A Labs model for startups?
Most startups work on one idea at a time, and measure its success. They ask, they tweak, they ask some more, the tweak some more; then either scale it or pivot. But what if there is more than just one idea? What if a portfolio of ideas includes equally seductive, promising and alluring concepts?
During last week’s Leancamp in London we gathered a few “experimental laboratory-ans” who have recently been juggling with multiple ideas in their startup labs, to tell us how they manage.
AN INVESTMENT MODEL FOR HACKS
Stef Lewandowski was known as the guy who could rapidly get an idea out of the door soon after he had come up with it. When a little over a year ago he founded Makeshift with two other people, the idea was to build a system for developing enough hacks so that at least a few of them could be followed through to investors. Makeshift turned into a private company that builds the kind of products it would use and during the first year it created 12 products, three of which are showing significant growth. “If at some point I was no longer ranked as the most active user, it meant we had a product,” Stef says. Makeshift gave its ideas three months to live. If an idea didn’t seem to get traction, they killed the idea with a sharp knife, and the clear understanding that it was not meant to be. They put an imaginary gate, which simply had to be crossed if the product was to live.
A labs model is usually typical for large organisations with a lot of money to spend on creating an internal setting for innovation experiments. “In the constraints of a large organisation with much bureaucracy though, even a lab could feel terrible,” Peter Shanley, a Principal at Neo and formerly part of Yahoo! Brickhouse and HP Labs/Snapfish mentioned. There is a slight trade-off that there is more focus, but it’s a small consolation.
In the context of startups though, the model gets all the freedom it could get. Based on leaps of faith, products are developed and tested with users without any VCs tempering with the flow and asking for artificial focus. “We had a maverick founder who funded us and we kept on hoping that at least some of our ideas would work. It was risky,” Stef explained. But the multitude of ideas also de-risked the situation, he was convinced. The idea for Makeshift was born after a successful challenge to build a product a week, which would be sellable by the Friday of the same week. Since Stef and the others managed to do that six times in a row, they figured a product studio that did only what it believed in, had a shot. To start off, they had a few principals — never go for mobile because it is a pain in the neck and always go for exciting products. Some of their hacks suffered the test of time as they did not manage to pass the second rule.
ANARCHY INCUBATOR
Making products that people would use themselves was the principle behind another “anarchy incubator.” People at product development agency Mint Digital, used their downtime to work on the ideas they would make for themselves rather than a client. Three years ago they came up with the idea to create Instagram picture magnets. Slowly it was picked up by users who eventually would pay for the chance to stick their Instagrams to the fridge. As StickyGram was getting traction, the revenue it brought to the company was invested in yet more hacks. The hacks that turned into products have steadily helped Mint double in size, by now there are three teams in Mint with only one of them serving as agency clients. The other two exist as independent product studios. “All the teams generate ideas and once a month they pitch their idea to the rest saying what roles they would need for it. Whoever likes their idea and has the time to pitch in can ask to join,” Utku Can, the former creative director at Mint Digital describes.
MANAGING TIME AND RESPONSIBILITY
How do you make sure you are doing the right thing and distributing your time wisely, was an overarching question. “We have autonomous smart people who are free to choose what to work on. We simply created a culture of experimenting, where everyone was free to work on what they believed had potential,” Utku explains. But in that autonomy lies also responsibility. It is the creators who figure out the ways to validate their ideas. When a team from Mint came up with the idea for desk delivery of craft beers every Friday around Shoreditch, to test their assumptions they took a cart filled with their favourite breweries brainchildren and went around the neighbourhood giving away free beer. People have been more than happy to pay for the liberty of getting a bottle of cold craft beer popping on their desk last thing Friday afternoon.
Mint relies on transfer of information between people so they can help each other. They do regular company wide meetings where everyone shares what they have been up to as well as the occasional demos. To help stay focused, Makeshift never offered time for hire. They stuck to building ideas and products they would only use themselves. And patiently listened for the bubbling buzz or lack thereof to guide them.
LESSONS LEARNED
This ‘labs’ session was held at Leancamp, a community-run event, where founders and practitioners share their challenges and experiences. You can join us next time at: leancamp.co/subscribe
CREDITS
Contributors to this session include Stef Lewandowski, Utku Can, Peter Shanley, Dharmesh Raithatha, Devin Hunt, Jon Markwell, Alison Coward and Salim Virani. You can read the original notes here and here.Leancamp London 3 was curated by Kumy Veluppillai, Ben Aldred and Salim Virani.
