Adam Berk’s last startup neighborrow was one of the first online platforms in the collaborative consumption space.
Berk and neighborrow were featured in the WSJ, Today Show, Oprah.com and more – but at the end of the day, the value proposition was not strong enough and the product not focused enough.
Berk was introduced to the Lean Startup Methodology and was quickly enthralled with the methodology he shifted resources to a new startup, ALBUM+, solving a problem he recognized at weddings. This time however, he was going to sell a version of the product before he committed to the first line of code. And he did. ALBUM+ is a simple, revenue generating product that would not exist if not for Lean. I have had the opportunity to sit down with Adam and discuss the latest project in which he is involved: the Lean Startup Machine.
Igor Khananaev: What is Lean Startup Machine’s mission?
Adam Berk: We aim to teach the lean startup methodologies and contribute to the advancement of entrepreneurship. We want to help put the theory and what you read online about the Lean Startup into practice. A lot of people think they have all the answers, myself included, but until you are pushed to do things a certain way, according to a certain scientific framework – your project will not likely amount to anything substantial.
IK: How is the LSM organized?
AB: We are a lean startup ourselves and typically hold 3 days workshops across the globe. We have validated that people really take away something valuable from our workshops with Shawn Ellis 40% threshold. We’ve been scaling in the past 6 months and entering new markets where there is a thriving startup community.
IK: The 40% threshold is the metric to measure your results? How do you do it?
AB: Exactly – In essence, we are happy if at least 40% of people will be truly disappointed if our product went away. After the workshop we make our participants fill out a survey and aim to have at least 40% of participants rate the experience a 9/10 or higher. What people have learned and how they can apply it in the future is what we care most for in the end.
IK: Your staff wears shirts with a bold “get out of the building” across it, why is that?
AB: Feedback is the single most important thing for a startup. A large portion of the workshop is spent out of the venue, validating assumptions directly with potential clients. People come in on Friday night, thinking their ideas are superior to sliced bread and we challenge and push them to think differently. They initially find us annoying but by the end of the workshop we are their best friends. They typically appreciate the framework of the scientific approach that cuts right between hope and reality. We all believe we are smart and our ideas will pan out and a lot of people are afraid to test their ideas because of the personal repercussions this might imply. It’s safer to think the best than to know the truth.
IK: Did anything go unexpectedly so far?
AB: The heat was unexpected! (laughs) On a serious note, it’s a good question, after doing this workshop in a bunch of cities you see a pattern emerging. When I used to pitch my startups to VCs they would talk to me about pattern recognition and we would get into a whole debate on statistics. It turns out they were right, when talking to costumers, if you have the right filter, the rule of five clients applies – and we teach that you really can see patterns without the need for statistically sound samples of 1000 clients and more. When we travel to new cities we no longer see anything unexpected – we observe the same behavioral pattern: people chasing a solution before validating a problem, they have firm beliefs that their products need to be built before they hit the market.
IK: What is Montréal missing to become the next Silicon Valley
AB: I think that a combination of the people’s and the government’s willingness to take risks is important. We live in fast-paced times, knowledge is no longer fragmented geographically and any individual, city or society can leverage this globalized platform to their advantage.
IK: If you had to give one piece of advice to Montreal’s startup community what would it be?
AB: Don’t be afraid to release an imperfect product. There is a saying that goes: “you never have a second chance to make a first impression” and this applies poorly to startups. Rather, continuous feedback is the ultimate currency of a startup, and you can’t get feedback inside the building. You do not need to build a product first or write any code. Unless you are in biotech, your main concern is not to build a product but to find out if there are clients willing to pay for it.