Charlie O’Donnell is a VC investor at Brooklyn Bridge Ventures. His blog, Thisisgoingtobebig, is a smart, candid stream of insights and tips that I read and re-read weekly.  Recently he hit on a theme that I see frequently and touched on here before: Too many entrepreneurs rush to ideas and solutions before truly understanding  the problems that customers have. In a world where ideas are too easy to execute, the winners will be those who love digging into the problems first.

Because of the importance of solving a problem, one of the 8 key questions we ask in the Minimum Viable Concept Test (after showing people a new product idea) is: “How well would this service solve a problem or fulfill a need for you?” This question helps us understand whether the solution is a must-have or a nice-to-have. The latter simply have a low chance of success when they enter the marketplace.

As an example, I recently ran an MVC Screener Test of the new-ish social networking app, Path. Path describes itself as “the smart journal that helps you share your life with close friends and family.” It is designed to allow you to share more, current moments and activities with a smaller circle of contacts. The app has gotten some positive momentum and a bucket-load of press coverage in the past few months. I wanted to understand user interest beyond the hype and a million or so early adopters. I’ll share the full results in a future blog post, but here’s a preview of how people rated Path on Need Fulfillment:

Path scored in the Bottom 20% of the all of the MVC Tests that we have run in the past 8 months.  Only 7% of people said it would “Definitely” solve a problem or fulfill a need and another 17% said it “Probably” would. Clearly Path is not hitting on a broad pain point.

I believe that the problem with Path is that it is trying to meet a need that relatively few people actually have. First, Path calls itself a “smart journal.” Well, keeping a journal is a classic example of something that sounds good in theory, but few people are able to follow through on it. Second, Path focuses on allowing users to share everything they are doing right now. It’s probably not a good idea to highlight what many feel is the most annoying thing about social networks–constant updates. In fact, in its latest redesign even Facebook relegated most updates to the upper-left quadrant of the screen–the zone of darkness in many an eye-tracking study.

Now, some innovations aren’t about problems and solutions. One might argue that there was not a clear, existing “problem” that Twitter or Facebook solved. That might be true, but a poor response on Need Fulfillment is a warning sign, and it means the odds of success are even longer. When my clients have a low score on Need Fulfillment, I suggest that they go back to customers and dig deeper into their problems, barriers and issues.

Just a little more digging into the problem early on–rather than rushing to a solution–can make a ton of difference in the marathon race to become a successful startup.

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

It is an amazing experience to spend one’s day hearing about entrepreneurs’ startup ideas. Between people pitching our fund, startups interested in my Minimum Viable Concept Test, and  friends-of-friends who are looking for advice, I have something like 10-15 first-time conversations with entrepreneurs each week. One of the first things you notice with this perspective is that ideas are easy, but actual success in the marketplace is brutally tough. I believe it’s time for prospective founders to make their ideas “harder”, so that execution and getting to success is much easier.

Entrepreneurs (and those who long to join them some day) have a very rare ability to recognize problems and come up with solutions. Instead of taking life as it comes, they spend their spare time asking why things have to be the way they are. They dream of inventing a better mousetrap, improving the world, and collecting a nice reward for the effort. Ideas often stick in their heads, and it can as though the only way to get them out is to take a leap and start a company. And they are increasingly encouraged by others’ success stories and a growing startup support system of accelerators, incubators and hack-a-thon events.

Then these entrepreneurs come to people like me, who have hard questions, push back on assumptions, and encourage them to show some proof that their ideas have merit. This is where the frustration starts to come in. Investors “don’t get it” and getting funding can feel like an unfair game. Those that do receive financial backing and bring a product to market usually discover that finding developers, users, customers, and press coverage is much tougher than they ever imagined. After struggling mightily for months or years the money runs out and most call it quits.

Founders are almost always “Idea People.” I have found that Idea People are actually pretty rare, and we desperately need them to invent the future. But here’s the other thing about Idea People: They churn out ideas non-stop–and we would all be better off if they let some great ideas fall to the wayside and refocused their thinking in areas where they have a much better chance of creating a company.

Let me try to describe the issue by borrowing an example from the advertising industry where I recently worked. Imagine that you are the creative team for Old Spice and charged with coming up for a new TV commercial. Now, go! Start coming up with ideas. C’mon. I’ve got all day….Done? Well, chances are that you drew a blank.  And if you did come up with an idea, how should we judge it? Will it both entertain and move cases of body wash?

In the real world of advertising you start the ideation process with what’s called a “Creative Brief.” It is usually a 1-page document that describes the business challenge, an insight about the target audience, and a focused product benefit that your commercial must bring to life (hint: that’s how your ad delivers revenue). Here’s the summary of a likely creative brief for Old Spice:

• Business Challenge: Old Spice has a leading share of the Male body wash category, but most guys still don’t use Male-specific product
• Insight: Women do most of the shopping for husbands/boyfriends, and they don’t think that guys need something special
• Benefit: Old Spice lets him smell like a man (which is what she really wants)

By narrowing down the possibilities, the creative brief actually helps drive a better brainstorming session–it gives the idea team “a box to think outside of.” The brief becomes a roadmap for execution success–and the result can be pretty awesome.

Now, imagine a “creative brief” for startup ideas. Before brainstorming ideas, individuals and teams would start by similarly narrowing down the areas in ways that are correlated to success in execution.

Here are 3 elements that I wish every startup could hold themselves to from the start:

Do you have relevant expertise?

No matter how world-changing it may be, if your big idea lies in an area where you have zero experience, your odds of success just plummeted dramatically. It is incredibly difficult to get to know a new industry while starting a company at the same time. To borrow from Malcolm Gladwell: Use whatever it is you’ve spent 10,000 hours on perfecting! And it’s often not enough to just “be the customer” and design something for yourself. Further, every industry has rules, jargon, norms and processes that a mere customer doesn’t understand. Steve Jobs may have designed for himself, but the guy had worked on building software and computers for the masses since he was a kid. If you lack industry expertise, you at least should be able to develop or make whatever you idea is on your own. If you lack both, stop planning right now and spend your time recruiting a co-founder who can bring what’s missing to the table.

Can you can make money from the beginning?

The odds of coming up with an idea that gets oodles of users is very low for any startup. It’s even a bigger stretch to assume that you’ll be able to suddenly monetize the traffic down the road. It’s kind of like hitting the lottery two weeks in a row. So why not hold yourself to creating an idea that starts delivering revenue immediately? There is something amazingly pure about getting paid in return for creating value–it is the clearest and earliest sign of whether you have a successful idea or not. If your idea is hard to charge for directly, then you should at least have a clear revenue end-point that is directly related to delivering on your core service. For example: One of our recent investments, Roadtrippers, is a free travel planning service, but it makes money by taking an affiliate fee when users book hotels through the site.

