Posted by & filed under Accelerator, Corporations, Startups.

I believe there are three phases of startup and corporation collaboration (all of which are needed by the way!):

One-night stands, dating, and finally marriage.

One night stands are the first contacts between startups and corporations. Mingling at startup events, arranging innovation competitions, hackathons and the like. These are needed for people to get first experiences with startups and learn how different, yet lovely they are.

Dating phase is an accelerator program. There corporations get to experience the startup way of doing things. Iterating fast, focusing on the user experience, and providing customer care that is beyond just words. They also get feel what it is to truly share information and work without silos – things that are essential for creating real innovations.

Research shows that such programs work when they are outsourced to a party that understands corporations, and even more importantly: follows “lean startup” or similar methods. Coaching in the program also has to be focused on designing the businesses so that it create value to customers, not pitching or scaling them too early (unfortunately that is what most, but not all, accelerators do). Dating may or may not include investments into startups, but at least it should include some kind of business deals with the most suitable ones.

To make all that happen, it is crucial to have commitment from the top management and resources allocated for collaboration. It is also important to be flexible to learn and adjust processes so that you can actually get the innovations from the startups.

Marriage means getting even more serious and committed to working with startups. In the startup world, marriage has to be polygamy as marriage with just one startup seldom works. There is a high risk of killing the customer orientation/speed of startups with corporate processes and rules. That is why you need to systematically work with enough startups to achieve the critical mass and also make sure the corporation learns to benefit from startups.

And that’s it, the lovely world of startups’ and corporations’ love life.

 

Posted by & filed under Accelerator, Corporations, Fintech.

Altogether 13 startups, 3 months. And in addition, we had one startup from Industrial Bank of Korea accelerator. We have learned a lot. Nestholma has now done 21 accelerators for large corporations and we are reaching the level that we know how to start the change in corporations. I would also say that Nordea has been an amazing partner. They accept the facts and start changing when needed. The guys working for Nordea have the right attitude for cooperation. Really professional gang, but also cool to work with.

But Nestholma has a bigger mission. We are saving corporations. They need to be saved. From themselves. And startups are great tools for that. Corporations learn how to be agiler, they learn how to make decisions fast and how to design products and services with customers; and fast. But the best thing on accelerators is that startups deliver the innovations, at the speed of light…or night. I usually say that it takes a year to iterate by a corporation and a night by a startup. It is almost true =). But often corporations are also lean. Well, at least some parts of them and yet still many projects just stop. For no reason, they just are undone.

The best thing about implementing our mission is that the startups gain so much. They get the support from our partner corporation and Nestholma team, they need and they can start scaling their businesses. And for investors, we provide “bank tested” startups. Of course, some of them are better than others, but all of them are much better than they were 3 months before.

So amazing 3 months done. Not to mention Slush week; I was on stage 4 times talking to corporations as well discussing the change at Bank of Finland event. We also did investments at Slush and Ultrahack hackathon. And last week I was named on the list of TIVI top 100 most influential professionals in Finland. I guess that is also a prove that corporate startup accelerators are here to stay.

I finally got some rest during the weekend and now I feel gratitude for the amazing entrepreneurs at Nordea accelerator startups, for Nordea guys and mentors and my colleagues at Nestholma. All this happened only because of you. My sincere thank you to all.

See the startups pitching in the Demo Day

Antti Kosunen @anttikosunen

Posted by & filed under Entrepreneurship, Product development, Startups.

All communities have their jargon, and startups are no different. Probably one of the most used terms is Minimum Viable Product, MVP for short. It’s considered one of the core messages of Eric Ries’ book The Lean Startup. If you hang out with entrepreneurs long enough, you’re likely to hear the acronym used for almost anything that people patch together.

According to Eric Ries, MVP is a “product which has just those features [that solve the core problem] (and no more) that allows you to ship a product that resonates with early adopters; some of whom will pay you money or give you feedback”. It’s necessary to learn quickly whether your idea makes sense to your customers. And if it doesn’t, you want to “fail” quickly, when you haven’t yet invested lots of resources! You build an MVP with the purpose of learning from your customers and understanding your market.

The problem with this is that most people get the meaning of MVP’s completely wrong! And probably the biggest reason is that every single word in that term is misleading. No wonder people misuse it!

