How to Validate Your Business Idea: The Lean Startup By Eric Ries

Starting a business is a very daunting task. However, with this week’s tips, you can start by validating first your business idea before you even go full blast with your business. Here are some tips from the book The Lean Startup by Eric Ries:

Draft the User Experience Vision. It is crucial to develop the journey of the user. If possible, draft it with functional specifications and UI/UX wireframe. It will serve as a high-level plan, so you will be able to consider all aspects that you can offer to your target market. The photo below is the actual brainstorming notes for our Snap Accounting project at Hilsoft.

Identify Critical Assumptions. With Snap Accounting, we assume that small businesses, who want to make their back-end transaction processing efficient, are not tech-savvy enough to setup existing self-service accounting platform. So our critical assumption is that they will need a platform where they can start to record their invoices or checks in a snap.

Build an Early Version to Validate a Critical Assumption (Concierge MVP, Smoke Screen MVP). In 2016, we started by forking the accounting module from our existing ERP suite. We quickly replaced the UI/UX but launched it without the self-service option yet. We offered it to accounting firms but did the customer onboarding manually. That is the concierge Minimum Viable Product (MVP) approach. The smokescreen MVP is where you develop marketing campaigns without a finished product yet. It is like a pre-selling or pre-order style of MVP.

Release and Measure. After reaching 100 active users in the Concierge MVP of Snap, that’s the time we developed the self-service option (hilsoftsnap.com). We are now in the process of posting online ads and measuring the feedback of the market. At the moment, we get about 5-7 new registrations per week, with about 1-2 accounts that remain active.

Pivot or Persevere. This stage is where you do iterations in your product and tweaks your marketing efforts. I recommended that you continue to do that cycle until you reach your ultimate goal of either your revenue goals or investment for growth. Perseverance is the key.

My Productivity Apps

Productivity is on the decline when we are disengaged from our work. We tend to procrastinate, at times, or become lazy with a big chunk of tasks on hand. It is the reason why I am obsessing the idea of making my work more anxiety-free and be more productive.

It’s a good thing that there are many productivity mobile apps available to make our work life more comfortable. I’ve tried a lot of tools, and here is what I use for now.

  1. Trello – I fell in love with Trello after trying several project management tools. I tried Assembla, Jira, Asana, Remember The Milk, but Trello somehow fit in with my work and lifestyle because of it’s built-in support for agile. I also have met Michael Pryor, co-founder and CEO of Trello and mentored us in Lisbon Web Summit last 2016.
  2. Alarmed – it is a very flexible reminder app that can nag you, or give you the option to snooze, add more hours or minutes on the fly. We all know that our day doesn’t really happen as planned, and with this app, I can easily adjust accordingly.
  3. Viber, WhatsApp, Messenger, WeChat and Telegram – I use all of these tools because of the different preferences of my contacts. If I have a choice, then I would prefer to have a single app for all. I tried researching for one, but there’s no available in the market yet. Hopefully, someone invents this soon.
  4. Spark – I just tried this email client app to solve my problem in delegating an email to someone without forwarding it to the person. I still use the Gmail app in sorting out my email, but I use Spark when I need to delegate some messages in my inbox.
  5. Forest – I use this app when I want to focus on a particular task, and if I don’t want to be disturbed. It is an app where a user can set some minutes to work on a job (Pomodoro style). Trees grow virtually as a virtual reminder that you are growing and productive until you finish the time set.

These are just tools, but in the end, it is all about how your approach in using them. You can use this and still be stressful. The key is organizing your time properly, time-blocking, and being mindful of urgent-important matters vs. non-urgent-non-important ones.

Maybe you would want to stop and gather your thoughts before engaging. I use Evernote in journaling and mind mapping when things are a little bit all over the place.

Are Filipino SMEs Ready for Virtual Employees?

