Thanking Troy Henikoff for a recent1871 walk-thru, which I joined as part of an MIT delegation. We first met at Techstars Demo Day back in 2014. Three years have gone by since, Troy is now a Managing Director with Math Venture Partners, an early to growth-stage fund focusing on entrepreneurial undertakings featuring “an unfair advantage in acquiring and retaining customers to produce outsized returns.” Here is a sample of Math’s portfolio.
1871 is a digital startup incubator and is positioned as Chicago’s premier center for entrepreneurship in the tech sector. Techstars is a startup accelerator and, as pointed out above, Math Venture Partners is an investment firm.
Long story short, 1871 is first and foremost optimized as a community environment. The underlying supporting framework provides collaborative workspaces, training focusing on design, technology and business, which includes senior mentorship, incubators and accelerators. All of these opportunities are available following the under-one-roof collocation practice downtown Chicago.
“What is 1871? The story of the Great Chicago Fire of 1871 isn’t really about the fire. It’s about what happened next: A remarkable moment when the most brilliant engineers, architects and inventors came together to build a new city. Their innovations — born of passion and practical ingenuity — shaped not just Chicago, but the modern world. What started 140 years ago continues to this day. Come to a place where you can share ideas, make mistakes, work hard, build your business and, with a little luck, change the world.” – 1871
Matter is 1871’s neighbor and Chicago’s healthcare startup incubator. As shared in this Chicago Tribune’s article, Chicago has major hospitals, medical schools, pharmaceutical and device companies, a powerful healthcare hub which Matter seeks to galvanize by supporting entrepreneurial initiatives and innovative tech.
Chicago’s area is also home to leading institutions such as University of Chicago, Northwestern University, Loyola University Chicago, The Illinois Institute of Technology, and DePaul University just to name a few. So, academia and industry intersect to take advantage of talent and business opportunities.
My personal interest in environments such as 1871 has to do with a “give & take” experience. Born in Hispania and back in the distant Roman times, Seneca the Younger believed that we are learning even more when we share knowledge that we might already posses. Basically, he was talking about Human Factors and Information Interaction: a virtuous feedback loop kicks in when we strive to articulate thoughts and structure conceptual frameworks to better convey insights. That, in turn, springs new thoughts.
I pride myself about having developed a mix of creative and in-depth expertise on innovation practices thanks to a fortunate interdisciplinary career spanning 20+ years already. That personal belief is backed by specific achievements and, admittedly, some disappointments, both having delivered teachable moments worth reflecting upon.
So, in a “give and take” scenario, my “giving” has to do with sharing know-how and synthesizing relevant advice to entrepreneurs, which I have been able to provide by joining Dr. Moises Goldman’s 1871 mentoring sessions on several occasions.
Going back to Seneca the Younger’s thinking, in exchange for volunteering my time (and whichever insights I can provide) I always get to “take” away valuable experiences back home with me such as:
(1) a sense of great satisfaction and fulfillment that comes from helping others in a meaningful way,
(2) a contagious entrepreneurial spirit that one can instinctively embrace in discussions driven by passion and determination,
(3) their combined positive impact in my own work since they re-energize my thoughts and goals.
My grandma used to remind me about a Spanish saying that translates into “tell me who you walk with and I’ll tell you who you are,” which might equate to “birds of feather flock together” in English. In any case, and leveraging Human Factors again, social and professional networks can be graphically depicted by nodes (individuals) and links (relationships), which can carry information such as reputation and influence levels, as well as information dissemination paths. So, I’m glad to count those who I interact with at 1841 as part of my network and can only hope that this is a mutually beneficial relationship.
“More than half of the companies are Chicago-based, which doubles the amount of local representation we had last year and is a testament to the power Techstars has to further establish a city like Chicago as a destination for tech startups. Of the 10 companies, six hail from Chicago, with international startups representing Israel and India. Two other U.S. startups, based in Miami and Nashville, round out the list […] we hit the ground running on May 27th and it will be a three month sprint to Demo Day from there!”