Can you bootstrap this for a while?

Instead of jumping straight into a new idea by quitting your day job and taking investor dollars, I wish more founders spent time pushing their business along during off hours and with their own dollars. The earlier you are in the startup process, the riskier things are. And a big, ominous countdown clock starts the day you step away from your day job and/or take investor money. Every hour must be spent wisely to turn your idea into a viable business. That’s enormous pressure when all you really have is a great idea…

On the other hand, it can be very cheap to test your biggest hypotheses early on. One of the reasons I created the Minimum Viable Concept Test was to help founders learn if their idea has merit at a tiny fraction of the time and money cost of quitting work and developing a Minimum Viable Product. And don’t worry about some other startup taking your great idea before you leap.Remember, ideas are easy and execution is hard–chances are the other guys will become a failure statistic while you steadily plot away on getting the execution right.

Bonus Tip: Having all three of these is a great way to win over investors! You might even raise your valuation and reduce your need for investment dollars so that you get to keep more of what you build!

I actually went through this thinking process myself back in Fall 2011. As I wound down the successful sale of my company and prepared to leave, I had a lot of big ideas. One of them was a social media tool that could have rivaled Twitter and Instagram. I spent a few days developing the idea, laying our financials, building a pitch deck–and I even created a name and bought a URL. Then I took a step back and thought through the facts that I couldn’t develop this on my own, I wasn’t too sure how social media startups spread, and actually making money on the idea would take a long while. The idea might take off–but probably not if launched by me. So, with some sadness, I let it go.

A few weeks later I started assessing and coaching startups in my investor role at CincyTech, and I saw that we needed a better way to gauge success potential and adapt before the time and trouble of building a MVP. I came up with the idea for the Minimum Viable Concept Test because of my knowledge of and love for consumer understanding and research. I saw that investors and founders were willing to pay for the output of the test. And of course I bootstrapped it using my own savings and sweat equity. I found the great idea that’s right for me, and things are working out nicely.

Ideas are infinite, but actual marketplace success is far from it. So be tougher on your big ideas, so that execution and success is much easier down the road.

Bonus: If you like this post, or if you think I’m full of it, check out a similar point of view on “12 Rules for Building Your First Profitable Startup.”

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

As I wrote in my last post, there’s nothing more rewarding than helping a customer win. Today I’m proud to share that Roadtrippers, an early customer of the Minimum Viable Concept Test, is officially on the journey to what I believe is great success.

I first got to know Roadtrippers’ CEO, James Fisher, almost a year ago when he started at Cincinnati-based accelerator, The Brandery. I was immediately impressed by his multi-disciplinary knowledge and passion for, well, road tripping. Once the dust of accelerator activity settled in the Fall, we had a chance to continue the conversation with James at CincyTech, our early-stage VC fund. I had just begun MVC Testing CincyTech prospects at that time, and we jointly decided to run a test before James and his team had finished development.

I’d rather not share the actual Roadtrippers test results in this blog, but let’s just say that we were very encouraged by the consumer reaction. The Roadtrippers team was able to uncover target audience insights, gauge favorite features, match itself against competitors, and even get an early read on business model assumptions before launch. CincyTech was impressed enough to lead a $250,000 investment round.

The MVC Test itself deserves no credit. Rather, it was James and his team who built a powerful idea based on consumer needs, and used lots of input throughout the process to hone the service.

Of course, Roadtrippers is just a few miles down the proverbial road to success. We all expect a few speed bumps and fender benders on the journey (along with a lot of bad puns). But my belief is that the strong team and effective planning before hitting the road will significantly improve Roadtrippers’ odds of winning.

If you’re heading on the road any time this summer, check out Roadtrippers and make the journey even sweeter.

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

I have a very unique perspective on the world of startups. I’ve built and sold a company, personally invest in startups, serve as a startup advisor and board member, work as an entrepreneur-in-residence at a VC firm, and I’m married to an entrepreneur. Plus, I’m now founder of a startup that helps other startups succeed. Despite being waist-deep in this culture, some of my biggest insights come from reading the words of other startup leaders.

A few days ago in the terrific blog over at On Startups, guest poster, Paul DeJoe, wrote a piece on “What It’s Like To Be The CEO: Revelation and Reflections.”  I’ve read dozens of books and thousands of articles about life in a startup, but this is perhaps the most insightful perspective of what goes on inside the head of a founder. I felt one passage in particular to be very moving:

You feel like a parent to your customers in that they will never realize how much you love them and it is they who validate you are not crazy. You want to hug every one of them. They mean the World to you.”

I remember selling to customers for the first time when I was a little boy. My family took a trip to the beach and my sister and I came back with a giant jar full of seashells. For some reason we decided to put up a card table on the front lawn and started a “Shell Sale” (say that 3 times fast!). Neighborhood kids suddenly appeared from nowhere on bikes and began handing us nickels, dimes and quarters. I was astounded by the rush of pleasure from seeing people happily pay me for what we had gathered. I was hooked on business and entrepreneurialism.

Since then I’ve spent a career producing and selling. Most of this has involved me personally pitching a product or service to another businessperson. And even when I worked at P&G on Tide, which is bought by 50 million nameless, faceless “consumers” per year, I often read their individual letters, emails and discussion board posts to get some real-world feedback and keep my finger on the pulse of their needs and wants.

But I have found that selling as a startup founder is a very different and deeper experience than working on a big brand or even in a traditional small business. As my hero Steve Blank describes in the short video below, startups are small businesses that aim to change the world…

Selling Validates Your Bet on Changing the World

When you aim to change the world, the odds are much longer than, say, opening a coffee shop or starting a consulting business. Not to denigrate these efforts at all, but startups represent completely new-to-the-world business models. Startups are a hypothesis, and the ability to convince customers to turn their dollars over to you for the first time is the ultimate test of your baby.

Every time I win a new customer for the MVC Test I feel like a new burst of wind is in my sails. It is especially encouraging since my service really has no traditional competition or established budget to draw from–meaning that my customers are handing over “new money.” Most have barely spoken with me, are already on shoestring budgets, and have no firm proof that my test output will deliver a ROI. My ability to convince them, and their happiness with the output (whether their MVC Test results are great, poor, or somewhere in between) makes me feel like I must be doing something right.

