I am reposting this from my post at http://blog.neulantis.com/?p=36

In talking to a lot of startup focussed developers recently I hear the words “domain expert” and “idea guy” used almost interchangeably. There is enough confusion on the subject that I feel compelled to write a small piece on the difference between the two, particularly given that over the past decade I have been both – a domain expert, and an idea guy, and to me the difference is stark.

When I was the “idea guy”: During b-school, surprise, surprise :), I was in a class called “Launching New Ventures”, and I began researching the topic of using algae to create bio-fuels. A few weeks into it I was convinced that I knew the magic formula to take an idea, that at the time of my research was clearly not commercially viable, and create a commercially viable venture out of it. Now keep in mind this is a problem that some very smart people from the US DOE have been grappling with for at least a few decades, but here I was, a 29 year old b-school guy with nothing more than some superficial understanding of the subject matter and a business plan, trying to change the world. From a sophisticated investor perspective, this was a clear non-starter for various reasons, but most critically because it failed the founder-market fit test.

When I was the “domain expert”: While at Accenture I was thrown into the fire of taking over the CTI (Computer Telephony Integration) capabilities of the then nascent NYC 3-1-1 service. We had just launched, and 3-1-1 was still a few years away from becoming the de-facto city service for everything non-emergency related. Now in order to design, develop and manage NYC’s CTI capabilities, I had no choice but to gain a very deep understanding of everything ranging from network latency, to trunking, to automated call distribution systems, to the intricacies of CRM (Customer Relationship Management) application adapters and how all of these things behaved under heavy performance load, various exception scenarios etc. Can a developer working on building an enterprise-grade SaaS based contact center idea leveraging the Twilio API figure all of this out? I am sure they can, anyone intelligent and motivated enough can, but keep in mind there is an opportunity cost involved – someone has to pay for that learning curve, and a venture with very limited resources can rarely afford to do this.

In short, while it is possible for a developer, designer or even a smart b-school type idea guy to become a domain expert, it takes time, its not an overnight process – just as its not an overnight process to become a top notch Ruby or Java developer, or an expert UI designer. I think it is critical for us to stretch our capabilities by learning each others skillets more, as it will only make for a stronger, more well balanced team, and increase our chance of success. I also think it is equally important for us to respect what each of us brings to the table, and not devalue real expertise and the effort required to gain it.

As an enterprise focussed technology consultant, you generally wait until you have something close to the “perfect” product with all the bells and whistles a v1.0  is expected to have prior to launching the product into a production environment. Truth be told there are some big differences between an enterprise product and the soft launch of a new Internet based product or service, not the least of which includes concerns around security and performance. The truth is, given that you are launching a product into an environment that has a concrete business need for it, there could be some significant negative business impact if the product fails to behave as expected. In the Internet startup space however, other than some market validation and A/B testing that you might have done, you don’t even know if anyone cares about your product. Chances are on day 1 other than your core team and a few early supporters nobody does. Hence its critical for you to get the product out as quickly as possible, and begin getting some real world engagement and quality feedback. This step is countless times more important at this stage of the venture, than building out the new cute widget that you think your product needs.

On July 16th we launched our product and invited a handful of users to begin using the product. Boy, are we glad that we made that decision. Waiting a few more weeks, and building out a few more features might have helped a bit, but would probably have hurt us more. Lets provide some concrete insight into what I mean by this. Our product, Neulantis, currently is being built with the objective of enabling designers, developers and domain experts to incubate their ideas on the platform, and to help them find a team to kick start their vision. All version 1.0 of the product had to enable this was:

  • the ability to create a profile
  • the ability to initiate a project and add required skills
  • the ability to provide project updates
  • the ability to follow or join a project

Some of the key features that were not included in version 1.0 included:

  • the ability to communicate with other users either through a messaging system or through a discussion forum on the platform
  • the ability for updates to be broadcast to project followers and team members

Now, while some might consider this to be a broken product, particularly with the inability to initiate conversations with others on the platform or go back and forth with project initiators, we believe that the core functionality required to convey the idea to people and begin true market validation was already there. Up to this point we had no concrete way of knowing if people even cared to post their ideas on the platform, however following the release when people began posting their project ideas we knew that this could work. This was the ultimate purpose of R1.0, to test our most basic assumptions – that people would be willing to post their project ideas, and other were willing to join or follow these projects.

