The Art of the Pivot

The hardest part of entrepreneurship is to know when it’s time to change direction, to pivot, and when it’s time to stay the course.

Foremost, you must be able to distinguish between internal operating problems, and external problems of the product in the marketplace.

The first requires improving competence and processes of the team, the second requires a product pivot.

Signs That You Need to Pivot

Product management in competitive marketplace, like the Art of War, involves tactics, strategy and vision.

When a product has problems competing, the first signs are in everyday tactical work.

From tactics to vision, here are signs to look for in the product management processes.

Scrum & Agile Development

When a product falters in the marketplace, Key Performance Indicators (KPIs) and other analytical measures will flatten or start dropping

The KPIs can drop in spite of product improvements. Completion of projects in the product’s agile backlogs may not bring the expected improvements.

Scrum and Agile are the most effective in prioritizing and completing projects in collaboration with all the product’s stakeholders. The agile processes are, however, poor in diagnosing more strategic and vision problems

UX Redesign

Research and testing with Users is the first step in fixing issues with an under-performing product.

UX Design Stack

Collaborative design with mixed skill teams, which include User feedback, is the backbone of UX design.

UX addresses usability, product identity & narrative, branding, aesthetics, gamification improvements. Improvements in the entire design stack, shown in the graph, are tested with users to validate the work.

The UX design team must, however, recognize when a product’s problem are beyond the scope of just improving the User’s Experience.

A wider view, which includes the marketplace, is needed to solve the product’s problems.

Lean Startup

The business canvas is the best way to map out the immediate strategic issues of a product

Lean Business Canvas

The lean startup and customer development, are excellent methods to collect information for the Business Canvas.

The processes build lightweight prototypes/modifications and measure User’s reactions to when using them. Lean startup is able to prioritize the weakest areas and riskiest assumptions in the business canvas, and establish the cause of a product’s weakness,

When a product’s vision still has full potency, these build-measure-learn iterations are sufficient for small change pivots, like price, narrative and re-targeting customer segments.

Based on the business canvas, a lean startup team can establish, also, when a product’s problems are beyond their responsibility.

Design Thinking

Design Thinking

When a product’s problem are beyond quick build-measure-learn iterations. Questions of vision and purpose may come into play. The framework for a possible solutions expands beyond a business canvas.

A more extensive user research project, a full ethnography, may be needed to understand the User’s full daily environment. An ethnography enables a wider exploration of the problem domain.

Design Thinking provides processes and people culture to explore a wider area of ideas. The product’s situation can be mapped, studied through ideation, prototyping, user testing and other creative methods.

Design thinking always starts by framing the problem, defining a goal, including time-frames and constraints. The design thinking team can, also, identify when and how a product’s problems are beyond the scope of their fixing.


In spite of well established methodologies, products fail all the time.

The best product management teams in the world cannot fix a depreciated product vision. Usually, the breadth of pivot required exceeds their framework of competencies.

Entrepreneurs, however, continually create products that disrupt markets, even without the help of formal methodologies.

Hence, once the product’s vision has lost potency, the product’s founders must create a product vision anew. The owners must embark on an entrepreneurial big pivot.

The new product vision must show how to make the product original & valuable again, how to achieve a unique differential in the marketplace.

Clearly, entrepreneurs operate on a wider vision of the market place. The  widest understanding of the context for a product.

The broadest context canvas is “USER”, “TECHNOLOGY”, and “MARKET”, as shown. The most common forms of product failure, for example, can described as follows:

  • USERS: no differential utility
  • TECHNOLOGY: will take several decades to mature
  • MARKET: squeezed out of the value chain by bigger players

 The Art of Entrepreneurship

A big pivot, an entrepreneurial project, has the widest framework and freedom from constraints allowable. The bigger the problem perceived by the product team, the wider the allowances made to the big pivot team.

The art of the pivot is combining the freedom and the constraints. A
judicious blend of bottom-up experimentation and top-down guidance.

Freedom Constraints
Bottom-Up Top-down
Original Valuable
Exploratory Procedural
Ideation Synthesis
Problem Focused Tools Focused
Problem Pulls Method Pushes
Discover Exploite
Rebel Collaborate
Interesting Useful
Disobedient Disciplined
Disregard Orthodoxy
Random Incremental
Unpredicatable Methodical
Irreverant Doctrinal
Open Mind Dogmatic
Un-grounded Reasoned
Beginner Expert
Experiment Look It Up
Improvise Analyse
Self Learning Educated
Wonder Measure
Move On Acumulate
Challenge Comply
Defiance Conforming

The rules of engagement of the pivot team is freedom w
ithin the agreed framework.

A part of entrepreneuship is an art which cannot be taught, Steve Blank, Stanford University

The pivot team is best composed by those most exposed to changing externalities (technology, shifting user base, strategic competitors).

Also choose the specific domain experts, those with the know-how which creates the most differential for the company.

Usually, the founders are in this group.

Framing and Constraints

Frame your pivot as solving a worthy problem for the User. A worthy problem is naturally original, and valuable to users.

A big pivot must be risky and uncertain. It is a law of nature with worthy problems.

The key here is the problem domain’s know-how.  The most expensive asset. Know-how about the Users, the Technology and the Market in the problem domain is essential to build and explore.

