While finding product-market fit is important, getting the rest of the business model right is the difference between a great demo and a great business.
And embracing risk-taking or failure is hard when you go to college and have to be the example for your family.
Lessons learned from starting up and teaching entrepreneurship were the focus of an interview with the latest guest on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).
The show follows the journeys of founders who share what it takes to build a startup - from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.
Joining me in SiriusXM's studio in New York was Grant Warner, director of innovation and entrepreneurship at Howard University's College of Engineering Architecture and Computer Science, and co-founder of ConnectYard.
Listen to the full interview by downloading it from SoundCloud here.
(And download any of the past shows here.)
Clips from his interview are below.
Dr. Grant Warner is the Managing Director of HowU Innovate at Howard University. HowU Innovate provides campus-wide innovation courses, in which students are guided through the process of founding technology startups.
Grant is a core faculty member of the NSF I-Corps and directs the Howard University - Hampton University I-Corps Site, which commercializes university research. Additionally, he is the co-founder of ConnectYard, a social analytics platform for e-learning platforms. He is also a co-founder of XediaLabs, a DC-based incubator that provides training and technical consulting to local startups.
While building ConnectYard, Grant learned that product-market fit is not the only ingredient for success:
Grant: One thing I would say about my co-founder, he's very intuitive on the sales side. We did do a lot of ... customer discovery. We did a lot of talking to customers, trying to understand who really had the need. What was the value proposition? That helped us develop a product.
What we didn't do as well was really explore the (rest of the) business side - channels and all the other things. ...(And that) hurt (our effort).
... We had raised some money and had moved forward. We found customers who said, "Yeah, this is a real problem," developed a product, they said, "Yeah, we dig it." We were able to acquire some early customers ... (and) used that to raise some money. Then we decided, "Yeah, we're going to go and sell this directly to universities."
(But not focusing on the other aspects of the business model) hurt tremendously. We pretty much ran through all of the money without finding the proper way to reach (customers).
Steve: You weren't thinking about the right channel and that should have been something else being tested in customer discovery? If you would have had a framework, you would have said, "Hey! We haven't tested these hypotheses."
Howard University's approach to entrepreneurship education for students in this historically black college has them plugging into the DC-area startup ecosystem. Grant explained why:
...This parallel between hip-hop and startups is an important one, particularly when you think about technological entrepreneurship for people of color.
When I think about hip-hop, it started off as something that people did as a hobby. Then an opportunity to grow business ventures off of hip-hop (emerged), and that opportunity spread like a virus. People said, "Wait, hiphop is a model that shows how I can step through this to grow what I'm interested in."
I think the same opportunity is available now for people of color to participate in technology startups. We need to show the model and broadcast the model.
Steve: You think that's widely understood among people of color, that this is an opportunity not just for white folks?
Grant: Yeah, I think there's a growing understanding of it but there's two sides to the coin. One side is understanding for people of color, this is something that you can do. But on the flip side, it requires people who are driving industry to say, people of color can participate in this. ...
Steve: You think there's bias in funding and in startups?
Grant: Look, we're people, right? There's no reason why funding should act any differently (based on color) but there's an unintentional bias that comes from networks and exposure to networks. One of the things that we're trying to push (at Howard University) is the integration of what we're doing on campus in entrepreneurship with the broader (Washington) DC ecosystem. We want our students to understand who are the movers and shakers in the ecosystem that can help them grow.
He also spoke about the cultural implications of failure:
Grant: Fear of failure has some cultural implications for us. For our students, they come in to school, and they think, "you have to be the example for your family". You might be (the first in your family to go to college).
Steve: And entrepreneurship is for crazy people.
Grant: Right. (They think) it's only for crazy people. We want to encourage them to take more risks with their career. Part of it is real, right? You might feel like, "I want to graduate, get a good job, so I can help my family." That's a real thing that people feel.
Our take is that, "Well, you could graduate. Take a risk. If you fail, the good job is always going to be there as long as you learn a lesson." So you're not recklessly failing. ...
... what we're pushing against is that you can fail without being a failure.
Grant said doing a startup changed his overall mindset:
Despite all of the years of undergrad and graduate school, I learned more in the first couple years of building ConnectYard than I had prior to that point.
... ConnectYard changed the way I viewed what I was doing at the university. ... I'd go to faculty meetings and realize, "These conversations are pointless, nobody wants to get anything out of this (meeting)." (At ConnectYard) we couldn't afford that. Each meeting we went into for ConnectYard,had to end with hopefully something positive. If not something positive, at least something quick. That changed the way I thought about making decisions.
Steve: That's a great lesson. ... I remind entrepreneurs that in a startup there are only two types of decisions, revocable decisions and irrevocable decisions. In a meeting, if it's a revocable decision, meaning you can change your mind later, you are making a decision in that meeting.
There is no other meeting to have the meeting to schedule the conference room to have the meeting. However, there are a few decisions that irrevocable. Who are you taking money from? Do we sign a five-year lease? Do we hire 50 sales people? Those are hard to roll back. For a startup you might want to have 48 hours to consider those. I think what you just pointed out is some people in large organizations tend to make revocable decisions into a four-year meeting process.
Grant: That's exactly what it is. They just go on forever.
Steve: What was the light bulb (moment) that changed you?
Grant: It really was going through the life or death of ConnectYard, realizing that each day was a day that the runway (of money left in the bank) was running out. We couldn't afford (to waste time). It changed the way I looked at things. The other piece was that my partner had some of the Lean Startup process down cold. Thinking about that ... helped me think about how you approach projects, and understand what's important in the project and get to a result quickly. ...
Steve: You think it's made you a better faculty member?
Grant: It's made me a better everything. ... Really, I do believe that. Definitely a better faculty member because it's helped me talk to students in a different way. It's helped me approach projects in a different way.
Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.
Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to email@example.com describing your entrepreneurial journey.
Steve Blank's blog: www.steveblank.com