On the same token, some will argue that we could theoretically have tested this assumption with surveys, basic mockups and splash pages, but the truth is at that point people are still not using the product, and from our perspective the sweet spot to truly test your most basic product assumptions lies somewhere between a splash page, and a fully functioning robust product. You need people using the product in some concrete way before your assumptions can be really validated. Further without an actual product, it very difficult for people to provide any quality feedback, and at this stage of the venture engaging your early user base, and providing them a sense of ownership is as critical as having them take the first step of registering on the platform. Since we launched our product, almost our entire development process has been guided by early user feedback, and hypothesis validation vs. master planning, and the product is better off because of this.

When starting a business in the physical world, it is easy to grasp the criticality of “product first”. Wether someone is creating a new type of vacuum cleaner, garden hose or starting a restaurant with a specific cuisine in mind, people start of with a very specific product that meets some very specific unmet need in the market. However when the same logic is applied to products in the digital world, the response that you immediately get from a lot of people, particularly those inexperienced with launching a product in the digital world is: “hmmn, thats it? thats all the product will do? but you can do so much more, there are so many more bells and whistles that you can plug into the product”. The problem is compounded further when someone like myself, trained as a consultant that implements very large complex systems for very large companies, try’s to launch his or her first product. Invariably we always start with a grand world changing vision, and a complimentary product that does quite a lot from day one.

I remember when I first heard about a product that enabled people to easily unsubscribe from unwanted mailing lists that they may have signed up to consciously or unconsciously eons ago. My gut reaction to the product was that “its so basic, its not world changing, I can probably create a crude version of this product if I locked myself up in a room for a week”.

Product development in the digital space is so counter-intuitive that even an intelligent, experienced professional like myself was missing a key premise in my analysis. To create a great company, one has to start not with creating some average product with a million bells and whistles, but one product, perhaps even something that looks nothing more than a feature in the context of a larger more complex product, that does something better than anything else out there. This premise holds true wether it be Levi’s using copper rivets to to reinforces points of strain on a pant, or Google creating the page rank system. Great companies and great brands, generally start with one product that is exceptionally better than anything else in the marketplace, make themselves relevant, and then begin to expand their product suite. Hence, something that starts of as a very simple but exceptionally executed un-subscription product, and helps solves a major annoyance faced by consumers and business users alike, could be the first step towards a product that ultimately helps reduce all kinds of clutter, digital or physical, in peoples lives. So next time you see a product that looks like a feature, don’t assume that founder is not a visionary that can’t think big, but perhaps simply a more experienced entrepreneur than you.

(PS: A product in this context does not simply refer to a manufactured entity, it also equally well refers to a service being offered. Google search, Facebook social networking, consulting provided by McKinsey, or an exotic derivative created by Goldman Sachs are all services, but in each of these cases the service being offered is the companies product).

When I left consulting to focus on my venture full time, I figured that a lot of what I learnt as a consultant would be easily transferable to my life as an entrepreneur. While this is to some extent true, boy am I surprised by the amount of unlearning that I have had to do! Three things stand out when I look back at the key lessons learned:

1) Focus on getting the product out, vs. the perfect product out: In consulting, the focus is on getting as close to a perfect product out as you can the first time up. Running experiments, creating an MVP, and iterating (though it might actually make sense even in a consulting engagement, a separate post on this later!) is not done often enough. They are really not part of a consultant lexicon. The focus as a consultant is on producing the best possible client deliverable – which may be a powerpoint deck, a study, or a CRM system. While this pursuit of perfection is in itself a must have from the perspective of an entrepreneur, the focus in the early days needs to be on validating assumptions as fast as possible, and if that means putting together a quick and dirty prototype, or an A/B test that falls somewhat short of your perfect standards, then so be it.

