#pivoteast

[mustbicycle]

PivotEast 2014 statement: the importance of product-market fit

MapJam pulled out of the PivotEast competition as one of the finalists in the entertainment category at the last minute.

Why?

In a sentence: too big, no defined market!

Going in to the competition we had defined ourselves as the killer app for small merchants across Kenya. A means for the mass market of consumers to locate the nearest small merchant/enterprise: tailor, butcher, liqour seller, khat seller, DVD seller....etc. Despite this we were lumped in the entertainment category!

Photo credits: Jamie.Kairu(at)gmail.com

At the outset we are told the most important criteria for the competition is traction. Well then it can't really be a competition can it? How are you going to gear your company into gaining market traction within 30 days? Well we really tried to do such a thing and participate in the competition. In the process we learned a valuable lesson.

My criticism of the competition is that there is not nearly enough focus on market. Because it is a competition it is heavily weighted on team and product and for most of the month it felt like a public speaking competition more than anything else. Talking with other finalists it seemed like there was overwhelming pressure on the delivery of the pitch. Because I was not seething with passion I was getting questions like "did you actually build this product?" from the administrators. Having a great pitch is awesome but it is not the be all end all moment for startups like you are made to believe it is participating in PivotEast. Getting the investor's attention is one thing, having a viable startup that will gain investment is another thing entirely. Investors ultimately don't care about team and product. Don't take my word for it please read Mark Andreesen's seminal post on product-market fit.

I think the whole thing is geared wrong and misleading to startups. Really what it is about is winning the prize money, it's not about investment or gearing your company up for investment.

Yes there are some great sessions hosted at the iHub for instance on customer development related to product-market fit from Sinapsis. It seems to me that these competitions ought to be effective and not just hype machines. They ought to involve direct integration with companies in the business of financial advisory and investor support such as Open Capital Advisors, who presented a session on investment during the PivotEast sessions. 

In the silicon savannah of Nairobi the pervasive mentality is still 'build it and they will come' not build a "sustainable business model." NGO + aid has built this into the tech hubs in Nairobi, like mLab, they themselves being recipients of public and charitable funds. They need to seem pertinent to the market, therefore there is alot going on the surface but just like any other NGO in Kenya the incentive is not based on market forces and therefore there is little market impact but a lot of hype.

There is one massive question that is not addressed by any of these innovation challenges and startup competitions and that is: "How are you meant to understand the market potential of what you are building?" What is the potential size of what you are building? To Quote Andreesen again: "The size of a startup's market is the the number, and growth rate, of those customers or users for that product."

The answer seems to repeatedly be - build something super specific for a super specific market segment. Great, but too simple and dangerous. This course of action can easily lead you down to startup failure. Going back to Mr. Andreesen, what about the size of that market? If you can corner a specific market segment, but can't scale from there then you are doomed.

In my opinion too many people, GREMLIN, included have been building products without thinking about the market. Just because they work well and do some new innovative things doesn't mean shit. How big is your potential market?

[nairobridge]

Leaders Are Negotiators

Nothing warms up an audience like laughter. Last semester I observed how several of my professors used humor to animate their lessons, particularly Bob Bordone and Debbie Goldstein of Harvard’s Spring Negotiation Workshop. Through skits, role-playing exercises, and tactfully incorporated film clips, Bob and Debbie used humor to make challenging negotiation concepts stick.

This week I will attempt to model this approach during a weeklong training on effective negotiation at the iHub. This short course builds off of the two talks I led here in Nairobi earlier in the summer, but provides much more time for dialogue, a full-blown negotiation simulation, and of course, a generous dose of snark and humor. Thanks to the continued support of Harvard’s Program on Negotiation (PON) and Tufts’ Institute for Global Leadership (IGL), I am able to offer this course free of charge to colleagues from Ushahidi, researchers at the iHub, and the winners of last month’s Pivot East competition.

Yesterday marked the first day of the four-part series and centered on the seven elements of negotiation pioneered by William Ury and Roger Fisher in Getting to Yes. A small but engaged group of entrepreneurs explored Ury and Fisher’s elements, considering how these concepts could be applied to their own negotiations with potential partners and investors. At first, the participants were reticent. I have seen this before. It’s tough to speak up in a group, especially in front of your colleagues. But I eventually got the conversation flowing, in part thanks to the battery of helpful facilitation techniques I picked up while working for Uncle D (our tongue-in-cheek nickname for Deloitte). For example, using sticky notes as a brainstorming tool is a surefire way to draw out the wallflowers. This simple piece of adhesive paper can be used as a microphone, amplifying ideas that would otherwise remain trapped in shy but sharp minds.