“10 New Companies for Techstars Summer 2014 Chicago Session” by Troy Henikoff.
Yesterday I made it to Techstars’ DEMO DAY, which featured presentations by 10 startups and was held at the iconic House of Blues in downtown Chicago. Today’s Crain’s John Pletz blog starts by discussing NexLP’s “wow effect” since CEO Jay Leib announced closing $2M in funding at the end of his presentation and in an event geared toward the angel and venture capital community.
I met Jay last month at 1871 during a mentoring session and was impressed by: his vision linking “big text” to “big data,” his consulting background, the team’s experience skill set, a robust foundation and tangible progress already made. NexLP is about “next generation analytics and visualization technology that dramatically reduce enterprise costs related to eDiscovery, froud investigations and compliance.” That vertical presents an immediate and quite substantial business opportunity definitely worth first addressing. NexLP’s technology could eventually power solutions in other areas such as customer experience and relationship management in communication technology markets.
All 10 startups did an excellent job and got high marks. This was an impressive event and there is a need for congratulating everyone involved. Given my work’s focus on communication networks, I was mostly interested in learning about Telnyx and Gamewisp, in addition to NexLP.
David Casem, Telnyx CEO, defines his company’s business as “enabling universal voice communications via the web, regardless of application and device type,” which he positioned as a disruptive CSP (Communications Service Provider) competing head to head with conventional telcos (network operators) and well known VoIP (Voice over IP) enterprises. I also met David and his team last month before my going to Software Telco Congress. Kelly Littlepage, Telnyx CTO, discussed cost efficiencies delivered by “switches that are virtualized, cloud based, distributed and not dependent on legacy architectures,” coupled with highly efficient routing algorithms, which his proven experience on high frequency trading technologies equips him to lead with. Telnyx is already generating revenues and my recollection is that David highlighted opportunities in the call center sector.
Admittedly, I didn’t know much about Gamewisp before Demo Day. CEO Michael Anderson discussed quite eloquently on stage how his company “gives gaming celebrities the tools to interact with their devoted fans and monetize their content.” Content focuses on game pros with large followings. Gamewisp’s experiences involve gaming video broadcasts, live events and communications. This is a marketplace for video content based on end user subscriptions rather than ad-revenue.
IIT’s Real Time Communications is now a month away, the event’s agenda is pretty much all set, but I think that it would be great to feature NexLP, Telnyx and Gamewisp if they were available to present.
Chicago’s Demo Day showcased two keynote speakers, Tom Ricketts, Founder of Incapital and Owner of the Chicago Cubs, delivered the opening keynote; then Desire Vargas Wrigley, CEO of Giveforward, spoke after the intermission. Both talked about lessons learned by doing. Tom outlined the following:
- the need for a compelling vision driven by customer emphasis and empathy
- courage and conviction as well as honest communication
- working with the right team, exercising leadership by actively contributing to the community
Desire conveyed complementary insights and personal experiences around:
- leadership as constantly evolving and as a continuous improvement process
- learning how to best listen and calibrate the needs of the team and the business
- maintaining the emotional health of the team and how to be vulnerable and open to feedback in that context
- building strong working and productive relationships with investors and board members
Once again, congrats to everyone involved in yesterday’s Demo Day.
“[Leaders] use cloud-based communication tools to connect, coordinate, and collaborate with customers, suppliers, and employees everywhere […] ‘Technology lets me reach my consumers in real time’ says Melissa Shin, founder and CEO of Dagne Dover; a U.S. custom-handbag company. ‘Consumers want to have a dialogue with each other and the brand. They expect it. Technology lets us be unique, personal.’
“Moreover, cloud-based collaboration technologies allow SME leaders to more easily and effectively manage a dispersed and mobile workforce […] Leaders use technology creatively to operate more efficiently […] invest for impact and grow faster. But they do not necessarily spend more as they grown.”
– “Ahead of the Curve” by David Michael, Neeraj Aggarwal, Derek Kennedy, John Wenstrup, Michael Rubmann, Ruba Borno, Julia Chen, Julio Bezerra at The Boston Consulting Group.
