Having been a part of various hackathons and startup weekends as a participant, facilitator and mentor over the past 3 years, I've decided to pen down the top 5 lessons I've learnt along my journey.
1. Show That You're Foolish
When we join a hackathon or startup weekend, we start off with a huge idea of what we want to build and an imaginary new world made better by the solution we've conceived. Yet somehow, that vision shrinks when we try to translate them into words. Why does that happen? Maybe it's because the dream seems too far-fetched and unachievable, so we choose to be conservative in our vision to avoid sounding silly. That big hairy audacious goal (BHAG) is then lost in the process.
Here's the thing - If your vision doesn't sound foolish enough - it probably isn't good enough. Just do a quick scan of the companies making - or at least standing a chance to make - a real change in the world today. Their visions would have been touted as delusional when they started. Who would had foreseen that it would be globally accepted to stay in a stranger's house when you travel? AirBnB believed in that world, and made it happen.
2. Focus On The Why
During Startup Weekends, teams are urged to conduct as many validations and experiments as possible to prove that our problem, customer, solution and business model is viable. However, many teams end up validating only the "What" without truly understanding the "Why". In the case of the Business Model Canvas, it isn't about guessing a customer segment and testing to see if your guess was right. It's about investigating the underlying reasons behind why the results are the way they are.
Here's an example to better illustrate this. Let's say there's a startup that believes in proactive healthy living. Their solution is a mobile app that allows users to monitor and analyse their health history. As health becomes more of a problem when we get older, the startup then assumes that their key customer segment is in the 35 to 55-year-old range. If we tested the "What" of this assumption, it would highly turn out to be true as we'll only be focusing on the fact that 35 to 55-year-olds are more health-conscious.
If we were to delve into the "Why", we might discover that the reason for them being more health-conscious now is because they could not proactively monitor their health when they were younger as there was no good solution available. Investigating further on this, the startup then identifies that the younger generation is actually concerned about health too and do not wish to be in the state where the 35 to 55-year-olds are right now, when they get older. By delving into the "Why", a more tech savvy, younger generation with increasing spending power could had been identified as the potential early adopters for their solution instead.
3. Emotions Trumps Numbers
During demo-day or the final pitch, it is always tempting to put the spotlight on large market sizing and revenue numbers to entice the judges. However, the truth is that it's the customer that makes or breaks your business - not how big your projections are. If your customer connects with the deep frustration you are trying to solve, you'll get the revenue. Even if your market is small, by solving a real negative emotion, you'll eventually monopolise the market.
This was what Google did when other search engine giants were already around. Web users had a huge pain finding something relevant online and existing search engines were plagued with distracting advertisements surrounding the search box. Google's solution was to cut down on frustrations and distractions, thus making them the world leader in search today.
On top of this, we've got to remember that the judges at such events are people too. By pitching from emotional value instead of market capitalisation, you'll be more likely to get their attention during your pitch.
4. Growth Is Better Than Size
If you do choose to focus on market sizing and potential revenue of your startup instead, it pays to emphasise on growth over existing market size. Let's say your solution is in the travel industry and you've identified that the market is worth trillions because that's how much the industry is generating today. How much market share could you realistically get? Probably 0.1%? If you're trying to convince the judges that you have a grand vision, yet that vision is limited to 0.1% of a highly competitive red-ocean market, it's not that great a vision now is it?
Peter Thiel has a great explanation of this in his book Zero To One. By owning a small percentage of a large but highly competitive market, it's difficult to stay ahead as anyone can join in the rat race. It's probably better to get 100% of a smaller market where you can block off competitors as you gain control of the ecosystem. Whenever possible, show how you'll create a niche market which you'll be able to own a hundred percent of and how that new market will expand in the future. AirBnB created a new supply and demand market for hospitality. Uber developed a new supply channel for on-demand transportation. Facebook was the reason why social media marketing even exists today. These are great examples of how companies can create and monopolise new markets.
5. Minimum Viable Product doesn't mean Broken Product
This is probably one of the most common mistakes startups make. By being lean, we are advised to push out a minimum viable product (MVP) as soon as possible, to test as much as possible, at a cost that is as low as possible. But that doesn't mean that it it is acceptable to launch an MVP that is broken in any form.
If your MVP doesn't have the right amount of emotional design, usability and reliability, you'll lose customers right after the first interaction. And all of us know that it's very tough to recover a broken relationship. So I implore startups out there to please not screw up your MVP.
OK, The ONE Lesson
If there was only one lesson that is truly more worthwhile than all those I've listed above, it's my newfound definition of a startup. A startup is not the result of a ground-breaking solution, nor the outcome of a grand vision on pitch day. A real startup is created only when a bunch of people who trust one another decide to make an impact in the world they live in - as a team. So, even if you failed to win any hackathons or startup weekends, what is important is the team that you've created. Cherish that team and anything is possible.