Problem Domain

Even a random bottom-up exploration needs the know-how to (1) build and solve small problems, (2) avoid re-inventing the wheel, and (3) perceiving an out-of-the-ordinary outcome.

You must frame your problem domain in accordance the resources, the know-how and time your have to explore it. Otherwise, you will find yourself trying to swallow an ocean.

Choose a problem domain you have a passion and know-how for. Big pivots are long term endeavours of indeterminate length. Think of it as a at least a 3 year commitment. It is likely you will achieve success on the 2nd or 3rd bounce of the ball.

Grass is greener projects maybe attractive initially but the effort and time required to achieve a critical mass of problem specific know-how will be considerable.

The narrower the focus of the project, the more specific the User’s problem, the more feasible the exploration.

Start Learning

Unbiased exploration within the problem’s framework is most critical here. Unconscious assumptions, cognitive biases, existing expectations guarantee failure.

An empirical approach, where you make, build and user-test is best in suspending prejudices, and perceiving truly. Thinking with your hands is the good approach to finding original problems.

Use bottom-up, individual sample of problems within the framework, with a strong disregard of established expectations. Use the small problems as an opportunity to learn the problem domain, and actively look for unexpected outcomes, failures and opportunities.

You must pull knowledge in, learn what you need, to solve the problem at hand. It is problem-driven, self directed learning.

The ability to pull knowledge as needed is what distinguishes
product professionals, from classic specialist professionals. Department, function centered staff, like programmers, designers or salesmen, study the tools, methods and processes of their profession. Product focused professionals are discipline agnostic, and learn only to better the product outcomes.

Self directed learning is not easy. Every discipline, department and community you approach will consider you a beginner. It requires a beginner’s-mind, humility and self confidence.

Diversity through team work can enable discipline agnostic work. Know-how is best shared through prototypes and visual thinking.

Rules of engagement are important when working collaboratively with people from diverse backgrounds. Blending the arbitrary, random, discovery work with the discipline to build and test requires an understanding and an agreement of the overall process.

Map Your Progress

Visual thinking is a well known technique for avoiding biases and perceiving truly. A project wall with post-its, pictures, and graphs is a great way to make connections between different experiments, studies and map and re-map along interesting trends.

The know-how that will make a difference will not be generic. It has to be problem specific, and combined from diverse areas:

Looking & Observing


  • Do you have enough know-how?
  • Are there enough post-its on the project wall?
  • Are you sampling the problem area well?
  • Are you working outside the problem domain?
  • Should you redefine the problem domain?
  • Are you covering enough perspectives, enough disciplines, enough user segments?
  • Is there a different discipline or specialist that could contribute to the problem?
  • Are prototypes failing because you don’t know?


  • Is there originality, randomness, exploration?
  • Is the exploration too methodical?
  • Is there too much groupthing?
  • Are you breaking any rules?
  • Have you built anything yet?
  • Are the prototypes heading to new areas?
  • How many of the prototypes failed?
  • Are the prototypes bringing anything new?
  • Are you having fun with the prototypes?


  • How are the ideas, post-it notes, clustering?
  • Any ideas outside classical, orthodox disciplines and specialisms?
  • Any cluster of ideas cross-pollinating?
  • Can you draw a any spectrums, low to high, on the project wall?
  • Does clustering ideas along the value chain show patterns?
  • Are you finding a User Segment focus?
  • Is there a disruptive Technology?
  • Is there anything un-expected?
  • What is irritating?
  • Do any of the prototypes have traction?
  • Is anything not making sense and why?


  • Is the framework too wide?
  • Is the framework too narrow?
  • Does the problem domain need to be moved along either the User, Market, Technology axis
  • Are there too many competitors?
  • Is this problem domain too old, too mature?
  • Do any of the prototypes have interest?

 A Game of Know How

Reaching Critical Mass of Focused Know-How

Know-how is bed-rock. Intuition is possible only with enough domain know-how.

Accumulate enough focused know-how and perception of possibilities multiplies a thousand fold. Past a critical mass of focused know how, and creative output explodes.

Accumulating focused know-how is frustrating though. How much is enough? Is this enough? When does it finish? The narrower your focus, the quicker you will go up the learning curve. So focus down.

The most reliable form of innovation is extending ideas and patterns from an unrelated domain. This form of innovation requires high know-how levels, you must master several domains before you can visualize parallels.

Have You Reached Problem Domain Mastery?

How do you measure problem domain competence?

Have you failed, or do you continue the learning process?

The difference between beginner and master is awareness of context, the true size of the problem framework. The expert knows how much he does-not-know.


Mastery is when domain of expertise becomes second nature. You are not conscious of the rules, methods or tools. You just perceive, build, talk, play without a second thought or effort. You are native to the problem domain.

Can you do things in the problem domain others cannot?

The Mythical Man-Month

The truth is adding more people to a team does not speed up or help know-how intensive tasks – The Mythical Man-Month.

Though diversity and open emergence of ideas are essential, problem domain know-how is still required for team members.

A pivot team must be composed of domain experts, each in their own field. T-shaped experts are recommended.

And a Lot of Luck

Entrepreneurship is, also, about being in the right place at the right time.

The best venture investment teams in the world score 1 in 10 as sustainable companies, and 1 in 1000 companies reach their target investment returns.

Entrepreneurship is not like a job. Often it is an all or nothing bet.