Daymond John, President and CEO of FUBU (For Us By Us), is definitely engaging. Yesterday’s keynote presentation at The Exchange 2014 was dynamic, creative and insightful. His delivery was mostly about grit and the entrepreneurial spirit behind his success. His journey was packed with difficult situations where turning duress into defining moments propelled his business. Among his many interesting remarks, I would like to selectively highlight this one: “the reason we are all here today is because we don’t need to get stuck in the office… we have the technology (…) you have to use it or you will be dead.”
Derek Kennedy, Partner at Boston Consulting Group, discussed research findings showing a “strong correlation between the adoption of advanced information technologies on the one hand and growth in revenue and jobs on the other” in a report commissioned by Microsoft. This study surveyed 4,000+ SME (Small and Medium Size Enterprises) in the U.S., Germany, China, India and Brazil. Note that SMEs account for more than 50% of China’s and Germany’s GPD and job creation, 40%+ in the U.S.’ and Brazil’s cases, and 20%+ in India’s.
Enterprises qualified as “technology leaders” by BCG’s research happen to be heavy users of cloud based services, which the study’s taxonomy portrays as the most salient differentiator: “the extent to which these leaders outpace other SMEs is both remarkable and remarkably consistent across all the countries.”
These companies’ revenue experienced 17% 2010-12 CAGR (Compound Annual Growth Rate) in the U.S. and Germany and 28% in China, India and Brazil. This is not just about double digit growth rates on average, but also about increasing revenues 15 percentage points above the other companies and creating about twice as many jobs in the process.
Back in February I was in Barcelona’s Mobile World Congress with Dan Johnson. We discussed and conducted live demonstrations on our innovative Cloud Communications Platform for service providers. Some questions had to do with the underlying economics, opportunity costs, trade-offs, behaviors and cultures.
Cloud economics happens to be about business model innovation, entrepreneurship and lean operations. BCG’s research helps make the point about crossing the chasm as leaders are clearly outperforming with cloud already. But some remain concerned about any operational efficiencies being offset by hidden costs, lower performance, loss of control, security or, simply, missing key features.
Barcelona’s discussions addressed these anxieties because service levels matter. SLA (Service Level Agreements) are of the essence and make all the difference. These are contracts between enterprises and service providers, which specify what’s available and what performance level applies for each package. Enterprises can take advantage of the following:
- User friendly self-service coupled modular a la carte packages, pay as you grow plans and customer care.
- Custom data visualization for reporting, analytics and account data such as billing.
- VPNs (Virtual Private Networks) with multi layered security and management policies to access cloud services, instead of just having employees use any browser over the public Internet.
- Secure and high performance in-network clouds, also known as carrier clouds.
- VPCs (Virtual Private Clouds) providing enterprise grade security while isolating a company’s resources, so that infrastructure is not shared with other cloud customers.
- Disaster recovery and business continuity with backups and built-in geographic redundancy.
Regarding cloud communications, IMS (IP Multimedia Subsystem) supporte Real Time Communications (voice, video, data) and is engineered to meet “5 nines” reliability, this means high availability with just 5.26 minutes of downtime in an entire year. This is 25.9 seconds a month to make it more tangible. Our team has successfully delivered vIMS (virtual IMS) deployment for a leading service provider’s “production environment / live network” for the past two years with “zero” downtime. IMS is integral to new mobile services such as VoLTE (Voice over LTE) which entails simultaneous voice and data services (integrated multimedia communications) for mobile users.
Technology is a game changer, but cannot solely account for what’s going on. This new paradigm shift also involves a different mindset. Companies embracing what cloud has to offer are also setting the stage for new business models and organizational behaviors. This is an expanding virtuous spiral (rather than just a flat virtuous circle) where behaviors, business models and technologies interact and fuel one another’s growth and innovation.
For simplicity sake, I started this outline thinking that just framing 3-5 leading behaviors would do the job to being with. But, interestingly enough, late last night I ended up listing 10 concepts as part of this first version of my model, which I will further develop in subsequent writings.