This is the biggest reason why I believe most startups should begin life with a true business model, and actually charge people for the value that they are providing. There is simply nothing more powerful than market forces to hone your approach, and until you make money, you have no real market.

You Gain Pleasure in Customers’ Success

The feeling of progress through customer acquisition motivates most startup leaders to provide impeccable levels of service. Since we feel a personal connection to our customers, and their patronage is positive feedback on our businesses, we want to do as much as possible to help them win. We begin to feel a symbiotic relationship and see our success linked to their success.

I find that helping other startups succeed is 10-times more special than my previous role working with some of the largest companies in the world. Just last year I was working with the global CMO of a multi-billion-dollar consumer goods firm on a project critical for its long-term success. While it seemed sexy and was certainly an incredible challenge, I get so much more personal value working with startup founders. You see, this giant company (like most) was slow, bureaucratic, and likely to sail the current course no matter what strategy recommendations I came back with. This global CMO could fail and still move on to any number of high-salary positions somewhere else. It just wasn’t personal.

But working with startups is a much higher calling. These people are putting their life savings and family relationships on the line. And when you provide advice, they actually listen–and put it into action the next day! I probably work harder to craft my recommendations for startups paying the equivalent of 1% of the budget of those global CMOs, because it’s personal for everyone involved. When they succeed, you feel like you had a real hand in their win. And they will often repay you with help and loyalty for life.

There Really Are No “Bad” Customers

Back when I was the client service leader at our digital agency, from time to time we would have a client that would put us through the ringer. I’ve had clients berate my team and I in public, threaten to fire us, and then go out of their way to bad-mouth us within their organizations. This can be extremely painful when you know that this can literally take food off your family’s table, and seriously hurt the career of someone who really was at no fault. Whether it’s a strategy consultant or a restaurant waiter, those who serve often become the scapegoats for someone else’s screw up, low self-esteem or bad day.

Everyone faces this at some point, but the true test comes from whether you can respond with emotional intelligence. I remember hearing about a competing ad agency that brought an old car to their parking lot one day, spray painted “CLIENTS” on the hood, and gave employees a chance to swing a sledgehammer at it to get their frustrations out. I often told this story to my staff when they were feeling at their lowest because of a challenging client. “There are no bad clients,” I would repeat to my team, “They pay our salaries, and we must find a new way to crack their code.” After all, the agency that pulled the sledgehammer stunt later fell off the map and became a shadow of its former self.

Of course you should not aim to keep every customer. I’ve had to “fire” clients who treated our people unethically or refused to accept that we needed to run a profitable business, too. The latter issue is where most startups can be blinded by their love of customers. Those customers who angrily demand price or service at an unreasonable level are easy to cast aside, but we often miss the “nice” customers who simply don’t contribute to the bottom line.

I have a few customers that are unprofitable now and will likely never cover my investments in finding and serving them. But that’s my fault. Each one is a learning experience–a chance for me to reflect, adapt, and get it right the next time. And if you provide the same, high level of service to an “unprofitable” customer you just might make up for the loss when they recommend you to a few dozen others in this increasingly small world.

So I offer humble thanks to my customers, and pledge to continue a win-win relationship that leaves us all successful. And I hope you hug a customer today,too! Thank them for their support, trust and budgets–and don’t forget about them when you hit the big time.

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

You are an entrepreneur, a builder, and an artist. If you wanted to spend all day “writing up plans” or “researching” you’d be back in the corporate world, right?  After all, real artists ship. But one of the biggest mistakes startup founders commit is rushing to make, rather than taking the time to listen and learn.

In the past six months I have run across scores of eager entrepreneurs who put their heads down to build a solution without thinking through the basics of their businesses. I recall the crowdfunding startup that raised funds and raced to a beta version but failed to think through which customers they should build for.  Then there was the advertising services company that didn’t stop and learn about how the marketing world actually works. And I’ll never forget the group texting startup that had no clue who might use its service and why. Each company was full of energy, brains and passion, successfully got something into the marketplace…and struggled to move past the early stages. No amount of A/B testing could get them past the basic misses that we already baked into their businesses.

There are many reasons that founders seem to be rushing faster-than-ever to build. First, the people who start companies tend to be those with the skills and confidence to put something in the marketplace. After all, software developers like to, well, develop software. Second, by now nearly everyone has read The Lean Startup and taken as gospel that companies should get a “Minimum Viable Product” into market as soon as possible. Lots of investors have fanned the flames by encouraging pitching companies to, “Go ahead and build it…and come back to us when you have some traction.” Too often this is an easy way to show companies the door without having to actually reject them and their ideas.

There are some deeper human tendencies at play here, too. It might sound counter-intuitive, but making something is often “easier” than planning your approach and getting feedback before you build. Human beings tend to avoid two things, which can kill startups:

1. Work you don’t like to do – We all naturally gravitate toward the kinds of work that we like and think we’re good at, but we need to put our feet in the mud once in a while and do the things we hate in order to get to the greener grass. Most software developers I know would rather bite off their right arm than go to a public park with a clipboard and ask strangers what they think of the new app they are working on. It’s also a lot more fun to launch a web page than spend hours Googling for industry facts and figures. An no one likes to sit in front of a blank word doc and write out the 25 reasons why your company might fail. Unfortunately, these un-fun tasks are often the ones that help you learn to build better and dodge bullets.
2. Rejection – We don’t want people to judge our baby’s name before birth, and we don’t want people judging our startup idea before it’s on the app store. That’s why we tend to keep both out of the limelight until the product is delivered and people are much more likely to congratulate you than question your decisions. While it might be a smart idea for baby names, keeping your idea quiet is the absolute worst course of action. You should get as much feedback as possible as early as possible–as it is the best way to learn, adjust and check your assumptions. Ask everyone you know who is even slightly relevant for your business–and ask them to connect you with five other people they know. Don’t spend too much time trying to sell or convince them that it’s the next Instagram; rather, spend 5 minutes sharing the idea and 25 minutes (or much more) listening to what they like, what they hate, and whether and how they might use it. The earlier you are in the process, the more honest people will be–and after several dozen interviews like this you will vividly understand their needs, along with how you totally missed the mark on your version 1.0.

By failing to do the yucky work and embracing rejection, you’re really just postponing the inevitable: A big, hairy, public failure–potentially with lost income, strained family relations, pissed investors, and a scar that might scare you away from the entrepreneurial path altogether.