The Efficient Market Theory

The efficient market theory (Nobel Prize, Merton & Scholes, 1997) states that when more than 10,000 people are examining a market with equality of information, you can no longer outperform the market. Market is risk-reward efficient.

Sometimes, the market is just too crowded, and the problem domain know-how has become a commodity.

Your domain know-how has become generic. A big pivot is not possible within the old framework. It is time for the entrepreneur to move on.

 No Shortcuts – Beware Strategy Schools

Beware “descriptive” strategy methods from Business Schools.

“Descriptive” methods are good for describing what HAS happened. But useless at deciding what to do. Great post-event, bad pre-event.

Michael Porter’s “Competitive Advantage”, Kim & Mauborgne’s “Blue Ocean Strategy” are two such popular descriptive methods. Excellent for explaining success or failure  AFTER the event.

“what got you here, will not get you there”

Descriptive methods fail because they rely on historical knowledge, past history. Extrapolating the past does not work in efficient markets.

“Prescriptive methods” provide a process to learn new knowledge. To find a new differential in the market. Prescriptive methods are exploratory.

“Prescriptive methods”, on the other hand, give you a process, a framework, for what-to-do-next. Processes like Lean startup, Design Thinking, OODA Tactical Loops, visual thinking are “prescriptive”

Focus, Focus, Focus

As you quest forward, your framework will narrow. Your quest will converge within the framework.

Searching for a worthy problem is like panning and sluicing gold paydirt, looking for nuggets. Focus is the narrowing down to the promising areas.

Focus, the ability to disregard areas, to say no to problems is a joy when it arrives. It arrives in moments of intuition, in fits and starts.

Focus, unfortunately, is fickle and often comes wrapped in doubt. By narrowing down, are you stepping past a worthy problem?

You can never have enough focus. The more limited your means, your time, your assets, the more you need a hard focus



    1. Anti-disciplinary, Joi Ito
    2. Simplicity on the Other Side of Complexity, Jon Kolko
    3. Understanding a Problem Better than Anybody Else, Chris Dixon
    4. Generating Startup Ideas, Marc Barros
    5. The Role of Domain Experience, Marty Cagan
    6. Finding Your Edge, Alice Bentinck, Entrepreneur First
    7. Complexity and the 10,000 Hour Rule, Malcol Gladwell
    8. The Problem with Design Thinking, Tim Malbon
    9. There is no such thing as the perfect idea, Alice Bentinck
    10. The Secrets Behind Many Successful Startups, Vinicius Vacanti, Yipit
    11. Beyond Agile and Lean, Marty Cagan, SVPG
    12. How to be an Expert in Changing World, Paul Graham
    13. Etsy CTO: We need Software Engineers, Not Developers, John Allspaw


  1. What Does Design Thinking Feel Like, Tim Brown, IDEO
  2. The Zag, Marty Neumeier
  3. Look, I Made a Think: Confidence in Making, Jon Kolko
  4. Illustrations by Hugh McLeod, Fair Use
  5. How to Get Startup Ideas, Paul Graham
  6. Why to Not Not Start a Startup, Paul Graham
  7. Before the Startup, Paul Graham
  8. Creative Confidence, Julie Zhuo, Facebook
  9. Creativity Inc, Ed Catmull, Pixar
  10. Startup Differentiation: You are the DNA of your Company, Peter Nixey
  11. Advice for Thriving in a World of Change, Joi Ito
  12. How Reframing A Problem Unlocks Innovation, Tina Seelig
  13. You’re working on the wrong idea, Alice Bentinck
  14. Leaders Can Turn Creativity into a Competitive AdvantageTim Brown, IDEO
  15. Roofshot Manifesto Luz Andre Barroso
  16. Surely You’re Joking Mr Feynman


  1. A Visual Vocabulary to Product Building, Dan Schmidt
  2. Using Situational Maps for Business Strategy: On Being Lost, Simon Wardley
  3. Framing your Search: Vision vs Hallucination, Steve Blank
  4. Founder’s Vision – Entrepreneuship is an Art, Steve Blank
  5. Product Evangelism: Sharing the Vision, Marty Cagan
  6. Missionaries vs Mercenaris: The Need for a Compelling Product Vision in Driving Product Teams, Marty Cagan
  7. Product Managers Must Understand Product Vision: Big vs Small Product Owners, Roman Pichler
  8. How do You Find the Secret for your Product, Peter Thiel
  9. Pivot, don’t jump to a new vision, Eric Ries, Lean Startup
  10. Get Clarity on the World Around You and Your Business with the context map, Erik Van Der Pluum, Design A Better Business
  11. Vision versus Hallucination – Founders and Pivots, Steve Blank
  12. When vision blinds traction, Stefano Zorzi
  13. How to Understand Your Market, Justin Lokitz, Design a Better Business
  14. You product is already obsoleteDes Traynor, Intercom


