Strategies to Test Business Hypothesis - 6th Meetup

We had our 6th Meetup @Cafe Solon last evening. We once again had a very good turn up, around 30 people. The topic of the discussion was Strategies to Test Business Hypothesis, which was a follow up from last week's meet topic "Business as a Hypothesis", here are the Notes to that meetup and follow up write up. Björn Brynjar Jónsson, give a 5 minute brief talk about a topic of interest that he wanted to share with the group. The topic that he talked about was from the book "Start with Why" by Simon Sinek. It was very interesting and inspiring. Björn talked about the Golden Circle from the book. The premise is that we tend to focus our effort our vision etc on the "What", whereas great leaders who inspire us usually start with the "Why", which refers to the Purpose of why we do the things we do. When we understand the purpose and communicate the purpose we can inspire people to action. He gave the example of Apple. Here is the Video of Simon talking in Tedx.

• We talked about Strategies that were used in Clara to test their business model through the product Vaktarinn. Originally, Clara had not created the software that automatically sources all the digital content and provides the visualization that they do on Textual information. Gunnar explained how they got 10 of their friends to manually enter all the text from different sources into Excel Spreadsheets and then manually created the visualization look and feel on the data to validate if anyone would be interested to buy the product. Their first revenue was in selling that manual work, once they validated that idea they went on to build all the software that powers Clara Insight and Vaktarinn now. This was a quick and dirty way to see if there is a market for what you want to build. 
• The second example was from the company Buuteeq, how the team there validated their hypothesis that Independent Hotel Owners are willing to share their contact details and everything about their hotels to a third party and host their solution on a third party platform. They validated that by creating a Hotel Directory Service for Independent Hotel Owners called Wandari.com. Not only were they able to validate that business hypothesis they also created their customer funnel which they could target and convert into actual paying customers. 
• There was a discussion on a new business hypothesis that Safe Drivers would be willing to save money on their car insurance by allowing a tracking device to be installed in the car. We talked about how this hypothesis can be validated by just creating a web page with a simple button that says "Are you a Safe Driver? If you answered Yes, You can save 30% on your Car Insurance!" Sign up to be the First of the Safe Drivers to take advantage of the offer." Ok, I made the actual sentences up but that is where the discussion was going!
• The 4th business hypothesis was about non-availability of Icelandic Candy on Souvenir shops. One of the participants wanted to create a business on creating an attractive wrapper around the traditional Icelandic Candy and sell it to the Souvenir shops. The group guided her to actually pre-sell the candy to the stores with just using Digital images and depending on the demand she could build up her business. I was so happy to see how excited she was about being able to launch her business by this weekend! Entrepreneurs find the way! 
• Kristján Freyr Kristjánsson shared the story of how they created a business to sell the Eyafjalljokul's volcanic ash. They sold this idea while they were stranded in the airport in London, they just used digital images to create a visualization of a fancy bottle with the Ash in it and they sold it even before the product was ready. Overall a fantastic meetup and the next meetup is going to be on Pivot Stories. 

Related articles

• The Golden Circle Theory - Simon Sinek Discusses How Great Leaders Inspire Action (TrendHunter.com) (trendhunter.com)
• Buuteeq, a hotel marketing software startup founded by ex-Microsoft execs, raises $2m (thenextweb.com)

Delighting the customer - The only bottom line

What should be the one overarching goal of company? Steve Denning, has a great article that argues "Delighting Customers" or in other words "Delighting Others" should be the goal and how all of us confuse the means (the employees, products and services), the result (profit, shareholder value), and the values (environment, social contract and responsibility) with the goal. I thought this experiment by KLM using Twitter to get to know their customers and delight them in a small way is a great example. I would have preferred that they did that by making their flying experience better... there is one example of that in the video when they approached an old lady and gave her a better seat because it was long flight. Here is a business idea, build an app that aggregates a person's public profile and provide that to all the customer facing employees and train them on how to use that to delight their customers. I think the first step in delighting someone is to understand them and with the advent of social media that has become easier because we are giving permission to the world to get to know us... and I think that is the power of social media.

Related articles

• Maximizing Shareholder Value: The Dumbest Idea In The World (forbes.com)
• Dear CEO: Focus on Shareholders AND Customers AND Employees AND Society/Environment (customerthink.com)
• Why A Firm Has Only One Bottom Line (forbes.com)
• KLM Airlines: Social Media Pioneer?? Yes (thetechscoop.net)

Categorizing the Sales team

Interesting post by Mark Suster, on the money on defining a sales person and categorizing one.

Questions to ask while preparing a budget for your business

Why Budgeting Kills Your Company — HBS Working Knowledge A very insightful article that makes you ask some interesting questions while your ogranization embarks on a budgeting cycle, which my bank is undertaking right now.

I have always wondered why companies spend months planning for a year, while I was consulting with HP as a manager in Capgemini... HP business managers used to dread and prepare months in advance for their annual budgeting process, which was a haggling activity. The article above states how that is such an inefficient way of doing budgeting.

Based on the above article I came with 6 questions that all leader of organizations need to ask...
1. Are we pushing business units to a fixed-performance contracts, which always results in under performance?
2. Are we ensuring that each business unit is developing its goals based on longer-term external benchmarks instead of internally negotiated annual targets?
3. Have we set expectation on evaluation and rewards based on relative-improvement contracts instead of some archaic targets?
4. Do we have a continuous and inclusive action planning rather than a one time budgeting activity?
5. Do we have the discipline of making resources available on an as needed basis instead of allocating it in advance?
6. Do we have a focus and discipline of using budgeting to enable strategic alignment?

BeyondVC: Globalization and the world economy

BeyondVC: Globalization and the world economy Ed writes about Globalization, Off-shoring and the equilibrium shift from the US to China and India in the coming years with regard to GDP output, growth and interestingly number of students entering science and engineering colleages. He argues that right now the quality of a student with Science and Engineering degree from India or China is below that of the one from a US university... I don´t agree with that but never-the-less, he says that India and China will catch up and US should do whatever to boost its competitive advantage.

It was interesting to note that he got this from Greg Mankiw´s blog, which I read as well :) so I am probably in good company linking to these guys.

Anyway coming back to the discussion of quality of students... I think the quality is dependent on how the output is utilized until now the utilization in India (which I can talk about, as I went to school in one of the Indian universities) has not been tapped comprehensively, when the opportunities to innovate and actually drive value comes to India and China... the competitive advantage that is held by the US will be leveled.

Making India a hub of venture capital | CNET News.com

Making India a hub of venture capital CNET News.com, as I wrote in my earlier post India is undergoing some rapid change and development. The article above describes the flow of Venture Capital funds into India, it has increased 400% to $3.6 billion. I personally think India will beat China in this funds race due to the Indian governments great strides in establishing Intellectual Property.

The new India
Cisco to inject $1billion in India
Intel investing in new India
Rediff.com branches into other
CNET.com big picture view

Life Without Wires!

Life Without Wires� by Eric Broockman � Apple Musings: How making the switch might get easier

Alereon makes Wireless USB and it should appeal to a company like Apple which has always come out with elegant design. This article talks about that... In addition, there was this link to a Microsoft Strategy of trying to do vertical integration to the device as the Computer is getting marginalized by devices like iPod, mobile phones etc...

I think this business should take off... I agree that the computer is going to be a repository, the center of my data but I am not going to spend a lot of time in front of it atleast not personally... I´d rather be running with my iPod