No amount of advice can guarantee success, but I have repeatedly seen startups increase the odds of success (and significantly instill great confidence from investors) by learning before they leap. Here are three buckets of work you can do today:

Dig Up Graves

Many of the great ideas founders come up with tread on ground that others have cleared years before. Blogger networks, insurance quote sites, and family calendar tools have been around for well over a decade at this point, and we keep seeing ideas like this return from the grave. So one of my first questions when hearing a pitch is: “Who has tried this before–and what can you learn from them?” But too often the founders have not done their homework, despite hundreds of Googleable articles and even founders fail posts. Smart founders dig deep into failures in order to avoid their mistakes, but also to uncover a new approach that might work. One of my favorite business school professors, Peter Golder, wrote a book showing how most successful innovation comes not from the first mover, but from the follower who broke open the one or two barriers that prevented an idea from going big. You can do the same.

Believe it or not, you can even contact someone who worked at a company that didn’t work out, and ask them an hour’s worth of questions about what went wrong and why. Most people can be tracked down thanks to tools like LinkedIn, and people tend to want to help others who are following in their footsteps. A startup client of mine recently interviewed a founder who failed with a similar idea; he not only got priceless perspective, but discussed licensing his technology solution at a vary favorable price.

Fake it Before You Make It

Instead of making a full-blown solution, you can often learn faster and cheaper by creating your business in a way that feels very basic but works well enough to gauge interest. This is the idea behind Eric Ries’s Minimum Viable Product. But too many startups don’t think basic enough; they tend to want something like a completed house when all they really need is a false door and mailing address. If people knock on the door and put checks in the mail, you win; if not, you’ve learned a lot without taking out a mortgage and hiring contractors.

Eric Ries did this when he was thinking of turning his blogging and speaking topics into the book version of The Lean Startup. Instead of spending a year selling into publishers (yes, it takes a year in my experience), he took book pre-orders on his website. If the book didn’t get many pre-orders he could have given people their money back and saved himself a ton of time. Zappos didn’t start with a warehouse full of products–rather, the founders tested the idea of online shoe ordering by taking photos of shoes from a local store, and when orders came in, they bought them from that store and re-shipped them.  Or you can take my “false door” analogy literally, as one of the newest trends for deciding on which features to add to an app or website is to build a graphic link or banner ad, and count how many people click on it.

While I don’t like investors who send companies away with an order to “just launch it,” as an investor I do like to help startups think about how they might learn with a very basic MVP. For example, one company recently told me about their idea for a web matchmaking service to link brand marketers with social media mavens. The founders spoke with big brands and their PR agencies, who were eager to buy, and they intimately knew the maven audience, which was willing to get involved with big brand campaigns. The company asked me for $X dollars to build an online portal to make the matches. But I said, “Hey, why not go ahead and tell the brands you are in business and begin making matches?” They could run the whole business at an early stage with just email and phone calls, giving them a chance to work some of the bugs out and test brands’ willingness to really fork over their dollars.

Test your Minimum Viable Concept

Speaking of which…Why create a Minimum Viable Product, when you can get a great feel for receptiveness to your idea by just sharing the idea with a large number of the target audience? That was my inspiration to create the Minimum Viable Concept Test. I was tired of seeing companies struggle after spending months and money getting a product into market, so I developed a simple, affordable research tool to get unbiased feedback from a few hundred general market consumers across the U.S. Today, I’m able to get startups real, invaluable data on consumer interest, likes, and dislikes, within a couple of days. And the results are compared to my database of dozens of other startups’ tests, so you get a better feel for your odds of success against the noisy din of new ideas.

Unfortunately, Steve Jobs gave market research a bad name, and not a week goes by without hearing his famous line: “People don’t know what they want until you show it to them.” Entrepreneurs often take this legend’s words as yet another excuse to just launch it, baby. Well, the fact is that you can “show” people your idea and get a response at a tiny fraction of the cost and effort with a basic write-up or video animation and asking a big group of people what they think about it.

Ironically, as I was half-way through writing this post I took a call from an aspiring entrepreneur who pitched me an idea that had more than half-a-dozen holes in it. I listened for a bit, then started prying, prodding and pushing at the idea–as investors are wont to do. It was clear that he needed to stop pitching, cease building, and start over. I wanted to help and seriously feared that he would be risking a great deal personally by continuing down his current path. So I amped up my voice and proceeded to vigorously walk him through the suggestions laid out in the post here. He sounded rejected at the end of the call and my partner in the other room remarked that I sounded “a bit tough.” If you, dear reader, are the person I was speaking with–or anyone that has been or ever will be on the receiving end of my passionate reactions–I apologize if it felt a bit too “vigorous.”

Please know that my passion comes from my belief that entrepreneurs hold our future, and my commitment to helping you avoid the mistakes and pain that those of us before you have felt deeply. If you stop building for a moment, you might discover a better way.

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

A few weeks ago I had a chance to spend some time with David Richins of Collaborative Vision Media. He has started a new educational video series at The Lunch is Free and asked me to share some thoughts on my experience and suggestions for startups. I think it turned out pretty well. Thanks to David for the opportunity!

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

Last week Sarah Needleman, one of the small-business reporting leads at the Wall St. Journal asked for my take on how startups are using video to succeed. I shared several thoughts on my experience–some which are captured in her article here. Now, I would like to use this post to expand on how video can help startups learn early and further leverage their ideas to improve their odds of success.

The value of video communication

Simply put: Sight, sound and motion communicate much better than written copy and static images. You can post your video across dozens of social networks; and the costs of production continue to decline. No wonder many startups are giving demo videos priority on their websites. In fact, the latest hot startups feature a full-screen video demo looping in the background of the landing page. Check out the latest sites for Path and ShopKick as examples.

I first saw the startup video trend happen when Flipboard launched its service with a video on YouTube. It is simple, compelling and effective:

In my Minimum Viable Concept Testing I’ve found that videos typically score significantly better than print or website concepts–mimicking what happens in the real world. I almost always recommend that clients test video if they have it. It’s simply the best way to fully engage a prospect’s senses with multiple conscious and unconscious cues.

But don’t fall for the siren song of “viral videos.”  Too many people see the success of big brand marketing videos featuring the Old Spice guy or Kia hamsters and figure that’s the way to win. Dollar Shave Club is being held up as a model for startups, but getting this kind of success is a very long shot. Big brands must try for ultra-creative viral success because their base products are mostly uninteresting.

Success is not about collecting video views, but about generating users and paying customers. And when your product is interesting, a simple, straight-forward video can break through the clutter and get consumers to pay attention. Believe it or not, people are actually interested in what’s new and different.