  1. Developing Strong Product Owners, Marty Cagan
  2. Product Strategy in an Agile World, Marty Cagan
  3. Product Porfolio Management: Planning the Life of Your Products, Marty Cagan
  4. The Kano Model: Depreciation of UX Design Differentiators Over Time , Jared Spool
  5. Emergent Strategy: The Big Lie of Strategic Planning, Roger Martin, Harvard Business Review
  6. Change by Design, IDEO, Tim Brown
  7. Driving Corporate Innovation: Design Thinking vs. Customer Development, Steve Blank
  8. Well Designed: How to Use Empathy to Create Products People Love, Jon Kolko
  9. Lean Doesn’t Always Create the Best Products, Jon Kolko
  10. Be a Great Product Leader, Adam Nash
  11. Driving Corporate Innovation: Design Thinking vs. Customer Development, Steve Blank
  12. Agile vs Lean vs Design Thinking, Jeff Gothelf
  13. Where Lean Ends, Peter Nixey
  14. Beyond Lean and AgileMarty Cagan, SVPG
  15. The Tao of Boyd: How to Master the OODA Loop, Brett & Kate McKay
  16. Ethnography: When and how to useAndy Walker, Spotless
  17. Why anti-Lean Startups are BackDennis Mortensen,
  18. Why Innovating Is About Doing, Not Talking Diego Rodriguez, IDEO


  1. Product Passion: What are you trying to achieve?, Marty Cagan
  2. Startup Playbook, Sam Altman, Y Combinator
  3. Big Ideas: Google’s Larry Page and the Gospel of 10x
  4. Why Founders Fail: The Product CEO Paradox, Ben Horowitz
  5. Why Startups are Agile and Opportunistic – Pivoting the Business Model, Steve Blank
  6. How to pivot properly — linear ideation, Alice Bentinck, Entrepreneur First
  7. Black Swan Farming, Paul Graham
  8. Why is it Hard to Bring Big Company Execs into Little Companies?, Ben Horowitz, A16Z

Product Vision and Creative Leadership

“So, how did you get that idea?” the aspiring entrepreneur asks the billionaire

Where does product vision come from?

A product vision describes a problem, owned by enough people, that it is worth solving.

Finding a product vision is, then, about finding a worthy problem.

My Quest for a Worthy Problem

As a PhD student at Oxford University, I was prone to solving problems, any problem. Ticking boxes felt like an achievement, like progress. Eventually, I learnt that to contribute to science I would need to solve one problem. One worthy problem.

I asked my PhD supervisor, Mike, to give me my one worthy problem. He told me PhD’s were all about the search for the one worthy problem. This search was my quest, my mission, my purpose.

Mike gave me a broad title to frame my search, a broad vision to aspire to, a friendly research lab, and sent me on my way.

For three years I apprenticed and learnt my problem domain, robotics. With time I kept narrowing the focus of my problem to one that still mattered and I could solve.

Only at the very end of my thesis, as I was about to end with no results, did I finally perceive a problem that made a difference, and I could solve

An image analysis method for sure detection and diagnosis of Cancer in mammographs

Mike Brady, Oxford University

How does DNA replicate and how is hereditary information coded on it?

Crick and Watson, Cambridge University, Nobel Prize 1963

Pick Your Problem Domain

A quest for a worthy problem is domain specific. You have to commit to a problem space that is non-generic, a narrow specialization.

Many turn away from specializing in such a narrow domain. Preferring a wider, more generic domain, where clients are more numerous and possibilities more diverse.

Without a quest into a problem space, however, there is no chance of finding a worthy problem. You will not achieve a product vision of any value.

The problem domain is about 3 things:

  1. Users & clients
  2. Markets: the value chain, the competition
  3. Trends & Technology

Tips for choosing your problem space:

  • Who are you, and what makes you different?
  • Where can you make a difference?
  • What trends and breakthroughs are making new problem spaces

First Problem Title – the Problem Framework

Choose a broad problem title to frame your opportunity.

Best to choose a broad, ambitious goal first. A statement of intent

A times ten improvement of an existing problem is a good standard. 10x thinking is favored at Google for framing problems

A narrow, timid, un-ambitious problem framework is unlikely to contain a worthy problem. It will constrain creativity, and will not inspire. Be brave, go ahead, “cure cancer”

Purpose & Belief

At the start, there is no testing, no validation, no process, no management, no derisking, no reassurance.

You have to commit to this fully. Purpose and belief is your only recourse.

If you are not nervous, not un-comfortable, you are doing something wrong. Go back and multiply by 10 the ambition of your problem framework

The searching for a potent product vision is profoundly uncomfortable. Many turn away here.

I am a recovering executive. I like order and structure, certainty and process. Being aspirational and brave in my problem statements is still difficult for me. Hence, I fail a lot.

Jewelry that represents the world of good taste, timeless design, purest materials, and finest craftsmanship


Sportswear that brings inspiration and innovation to every athlete in the world


Enabling People to Live on Other Planets

Elon Musk, SpaceX

To enable sustainable transport through making every-day electric cars as soon as possible

Elon Musk, Tesla Motors

Tools to organize the world’s information and make it universally accessible and useful.


Computer-animated feature films with memorable characters and heartwarming stories that appeal to audiences of all ages


To give people the power to share and make the world more open and connected


To give everyone the power to create and share ideas and information instantly, without barriers


Well designed home furnishings at prices so low that as many people as possible will be able to afford them


To make a contribution to the world by making tools for the mind that advance humankind.

Steve Jobs, Apple

The Quest Process

The first problem title, the initial product vision, will be broad, aspirational and full of potential. It is the framework for the search for a valuable problem.

Finding a potent product vision is about progressively making choices. Progressively narrowing down, focusing till you find the one worthy problem.

focus, focus, focus

As you quest forward, your framework will narrow. Your quest will converge within the framework.