Vision – outlines far-reaching and game-changing insights; defines new value shaping future opportunities; clarity gives the project a purpose and a given sense of direction.
Motivation – envisions rewards and provides the inner drive coupled with the force to get the project off the ground.
Habit – consistent practice; endurance gives our habits staying power and momentum without involving further thoughts and decisions.
Discipline – it takes willpower to make progress in the face of setbacks, occasional negative self-talk and emotional rollercoasters.
Passion – focuses on compelling convictions framing positive outlooks; a believe system injecting enthusiasm and the kind of intensity that is needed in defining moments.
Creativeness – leverages analytical skills that connect dots unveiling new unconventional solutions; some entail simplicity while other yield elegant sophistication.
Resourcefulness – helps assemble what’s needed to get the job done; specially in crunch time, under pressure and when operating under hardship.
Collaboration – all individuals should feel and be empowered to make a difference, while understanding that it often takes teamwork and partnerships to make things happen.
Agility – this is about staying nimble all the way while setting the pace, striking trade-offs, course correcting, adapting and morphing as needed.
Entrepreneurship – risk taking spirit behind exploring and venturing on new journeys, often going well beyond one’s comfort zone in the mix of uncertainty.
While these 10 terms are set in some logical order, the fact is that innovating is a dynamic endeavor, one that can be highly volatile. The implication is that different stages and situations require different mixes and dosages of these attributes. What makes us smarter is (1) our ability to figure out what actually applies best in a given context as well as (2) engaging in a continuous improvement mindset.
If interested in the this topic, chances are you might already be thinking of stuff that seems to be missing. There are more key items that matter such as leadership. As an example, this topic can be addressed in terms of resourcefulness and collaboration just to begin with. This type of frameworks are reference models designed to structure the start of a meaningful discussion. That leaves you in charge of what the actual thought process and conversation should be about, and how deep one must think thru and go into any given subject.
“Customers decided what brand is the leader, no matter how much energy and money service providers invest in trying to persuade them (…) customers do no seek out the service provider that know what they want; they seek out the one that knows what they will want.” – “Customer Centered Telecommunications Services Marketing” by Karen G. Strouse.
“Many technologies initially get pulled into the market by enthusiasts, but later fail to get wider adoption. So to create a company that is worth hundreds of millions of dollars, entrepreneurs need to come up with strategies that will help them build a bridge across that gap (…) Crossing the chasm is all about getting a technology widely adopted.” – “Rethinking Crossing the Chasm” by Alex Iskold, ReadWrite.
“When superior technologies emerge, old ones usually don’t simply fade away. To the contrary, their performance often leaps suddenly, thereby extending their lives and slowing the adoption of the new technologies.” – “Beware of Old Technologies’ Last Gasps” by Daniel C. Snow, Harvard Business Review.
“Successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet customers’ unstated or future needs.” – “Innovators’ Dilemma” by Wikipedia. Refers to Clayton Christensen’s research.
“If I had asked people what they wanted, they would have said faster horses.” – Attributed to Henry Ford. “Henry Ford, Innovation, and That Faster Horse Quote” by Patrick Vlaskovits.
“Innovation has nothing to do with how many R&D dollars you have (…) It’s not about money. It’s about the people you have, how you’re led, and how much you get it (…) It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” – “Steve Jobs Best Quotes Ever” by Own Linzmayer at Wired.
Hopefully, the above set of quotes got your attention and, perhaps, you have already started to connect the dots on your own. Here is my viewpoint, which I have structured under four sections.
Knowing that one can make a difference is a “condicio sine qua non” when undertaking a star-up’s journey. Otherwise, why bother? In today’s day and age, teamwork, networks and partnerships are of the essence. But, what I just stated does not negate the fact that an individual’s confidence, skills, independent thinking and decisive actions happen to be instrumental.
So, “knowing” in this context relates to achieving a confidence level at which we can logically articulate a compelling vision, one that is grounded on the art of the possible, and one that can be embraced by others. This is about outlining a guiding vision that we can believe in and commit to with passion.