Telecommuting, remote work, home-based jobs are terms that we use in working virtually.  This virtual team structure is growing in popularity in organizations.  To some extent, we are already practicing working with people who are not in our visual proximity although we are in the same building or premises. 

We utilize instant messaging, emails, video conference tools to collaborate with our team.

Many organizations who are flexible and adaptable have already explored a virtual office environment as one means of achieving goals and project objectives. 

BPOs in the Philippines are virtual teams of their corresponding HQs in the US or Europe and not only dispersed geographically but also in timezones.

Here are some advantages of virtual teams:

  • Reduced time and costs in travel
  • Higher productivity, more time, and fewer distractions.
  • A higher degree of employee engagement and freedom from office policies
  • For companies to leverage talent across geographic boundaries.
  • Lesser overhead cost of office space for organizations.
  • Quicker decision making, less face to face meetings.
  • Improve detail due to documented instructions and notes

Disadvantages:

  • Some people work well with physical interaction.
  • Employee behavior diversity in virtual teams leads to cultural issues.
  • Employees who need training, encouragement, and motivation.
  • Weaker control and some employees don’t have a conducive workspace.

To be honest, I don’t know if Filipinos are ready but I am writing this because I really have this strong urge to go virtual due to its inevitability, especially the growing traffic problems and unforeseen events in the future. Its success may depend on the industry, culture, nature of products/service, or ethnicity but I might as well be the first one to adopt and do this bold move which may result to be our competitive advantage.

This post is also to officially announce that Hilsoft, being an advocate of change adaptation and innovation is going partly virtual. It is in line with our recent initiative to go complete SAAS by the end of 2020.

Since last month, I already started experimenting on it by living in a nearby province and less face-to-face meetings with the team at HQ.  We already have initiated a survey internally with the employees who are willing to work at home, which 50% responded yes and the 25% others responded either option would do.  The rest, which are new employees, wanted to work in the office, which makes sense.

This coming week, I am about to finalize remote work policies, control procedures, and performance measurement.  There’s so much more to consider, from hiring, face-to-face team meeting schedules, training, sales calls, client visits, etc.

I will document and publish the progress, hoping to provide value with entrepreneurs who are considering this strategy.

Update:

Here are the policies we implemented together with its revisions from Sep 2019 to Feb 2020.

For recruitment, we schedule written exams remotely with a dedicated time slot, we ask them to send personal videos as initial assessment and then final interview in person.

To date Feb 2020, we are doing good and so productive.

The Cash Flow Friendly Way to Start and Run a Business

“We developed our first product in a 28sqm condo unit in Makati. It’s not so quiet as we hear the city train pass by every 10min. It’s comfortable, but it was not that conducive for work.

Our initial budget was P100k. I was the one who opened the checking account in Metrobank and cut checks to buy our first desktop workstation and a small computer table. The 80×50 whiteboard behind us was the one we purchased at National Bookstore in Glorietta, which we had a hard time loading in the cab.

It was 2001, and I remember the fall of the twin towers were all over the news at that time while my brother and I just resigned from our employment to pursue the business. We both started with an allowance of about P5k each per month, rent and utilities financed by our uncle. We operated in very minimal monthly expenses.”

If you have a great and promising idea that you are itching to start, then here’s the most cashflow friendly way to start and run a business:

A. Do not formally register the business yet without a product and initial traction, especially if you are in a bootstrap mode. Registering the company only makes sense if you have either a financier or revenue.

B. Do the business registration yourself. You don’t need to hire a full-time admin or an accountant yet. We have guides on every public office from the SEC, or DTI, Cityhall, BIR, they have detailed instructions on how to register the business. You may need to talk to a friend who has the experience, get a list of requirements from him/her.

C. Get a virtual office. You can get a virtual office as low as P1,500 per month in Makati. All you need is to register the business with the address that you can put on your website. These virtual offices offer a conference room that you can rent on a per hour basis if you need to meet people or customers on-site, ranging from 1-2k per hour.

