Innovating, Part 1 – Knowing Your Market

Some friends of mine, Alex LaPrade and Ray Angel, have started an investment fund, Lion Fund.  One of their investment precepts is that market is more important to a startup than team.  The fact that this is contrary to the traditional belief of betting on the team is the subject for another day.  Today, however, I’d like to discuss the similarities between this element of Lion’s investment philosophy and the innovation process I employ and write about.

As Alex puts it in a post titled “A Contrarian Thesis on Startups for the Rest of Us” …

“Before gambling on whether an idea will work or not, start with market research (yes, it sounds like it’s straight out of a 1950′s B School class) and find out what is valuable to this market.  Remember, the more valuable your product or service is (and the bigger the pain point it helps solve), the more you’re able to charge (e.g. more revenue for you and we’re all capitalists, not communists, right?).”

The innovation process I describe in my book Innovation Rules and Tools starts with a step called Discovering Value.  The whole idea is to learn what the various customer segments and stakeholders in the market think is valuable – before you create and deploy your product / service / business model solution.  Like Alex, I think it is just common sense.  Why would I create a solution that is designed to make money until I know what people value (another way of saying pain point)?

Learn What the Market Values by Studying What People Do

The best technique for gaining market understanding is the good old fashioned one-on-one interview – combined with observation.  There is nothing quite like talking with someone (i.e. asking open ended questions and doing a LOT of listening and note taking) for an hour or more and doing a deep dive into their perceptions, beliefs, and values about what they do in that market and how they interact with the product you are designing.

When I talk with customers, I listen for the activities they do (or want to do) – from cradle to grave as they work with the product.  When I hear a new activity, I’ll have them either walk me through it verbally – or beter yet let me observe them doing it.  I learn in depth by asking lots of questions like, “Why did you do that?”, “Why is that important?”, “Tell me more”, “How do you do that”, “Who else is involved”, and more.

Organize Your Market Knowledge by Activity

I like to organize the data I find about a market by the customer’s or stakeholder’s activities.   My colleague Ron Sears at the Design Consortium (I worked with Ron as a protege for 6 years) leads the discussion of his Product Value Matrix innovation process with this …

“The value anyone receives from a product must, by definition, stem from that person’s interactions with the product. If you don’t use, touch or interact with a product in some way, it has no value to you at all.”

If you create a thorough description of each activity (or, as Ron would put it, interaction) for each customer segment or stakeholder group and keep it up to date, you possess a comprehensive guide to value in your market.  I call this “The Book”.  For each activity, it can tell you not only what people want to accomplish, but also what they like, hate, and wish for.

Compare Your Competitors, Yourself, and Your New Concepts

You can use The Book to rate your competitors across each activity, noting what the winner does to achieve success and what the loser does to lose.  Knowing  which competitors do a great (or poor) job with an activity already, how they do it, and why it works (or doesn’t) gives you even more market insight.

You can also use The Book to rate your current product (if you have one) and your new concepts.  This ranking gives you an objective view of where you are behind or ahead.

Even better yet, The Book and ratings will pinpoint for you those activities where no one does a good job today.  These are areas where innovation can have the biggest impact, the areas where your competitors (and even you, so far) don’t seem to understand what it takes to be wonderful.

You are now at the point that Alex described where you are able to tell if a venture idea is wonderful or terrible – or what  I describe makes you ready to start ideation and create a brand new venture idea that is wonderful!

Subsequent posts in this series will describe more about other innovation steps.

For more detail, Innovation Rules and Tools is a practical handbook that describes a complete set of innovation steps that you can use to make innovation happen on demand in your company.  For each step, it describes a set of general rules or keys to success along with multiple tools you can apply from day one.  It is available in paperback and Kindle from



Innovation Rules and Tools Now Available for Kindle

Good news, everyone!

Innovation Rules and Tools, my handbook for how to make innovation happen in your company, is now available at for the Kindle!