Questing for a worthy problem is like panning and sluicing gold paydirt, looking for nuggets. Focus is the narrowing down to the promising areas.

Focus, the ability to disregard areas, to so no to problems is a joy when it arrives.
It arrives in moments of intuition, in fits and starts.

Focus, unfortunately, is fickle and often comes wrapped in doubt. By narrowing down, are you stepping past a worthy problem?

You can never have enough focus. The more limited your means, your time, your assets, the more you need a hard focus

No amount of work, magnitude, can make up for a lack of direction. Without focus and direction, you will not vector forward. Simple Math.

Research Mantra

If you are a large conglomerate, you are HP Innovation Labs, then you can widen your focus, and likely find a handful of worthy problems. If not, you must focus.


Best creative work involves talking to people, and making stuff. There are three types of learning;

  • enactive – action based
  • iconic – image based
  • symbolic – language based

The best creative work occurs by combining working with your hands, drawing and talking to people.

At this stage, dreaming is the best form of prototyping


Imagination is a difficult exercise. Uninformed imagination leads to re-inventing the wheel, chaotic digging exploratory holes all over the framework field, and gimmicks that have no value.

Yet imagination is key to the best problem category “new to the world”. Where the problem is not derivative. A true sideways jump, going outside the box. Seeing things no else sees.

Critical Mass of Focused Know-How

Know-how is bed-rock though. Accumulate enough focused know-how and perception of possibilities multiplies a thousand fold. Past a critical mass of focused know how, and creative output explodes.

Accumulating focused know-how is frustrating though. How much is enough? Is this enough? When does it finish? The narrower your focus, the quicker you will go up the learning curve. So focus down.

The most reliable form of innovation is extending ideas and patterns from an unrelated domain. This form of innovation requires high know-how levels, you must master several domains before you can visualize parallels.


So first, critical mass of domain specific know-how, then look to migrate patterns from un-related domains onto your problem domain. Finally, attempt whimsy and imagination; can you reframe the problem? Forget all assumptions about your problem, what comes to mind?

The Perpetual Pivot: Method in the Chaos

During a problem quest, the entrepreneur will appear to be cascading through perpetual pivots. He will look at succession of user segments, points of the value chain, trends and technologies.

The quest is chaotic and uncomfortable. Every area and task will require learning anew. Nothing will be a comfort zone.

Yet there is order and a pattern in the chaos. Focus and direction.

The quest is a constrained, disciplined exercise, with boundaries. The multitude of pivots, in user segments, differentiation and technology are framed tightly within boundaries.

An effective entrepreneur has discipline. He stays within his problem framework; sticks to his chosen problem domain, his problem title.

Deadlines are Your Friend

Creativity needs constraints, and a deadline is the best of constraints. A pressing deadline gives you resolve and energy to decide, to make choices.

At this stage, you will have little data, no extensive metrics to gather, no KPIs, no excel sheets. Most choices will be based on incomplete data, on intuition.

Pressing deadlines give you the energy to keep making choices, keep deciding on the way forward. Keep Moving!

Actionable Product Vision

The quest for the one worthy problem finishes when you hand the product brief to a product manager.

The product manager will require

  • customer segment for which the product is intended
  • customer problem which the product will address
  • utility prototype demonstrating the utility to serve the customer’s needs
  • technology prototype demonstrating the technology to be used

Introduce the product manager to your fieldwork, the pool of test candidates on which you have been testing your product vision

As a guarantee for your work, explain the user value tests you have conducted. Some measure for User satisfaction, NPS (net promoter score) that proves a defensible differentiation in the market.

Once the product vision reaches this point, it has to have sufficient focus and potency that it requires no more pivots.

Senior product managers will run opportunity assessment evaluations of their own, to establish that the product vision is viable and has potency. They will then proceed with a product discovery process which will detail the user segment and prototypes, and mature them to targeted production quality products.

Senior product managers, with a good UX team, are capable of limited scope product pivots, and minor market pivots. But the product founder should not count on these, and should consider the product vision search complete.

Product Vision Lifecycle

The internet, with its almost perfect information flow, is making a product’s differentiation depreciate quickly. Your competitors can copy you quick.

In fashion, it takes only one season for a leading style to go out of fashion, or be copied by other fashion houses.

Product differentiation lessens through both competition and commoditization of the market

So, experienced product managers will demand an appreciable differentiation in the product vision.

The Best Product Team in the World

Differential utility buys the user goodwill essential for a product to engage well with a user. If the utility you offer is available, equally, one click away, you have become a commodity. The user will extend a very limited amount of goodwill during the interaction.

UX design teams sometimes don’t understand this.

Usability, lean startup iterations, product identity & narrative, branding, aesthetics, interaction design, and gamification are for naught if the product vision does not provide differentiation

The best UX design work in the world does not make up for poor differentiation.

Even with lean startup iterations around the product vision, the market’s maxima positioning is taken by a competitor. The market horizon for the product has become fallow.

It is time to pivot the vision, pivot the product, pivot the business.

Signs of End-of-Life

As differentiation depreciates, the product team will start to struggle with important metrics, KPIs. Starting with virality, then loyalty, then basic engagement.

The efficiency with which a product team achieves its outcomes degrades progressively, as product vision depreciates.

The life-cycle of a product ends either as a monopoly, or as a commodity, like Aspirin. You may achieve basic User engagement through brilliant product, sales and marketing team. But profit margins will be zero.