Did you know that TiVo reports informercials are some of the least-skipped TV ads? When I worked in new products at Procter & Gamble, I once consumer-tested a $10,000 concept video in the same research process that we used for $500,000 TV commercials that play in prime-time. Guess what? My cheap, boring product video scored in the top 20% of all commercials tested in the past decade.

Startups offer new and interesting “products” that can generate high engagement and social sharing with videos that explain what they are and how they work. Plus, the buzz you get is about your new business–not the guy on a horse or hip-hop hamsters. The recent case study of Google Glass and its amazing product-focused concept video shows a much better way to go.

Follow the proven structure

If you watch a handful of startup demo videos you will likely notice a pattern that was laid down by the first mass advertisers nearly a century ago. The first radio and television commercials repeated this pattern to introduce new-to-the-world categories such as laundry detergent and dandruff shampoo.  This structure is a proven framework for a video, and mimics a conversation people might have in real-life.

Here’s the simple, yet effective structure of a good concept that most CPG marketers learn in their first week on the job:

Accepted Consumer Belief – The problem statement, a.k.a. the “Don’t you hate it when…?” It frames the issue in people’s minds and captures the pain and issues they experience–even though they are likely not experiencing the pain at that moment. Using Instagram as an example, it might be: “I love sharing mobile photos, but the quality is poor, it takes too long to upload, and I can’t share across multiple social sites.”

Benefit Statement – Introduces the new brand and describes the single most important improvement that it brings. “Introducing Instagram. It helps you get more out of mobile picture-taking.”

Reason(s) to Believe – This provides some evidence to back up the Benefit Statement–usually a data point or a short description of how it works. “Instagram is a mobile app that includes filters to help you improve the look of your photos, then quickly share them on Facebook, Twitter or email.

As an example of how this can be done effectively (and fairly cheaply) for even a very technical product, check out the video below from Ilesfay, a B2B IT startup in our CincyTech portfolio:

In using this concept development process with my clients in the first step of MVC Testing, I’ve found that it helps them focus on what is most important–and some go back to whittle down their websites or feature lists before the test results even come back. This focus is the single biggest takeaway from Instagram’s success.

Meanwhile, the historic mass marketers already have mass household penetration–there just aren’t many new-to-the-world categories of consumer products. So they use creative commercials, celebrity endorsements, and recognizable music to remind you that they exist. But innovation happens elsewhere, and this proven communication model has been picked up by everyone from Oxiclean to Apple.

Three tips for success

Based on my experience personally launching new products with videos and coaching dozens of startups, I offer these two suggestions:

1. Limit your time – Too often companies throw the kitchen sink of benefits into a video. Since the video can be as long as they like, they become tempted to wedge a laundry list of problems-solved and features-offered into the video. Again, focus, focus, focus is the name of the game. For general consumers, anything over 60 seconds is pushing it; but I think it’s OK to go to 2 minutes for a B2B product where buyers are more likely to lean forward.
2. Go with the pros – I almost always subscribe to the belief that startups should do everything they can by themselves, and there are a few ways you can make your own demo video. But I believe video development is an area where outside expertise is well worth the money. Creative talent will help enormously with quality, and it’s getting easier to find the help. For example, Tenlegs has created a marketplace for video buyers to connect directly with top creatives. This video for CourseHorse, an local teaching marketplace, was done for only $2,000.
3. Test your work – Don’t expect to just put the video up and wait for the view count to jump to life. Save money for editing based on early views, and be ready to change your video as you adjust and pivot your business in the months ahead. Of course, when your video is complete it’s a great time to get some quantitative data from real-world consumers and compare it against a database of other startup concepts for a mere $1,000. (sorry for the blatant plug).

Getting over the cost barrier 

The biggest issue with videos is obviously cost.  Even a simple animation can run $10,000 to $25,000 or more for professional assistance (which I fully recommend–it’s a skill, people). In selling my own Minimum Viable Concept Test research to startups I’ve seen that any expense is difficult to take on–especially when the costs are known and the return on investment is unknown and mainly intangible.

Last week I spoke about the issue with Lucas Cole, head of business development for Epipheo Studios. If you’re a digital entrepreneur you have likely run across Epipheo’s signature videos for hundreds of startups, as well as for a few big brands like Google, Amazon and GE.  (Side note: Epipheo is a fellow Cincinnati-based startup.) Lucas has often talked startups through the budget challenge and feels their pain. He shared a few stories about startups that stroked a check with fear, but ended up getting seed funding or early customers after simply running the video a few minutes after starting a meeting.

Of course not every startup that develops a video or runs a Minimum Viable Concept Test becomes successful.  Just last week I had to share some not-so-good MVC Test results with a team of passionate entrepreneurs. That is never a fun meeting–but I feel good about the chance to provide difficult news early, rather than watching a great team spend the next year of their lives and thousands of dollars in digital development to create a product that flops upon market entry. A $10,000 concept video and $1,000 MVC test can help startups and their investors learn long before they leap–and just might help you score seed funding at a rich valuation.

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

Working in the startup community one hears daily that “Ideas are easy, execution is hard.” It’s a useful way to remind ourselves that we shouldn’t get too excited about an opportunity (or fear competition) until we actually get our hands dirty in the business building and selling process that comes long after an idea is hatched. But today I’d like to talk about what’s more important to think about before the bright idea, and perhaps coin a new phrase: “Ideas are easy, needs are hard.”

When I first began working in new products at Procter & Gamble, I quickly learned to build a health obsession about finding “unmet needs” through in depth consumer research. You would be amazed how much time has been spent over the past 50 years working on  you can question people about their habits around laundry, deodorant and toothpaste. We used tools like “usage & attitude studies,”, conjoint analysis, and good old-fashioned one-on-one interviews to tease out and prioritize their frustrations and desires–then used the insights to power a steady stream of new product launches.

Innovation in the world of technology is arguably a lot easier than packaged goods. New devices, content, apps, stores and services can solve problems much deeper than, say, detergent with a dash of Febereze.  And the cost to bring a digital startup to market is a small fraction of what it takes to open a factory and shipping packages of toothpaste.

But all too often we get me-too startup ideas. I believe startups and investors must spend more time uncovering customer problems that are big enough to deliver a winning idea. One of the most frequent issues that I see startups flounder on is the lack of a compelling consumer need. In pitch presentations, founders typically spend a few bullet points on consumer understanding, then jump straight to the solution and how many  zeroes it will add to the revenue line some day. When that happens I usually back them up to push further on try the customer pain point or compelling need that people may have. Our society worships the story of bright ideas, but I wish more people would come to me saying, “Eureka! I’ve found a pain point!”