Innovation Rules and Tools Kindle Edition

So, you can …

  1. Be learning how to apply hands-on innovation in a matter of minutes.
  2. Acquire Innovation Rules and Tools for only $7.97.
  3. Carry Innovation Rules and Tools with you electronically as a handy reference.

Why wait?  Go grab your copy now!

p.s. for you print purists, you can still purchase the paerback edition here.


Why Every Entrepreneur Should Cultivate Optimism

Recently I saw a post on Quora answering the question, “What is the single most unfair advantage a person can have?”.  Among all of the usual suspect answers, one stood out.


That short answer, by Sondra Webber, went on to say, “Studies show optimistic people are more successful, and happier, because they believe in themselves and more or less make it happen.”  That answer just happened to hit home for me that day, as I was thinking about the own life and my own entrepreneurial activity.

Pessimists Miss Opportunities

I realized that pessimists lose in three ways.

  1. Pessimists dismiss opportunities when they see them because they don’t believe the opportunities are attainable.
  2. They don’t see opportunities because they don’t believe that it is even worth looking.
  3. When we take a step in a new direction, the vista is different.  Pessimists don’t ever see positive new vistas that are built on the results of positive actions and thoughts.  Worse yet, they see new negative vistas built from the results of their negative direction.

The implications for optimists are the reverse.

Optimists See Opportunities

Optimists are open to opportunities.  They will try something.  Perhaps, as Sondra says, because they believe in themselves.  But perhaps, I think, because they believe in the opportunity, whatever it is.  I see that all of the time in my entrepreneurial friends here at Founders.  We’ll be talking about something, anything.  An idea will pop up.  Somebody will say, “Awesome, what a great idea!”  Someone else will say, “We’ve just gotta do that!”  And then maybe a couple of people will head to a whiteboard or the front windows with some dry erase markers.  Pretty soon domain names are being purchased and code is being written.

Optimists Create Opportunities

Believing that something can be done, and then starting to do it, is enormously powerful.  Starting work on an opportunity puts you in a position where you might see even better opportunities.  As I’ve recently retooled some of my own professional services, the product that I started creating has changed based on ideas I never even imagined until after I started developing the idea.  Had I pessimistically avoided developing the initial idea, I would never have seen the other more powerful ideas.  I’m willing to bet that every entrepreneur has experienced this same phenomenon.

That Helps Entrepreneurs Play to Win

It’s simple.

  • Because optimism helps you see and take advantage of opportunities, you can’t win without it.
  • Because optimism helps you create opportunities along a positive vista, you can’t win big without it.

Cultivating Optimism

Cultivating optimism is not difficult (yeah, I know that sounds sorta optimistic itself).

The first thing to understand is that cultivating optimism is not the same as reducing pessimism.  It is not setting aside time to identify and study those occasions when you have been pessimistic and vow to get better.  When you work to reduce pessimism, your framework is still pessimism, so although you may change you are still grounded in the world of pessimism.

Instead, try taking some time each day to practice being purely optimistic.  Take ten minutes (or more) and let yourself think optimistic thoughts (force yourself at first, if you have to).  Imagine you will have a successful outcome to some of the key things you are working on in your venture.  Imagine you will have a successful relationship with those people that are habitually hard for you to deal with.  Imagine that your team is really, really motivated, full of great ideas, and just plain primed to kick ass.  Imagine that the city looks sparklingly great early in the morning.  Imagine that you have everything it takes to be uber-successful in your market.  Etc.  Just practice being open, concentrate on how all that feels, smile a lot, and see where it leads.

I predict that two things will happen.

  • Your framework will change.  You will begin to think from an optimistic viewpoint, rather than a pessimistic viewpoint.
  • Your perception will change.  More and more each day (outside of your 10 minute practice time), you will see positive opportunities that will help you achieve success.

Have fun!

Creativity and Work Ethic in the Arts and Entrepreneurship

Today at Maria Popova’s Brain Pickings site, Maria has posted about the book Inside the Painter’s Studio, which looks at the creative sources, inspirations, and working environments and regimens of several artists.

She highlights, and I particularly like, the working philosophy of artist Chuck Close.