Either conjure up a new potent product vision, or change the business to provide services to other product companies.

Creative Leadership

Creativity is, increasingly, the only differentiation in the market

So expect to monitor, and prepare for end-of-life of your product vision.

When, ultimately, the product’s end-of-life arrives, it will arrive suddenly

Have the next product vision ready.


Product Vision bookshelf

Understanding a Problem Better than Anybody Else, Chris Dixon

Generating Startup Ideas, Marc Barros

Founder’s Vision – Entrepreneuship is an Art, Steve Blank

Framing your Search: Vision vs Hallucination, Steve Blank

Developing Strong Product Owners, Marty Cagan

The Role of Domain Experience, Marty Cagan

Product Strategy in an Agile World, Marty Cagan

Product Passion: What are you trying to achieve?, Marty Cagan

Product Evangelism: Sharing the Vision, Marty Cagan

Product Porfolio Management: Planning the Life of Your Products, Marty Cagan

Missionaries vs Mercenaris: The Need for a Compelling Product Vision in Driving Product Teams, Marty Cagan

Product Managers Must Understand Product Vision: Big vs Small Product Owners, Roman Pichler

The Kano Model: Depreciation of UX Design Differentiators Over Time , Jared Spool

Emergent Strategy: The Big Lie of Strategic Planning, Roger Martin, Harvard Business Review

Finding Your Edge, Alice Bentinck, Entrepreneur First

Startup Playbook, Sam Altman, Y Combinator

Big Ideas: Google’s Larry Page and the Gospel of 10x

The Zag, Marty Neumeier

Change by Design, IDEO, Tim Brown

Driving Corporate Innovation: Design Thinking vs. Customer Development, Steve Blank

Look, I Made a Think: Confidence in Making, Jon Kolko

Well Designed: How to Use Empathy to Create Products People Love, Jon Kolko

Lean Doesn’t Always Create the Best Products, Jon Kolko

Illustrations by Hugh McLeod, Fair Use

How to Get Startup Ideas, Paul Graham

Why to Not Not Start a Startup, Paul Graham

Before the Startup, Paul Graham

Creative Confidence, Julie Zhuo, Facebook

Creativity Inc, Ed Catmull, Pixar

Startup Differentiation: You are the DNA of your Company, Peter Nixey

Why Founders Fail: The Product CEO Paradox, Ben Horowitz

Be a Great Product Leader, Adam Nash

How do You Find the Secret for your Product, Peter Thiel

On PhD Students, Sir Mike Brady (my supervisor), Robotics Research Group, Oxford University

Advice for Thriving in a World of Change, Joi Ito

Contrarian Investing: The Story of Mr Womack, the Pig Farmer

“Mr Womack the Pig Farmer” is my top investment philosophy

The man never had a loss on balance in 60 years.

His technique was the ultimate in simplicity. When during a bear market he would read in the papers that the market was down to new lows and the experts were predicting that it was sure to drop another 200 points in the Dow, the farmer would look through a S&P Stock Guide and select around 30 stocks that had fallen in price below $10—solid, profit making, unheard of companies (pecan growers, home furnishings, etc.) and paid dividends. He would come to Houston and buy a $25,000 “package” of them.

And then, one, two, three or four years later, when the stock market was bubbling and the prophets were talking about the Dow hitting 1500, he would come to town and sell his whole package. It was as simple as that.

He equated buying stocks with buying a truckload of pigs. The lower he could buy the pigs, when the pork market was depressed, the more profit he would make when the next seller’s market would come along. He claimed that he would rather buy stocks under such conditions than pigs because pigs did not pay a dividend. You must feed pigs.

He took “a farming” approach to the stock market in general. In rice farming, there is a planting season and a harvesting season, in his stock purchases and sales he strictly observed the seasons.

Mr. Womack never seemed to buy stock at its bottom or sell it at its top. He seemed happy to buy or sell in the bottom or top range of its fluctuations. He had no regard whatsoever for the cliché’—Never send Good Money After Bad—when he was buying. For example, when the bottom fell out of the market of 1970, he added another $25,000 to his previous bargain price positions and made a virtual killing on the whole package.

I suppose that a modern stock market technician (on CNBC) could have found a lot of alphas, betas, contrary opinions and other theories in Mr. Womack’s simple approach to buying and selling stocks. But none I know put the emphasis on “buy price” that he did.

I realize that many things determine if a stock is a wise buy. But I have learned that during a depressed stock market, if you can get a cost position in a stock’s bottom price range it will forgive a multitude of misjudgments later.

During a market rise, you can sell too soon and make a profit, sell at the top and make a very good profit. So, with so many profit probabilities in your favor, the best cost price possible is worth waiting for.

Knowing this is always comforting during a depressed market, when a “chartist” looks at you with alarm after you buy on his latest “sell signal.”

In sum, Mr. Womack didn’t make anything complicated out of the stock market. He taught me that you can’t be buying stocks every day, week or month of the year and make a profit, any more than you could plant rice every day, week or month and make a crop. He changed my investing lifestyle and I have made a profit ever since.

From John Train‘s, The Craft of Investing.

The longer your time view, the easier the practice of contrarian investing

The art of waiting for the large sentiment swings. Waiting on the market does not come naturally to investment professionals

Set your own rules, don’t be influenced by market volatility.