Instagram brings a recent and widely understood example of how to succeed by recognizing and solving a genuine pain point. In this short video from Stanford’s Entrepreneurship Corner, we learn how Instagram’s founders decided to improve the 5 pain points of mobile photos–things like improving the look of photos allowing people to share them quickly across any social media channel.

Instagram’s Kevin Systrom goes on to say that once you believe you have a great solution, you need to quickly learn whether or not it truly addresses a problem people are having. He advises getting the Minimum Viable Product (MVP) into market as soon as possible to see if a simple product solves significant problems. While this is indeed a key step on the path to learning and succeeding, I believe it is possible to learn much faster by testing an idea before a product is released. The problem of product development is that is takes significant time and money for most ideas to get to the MVP stage, and once you launch, it is difficult to use the early experiences of a handful of friends & family to determine if you have a winner and how you need to adapt.

The better solution is to develop a description of your solution–a “concept”–and seek responses from as many people as possible, preferably a group of people who you do not know and who represent a good cross-section of the market you wish to win over. All that is required is a 1-page description of the problem and your proposed solution, and a group of people in your target audience who agree to read it and respond. Website landing pages and videos can also be helpful, but they are not necessary for this first check.

I created the Minimum Viable Concept Test to make it simple for startups to get feedback from a few hundred people before they build, with the additional feature of being able to compare their test results against a database of others’ ideas. This ability to compare results allows for a much tougher check on the size of a problem and value of a solution.

Through this research, my clients sometimes find that they need to go back and dig deeper into the problems of consumers. While this can feel disappointing, those who are determined get back to work on the central problem and bring back a much bigger idea–without wasting the time and money needed to learn this lesson in the marketplace. As Systrom says in the video above:

It turns out that the hard part is trying to find the problem to solve…solutions actually come pretty easily.”

Here’s one example of a public product that could have learned from earlier concept testing and better problem analysis:

Last Fall I ran a MVC Test (on my own) of a digital service called AdKeeper. AdKeeper launched in 2011 as a service to help people save banner advertisements that they notice on the web. The company is headed by Scott Krunit, who was behind the success of About.com, and featured a celebrity list of investors, advisors and brand partners. The company secured $43 million in VC money at a valuation of $100 million.

In its launch marketing and pitch materials, AdKeeper explained consumers’ problem as follows: “People often find advertisements useful, and nearly everyone has ripped an ad out of a magazine to save for later…But on the web, there is no way to save a banner ad.” According to research by AdKeeper, “56% of people would save a banner ad if given the option.” As a former digital agency leader, I was very curious about AdKeeper, and wanted to gauge consumer reaction for myself. So I created a concept description of AdKeeper using images and descriptions taken directly from its home page, and launched a MVC Test to gauge the general consumer reaction.

The results were…mixed. Compared to my database of other new digital consumer services, AdKeeper scored below average overall. On the positive side, AdKeeper scored high for Uniqueness, Believability and Use Frequency. However, the concept scored below average on the critical measure of Need Fulfillment. I believe this score was low because people generally do not feel that banner ads need to be saved–and while there may a few times where such a service would come in handy, the requirements to create an account at AdKeeper.com and return to the site’s personal “locker” to check saved ads seemed to be too much work for too little reward. Despite AdKeeper’s data that 56% of people would use it, you must dig further with research to see if there is enough pain for them to really do it.

Now, if I had a chance to share these results with AdKeeper before its launch, I would have suggested that the company dig deeper into the problems around consumers engagement with advertising and marketing. Perhaps banner ads are not the digital marketing that people are most interested in “keeping.” And I would offer up that the registration requirement was adding more pain and hurdles to the AdKeeper solution.

Flash-forward to the present–I checked in in on the latest AdKeeper news. Despite a major digital and traditional marketing campaign to drive consumer awareness, the company seems to have come down from its initial positive buzz. Traffic to AdKeeper.com is down below 10,000 visitors per month, a new low since its launch a year ago. And industry experts and brand customers are beginning to publicly cast doubts.

Meanwhile, AdKeeper is making some interesting product moves. It seems to have eliminated the need to register and create a locker for kept ads; now when you click the “K” button on a banner ad you can email it to yourself. And the company seems to have pivoted to a service that allows you to “Keep” any kind of online marketing–somewhat of  a “Pinterest for Brand Marketing.”

Time will tell for AdKeeper…My fear is that it has already spent a large amount of its raised capital, and both its investors and brand partners won’t have the patience to wait for the company to successfully pivot. You often only get one chance for the big bang of press coverage and sales pitches. The moral of this case study is that your startup can significantly increase its odds of success and reduce wasted money and time by honing in on a true consumer problem through concept testing before you launch. Challenge yourself and your idea early and often.

What’s really exciting in the world of startups today is how rapid adoption of new uses of technology are also creating new needs. In other words, every time we change our habits and do something new, we can hit against new pain points or complaints that open the door to new solutions and business models. Instagram is a prime example: As people became more comfortable sharing mobile photos with friends thanks to smartphones and Facebook, they started to feel frustrated with the quality of photos and Facebook’s mobile sharing app. So Instagram developed a solution for this new need. The new class of “social discover apps” are another attempt to solve problems created by new technology habits–aiming to tie together various social media accounts to help you find interesting people nearby. But as I wrote in depth in this post, I believe the need for such services is small–as finding a way to meet interesting strangers is not high on most people’s pain meters.

In a future post I will share MVC Tests on two new solutions to new social media problems–Path and Pair. The results were pretty surprising. Stay tuned!

You should learn more about the MVC Test here, and follow me on Twitter here.

+Bob Gilbreath

$1 billion for Instagram is a big number for a company with no revenue. That’s a bigger valuation than The New York Times, and about 30x more than the last major photo sharing app acquisition, Flickr, which sold for a mere $35 million to Yahoo! in March 2005. It’s a year’s worth of cash flow for Facebook–a company that is about to ask a lot of stodgy public investors to start buying its shares. I’m personally not thrilled to see such unfathomable valuations in an industry that is constantly at threat of mania. But if the world of startups can learn the lessons of building a great product from Instagram, $1 billion will be a bargain.

The story of Instagram’s launch is a brilliant case study of all that is right about building a great product by designing for people’s needs. To make a long story short, the founders of Instagram originally planned to create a social network called Burbn. It was essentially Foursquare with photo sharing and a lot of other features to help you “discover and share” with others. Today it sounds a lot like the Social Discovery Apps that were fighting for attention at SXSW this year. The team spent 8 months working on the product–which few of their friends and family really used. In other words, it was just another failed idea.