“Inspiration is for amateurs — the rest of us just show up and get to work.”

Isn’t that a great quote?  While you take a moment to think about how it widely applies to a lot more than just the arts, I’m going to zero in just one other area – entrepreneurship.

Work Ethic Wins in Startups

It rings particularly true today in the world of startups and entrepreneurship.  Showing up and getting to work (versus waiting around for that killer app idea to materialize or that 100-page business plan to be funded) is exactly the difference between entrepreneurs who succeed and those who either fail or never take off.

When I say “work ethic wins” in the startup community, I am not simply referring to hard work (although startup entrepreneurs certainly work hard).  What I am referring to is the startup community’s bias toward stepping in and getting started … i.e. building something.  A business plan without a product or at least a prototype is discounted as a useless old school exercise.

Today’s startups are strongly influenced by the customer development / business model development / lean startup techniques of people like Steve Blank, Alexander Osterwalder, Eric Ries, and many others – all of which depend upon building something and then using that to test product / market fit and business model validity.  The bias toward building something gets kicked up a notch in startup incubators like Y-Combinator and TechStars, where from day one the clock is ticking toward a Demo Day deadline.

Work Ethic Enhances Creativity

Chuck Close continued by saying …

“And the belief that things will grow out of the activity itself and that you will — through work — bump into other possibilities and kick open other doors that you would never have dreamt of if you were just sitting around looking for a great ‘art idea.’”

An initial hunch or bit of creativity may get you started, but it is not sufficient for a robust, deeply valuable product (or work of art).  First of all, you (the entrepreneur) simply do not know everything there is to know about the market.  You have to listen to others who use products in different ways than you, have different needs or wants than you, have different experience levels than you, and so forth.  When you hear a entrepreneur who does know it all, be very afraid. The more people in the market with whom you engage, the more you learn – and the more opportunity you’ll find to understand needs both widely and deeply or crash multiple good ideas together.

When I worked with Ron Sears doing innovation consulting, we would spend anywhere from weeks to months of up front research engaging and listening to a cross section of stakeholders to a product or business before starting ideation or design work.  My experience taught me that intense customer / stakeholder engagement always produces the sorts of insights that drive huge value into the product.

Sometimes Less is More

Building will not only uncover possibilities and open doors, but will also help you shut doors.  The best way to see if an idea will fail is to try it.  This is as true for art as it is for entrepreneurship.

For an entrepreneur, continuing to beat the dead horse of a idea that has no market validation is a cardinal sin.  Customer development / lean startup techniques emphasize quickly moving away from concepts that have no validation, and finding what to throw away can be just as creative as finding what to keep.

Overall, Building Wins

Overall, for both artist and entrepreneur, what wins is action.  Building something.  Without building something you cannot either engage the market or see (hear, touch, taste, smell) the art.  You cannot learn how to bridge from one iteration to the next even-better possibility.  You cannot learn what the market doesn’t like – or what artistic elements just don’t work.

So, the lesson of the day comes from Chuck Close, via Maria Popova – just show up and get to work!

Renaissance – Post 2, Some Selfless People Who Care About Fort Wayne

My first Renaissance post foreshadowed a number of posts to come, about different groups of people doing remarkable things in Fort Wayne.  Here goes.

The common thread among all of these people who are moving our city forward is  that they all care deeply about our city, its people, and making Fort Wayne a better place.  What better place to start writing this series than with a group that purely embodies caring.  At the risk of embarrassing them (and no doubt alienating many others who are doing great things) I have selected a short list of people.  They are all role models who are out there helping our city just for the sake of helping our city.  They act selflessly.

  1. Andrea and Micah Rapp
  2. Craig Crook
  3. Andrew Hoffman
  4. Downtown Larry
  5. Christy Landrigan

Andrea and Micah Rapp

What did you do with your summer?  This year, Andrea and Micah Rapp rode bicycles across the country in support of affordable housing.