2) Learning to embrace uncertainty, vs. attempting to eliminate uncertainty: By definition a venture involves a huge amount of uncertainty. Trying to mitigate every risk imaginable when working on a venture is akin to trying to mitigate every risk involved in making a movie. The best you can do is validate your biggest assumptions quickly, put together a great team, trust the team, and execute to the best of your abilities. Beyond that you simply have to acknowledge that starting a venture is risky business, and while you can get better as an entrepreneur with time, even the best entrepreneurs are not immune to failure. If this is not something that you can handle, then perhaps you should reconsider the entrepreneurial path.

3) Don’t be a consultant for too long: A lot of the most essential skills you need to be an entrepreneur you can learn very quickly – in the first 2-4 years of being a consultant. These skills include everything from effective time management, to presentation skills, to relationship development skills. In fact these are skills that you probably already have to have made into a top tier consulting firm, all you do as a consultant is put them to use consciously every day and make it second nature. However having done that you reach a point of diminishing returns, and every additional day you spend being a better consultant, is one less day you spend learning to be a better entrepreneur.

In summary, consulting can be a good training ground for someone with entreprenurial aspirations, just don’t remain a consultant for too long, and make sure you stop by you local B&N or place an order on Amazon for Eric Ries‘ “The Lean Startup” as part of your exit procedures!

This is in response to an article on Forbes by John Mancini. John’s basic premise is that Enterprise IT is too slow, too bloated and generally unable to keep pace with the changes brought about by Social, Mobile and the Cloud. While there is some truth to his argument, that large Enterprise IT departments are reluctant to cede control, the truth is a lot more complex than that.

Most IT organization today are focussed on keeping systems up and running, through various integration touch points, and a myriad of custom and packaged enterprise applications. Large organizations have upwards of a 1000 enterprise apps, integration touch points and their corresponding infrastructure to support. It’s easy to suggest that IT doesn’t get it, however remember that business professionals are not the only ones that use social media, mobile and cloud, in terms of personal use IT professionals are probably the earlier adopters of these technologies. However someone has to worry about keeping the monster running, and that thankless job falls on IT.

All this being said, the points being made in the article are still valid, i.e. IT needs to evolve from worrying about systems integration, to worrying about data (the “information” part of IT) and adding business value through the wealth of data and information processing capabilities being made available through social, mobile and the cloud. But the road to this, particularly for large organizations is littered with vested interests, legacy apps, band-aids put together to keep apps up and running, and over a decade spent by most companies chasing wage arbitrage opportunities in IT.

I have been thinking a lot recently about some of the reasons why enterprise IT seems so antiquated in comparison to consumer IT. One of the key’s has to be the differences between the talent involved in both sectors. Enterprise IT dwarfs consumer IT in terms of global spend, but their approaches to talent acquisition cannot be more different.

In consumer IT you are constantly looking for the best resources possible to create a better product or service. Whatever your producing is your core product, and hence you want the best talent available to help you create it. Your product is your differentiator, your revenue generator.

Enterprise IT is largely a cost center, and like with any cost center the incentive inherently is towards minimization of spend. Hence while consumer IT chases talent, the key focus of enterprise IT over the last decade or so has been to take advantage of global wage arbitrage opportunities.

Now, while this difference would have been a purely theoretical observation even half a decade ago, the consumerization of IT has changed all that. For enterprise IT to even remain relevant it has to start looking at it’s approach to talent acquisition and more critically start to make a shift from being a cost center to being a clear revenue driver. Wether this means turning to big data, or creating innovative consumer-centric services enabled by IT, they have to do it fast, if not the end game will be hard fought, but the winner is clear.

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