The team realized that the users had spoken, and they chose to start over.

We decided that if we were going to build a company, we wanted to focus on being really good at one thing.” – Kevin Systrom in Fortune

They saw photos as a big, existing market with universal appeal and a seemingly endless ability to add value, and they made a big decision to focus their efforts. In looking across the photo market, they loved the filters of Hipstamatic, and hated how Facebook, Flickr and other social networks made mobile photo sharing so difficult. The solution was simple, and took only 8 weeks to get to market. The result won on many keys to new product success:

• Make something people love – People already cherish photos and the subjects of their photos–like the “gaggle of cousins,” above. By making a great thing even better you succeed. We see ideas like this win again and again in our Minimum Viable Concept tests.

• Make people better – By using Instagram amateurs can make art; and it doesn’t take $1000 cameras and monkeying with special lenses and light settings. Everyone has a desire to create something beautiful, and the simple filters of Instagram make magic.

• Solve a problem – Before Instagram you had to use individual social networks and email accounts to share photos–a true pain, as photo sharing is one of the most popular online activities.
• Built-in word-of-mouth – Instagram built word-of-mouth marketing into its core service. As Max Klien says, “build around your discovery mechanism.”
• Provide an immediate “wow” – Mobile apps win when they provide “ahhh!” value within the first 60 seconds of downloading. Otherwise people get bored and move on. Instagram makes photos instantly look great.
• Build a habit – Lots of apps get a first “wow” but very few are used again after the first day. Instagram found success here by allowing people to discover and follow each other. You’re hooked by creating your own photos, then suddenly discover a wide field of amazing photographers who make you laugh, cry and think. (You should learn more about habit-formation by clicking here)

The other big lesson from Instagram is that there is always room for creative+disciplined entrepreneurs to build enormous businesses right under the noses of the market leaders. Kodak fell behind long ago–and the other manufacturers (e.g. Sony, Samsung, Canon) know nothing about software. Flickr has been stuck in the bureaucracy of Yahoo! And even Facebook fumbled because it was too busy making the entire world sharable. It has never been harder to innovate in a large company, and it has never been easier for a small startup team to create a billion-dollar business.

In the short-term, the zaniness of Instagram’s $1 billion price tag will dominate the news and water cooler conversations. Instagram will be absorbed into Facebook somehow, and we’ll find a new killer photo app to try and share. But I hope in the long-term that our startup ecosystem captures a photographic memory of the beauty of a product-market fit that is Instagram.

You should learn more about the MVC Test here, and follow me on Twitter here

+Bob Gilbreath

I absolutely love to tell people about my first new product failure. In 1999 I was part of the team at Procter & Gamble that launched what former CEO A.G. Lafley called, the worst new product in the company’s history: Fit Fruit & Vegetable Wash. I didn’t know at the time that sharing stories of failure would become a rite of passage in digital startup circles. And today I’m launching a “Startup Fail Blog Wiki” to collect these stories in once place–and I’m taking the opportunity to share my own stories of failure.

Fit Fruit & Vegetable Wash was a great new product idea–a “soap” made with all-natural ingredients that removed dirt and pesticides from produce. It was a promising idea for an entirely new product category from the group that launched successes like Febreze and Swiffer.  But we made many, many mistakes in getting it to market–especially by forcing it through the “big bang” launch model that works less well on products that require more education. Most people who worked on the brand quietly disguised it in their resumes, but I’ve always carried it as a badge of honor. While I was just an assistant brand manager on the product, I took it personally. I was embarrassed to let the company down, and was pained at the years of wasted time by dozens of teammates. After its failure, I became obsessed with cracking the code on new product success–and I was fortunate to win in later launching new products like Mr. Clean Magic Eraser. Failure taught me important lessons, and I could never have been successful without these struggles. (Note: Fit is still around with an entrepreneurial owner and gradually growing–while using the same packaging and claims I developed in 1999–give it a try!)

But the purpose of this blog post is to share the story of a digital startup that I led, launched–and folded. I hope my story is a lesson for others.

Flash forward to a few years ago and I was co-owner of a global digital advertising agency. Our core business was to develop digital strategy and creative projects, but a few of us yearned to use our knowledge and skills to create a startup within the company that would allow us to differentiate the agency and create a new, scalable business. We created a mostly informal group of strategists, creatives and developers who played with technology and business ideas. The first idea we hatched was a service that would add a meaningful advertising-based business model on top of Twitter. We created a working prototype way back on Spring 2009 and considered launching it. But we pulled back for two reasons: (1) We were worried about building a business on top of the Twitter API at a time when the company was starting flex its muscle; and (2) we came up with another idea that we liked even better…

Our new idea sprung from some technology that our team developed around image recognition. We had followed the success of apps like Red Laser which rose to the top of the charts with a simple UPC scanning tool that could send users to a  basic search results page. While interesting, we felt there was more promise in image recognition. Some products lack UPC codes, and the ability to search a database using colors and characters seemed within our reach. We knew that image search would be aided by the rise of tools like Google Goggles, and we foresaw that QR codes would be too complicated for most people to understand and to embrace.

In addition to noting the promise of image recognition, we saw the opportunity to create a startup with a “meaningful marketing” model baked-in. You see, I had just published my book, The Next Evolution of Marketing: Connect with my Customers by Marketing with Meaning. It was our agency’s manifesto, describing our belief that the future of marketing is not about finding new ways to interrupt people with impressions, but rather to create marketing that people choose to engage with, and advertising that itself improves customers’ lives. Naturally, we believed that any startup we created should embody our brand purpose.

We were also frustrated in working with startups that pushed our clients to buy more banner ad space in order to pump up their revenues and valuations. We longed for a startup that provided a service for consumers, yet allowed marketers to engage and make it even better–something like Google Adwords, in which paid search can help people find that they need, and give companies a pay-for-performance marketing channel.

One day, while in a meeting to discuss how to use our team’s technology, the pieces fell together and inspiration struck. We realized that consumers frequently have a need to look up information about the products they buy and use everyday–say, when they are checking ingredients in a store, searching for a new product coupon, or looking for dosing instructions for a cough medicine at 2am. Much of our insight came from our work with dozens of consumer packaged goods brands in our agency portfolio. We knew that millions of people visited our brands’ websites each year to find such info, and we saw that about 10% of these sites’  traffic (and growing quickly) was sourced from mobile browsers. But searching for information via mobile phone is difficult; no one wants to type in a URL on a tiny screen or wade through mobile Google results. We decided to create an app that would use package/image recognition to deliver them to a mobile-friendly page of helpful brand information.

