Of the thousands of startups that launch every year, most fail because of a shortage of customers and the lack of a profitable business model. Startup Weekend launched the national NEXT program (powered by Google for Entrepreneurs) to provide access to seasoned entrepreneurs who can teach the critical Customer Development skills that build successful startups.
Recently I had the opportunity to speak with Michael Sitarzewski, the Entrepreneur-In-Residence at The DEC, about the program and to sit in on the third week’s session. In addition to Michael’s fascinating experiences with Techstars Cloud 2012, Softlayer’s Catalyst program and his company Epic Playground, we discussed his obvious passion for Customer Development and why it’s beneficial to participate in programs like NEXT.
Michael’s current startup, Epic Playground (formerly Callisto.fm) developed the innovative media analytics system MediaGauge; which provides engagement insights to content creators, such as likes, plays, duration of play, time of exit and so on. Before MediaGauge, Michael had developed a platform, called Callisto.fm, for podcasters to promote and generate revenue from their content; essentially to fill a personal need. Interacting with customers lead him to understand that what they really needed was better data on how their content was being consumed. He explained that their feedback was what inspired him to build MediaGauge,
“Callisto was a combination of directory plus streaming plus advertising, and we would share the revenue with the podcaster – and no other portal, to my knowledge, was doing that…That one key element lead to the analytics piece. I went to LA and San Francisco and started to talking to the people we thought were our customers. Turns out they wanted better data.How long are people listening? Where do they drop off? That second iteration, the analytics piece, came from customer development.”
Those experiences, along with mentorship programs, the Techstars accelerator and learning from peers in the startup community in Boulder (where Epic Playground is headquartered) have given Michael a deep appreciation for the customer development process at the heart of the NEXT program. Earlier this year Michael moved back to Dallas, on a mission to help build the startup community and share his experiences. After getting to know Trey Bowles at events at The DEC, Michael was invited to be a mentor and the first Entrepreneur-In-Residence (EIR). He explained that it was this relationship that lead to him to assume the role of City Coordinator for NEXT,
“The opportunity to do the Startup Weekend NEXT program came up and [Trey Bowles asked] ‘Are you interested in doing it?’…The role of EIR additionally means that I get to use my 18 years of experience helping the teams here [at The DEC] through issues they might have.”
I asked Michael, a serial entrepreneur with 8 startups and 2 successful exits, how he knows when he has a viable idea and his answer neatly summed it all up,
“It’s what I’m teaching here with the NEXT program…Customer Development. The whole philosophy is, your business idea is nothing more than a hypothesis. It’s something you think will fit into the market. …The rule is you have a hypothesis, you put together some questions and expectations; you ask (who you believe your customer is) and then you pivot and iterate until you find something that resonates with everyone and that’s your Minimum Viable Product…Then you know when you build it that you’re not launching to crickets.
That’s what the Startup Weekend NEXT program is all about; taking that Steve Blank philosophy of Customer Development, combining some lean methodologies and giving the people that come to this class a ‘whole new brain’ around creating and putting an idea into the market.”
Developing a business model around customer feedback just makes incredibly good sense; but I couldn’t stop myself from saying…
“The program seems fairly rigorous; the syllabus has a lot of homework in it:”
With an enthusiastic grin, he replied,
“Well you pay up to 200 bucks for that. It’s the same philosophy as going to school right?”
What a compelling idea…hands-on training for a rare set of revenue-divining skills, with a network of accomplished mentors at your disposal. At this point, I was very curious to find out how the participants in the NEXT program were faring. Even more importantly, had they been able to translate experiences from the class into actions in their own businesses?
“Absolutely.” He then explained how the program evolves with its participants, “The other thing that’s great about the NEXT program, Matt French and those guys, they view this entire thing as an experiment…There’s still..constant iteration…Our third week class is a little different from everyone else’s third week class [in the nation] because of the things we’ve learned here.”
After our chat I was able to observe the class in action with the first 15 Startup Weekend NEXT participants in Dallas. Immediately I got the impression that this was far more brainstorm and work session than formal class. Though there was a quick (and informative) video to accompany the class material, the real value in the session was peer-to-peer engagement between the participants and Michael.
Homework from the week before was performing customer surveys and learning from the feedback. Participants called up to 60 different potential customers for their future product or service and gathered their responses to strategic questions.
“How many competing products have you tried?”
“What features are missing from your current solution?”
“How much more would you be willing to pay for a product like this?”
Collecting the data was obviously hard work, but it was easy to see how this process could save a prospective CEO a great deal of time and money. More importantly, this kind of real-world insight could demonstrate exactly how to build a profitable company.
I could tell from the conversation that some of the participants had discovered some harsh truths in the results of their surveys. But, Michael and their classmates were quick with support and thoughtful suggestions. In the end, profitable business models develop by adapting to harsh truths. The curriculum at Startup Weekend NEXT is designed to teach techniques that help extract the truth quickly and effectively; giving agile startups a figurative roadmap to success.
This year’s Startup Weekend NEXT ends on November 6th, so I asked Michael if there were any future editions of the program planned,
“Yes. Not formally planned, but there will be more; and also FT Worth has some stuff going on over there, I wouldn’t be surprised to see [a NEXT program] over there.”
Till then, interested parties can continue to expand their minds and skill sets with other exciting events taking place at The DEC. Check the calendar and follow The DEC on social media (on Twitter and Facebook) to stay informed about upcoming opportunities and the Dallas startup community.
Nathan Binford, the author of this post, has spent the last 16 years working closely with startups and small businesses; as a writer, developer and marketer. Nathan contributes to a variety of blogs, including this one. His views are his own, but resources for this post were provided by The DEC and Speakeasy (a partner of the Dallas Morning News).
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