre Stage

Founding father and one of the Lean Startup’s  triumvirate of Blank, Ries and Osterwarder, Steve Blank, has written the cover story article of the May 2013 issue of the Harvard Business Review “Why the Lean Startup Changes Everything“. It is a breakthrough moment for the Lean Startup movement as it steps on to the centre stage and into the limelight it so deserves. If there are leaders of industry and academia who have not been paying attention to or took no notice of the movement, they must now.

Organizations are confronted with the continuous buffeting from forces of globalization, disruptive innovations and “Black Swans”. They face the imperative of innovate or perish with the average life expectancy of a Fortune 500 company having declined from around 75 years in 1955 to less than 15 years today. As Steve poses, “business-as-usual management techniques focused on efficiency and execution are no longer a credible response”.  Lean Startup is not just for startups, its approach in the search for a repeatable and scalable business model can be and should be fully embraced by intrapreneurs within all organizations and institutions, big and small, old and new in response to these challenges.

For the next month, the Harvard Business Review is providing free access to the article. Read it. Share it. Talk about it. Apply it.

Gallup Positivity Survey Shocker … Material Wealth Does Not Buy Happiness!

Daniel Kahneman and Angus Deaton in their 2010 paper, “High Income Improves Evaluation of Life But Not Emotional Well-being”, concluded from an analysis of 450,000 responses of Americans to the Gallup-Healthways Well-Being Index “that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being”. http://www.pnas.org/content/107/38/16489

A newly published Gallup survey that measured positive emotions in 148 countries and areas in 2011 http://www.gallup.com/poll/159254/latin-americans-positive-world.aspx supported this conclusion. They asked the following five basic questions; Did you feel well-rested yesterday? Were you treated with respect all day yesterday? Did you smile or laugh a lot yesterday? Did you learn or do something interesting yesterday?

They found that Latin Americans were the most positive in general. Panama was 1st overall with 85% of Panamanians polled (despite ranking only 90th on a GDP per capita basis globally) responding yes to all five questions. They were followed closely by Paraguay, El Salvador, Venezuela, Trinidad and Tobago, Thailand, Guatemala, the Philippines, Ecuador and Costa Rica. Singaporeans are the least positive worldwide with just 46% answering yes to all five despite ranking 5th on a GDP per capita basis and were out ranked by war torn countries such as Iraq at 50% and Afghanistan at 55%. 80% of Canadians (11th overall) and 76% of Americans (curiously 33rd place, the same as the Chinese) while 74% of French, German and Finnish (the same as impoverished Somaliland) responded yes to all five.

While the Gallup poll may skewed by what critics claim is a cultural bias of Latin Americans and others to avoid negative statements regardless of what one really believes or thinks, Jon Clifton, a partner at Gallup, said skeptics shouldn’t “undervalue the expression of positive emotion as an important phenomenon in and of itself” and that “those expressions are a reality, and that’s exactly what we’re trying to quantify. I think there is higher positive emotionality in these countries.”

What are common traits of the top scoring societies? A proclivity to focus on family, friends and quality of life with a level of relative material well-being and the perception of personal security.

Happy New Year!

Reflections in Anticipation of the Attending the Lean LaunchPad Educators Program

In preparation for the Lean Launch Pad Workshop in Berkeley later this month, my colleague Laurie Jensen and I have been thinking about our Innovation and Entrepreneurship Program at Mount Royal University and our experiences teaching the Lean Start-up approach. Over the past few years, we have re-designed our entrepreneurship program from a small business management focus to the primary goal of developing an entrepreneurial mindset in our students and a secondary goal of creating innovative, scalable business models for new and existing for-profit and not-for-profit ventures that lay somewhere between “a great living” of Alex Lawrence‘s “Main Street” and the billion dollar IPO of Sand Hill Road VC’s. Our minor in Innovation and Entrepreneurship has students with varied backgrounds – mainly business majors but including students from computer science, outdoor education, kinesiology, general arts as well as continuous education students (usually returning students looking to launch their own ventures). We believe this multi-disciplinarity has huge benefits resulting from the different perspectives and approaches to creativity and problem solving students bring to the classroom.

We have been using the Lean Start-up approach, Customer Development process and Business Model Generation materials in our Opportunity Development and Venture Launch courses for the past year. We would like to share in advance of the Lean Launch Pad Educators Program several factors and circumstance that separate our experiences from some of the present body of work.

  • Our approach is centered around educating and developing the entrepreneurial mindset, growing individuals that are confident and aware rather than the actual launch of sustainable and scalable ventures. The majority of our graduates are unlikely to start new ventures or join early stage ventures straight after their graduation. They almost all will likely be contributing members of operating organizations, large and small, commercial, charitable, political or otherwise in nature.
  • Working with undergraduate students presents its own set of unique challenges different than those of graduate students and in-the-field practitioners. They generally have a narrow field of experience and perspective. A full undergraduate course load coupled with part-time job and athletic commitments makes the additional workload of venture development very challenging for most. Getting out of the building is extremely valuable for expanding their way of thinking but very difficult due to lack of time, experience and limited contact base.
  • We are not focused on tech startups exclusively but more broadly ranging from “bits to atoms” in nature, for profit to non-profit and intrapreneurial in-house new ventures.
  • We live and work in a “small market” demographic. The Western Canada population is under 11 million, similar to mid-size states such as Georgia and Michigan but with ten times the land mass. About half the population is concentrated in two major urban areas, the Greater Vancouver area and Calgary-Edmonton corridor which both have populations of just under 2.5 million.
  • Our local Calgary-Edmonton economic corridor is dominated by primary resource extraction and the tertiary sector of related financial services (we arguably have a global tier energy industry cluster forming) with abundant capital that unfortunately has very limited investment attention for non-resource extraction related ventures. Our angel investment community is limited and jaded. We have an under-funded and overly conservative venture capital industry and wary institutional investors still smarting from dot-bomb era collapses such as Nortel and JDS -Uniphase. Most are content to stick with what they know – the resource extraction economy.
  • While we have a vibrant and active entrepreneurial and academic community with local groups such as the A100, an organization of “been there, done that” tech entrepreneurs and executives dedicated to helping Alberta’s next generation of innovative startups, our ecosystem is an order of magnitude smaller in scale and energy as compared to the leaders. Although the community is growing, we have a limited depth of experience and talentfrom which to draw advise, mentorship and support.