While our vision was grand, we got some great early feedback from a friendly VC investor. He cautioned us against “boiling the ocean” with too many features and functions. He challenged us to start with one valuable benefit that had never been seen before. After many white board sessions we decided to focus on the ability to find a particular product on sale near you. People often plan shopping trips based on a handful of everyday products like Tide detergent and Coca-Cola 2-liters, and the only option was to wade through dozens of weekly newspaper circulars. We also found a terrific third-party source of this data, which had not been tapped in a mobile app before. The image search was still a bit buggy, so we also included a UPC scan and keyword search.

After about a year of working on the project at nights, weekends and during slow periods we launched our app–Phogo– in November 2010. However, just a few months after we finally launched on iTunes, we hit a barrier that we couldn’t overcome. We existing agency business merged with 3 others to create a new, global agency network. It was the right thing for our +$100 million digital agency–but took our eyes even further away from Phogo. While we used to be able to carve out a little time for skunkworks projects–I was suddenly flying around the world and helping to create a new agency brand and strategy organization. Our team got together and decided to pull the plug on our own.  Here’s a few of our lessons and learnings:

What Worked

• Focused User Benefit – Users quickly understood the benefit of Phogo and were very positive about the chance to find their favorite brands on sale near them. The advice about not “boiling the ocean” was spot-on. The app worked reliably and brought great results on the most frequently-purchased products.
• Meaningful Marketing Model – I met with dozens of the largest CPG companies in the world before we launched in order to rally support and seek test & learn dollars. Nearly every major brand understood the value of reaching their consumers with Phogo at the two main moments of truth, purchase and use. They loved our pay-for-performance pricing model, and the fact that we could get them up and learning within minutes. I was invited to share Phogo alongside the biggest startup names at mobile innovation events for Coca-Cola and Frito-Lay.
• Team Passion – My team jumped into Phogo with very little prodding and zero incentive. I couldn’t offer an ownership share or any guarantee that they’d get special hours set aside for the project. But some of our best people across all skill areas were fighting for the chance to work on Phogo.

What Didn’t Work

• Slow to Release – One of the most-repeated mistakes in startups is being slow to ship, and we fell victim to this one big-time. Part of the issue was that we all had “day jobs” at the firm with weekly billable hour and monthly revenue targets to hit. But we also didn’t stick to self-imposed deadlines, and we didn’t know how much delays could really cost us.
• Shiny Feature Obsession – The biggest reason for our slow release was our focus on making image recognition work. We were in love with the cool-factor of the tool, which we thought would help us attract users and beat the competition–and we knew that this is what the future of search would be. But it was incredibly complex technology, and, frankly, was not key to the basic product benefit. A UPC code or even word search worked just fine for 95% of use situations.
• Developer Turnover – Back in 2009-2010 there was a shortage of good mobile developers, and our best people were pulled into the most important projects. We lost the development leader of our app to a startup as he was half-way into programming the app, and then his replacement headed to Silicon Valley soon after. The code was re-worked too many times and we got tired of fighting for resources.
• Waiting for Brands – Back when Phogo was still an idea, I believed that we could sell an investment partnership to big brands–and use those funds to help pay for our development. Mobile is a huge priority for traditional marketers to figure out, and we offered something much better than more banner ads. I was able to get meetings with most of the biggest CPG companies, and they liked what they saw. But the politics around investing in a startup are enormous, and since Phogo was still in development there was nothing for them to buy. We should have focused on shipping our app and selling to brands once we had user traction.
• Corporate Distraction – At the end of the day, the innovator’s dilemma hit us in the face. We had a holding company holding us to hit our monthly revenue forecasts–and Phogo was a known “cost” with an unknown upside. It was difficult for my fellow executives and I to put our employees’ jobs and profit-sharing at risk for an unproven startup idea. This is a struggle for all advertising agencies in particular; unlike the P&G’s of the world, they have no baked-in R&D budget. In fact, because of the realities of accounting, our holding company could easily invest in external startups with its available cash, but any internal investment hits the bottom line as an additional expense. That’s one of the reasons we were able to sell our digital agency to this holding company to begin with!

Advice for Aspiring Intrapreneurs

• Go Whole-Assed – One of my personal beliefs is that you should “go whole-assed or no-assed but never half-assed.” It’s usually a mistake to juggle multiple jobs and distractions at once, and better to chose something to focus on–or kill it outright. For intrapreneurship to work, company executives must dedicate resources, set timelines, assign staff, and closely watch progress together. Otherwise, admit from the beginning that you can’t do it internally–perhaps instead allowing a handful of passionate employees to take the idea outside the company while retaining a share of ownership.
• Get Outside the Office – We constantly talked about getting out of our existing office space and setting up our own physical location. We knew that the day-to-day of our day-jobs would pull constantly, and since our project team came from people scattered across four floors it was hard for us to collaborate. I think we could have worked much faster by co-locating offsite and living a little more of the ramen lifestyle.
• Make the Jump – To be honest, I believe it has never been harder to successfully launch a new product within a large, existing company. Going firms are under intense pressure to invest less and focus on their current businesses. Bureaucracy is choking what little innovation makes it through. Meanwhile, it has never been easier to launch a business and find seed funding. And if you’re too risk-averse to jump into your own startup (or don’t have a killer idea yet), I would recommend that you join a startup that is off the ground and beginning to ramp up. Salaries and benefits will be lighter than the Fortune 500, but your learning curve will go vertical, and you’ll get the confidence to make a go someday.

Knowing what I know now, I would still go through the experience of trying to make Phogo happen within my company. It was an amazing opportunity to learn, create and partner with some really smart co-workers. The effort also gave me confidence in my ability to strike out into the startup world. I decided to leave my job shortly after our companies were integrated and my ownership earn-out was complete. I quickly signed on to join the VC side of the table with CincyTech–while also launching this startup, the Minimum Viable Concept Test. Every day I get to help startups learn and succeed–while building out my own new business in parallel. It’s an incredible opportunity and I can’t wait to wake up every day.

If you found this story compelling, why not click over to my new “Startup Fail Blog Wiki” where I am pulling together similar stories of lessons from founders. The odds of success are long, but the more stories we share, the greater chance we have to increase the odds of success.

(And you should learn more about the MVC Test here, and follow me on Twitter here.)

+Bob Gilbreath