Silicon Valley Comes to Malaysia #SVC2M

Silicon Valley Comes to Malaysia” conference was a huge success, big thanks to the organizers Dash and Rebeca for bringing in Silicon Valley icons to Kuala Lumpur, namely; Jawed Khan of YouTube, Konstantin Guericke of LinkedIn, Jeff Hofman of Priceline.com, Jonas Kjelberg of Skype, to name a few (full list).

Failure is given, and it should be celebrated

Throughout the event, speakers and panellists have time and again reminded entrepreneurs that they have to take risks and prepared to fail, because they were told, for the first (few) startup(s) they were definitely going to fail.




As we know, failure is celebrated in Silicon Valley, but not so much in other parts of the world, especially in Asia. In most Asian countries failure is stigmatized, it’s especially true in Japan.

“From olden times, if you were defeated in battle you committed seppuku [ritual suicide by slicing the belly, also known as hara-kiri],” Mr Honda says. “That’s in our genes, so people don’t try if they think they might fail.”
Stigma of failure holds back Japan start-upsFT.com

For this reason, it’s not an easy feat for us Asians to take risks and celebrate our failures…

Failures == (Hopefully) Learn How to Launch Successful Startup?

For me the whole message of failures and embracing failures sounded a bit like, to put it very bluntly – “i don’t care what you do, just go and try and learn it by yourself. I don’t have time for this. Surely after few startups you will know how to launch successful startup/product“.


Cartoon (C) CartoonStock.com

Because let’s face it, not everyone’s startup will be next Twitter or Facebook. And not everyone is in the position to take risks. So, I thought and had desired that these successful entrepreneurs show some sort of “guidance”, “methodology” for starting a successful business or at least minimizing failures and maximizing success rates of new startups. But alas, the message was, again to put it bluntly “i don’t want to hear anything, just go do it yourself“.

Which brings me to next point…

Success of Incubation Centers
Incubation centers like Y-Combinator, TechStars have been quite successful in the US. These centers provide extensive training, mentoring and funding for startups if it passes their selection criteria. This is a very good development, and it’s very beneficial for the first-time entrepreneurs.

In Malaysia, MDeC provides somewhat similar program for entrepreneurs. Also the newly launched AllStars incubation program is a good start for the local industry.

Success of these programs is, I believe mostly due to the vast experience of the mentors who run these places regarding startups. Also their gut feeling about the next big thing when it comes to selecting ideas. Basically they are very hands-on with the startups that they mentor. They share their domain knowledge and expertise in the product development, marketing, team building etc. It’s an end-to-end program, which is what first-time entrepreneurs want. And not “go and do yourself” kind of message.

There is a way to successful startups

Until now, entrepreneurs have believed that there is no recipe for successful startup. And I believe, SVC2M speakers did genuinely thought that they were giving the best advice when they said that there is no one way to launch a successful business. You just had to try it for yourself, and once you have enough experience, a keen eye for “the next big thing” ideas, then you would finally hit a bull’s eye, hopefully.

However, Steve Blank, thinks otherwise. After founding 8 successful startups, he says that he saw a pattern in making startups work. And he has come up with, what’s called “Customer Development Methodology” for Startups. Some info on Steve:

After 21 years in 8 high technology companies, I retired in 1999. I co-founded my last company, E.piphany, in my living room in 1996. My other startups include two semiconductor companies, Zilog and MIPS Computers, a workstation company Convergent Technologies, a consulting stint for a graphics hardware/software spinout Pixar, a supercomputer firm, Ardent, a computer peripheral supplier, SuperMac, a military intelligence systems supplier, ESL and a video game company, Rocket Science Games.

Total score: two large craters (Rocket Science and Ardent), one dot.com bubble home run (E.piphany) and several base hits.

In his book “Four Steps to Epiphany” Steve talks about Customer Development Methodology extensively. He argues that “Product Development Methodology” is not the right methodology for running startups and making plans, especially sales and marketing plans. Because it exclusively concentrates on the product and totally ignores the customer part. He argues that, startups who use “Product Development Methodology” for running startups have higher chance to fail.

One important thing to remember though, he doesn’t advocate replacing “Product Development Methodology” with “Customer Development Methodology”. He says that PDM, should be used for developing and managing a product, and CDM should be used to manage, plan and run Startups.

CDM is a big topic in itself, so if you are interested, I highly recommend that you get the book.

MVP or Minimum Viable Product

Coupled with Customer Development Methodology, getting your product as soon as possible to the market with the most basic version first, in order to get customer feedback is gaining popularity now. MVP has been popularized by Eric Ries for web startups with his book Lean Startup.

The product is typically deployed to a subset of possible customers, such as early adopters that are thought to be more forgiving, more likely to give feedback, and able to grasp a product vision from an early prototype or marketing information. It is a strategy targeted at avoiding building products that customers do not want, that seeks to maximize the information learned about the customer per dollar spent.

Summary

I think there is a light at the end of the tunnel. I strongly believe that Steve Blank is right, and coupled with concepts like Lean Startup, every startup can iterate successfully and if not become the next Twitter, at least they will be able to minimize the failure rate. Sometimes, entrepreneurs are just happy to see their idea to be alive and profitable, even though it doesn’t become the multi-million startup.

And I hope that successful entrepreneurs, will guide beginners to these concepts and methodologies, rather than just sending them to battlefield with no weapons. Your thoughts?

Related useful book: Business Model Generation

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