Product First

What Comes First? Sales, Branding or the Product

What comes first? I have had this argument regularly for the last 25 years.

With sales, marketing, technical, and services departments. In fact, with every department director I can think of.

As a junior engineer, my sales director gave me my first “commercial awareness” ticking off; “first, you sell it”.

The 21st Century – Your Product is Your Branding

Not long ago, you could create a brand with advertising. Pure Brand Advertising.

Now, you can only create a brand with people, with a community. With a crowd of people that say your stuff is good.

You need buyers on ebay voting you as good. Good reviewers on Amazon. 5 star feedback, social media likes, up ticks, votes

What you think and say no longer matters.

Your brand is what the customers say it is. The crowd uses your product, and they decide

The product creates the experience,

The experience creates the reputation,

The reputation creates the brand

Dave Trott

Your product must do your advertising, your sales and your branding

I know sales and marketing directors who are confused and saddened by this new age

Think of it as an oyster,

You start with a piece of grit, and build a pearl round it,

People buy the pearl, they don’t buy the grit,

But no grit, no pearl

Dave Trott

So, please. Product first.


Death of Salesman, Marty Cagan

– “How to empower the customers who will drive your success”, The Brand Flip, Marty Neumeier

“Is advertising a Con?”, Creative Mischief, Dave Trott

Product Trumps Distribution, Nic Brisbourne

Positioning, Eric & Laura

Red Hat Community Branding, Chris Grams

Where Entrepreneurship is Easy

The US seems to be steaming ahead in its drive to out-startup and innovate the rest of the world. Consider, the qualities an entrepreneur must show, as Mark Suster well describes :

  • Not very status-oriented
  • Doesntfollow rules very well and questions authority
  • Can handle high degrees of ambiguity or uncertainty
  • Can handle rejection, being told “no” often and yet still have the confidence in your idea
  • Very decisive. A bias toward making decisions even when only right 70% of the time moving forward & correcting what doesnt work
  • A high level of confidence in your own ideas and ability to execute
  • Not highly susceptible to stress
  • Have a high risk tolerance
  • Not scared or ashamed of failure
  • Can handle long hours, travel, lack of sleep and the trade-offs of having less time for hobbies & other stuff

Evidently, this level of creative drive is more easily sustained when you are not starving or worried about how to pay the rent. When friends, family, and companies in your neighborhood provide a safety net, for you when you crash or need to bounce back.

Then consider the whitehouse’s Strategy for American Innovation, whose main lines are:

  1. Expand access to capital for high-growth startups ($2 billion)
  2. Expand entrepreneurship education and mentorship programs
  3. Strengthen federally-funded R&D commercialization
  4. Identify and remove unnecessary barriers to high-growth startups
  5. Expand collaborations between large companies and startups

Entrepreneurship is easier in a context that is so supportive. America is bound to have a lot more people prospecting for new businesses if the cost of failure and bouncing back is so reduced.

Cameron’s Silicon Roundabout needs some beefing up to stay competitive.


Speaking of which, just released:
Prime Minister Welcomes Cisco’s $500 Million Investment Goal for UK as Part of Support for East London Tech City

Executives Don’t Make Good Entrepreneurs

A Harvard Business Review article identifies
four deficiencies of corporate executives when working in startup and small business environments
. The four deficiencies are in fact great qualities for Executives in a corporate environment, but become their Achilles’ heel in entrepreneurial work.

High uncertainty, knowledge intensive tasks, and a rapidly changing market sector are a fact of life for startups and entrepreneurs. Training, experience and value system for a competent proffessional administrators give rise to difficulties adapting in startups in the four following ways.

The first tendency is lack of loyalty to comrades. Startups require strong leadership, and great faith from the staff. Startups have great uncertainty, no guaranteed results, little rational assurances. The entrepreneur must offer a great vision, and a sense of a life altering opportunity. The entrepreneur must give of himself and the company (equity). He must be loyal above and beyond, to expect loyalty back. The usual corporate paycheck and pension plan are not enough.

The second tendency is lack of task orientation. Executives are used to large scale service delivery and product improvement operations, where a portfolio of services must be cultivated, maintained and optimized for volume and maximum margins. The resulting inability to learn and see to the detail and finish of individual tasks makes for poor execution and finish of tasks. The cliche is their total reliance on delegating to staff in order to operate.

The third tendency is lack of conviction and single mindedness. Typically and executive will insist on guaranteed results. “But that is not guaranteed” is the cliche phrase. Without a high likelihood of results, the ultra rational executive finds it hard to commit; you need faith here. Startups create businesses where corporations dare not go; the zones of uncertainty.

Fourth and last is the inability to work in isolation. Executives excel through their negotiation, their team leading, their excellent communication and administration. In typical 10 staff startups, these same skills are secondary. The executive is unable to be productive without somebody sitting next to him.

As a former executive, used to directing business units with hundreds of staff, I can vouch that the four deficiencies are valid and representative of the corporate class. The deficiencies are due not just to lack of experience and training, but also prejudices, mis-conceptions and an unflexible value system. “you are too technical” often being the ultimate insult from one executive to the other. It has taken me a lot retraining, and some soul searching, to be a fully useful player in a startup.