This afternoon we will continue to unpack the seven elements, but tomorrow is when the real fun begins. Wednesday and Thursday we will dive headfirst into a Harvard-designed negotiation simulation. The case, codenamed Appleton v. Baker, is one of the first exercises I completed as a young negotiation student. While centered on a real estate deal, the underpinnings of this case provide ample opportunity to experiment with the seven elements of interest-based negotiation. I am confident that the group of edgy software engineers and entrepreneurs will take the exercise quite seriously—and I cannot wait to see how things shake out. After the one-on-one simulation we will come back together as a larger group to review and discuss the results.

While I realize that a short negotiation training is not going to transform these East Africans into rockstar negotiators, I believe it will elevate their communication skills and hopefully lead to more equitable deals as they move forward with their businesses. Research has hinted that teaching interest-based negotiation skills in Africa works. Consider the success of Innovation for Poverty Action’s (IPA) Girls Negotiation program that emboldened young Zambian women to make smart, productive life choices. Arming entrepreneurs with similar negotiation toolkits is an important step in the development of effective leaders—especially those set to pilot the future of Kenya’s dynamic tech ecosystem.

[1entreprenewer]

Had the exciting opportunity to meet one of my @udemy course #SuperLearner students from Nairobi at #pivoteast. It's quite an honor that in just 7 months we have students literally all over the world! (at The Panari Hotel)

[nairobridge]

Lights, Camera, Innovation

What an exciting morning! I write to you from Pivot East, East Africa's premier mobile startups pitching competition and conference. Held on the outskirts of the Central Business District (close to the giraffes in Nairobi National Park), the event showcases the remarkable talent here in Kenya and beyond. So far I have heard 10 different entrepreneurs pitch their path breaking apps in front of a captive audience of peers, sponsors, collaborators, and potential investors—essentially the who’s who of East Africa’s tech scene. Ideas have ranged from a rotating savings group designed for digital natives, to an app that connects rural Ugandan farmers to information, products, and access to a Lyft-esque taxi service focused on security and trust.

To date, my favorite application is Sendy, an intelligent courier app designed for Nairobi’s rapidly growing transportation marketplace. Similar to Uber’s dalliances into the courier space (see UberRush) and eBay’s new interest in door-to-door delivery (see Shutl), Sendy links boda-boda (motorbike) drivers with Kenyans in need of a courier. I was impressed with Sendy’s slick marketing and crisp value proposition. Evidently they’ve been down this path before. While Sendy is struggling to meet the burgeoning demand for their courier service across the country, I see definite long-term potential. This is especially true if Sendy can seal a rewarding deal with Jumia, the Amazon.com of Kenya. With a growing middle class in Nairobi, the market for goods-on-demand is surely set to increase. Sendy is positioned to win big if it can establish a stronghold in this competitive space.

Time to get back to the pitching room as the next round of entrepreneurs are getting ready to present. Watch out Silicon Valley—you have some serious competition in the Horn of Africa.

[1entreprenewer]

At #pivoteast #nairobi. Living in #telaviv, #startup conferences make me feel right at home.

[nairobridge]

Time to Train

As I mentioned on Friday, this weekend I had the opportunity to present a short seminar on interest-based negotiation to a cohort of young entrepreneurs from East Africa. I am happy to report that the event was a success! Over 25 people from Kenya, Uganda, and Tanzania (participating in Pivot East) packed the m:lab training room. I ran through a 30-minute presentation, emphasizing the importance of communication and collaboration in any negotiation. The session was quite interactive—in particular because I knew that I was the only thing standing between these entrepreneurs and a cold Tusker. I incorporated several of the best components of my experience at Harvard’s Negotiation Workshop and attempted to channel my best Bob Bordone. We discussed how to give feedback to colleagues and how to establish a productive working environment by setting a process at the beginning of any negotiation.

Following my formal remarks I opened the floor to questions—which was both exciting and intimidating as these entrepreneurs were whip smart. Most the questions focused on negotiating from a position of weakness, a common challenge for fledgling startups. Others asked about how to manage a difficult conversation or a fiery counterpart. One earnest participant inquired about the absolute worst thing to do in a heated negotiation. I tried to track all of the questions back to the importance of considering the long-term relationship—not just the individual negotiation.

While Saturday’s session provided a small taste of interest-based negotiation, many of the participants demanded more. At the end of the event, several hands shot up: “Where can I learn more? What other resources would you recommend? How can I land the best deal in my upcoming negotiation with a potential investor?” I plan to host another, more in-depth seminar sometime in mid-July. It will focus on the seven fundamental elements of effective negotiations. During the session I hope to run through a full negotiation simulation and perhaps even videotape a handful of the entrepreneurs to pinpoint moments of strength and areas for improvement. I also aim to present Saturday’s intro course for others at the iHub and m:lab, extending the reach of interest-based negotiation deep into the Silicon Savannah.

(Special thanks to Meghan Lazier for the brilliant photography)

[1entreprenewer]

It was an absolute honor and pleasure to share the stories of some of my most educational failures with the finalists of #PIVOTeast. I am really excited to spend more time getting to know these bright, energetic entrepreneurs over the next 3 days.