We also talk about gut feelings and intuition when logic does not apparently reach far enough. This can happen when we might not know how to best verbalize or help others visualize a new construct. In any case, decisions need to be made in a timely fashion even when we are way out of our comfort zone and just happen to face overwhelming complexity, intractable unknowns and seemingly contradicting dilemmas.
Working with others in entrepreneurial environments involves rallying, supporting, leading and changing roles as necessary. It also means taking unequivocal steps to move forward. Couple that with experimenting early enough to shorten the learning curve, capturing teachable moments, while navigating changing environments and, possibly, tectonic-like shifts.
Addressing the human factor at works benefits from contextual and situational awareness. It raises one’s emotional intelligence, as well as mental toughness to overcome drawbacks. One’s ability to identify logical fallacies (mind traps and errors in reasoning, especially so in business cases) and applying cognitive restructuring (turning around negative thinking) to tackle dysfunctional views and “innovation antibodies” will be unavoidable.
An innovator’s timing and the actual windows of opportunity happen to be critical success factors. Being too early or late to market are business issues of concern. Innovating is about sensing the future and getting to a given market before others do. Innovating is about being there ahead of the pack and leveraging any first mover advantages that might exist.
While production cycles happen to be accelerating in today’s business ecosystem, generally speaking, we are talking about months, if not years, of research, development and sales efforts in advance to launching a high tech application, platform, product or service. Basically, work that starts today under a given scenario might finally get to market at a time when industry conditions have changed, hence, early assumptions would no longer apply. So, innovating does take visionary spirit, foresight and agility for a new business to thrive. Some entrepreneurs share that what eventually made them successful was not necessarily what they started with.
Once there, there is no time to be complacent and overconfident. You have to “stay hungry and stay foolish” as Steve Jobs best put it. In addition to fast followers entering the market, there can be other competitive challenges and, in any case, customers will be presented with a wider range of options in no time.
As pointed out in Clayton Christensen’s research, incumbents might not be able to react fast enough given their commitment to serving well established and sizeable markets, leaving a door open for nimbler enterprises to capture market segments under the radar. In some cases, the start-up becomes an acquisition target and is bought out by the existing power player, which can actually turn to be one of the founders’ exit strategies. In some other cases, conventional technologies can still take advantage of their embedded base and economies of scale when incremental innovation and partnerships help them delay the impact and even fence off next generation systems.
There also is a need for understanding the value proposition behind alternative technologies and subsequent substitute effects, as well tangential opportunities. Start ups cannot afford be left blindsided and get the ball knocked out of their hands by competitors who happen to come from adjacent sectors and are expanding into the company’s core market. By the way, coopetition (cooperative competition) and ecosystems , are relevant subjects which I am addressing in another series of articles.
When satisfied early adopters have passionately adopted the novelty, they become the innovation’s best evangelists and help spread the word. Positive testimonials and references will assist with marketing the innovation even further.
Early adopters can be more open minded and far more understanding than other user groups when facing glitches or any other kinds of shortcomings due to the technology’s roadmap and maturity level. Some might have even personalized the product, performed hacks, customized fixes and add crafty adaptions themselves, which other users might not be interested in undertaking on their own, or not to that extent.
If the company’s sustainability calls for wider market adoption and growth, in addition to serving current customers, crossing the chasm is about figuring out what the next wave of users will require, which might (or might not) match what’s available or planned use cases. The same applies to broadening the company’s reach to other market segments.
Early in my career, a vice president of strategy who I enjoyed working for used to remind me that enterprise planning involves doing what it takes to win the business today while jumpstarting the work that will get us to remain relevant tomorrow.
”It’s the ultimate paradox for leaders: you can’t predict the future but you must make sense of it in order to thrive“ – Get There Early” by Bob Johansen.
“Do what you can, with what you have, where you are” – Attributed to Theodore Roosevelt.
“It is today that we must create the world of the future” – Attributed to Eleanor Roosevelt.