For enterprising MBAs who know that it is at the founding of a business that equity is divvied up, I recommend a post by Jeremy Liew at Lightspeed Venture Partners, to give a balanced view of the skills a business founder needs. For corporate executives looking for more fulfilling work with startups, John Smithson’s “The role of the non-executive director in the small businesses” is good.

It takes more than good administration to create a business. I find entrepreneurial and creativity training is still poor at most schools and universities. A tolerance for uncertainty and volatility is hard to teach; rational administration is still the core of most entrepreneurship courses.

As for John Hamm’s HBS article on the limitations of entrepreneurs, it is easier to criticize the flaws of an entrepreneur, than to identify, praise and teach entrepreneurial skills.

Achilles Heel of Web2.0 and A-List Blogs: Attracting the Mainstream

Many web2.0 companies, blog networks, and even A-list bloggers are struggling to generate sales. But, being popular among bloggers is not generating the wished for revenues. Enthusiast bloggers are currently too few, notoriously fickle, and do not buy everything they sample.

The essentials to keep in mind for web2.0 ventures are three, in order of importance

  • Provide value to the Client: a value proposition for the client – makes or saves him money
  • Clients have money and an immediate need
  • Be Unline the rest – better than the alternatives in some way

Early adopters, unfortunately, do not behave like Clients with Money – often on a sampling spree as they delight in trying free samples of many different products

crossing chasm

A mainstream niche, shown in the figure, must be part of a startups vision right from the beginning. A startup’s initial clients will likely be early adopters who help bootstrap the company, and do the viral marketing, but at some stage the startup must cross into a mainstream customer segment, and leave early adopters behind.

Enthusiast blog readers and early adopters are essential for viral marketing, but are ultimately a means to an end, before maintream readers arrive.

Another much debated issue is uniqueness: Differentiation is essential for strong growth. But if demand outweighs supply, differentiation can be secondary. Many a life-style company makes a living, and provides employment for its staff, without significant differentiation.

A good breakdown of 11 Suggestions For Not Being a Dot-Bomb 2.0

Lifestyle Companies – The Scourge of VC Portfolios

In a moment of weakness marketing guru Seth Godin muses that “So, what’s wrong with small business?”. In VC culture, stable no growth companies – or lifestyle companies – are disaster investments little better than bankruptcies.
Barings Bank observed in a recent review of startup investments that 20% of companies developed into substantial profitable businesses, 20% failed and lost all equity, and 60% drifted sideways often regressing to life-style businesses for a small group of owner-managers.
The fact is that an investor, bank or VC fund, does not inject money into a business to improve the founders life-style and status. A VC fund usually has a 5 to 7 year window in which to realize the value of their investment. Investors want growth, preferably in multiples of 10. Life-style companies clutter up a portfolio, and require investors to negotiate a buy-out with managers. Not quite bankruptcy, but not much better.
However, ultra-growth comes at a price always. No pain, no gain. Or in financial notation, no volatility – no return. Startup owners have to suffer through extreme risk and volatility in order to accomplish growth. Life is easier and safer for the small business owner, happy with his place in the status quo.
But is safe not risky ? With increasingly dynamic markets, globalization, a stable life-style company can have some nasty surprises as competitors, with greater economies of scale, descend on its little niche. Everybody has to acquire an appetite for change, either gradual or in big lumps. Small companies are not what they used to be.

Jack Welch: “Anyone Can Squeeze a Company”

The debate between long-term and short-term concerns never stops in a company, specially in growth industries. Google is already having “The Debate”, in its “we are a technology company rant”.

It takes place between the operations and the strategy teams. Between the Chief Operations officer and the Visionary founders. For a successful company, they are the two faces of the same coin. Long term can’t survive without short term. The daily grind can’t succeed without the long term investment. It is a bad sign when the debate stops.

Corporate managers, with the rational black-hat, excel sheet approach rarely push the creative, disruptive agenda. So it is refreshing to get Jack Welch weighing in on the creative class side: he states that “anyone can squeeze a company”.

“Look, anyone can manage for the short term just keep squeezing the lemon. And anyone can manage for the long just keep dreaming. You were made leader because someone believed you could squeeze and dream at the same time. They saw in you a person with enough insight, experience, and rigor to balance the conflicting demands of short- and long-term results. Performing balancing acts every day is leadership

from Jack Welch on leadership, in his new book “Winning”.

Corporate class warriors are no longer solely central to corporations. A healthy company needs creative and disruptive skills, not just an admin and management team. The mix is not easy though; corporate culture has difficulty with uncertainty, risk, irrational decisions, volatility, disruption, and continuous change. Takes strong corporate management to be continuously challenged in this way.

Watch a video Jack speaking at an MIT lecture

The next Google will come from outside the US

A great quote from Danny Rimer, the EU venture capital partner behind the Skype company. But, if not from the US, will the next Google come from Europe ?

Danny is getting a huge amount of mainstream Julie Meyer has been trying to close a fund since she exited from “First Tuesday” 6 years ago. Similarly Jon Snyder and Marting Bloom at Cambridge Accelerator Partners, and Marc Goldberg at Occam Partners.

Danny concludes with

Innovation is not a problem in Europe. But the lack of a unified market to sell that innovation, or even give it away, is a problem – and so is the paucity of investors willing to back it. “The next Google is more likely going to come from outside the US,” says Rimer. “Whether it’s in Europe, I am not sure. A lot of things have to change

European entrepreneurs will have to work extra hard if the next Google is up to them.