On June 3 they left Charlottesville, VA for Portland, OR where they arrived August 6 (see the top photo).  They rode as part of a program called Bike and Build.  With the help of riders like Andrea and Micah, Bike and Build has raised over $3 million to help housing programs throughout the country.

As part of their personal commitment, Andrea and Micah each raised $4,500 (and a bit more) for the charitable cause that contributes funds to housing projects in communities that need help, and during their local fundraiser benefit concert and auction, they raised money earmarked for the Fort Wayne Habitat for Humanity.  While they were riding cross country, they stopped and “rested” by helping build houses in communities.

What a great way to invest a summer!

Craig Crook

As Craig says, “Fort Wayne chose me.”  After growing up in Ann Arbor, MI and Upland, IN,  Craig migrated to Fort Wayne to raise a family.  Somewhere along the way, he grew to love Fort Wayne, the “best combination of small town and big town”.

Craig is the founder and curator of TEDxFortWayne, our own local version of the TED conference with the tagline, “ideas worth spreading”.  He has produced two TEDxFortWayne conferences so far.

How that got started tells you a lot about Craig.  I was part of a group he convened to discuss ideas from Seth Godin’s Lynchpin book.  At one of those meetings, after the group had been searching without success over a couple of months for a project to do, Craig brought up the idea of possibly doing a TEDx in Fort Wayne.  I remember how the vibe in the room immediately changed – that was instantly seen as the answer.  Craig secured the rights and then started convening volunteers to help.  Over 30 volunteers came to the early meetings, and from that start TEDx came to Fort Wayne!  The talks were amazing, and a lot of great new ideas were introduced to the community.

The second year, more TEDxFortWayne volunteers joined in with the experienced group from year one, and the production quality was plussed up.  The speakers were great again, as to be expected.  Today the TEDxFortWayne conversation continues in meetings that are not about planning the next event, but about just exchanging ideas.

If you read between the lines, you’ll find two themes to what Craig does – spreading ideas and convening groups of people.  Craig thrives on bringing people together to push themselves and our city forward with innovation.  He came to NIIC’s BizWiz student entrepreneur meeting and spread that spirit among our young entrepreneurs.  He operates the TQM Network to spread innovation and ideas through the business community.

When I asked him to think about the impact TEDxFortWayne has had, he mentioned that it has brought together people “who would not otherwise have met”, to “form new relationships and spawn new endeavors”.

Very cool, Craig, very cool!

Andrew Hoffman

One of the speakers at the 2011 TEDxFortWayne was Andrew Hoffman.  Andrew talked about positively changing neighborhoods, something that he is devoted to as an individual and as the Executive Director of non-profit NeighborLink.

Andrew describes him self as being “wired for service” and compassionate toward those who are suffering.  His involvement with NeighborLink grew from his grass roots volunteer work with a NeighborLink group at Fellowship Missionary Church.  It is refreshing to hear his viewpoint of NeighborLink.  “People sometimes perceive NeighborLink’s constituents as a bunch of poor people who just don’t care.  But that’s just because they don’t know them.  Once you know them, you see a bunch of really cool individuals suffering some life circumstance – who have been marginalized by their neighborhood.”

He talks about Jean, a 70 year old lady who was spending all of her money on her son with a liver transplant – and couldn’t afford to stave off a number of code enforcement issues at her home.  Over a course of a Fall, NeighborLink volunteers got the home back to code, and even after her son passed away her neighbors took notice of the activity at her home and started to engage with her.  That, Andrew says, is a classic example of how NeighborLink can “create and spark change in the neighborhood.”

NeighborLink has grown in the last few years from 262 projects in 2009, 494 in 2010, 724 in 2011 – to 500 already on 2012.  The original group of 250 or so volunteers has grown to  1,400!

NeighborLink’s latest innovation is combined with their recent move to a new shared office space inside the new Blue Jacket offices on South Calhoun.  The office, by the way, is only 3 blocks from Andrew’s home – yes, he believes in living in the neighborhood he serves and moved there with that purpose in mind.