D. Use LinkedIn, UpWork, or other free platforms to source for people. Use virtual administrators, recruiters, creatives, SEO specialists, programmers, or even sales lead generators who can work remotely. It is essential to pool people in your online network, so you have reserves in the case of wrong hires. If possible, engage with them on per-project commissions or incentives and not on a monthly or hourly fixed compensation.

Balance the tasks to delegate. Admin tasks that are urgent but not that important are ideal to outsource while important/urgent tasks are the ones you can do yourself.

E. Invest in learning social media strategies, personal branding, SEO/SEM. It is the best time today to do FB or IG ads as they are really cheap compared to Google Ads or SEM.

Matching your revenue and expenses is the key to cash flow management. Improve collection, remove the urge to spend non-essential things, and invest back your profits to your company.

How Integrity Helps You in Creative Decision Making

Integrity came from the Latin word Integritas or Integer in English. As you know, an integer is a whole number and cannot have decimals or fractions. In life, a person with integrity is incorruptible and 100% in terms of doing the right thing. It does not mean that the person will not make a mistake. It only says the person is doing what he or she thinks is right.

I’ve been an advocate of integrity for a long time already. I have a Chinese symbol tattoo on my back and one of the core values defined in Hilsoft’s core values.

In business or any workplace, you’ll be faced with a lot of scenarios that will challenge your integrity. There’s always a question of what is the best action for a particular problem. The first thing that we do is to reason with it and use our logic. If it couldn’t be explained through logic, then we follow our gut feel and intuition. But if integrity is within your core values, then that I think is the last filter to tell yourself if you’re making a sound decision or not.

I always hear from NBA coaches to play the game the right way. And most of the champions play the right way. What stuck to my mind is the 2004 Detroit Pistons led by coach Larry Brown and with no superstar player. They played the right way by passing the ball, selflessness and team chemistry and they were able to defeat the LA Lakers with an all-star team such as Shaq, Kobe, Karl, and Gary.

This example above gives integrity a strong argument, and that’s what I firmly believe. Would you choose positivity over negativity? Half full or half empty? I will never choose negative because positivity always wins. Cynical people may win in the short term, but in the long run, positive people or positive culture still prevails and wins.

So what are the practical ways to demonstrate integrity?

  1. Keep your commitments. Don’t say yes if you want to say no. If you say you will give feedback tomorrow, then provide feedback tomorrow.
  2. Let go of your ego. Sometimes our judgment is clouded because of ego. There came a time at Hilsoft where I had to let go of my perks and allow our finance team to controls my expenses. It’s my job to be a model for my team and let go of the ego when the finance team controls my costs. I also know that I am responsible for the survival of the company, our customers, employees, and our shareholders. They should all come first before me. It was difficult at first but I let the concept of integrity guide me.
  3. Take responsibility and accountability. If you made a mistake, admit it, and correct your errors.
  4. Don’t tolerate problems. People tend to tolerate problems when they see them. They always assume that it will take care of itself. It is not. So we have to resolve every issue that we see. It will never end but at least it doesn’t pile up.
  5. Negotiations should always be a win-win. Sometimes, people are tempted to win a deal without carefully assessing the other party’s benefit. This should apply not only to customers but also with employees and suppliers.

These are just a few examples. The takeaway here is to learn to always be in check on your decisions before making actions. Would you rather win but will bug you in your sleep forever or win with a peace of mind. An integrity-based decision to me is always a peace of mind. If you do this, then you have nothing to hide, and you won’t take criticisms seriously.

Solving Business Problems With Inversion Technique

Typically, what we do when we encounter any business problem is to point a finger, understand the cause, think of options, then decide what to do. If we fail, then we do plan B.

I came across with inversion or retrograde analysis with some articles I found online, and I wonder how can this concept apply to real-life business problems.

I’d love to share some sample scenarios based on my experience hoping this could help you as well.