We assume all participants face their own unique challenges and present these points merely as a catalyst for further discussion. Our goal is to continue to look for ways to apply the Lean Start-up approach making adjustments that meet our market and classroom situation.

We look forward to some interesting and lively discussions at the workshop and will share these upon our return. In the meantime, we would love to hear about your experiences in the entrepreneurial classroom.

Venture Launch Course Reflections II

I have just returned from my travels and have begun the process of re-factoring and improving the ENTR 4332 Venture Launch course that I have now taught twice at Mount Royal University . We had recently re-designed our entrepreneurship program from a small business management focus to developing an entrepreneurial mindset with the goal of helping students create innovative, scalable business models for new and existing for-profit and not-for-profit ventures.

Students entered the course with their venture opportunity identified and developed in Prof. Laurie Jensen’s ENTR 4331 course;
 out of the proverbial coffee shop and into the basement to develop their ventures. We incorporated Eric Ries’ Lean Start-up and Steve Blank’s Customer Development methodology by having the student teams iterate through build-measure-learn cycles designed to test hypotheses and refine their business models (documented on Osterwalder’s Business Model Canvas). We found these methodologies challenging to apply in an experiential way to essentially pre-revenue, low to no capital undergraduate student start-ups. As a result, we targeted to have their ventures by the end of the semester in state of preparedness to continue-on in a bootstrapped mode or ready to successfully court first round love money or angel investors.

The composition of this second cohort was quite different from the first semester’s inaugural cohort. While the first semester was exclusively second and third year undergraduates, this cohort had several continuing education students with varying academic backgrounds who were already in the workforce and in some cases are already been involved with new ventures. The wide-spread of individual capabilities, relevant business experience and personal drive made creating an impactful learning experience more than a bit of a challenge. But this diversity of the students backgrounds was also a blessing; there was a refreshingly candid exchanges of ideas and opinions in class and in their blogs, and clearly having a class composed of diverse, multi-disciplinary individuals enhanced the overall learning experience.

This time around, I was able to incorporate Eric Reis’ “Lean Start-up” as the core textbook. While I had used the Lean Start-up process in the first running of the course, the book was published too late to be used as the core textbook. Hard-cover books, with its long-form content in a collection of printed pages, curiously still impart a sense of authority and permanence that is lacking with all things on the internet … even with millennial’s !

What is Working Well:

  • General models and tools seem to be suitable and appropriate in practice with the students, in particular Business Model Canvas and Lean Startup.
  • Students “get” the “Pivot”, “get out of the building” (most of the time) and “lean thinking”.
  • Student journaling thought blogging has been effective for sharing observations, feedback and reflection between team members, teams and advisors.
  • The continuous education students add a lot to classroom experience; sharing of different perspectives and experiences.

Challenges:

  • There is a lot that has to come together in a short period of time for the students. Many have only limited employment experience to draw on.  A full undergraduate course load is challenging for most; the addition work load of venture development is a struggle for some. Several had part-time jobs or athletic commitments which made off-campus activity scheduling a challenge.
  • The students have difficulty creating reasonably realistic financial models for their venture and are very reluctant to “aggressively” scale their ventures.
  • Recruiting members that can contribute in a meaningful and timely way to the  advisory boards that students form for their venture teams continues to be a challenge.
  • Grading was time consuming  due to the volume of material to review in the blogs.

Re-work/Refinements:

  • Less “sage on the stage” … there is a plethora of material available on the net e.g. blog postings, readings and videos that could be incorporated into out of class readings and assignments.
  • Need to re-think the venture opportunity and team selection process that initiates the course to create more robust and creative teams. Actively encourage cross-disciplinary teams – e.g. recuit and include students from the computer science programs
  • Need to be more actively encouraging the possibility of a social ventures and intrapreneurial new ventures within an existing organization.
  • Need to find some simple and Lean Start-up “friendly” financial modelling tools that are appropriate for undergraduate students with a limited exposure to accounting and general finance.
  • Will continue the further refinement of integration with ENTR 4331 Idea to Opportunity course; moving forward the use of the BMC and a slimmed down experience of the Customer Development Model
  • Incorporate a formal requirement for two MVP cycles and a midpoint presentation to “force” the pivot or persist experience for all teams.
  • Look at some alternative methodologies that have been evolving; Ash Maurya’s work is very interesting and his Lean Stack is going to get a closer look this summer.
There has been an incredible explosion of entrepreneurship as a management science. The Stanford Udemy experience has stopped me in my tracks and made me reconsider my approach;  I need to continue even faster and further on the “less sage on the stage”, more to active discussions and creating experiential opportunities for the students. We need to continue to focus on the development of the entrepreneurial mindset ; more on growing individuals that are confident and aware rather than the actual launch of sustainable and scalable ventures. Steve Blank’s recent posting “Entrepreneurship for the 99%” has also given me cause to further ponder. The majority of our graduates are unlikely to start new ventures or join early stage ventures straight after their graduation. They almost all will likely be contributing members to operating organizations, large and small, commercial, charitable, political or otherwise in nature. Consider what impact can be brought to our community by these graduates with a developed entrepreneurial mindset!