Although this post doesn’t feature Blue Jacket Executive Director
Tony Hudson
(pictured above in green – and who was sorta embarrassed to be photographed in his sweaty lawn mowing clothes that I think just demonstrate that he is a regular stand-up guy), we should all take a moment to appreciate what he and Blue Jacket do to help ex-offenders in our community!

NeighborLink and Blue Jacket are using some of their space as a collaborative coworking space (yep, like Founders where I work).  The photos below show a countertop (being built) where people will sit and work and their first business, Justin Sheehan, a young entrepreneur friend of mine who operates Crown Jewel Productions and is starting Business Connect and Connect Fort Wayne.  Congrats on the new office, Justin!


A lot of what I personally focus on in the community is economic development.  Andrew pursues what he calls a holistic view of community development, where economic development only can thrive when the grass roots needs in the community are being done.

Thanks, Andrew!

Downtown Larry

Not too long ago someone mentioned something about a Larry Thomas from the Downtown Improvement District.  I couldn’t place who that might be.  Then it dawned on me – oh yeah, Downtown Larry!  Well before I heard the name Larry Thomas I knew him as Downtown Larry.  First by reputation – and then once I moved downtown to work I got to know him personally.

When the big storm passed through, Larry was out picking up branches and debris even before it cleared the downtown.  Only two weeks after we moved into Founders he stopped in and proposed a project to clean up the decay in front of the parking lot next to us (pictured below).  Once the years’ worth of debris is cleaned up, he knows from experience, people will take care of it, passersby will be less likely to throw junk there, and it will return to being an asset for downtown.  I know from others I talk to that these two actions of his are just the tip of the iceberg.

He didn’t have to do either of those two things.  I repeat, he didn’t have to be proactive and do either of those two things.  But he did – because he cares about downtown and wants to make it (keep it) a great place.

As Larry says, the 91 blocks of downtown are where he lives, where he works, and where he plays.  He grew up downtown, and he views it and treats it like “my own backyard”.  Being able to help somebody – usually by doing a personal project – is Larry’s way of giving back.

As simple as jumpstarting a car with a dead battery, or as complex as organizing a group of “green and clean” volunteers to revitalize a debris-filled greenspace, Larry is always there.  You’ll see him in that green shirt riding around town in that green Gator.  If you wave, he’ll probably stop and say, “Hi”.

Bill Brown, you may be the [interim] President of DID, but Downtown Larry is unquestionably DID’s heart and soul!

Christy Landrigan

Who showed up at Founders shortly after we got the keys and brought champagne?  Who goes by the name Startup Groupie?  Who organized a cash mob for the Downtown Deli?  Who is the most enthusiastic supporter for every young entrepreneur in the city?

Yep, it’s Christy Landrigan.

Christy doesn’t grab the limelight.  She doesn’t seek headlines.  She just celebrates and encourages young entrepreneurs.  She just supports and encourages downtown Fort Wayne businesses.  Always, without fail.

I first met Christy at IPFW where she was engaged in the business school’s student group.  Later I found her working for the Downtown Improvement District, and learned that she really, really loves downtown Fort Wayne and its businesses.  Regardless of where she works or studies, she always tends to show up where there are groups of entrepreneurs, especially young entrepreneurs, to encourage – like at last Spring’s Demo Day at NIIC (she’s got her back to us in the photo below).

Most recently, Christy studied and became certified as a facilitator for the Kauffman Foundation’s Ice House program.  The program uses an ice house as the backdrop for teaching real world entrepreneurial lessons useful to grass roots entrepreneurs.  Christy didn’t do this to make piles of money doing training – she did it to bring inspiration and skills to Fort Wayne entrepreneurs and help them bootstrap and grow their business.

Keep it up, Startup Groupie!

Now For Your Challenge

So, that’s my short list of people I admire for their caring efforts on behalf of a better Fort Wayne.  I know there are lots more people who do great, caring, selfless things in town – I plan to write about some in other categories during this series of posts.  I invite you to keep me honest by citing your own short list in the comments.  Let’s hear it.

In the meantime, how about some applause for these folks?