Startup CEO – learning is a key to success
I just completed reading Startup CEO by Matt Blumberg, CEO for the successful startup Return Path.
Overall, this was an excellent book for a first-time CEO. For someone with more experience, there will be many sections of the book that is unnecessary. But beyond the more tactical advice, there is an excellent broader perspective shared by Matt.
One of those perspectives is the importance of continuous learning. An example of this perspective is demonstrated early in the book when covering the topic of business plans.
Here is how a major enterprise might tell the story of their upcoming product release: “Our customers, who number x, have y problem, and they will pay z dollars for our solution. This is our plan for rolling that solution out and these are our cost and revenue projections for the next 18 months.” Here, by contrast, is how a startup should tell its story: “We believe that x potential customers face y problem. Our proposed solution to y problem is solution z at a cost of q dollars—but we’re also going to test the effectiveness of solutions a, b, c. Here is our plan for testing that hypothesis.”
Notice he said “should” – we see plenty of startups that never do anything like this. Not only do they move forward with the belief that assumptions are facts, but they don’t have a plan for testing.
Matt integrates a little summary of what “lean startups” are all about:
“Lean startups” focus on finding product-to-market fit through a process of rapid product development and quick iterations based on customer feedback.
Part of a learning culture is knowing how to gain and leverage a deep understanding of current reality. This means more than management by whim. Matt demonstrates an understanding of this premise with a couple of pithy sayings:
“The plural of ‘anecdote’ is not ‘data.’” Anonymous: “If we’re going to base our decision on facts, let’s hash them out. If we’re going to base our decision on opinion, let’s use mine.” If everyone on a team not only understands what is and what is not a fact and all team members are naturally curious to understand and root out all the relevant facts of an issue, that’s when the magic happens.
Matt also demonstrates an extraordinary tolerance for failure, something most entrepreneurs don’t even tolerate in themselves let alone their team. But failure is essential for learning, and, as Matt points out, innovation:
If they don’t innovate—then you will fail for sure. I start every management training session by saying that in the past 13 years I’ve made more mistakes than everyone else in the company combined. Everyone has permission to try breaking my record.
I will likely come back and share some more from this book at some point. But as I work with first-time CEOs in the startup world, I will certainly recommend this for their reading list. And if you want to learn more from Matt, you can check out his twitter feed and his blog.