Darwin’s Theory of start-ups

Darwin’s Theory of start-ups is not an original theory, I first learned about this theory at a talk by Sam Ramji in a conference a few months a go.

In his presentation Sam delved in to the theory of Darwin’s finches. Darwin’s finches are a set of different bird species, approximately 15 different groups of birds. All of these birds were found and studied by Charles Darwin on the Galapagos Island.

To briefly summarise the theory of Darwin’s finches; Darwin hypothesised evolution, that the different species of Galapagos finches descended from mainland finches that had reached the islands sometime in the past. Over time they evolved and gradual changes occurred to the island finches. Eventually they were different enough from the mainland finches to be considered a new species. Darwin proposed the island had become inhabited by many different but related species of finches. The following image was taken from Sam Ramji’s presentation, and graphically describes the evolution animal.

How does all of this biological science relate a startup company?

Start up companies, especially technology start ups, share similar patterns to those proposed in Darwin’s evolution theory. Businesses can be grouped in to sets (species), revolving around solving one problem. For example businesses that evolve around email may have one set of businesses who are the email inbox providers such as G-Mail, or Hotmail, Yahoo Mail etc. The second set of businesses could be email clients, that includes Sparrow, Thunderbird and Outlook, the list can go on.

Ramji uses Twitter, and it’s API as an example of comparing Darwin’s finches and modern businesses and startup companies (see slide 86 on the Slide share below). Using this example, there are many different types of  startups that have evolved from Twitter’s API.

Startup companies like Hoot suite and Tweet deck for scheduling tweets, and Bit.ly for shortening urls so they can fit in a tweet. All of theses startups have different interfaces, functionalities and use-cases, however they all originate from Twitter, and function around Twitter, through harnessing Twitter’s API.

What can a startup company take from this?

1) If you are building a business that has evolved from a similar product or service, you need to define what value you bring when using your product or service. Using Ramji’s example, with Tweetdeck one can schedule their tweets, and there isn’t the necessity to be logged in to twitter when the tweet is published.

2) When starting a business, or running a start up, you need to be aware of your market, and understand that there are other companies similar to yours. What you should do is study your competitors and find what defines you as the successful business in your market.

Finally Ramji has demonstrated that there are some similarities between Darwin’s evolution theory and 21st century startup companies. It is now for you to distinguish your company in your market, and succeed.

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From - Startup Guru

Vipin Sharma

MBA- Financial Services Management

Udaipur

Lean Startup method

“Startup success can be engineered by following the process, which means it can be learned, which means it can be taught.”- Eric Ries

The Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers' hands faster. The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.

Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don't care about the idea, the startup fails.

“The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration.”

The Lean Startup Process- Diagram

ELIMINATE UNCERTAINTY

The lack of a tailored management process has led many a start-up or, as Ries terms them, "a human institution designed to create a new product or service under conditions of extreme uncertainty", to abandon all process. They take a "just do it" approach that avoids all forms of management. But this is not the only option. Using the Lean Startup approach, companies can create order not chaos by providing tools to test a vision continuously. Lean isn't simply about spending less money. Lean isn't just about failing fast, failing cheap. It is about putting a process, a methodology around the development of a product.

WORK SMARTER NOT HARDER

The Lean Startup methodology has as a premise that every startup is a grand experiment that attempts to answer a question. The question is not "Can this product be built?" Instead, the questions are "Should this product be built?" and "Can we build a sustainable business around this set of products and services?" This experiment is more than just theoretical inquiry; it is a first product. If it is successful, it allows a manager to get started with his or her campaign: enlisting early adopters, adding employees to each further experiment or iteration, and eventually starting to build a product. By the time that product is ready to be distributed widely, it will already have established customers. It will have solved real problems and offer detailed specifications for what needs to be built.

“Using the Lean Startup approach, companies can create order not chaos by providing tools to test a vision continuously.”

CONTINUOUS INNOVATION

DEVELOP AN MVP

+LEARN WHEN IT IS TIME TO PIVOT

A core component of Lean Startup methodology is the build-measure-learn feedback loop. The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the MVP is established, a startup can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect question.

The startup will also utilize an investigative development method called the "Five Whys"-asking simple questions to study and solve problems along the way. When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth.

VALIDATED LEARNING

Progress in manufacturing is measured by the production of high quality goods. The unit of progress for Lean Startups is validated learning-a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty. Once entrepreneurs embrace validated learning, the development process can shrink substantially. When you focus on figuring the right thing to build-the thing customers want and will pay for-you need not spend months waiting for a product beta launch to change the company's direction. Instead, entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.

“Progress in manufacturing is measured by the production of high quality goods. The unit of progress for Lean Startups is validated learning-a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty.”

From- Vipin Sharma

Udaipur (Rajasthan)