4 takeaways from a different type of startup competition

Judges for the Lean Startup Machine competition

Between Startup Weekend, AngelHack and StudentRND you could spend every weekend hacking in this town.  And that’s just this month.  So I’ll admit I was curious if not skeptical when Lean Startup Machine entered the scene, and wondered what more this New York-based org could bring to the party.

Walking into the Belltown HQ of host HasOffers, I found the participants were just as hard-working and sleep-deprived as those at every other such event.  So what made it special? This one wasn’t about heads-down coding. And it wasn’t about amassing Twitter followers or sending out surveys.

Centered around the lean startup principles of Eric Ries, Lean Startup Machine’s T-shirts read: “Get Out Of The Building.” LSM’ers were challenged to walk the streets and talk to real people. Turns out you can learn a lot from living, breathing potential customers. So without further ado, here are my top four takeaways from judging this event.

1) The art of Q&A

No real surprise here, but it’s all about asking the right “Q” then listening to and evaluating the “A.”  One team was admirably persistent in de-bunking their own assumptions about a hot-or-not type fashion app.  They asked fashion-challenged males if they’d like to use their social graph for shopping advice (nope).  Then they asked the same question of fashion-conscious women (again, not so much).  Kudos to them for asking tough questions and re-evaluating their business as a result.

However, when it comes to Q&A, they’d only just begun to assess whether there’s a market for their service. Judges asked them if they were asking the right questions to the wrong people (perhaps the real target market is tween girls? Or maybe it’s not about clothes shopping, but high-involvement purchases such as cars?). Or if they were asking the wrong question of the right people (“fashionistas, would you care to get expert advice on your shopping choices?”).

Another word of caution came from fellow judge Sasha Pasulka, worrying that one team was taking answers at face value, and over-functioning on customer responses.  She reminded us all that what customers say they’ll do and what they actually do isn’t always the same thing.  The teams that really nailed this actually got letters of intent from customers … the best “answer” to whether or not customers would pay for their product, or just say they would.

Takeaway: There’s a fine-line between invalidation and validation. Don’t declare either failure — or victory —too soon.

2) Go with your gut

Members of team KidLink. Photos via Adam Berk.

The weekend’s winners were the poster children for pushing past apparent objections and persevering with their instincts. KidLink, debuting their GPS-enabled plans to help parents keep track of their kids, learned that at the Seattle Aquarium, some 12 times a day parents and kids are separated in the crowd.

So when they called Disneyland and were told “no one ever gets lost here,” they didn’t buy it.  Following their instincts, they called the 7-Eleven across the street.  The mini-mart jumped on the opportunity to rent out devices to families and tourists because ya, this is a problem. Judge Diane Hoeft fessed up to getting lost herself at the Magic Kingdom.

Takeaway: Ask, listen, but remember if something sounds too good to be true (or if you smell a rat) … it probably is.

3) Kernel of awesome

The evening’s presentations were chock-full of data.  That’s good, right? Somehow, I kept finding myself looking for the qualitative, not just the quantitative responses from customer surveys. So 2 out of 10 survey respondents said you might be able fix their problem…just how psyched are they about your product? Is their problem a minor headache or a serious migraine?  What is the magnitude of their pain, and just how much better is your solution?

Cheezburger‘s Ben Huh once described this phenomenon in a talk he gave on the wisdom of the crowd (“Gold Filtered.”) He reflected on startups who get excited after surveying 100 people where 20 said, “sure, I’d use it.”  What you really want, more than those 20 ambivalent responses, is 5 absolutely rabid customers who believe your product is the best thing since sliced bread.  If I find a product kind of interesting, but the one I’m using is good enough and cheap enough, then incremental improvements aren’t going to get me to switch.

Takeaway: Find that mind-blowing awesomeness and you just may have a winner.

4) Sweet t-shirt

Yep, all this and I got to keep the awesome tee.

At the end of the night, enjoying my light (lean?) beer, I was reminded once again of the dangers of coding in a vacuum. There’s no such thing as feature-complete if you haven’t talked to a customer. And if no one is interested in actually paying for your product or service, you don’t have a business, it’s a science experiment.

Rebecca Lovell is chief business officer at GeekWire, and a longtime member of Seattle’s entrepreneurial community. She writes occasionally about startups in her column LovelLetters. You can reach her at rebecca@geekwire.com or follow her on Twitter @Lovelletters.

  • http://theleanstartupmachine.com Trevor Owens

    Thanks for this awesome reflection of LSM, Rebecca! You nailed it on the head.

    • Lovelletters

      Thanks for the great time and of course the t-shirt! I am often inspired but rarely surprised, and this event accomplished both– plus I learned a ton. Happy to pass it on. :)

  • http://twitter.com/adamberk adamberk

    Thanks Rebecca. It is really refreshing and rewarding when people like you “get it”. The fact that we are able to inspire someone like you, is inspiring for someone like me:) Combine that with the opportunity to work with such amazing entrepreneurs, is the reason I wake up smiling day after day:) Thanks again for coming and seeing what LSM is all about.

  • Dan Collin

    Thanks for your help and great insights as a judge, Rebecca. I gave the presentation for the KidLink team and wanted to chime in that from a participant’s perspective it was very worthwhile. I had read Eric Ries and Steve Blank pretty extensively, but putting the principles to work hands-on took it to another level. Lots of valuable learning and even more valuable unlearning. Thanks again to Adam, the great mentor lineup and LSM for a great experience! [Quick note to be super-clear: we were also told the aquarium finds every child that ever gets separated from a parent, they have very extensive procedures + people focused on that as one would expect (and 12 is a peak day in peak season).]