Firstly, it might not be a product.

This word is loaded with meaning that does not apply to MVPs. We generally understand products as something that is manufactured or refined for sale. Even if you extend this to a service, the purpose of the MVP is not sales, but rather learning. And MVP is a tool that we use in order to experiment, to find out if the market really behaves like we assume it does. Of course, part of the assumptions we need to validate are whether people would pay for our product, but the mindset is completely different. What you build to validate that people will pay clearly does not include all the things that a final product would.

Using the word “product” makes people think that they have to build something that looks like the final product already, which might not be the case! Later MVPs will indeed be products (or product-looking), but early ones are likely not to be.

Think about the case of Buffer. They built a landing page to test whether people were interested in the product at all, and after that they modified to check whether people would be willing to pay for it. That was before they wrote a single line of code! Most people would not call that a product, but rather an experiment. You can read more about the story here.

Secondly, it’s only viable for the purpose of learning.

This is probably the most criticized word in the MVP term. Andrew Chen proposes to focus on a Minimum Desirable Product instead, to make the “product” more human-oriented. This gets a bit closer to the real purpose of an MVP: to test whether the value proposition is powerful enough to engage your early adopters.

The word viable tends to make people think of whether the business model holds together, and whether the product is technically feasible… which are not the first assumptions that you’re testing! If you’re testing your value proposition, early MVPs might not have a business model behind them. Most of them do not work as a complete business model — for example, if you’re building one side of a two-sided market-place — and are likely not to be viable… except for the purpose of testing your value proposition.

An example of this is Angellist. To test whether people would be interested in a service that connected startups and angel investors, they started by introducing them through email! That would definitely not be a scalable business, but thanks to that they found that there was quite some demand for it. You can read more about their initial launch here.

Finally, it’s not about the minimum set of features, but rather about the core value that it provides.

Don’t get me wrong: MVPs must be minimalistic and beyond. So much that you should be embarrassed about them when you show them around. But because of using the word “minimum”, most entrepreneurs tend to think about the complete product, and then start cutting things off. They often try to boil down their final product — their idea — to the minimum version they’d be happy with.

This is because the purpose of an MVP is to learn as fast as possible. Therefore, the train of thought should not be “what is the minimum set of features” — to which startups add all sorts of stuff — but rather “what’s the quickest way I can find out if this is good business”. As Steve Blank says, a minimum viable product (MVP) is not always a smaller/cheaper version of your final product. It’s something that helps you validate the core.

If the entrepreneur is thinking about several value propositions at once, they will be convinced that the “minimum” set of features is… well, a lot of things. And all of them are important, therefore they’re “minimum”. Instead, it pays off to ask the question of “where does the customer get the core value from”, and then build something that validates only that.

One often mentioned MVP is that of Dropbox. To validate whether people would use their product, they created a video showing the product. They didn’t have a product with any features when they put the video out, but the video went viral and they realised they had a really good case ahead of them! You can read more about their story here.

Even if the words we use to describe MVPs are not accurate, the concept of MVPs is clearly useful. So what would be a better way of calling it? Some have even proposed calling it Minimum Viable Experience. Some others, as we mentioned, favour the term Minimum Desirable Product. However, they only address part of the problems.

We think that we can correct each one of the words. And we think we can even do some word juggling so that you can continue using your acronyms comfortably!

Enter… the MVP: Main Value Proof! It’s the entity (product, service, experience, you name it) that lets you test the core value of your business. It’s not only minimal: it focuses on the main ideas, and only on those, so that you can validate them — or disprove them. It revolves around your value proposition, and not around other technicalities that you business concept might have — unless you’re in a later stage, in which you’re testing the value of those technicalities. You can have different MVPs to test your value proposition — which will be far from products — or the way you plan on delivering it — which will actually look a bit more like minimalistic products. But we’re not calling it product, since that could make you fall into innovator’s bias!

So next time you read the acronym MVP, think about the main value proof instead!

Dr. Daniel Collado-Ruiz, @ErCollao

What did you think about the content? Do you disagree? Are you interested in hearing more about other related stuff? Drop us a line in the comments or on twitter, and let’s chat!

 

Beyond startups hype: how collaborating with startups can improve your organization in three key areas