Case #1 – Sales Problem: Leads generation.
Inversion Analysis: How can I prevent the company from generating leads?
Some Answers: Don’t do telemarketing and online marketing, don’t ask for referrals from friends and existing customers ( i just thought about this now), don’t analyze what the customers want, don’t do promotions.

Action plan: Ask for referrals, analyze the market, start an online marketing campaign.

Case #2 – Operational Problem: Team Performance
Inversion Analysis: How can I prevent the team from delivering on time, and with quality?
Some Answers: Keep unprofessional people, don’t strengthen recruitment screening, don’t lead the team, don’t provide training.
Action plan: Strengthen HR rules, policies and recruitment. Establish a good training program. Lead by example, coaching, and motivation.

Case #3 – Financial problem: Cash flow
Inversion Analysis: How can I make the company run short in cash?
Some Answers: Don’t force collection, don’t control expenses, don’t match revenue and expenses, invest on an asset without a careful assessment.
Action plan: Strengthen collection and maintain a “funded” budget.

Case $4 – Product development problem: Marketability
Inversion Analysis: How can I make the product not sellable and marketable?
Some Answers: Develop fancy features that customers do not need, don’t analyze customer benefits, don’t invest time to enhance the user experience.
Action plan: Realize customer benefits and invest time in enhancing the user experience.

In summary, I think the main benefit of this technique is to make us look at things and problems on a different perspective. Examples above are sort of like high-level, but you can go down to a more detailed problem to solve using inversion.

Ego is the Enemy of Creativity: How to Drop Ego to Ensure A High-Performance Team

I have this habit to wonder if there’s something wrong with me. Perhaps I’ve spent too much time alone in running the business in its first few years. As a young entrepreneur, my ego was fed with the idea of having a business of my own. The unwelcome, small voice of my subconscious whispers that I am the man and I made it but in reality, I have not.

Back then when I was managing the company in full speed and full control, I set my perks and spent things that benefit my needs and not the company. I was doing it without carefully assessing the performance of the business.

I wonder, maybe this ego was one of the major reasons why I failed several times. That ego blocked my creativity. I was too full of myself and the know-it-all. I don’t show it though but deep inside I know.

But the failures showed me the way. They shook my head so I gathered my wits. The thing is, these are impulses. You have to have a strong sense of being emotionally mindful with massive actions to stay humble and be creative.

It was 2011 when I welcomed the idea that for me to be able to grow, I need a high-performing team.

I need to let go of the big ego so I can perform and be creative.

I have to go back as a student and be willing to learn.

I then welcomed a partner to help me out in sales. A met a guy in his 60s, a little aggressive and big-headed but he makes sense. I learned a lot from him, especially in a sales negotiation.

With him, we were able to grow our revenue by 100% year-on-year. We were the A-Team in sales. But I had to allow myself to be in his wing, follow his calendar, be his driver and enable him to dictate the pace in sales. I even titled him as the Managing Director of the company. I forget entitlement.

By 2015 when I allowed the company to try one more notch of a challenge. I met a foreign angel investor that I have always been grateful for. I used the investment to grow further in sales and product. But one of the major moves that I made was to hire a CFO.

I had to let go of a big chunk of ego again by allowing an outsider to manage and control the expenses. I had to place the company’s mission above me. I let go of the perks as I was questioned with almost every business decision that I make. I knew I have to empower them and be professional.

It’s not about me anymore, it is about the company, its clients and its employees.

The growth momentum becomes inevitable that eventually, we hired a COO, department managers, and groomed team leaders. I even gave up my own office at one time to accommodate them.

Accountability as a leader becomes higher that I need to keep my own KPI and find myself responsible for transferring my knowledge to the team.

To this day, I keep myself in check of my ego on my actions and every communication that I do to our team and our clients. Because if not, then the ego narrows vision, makes us vulnerable and corrupts our behavior.

Strengthen your self-esteem and stay humble.