Innovation Consultant Rene Bastijans on Uncovering Your Product’s True Competition

Innovation Consultant Rene Bastijans on Unlocking Growth for Lean B2B Startups

Innovation consultant Rene Bastijans had his dream job. In 2011, he was working in the small corporate R&D team of the largest education company in the world researching emerging technologies, developing prototypes for next-generation learning products and running workshops with intrapreneurs.

The company, Pearson, had been hit hard by the arrival of the iPad and other e-readers. They wanted to figure out what to do with new technologies.

Fast forward to 2015, Rene had moved from London to sunny Portugal to join Beta-i, the number one entrepreneurship and innovation organization in Lisbon, where he led their corporate startup accelerator Protechting. Out of a passion for The Lean Startup, he started teaching early-stage startups how to apply Lean Startup principles to validate their business models.

Rene now helps Software-as-a-Service (SaaS) companies understand how to build and sell products customers will buy through Jobs to be Done research. The insights gained from the research allow his clients to uncover revenue potential, create effective marketing messaging to make their products stand out and generate demand for their products in sales conversations that will win them new business.

I really enjoyed our discussion. In it, you’ll learn:

  • Why businesses often fail to implement an evidence-based innovation process.
  • Why companies are – more than ever – feeling the pressure to innovate.
  • Why Rene focuses on two frameworks: The Lean Startup and Jobs to be Done, and how both frameworks can work together.
  • How to use Jobs to be Done to uncover the wants and struggles of your target customers.
  • Who truly determines the value of your software.
  • How to rethink your product’s competition.

You can listen to the full interview below:

Etienne Garbugli (EG): What are some of the methodologies you use in your work?

Rene Bastijans (RB): I am pretty much focused on two. What I use from The Lean Startup is the fast experimentation, helping people create experiments that are lean to replace guesses about the business model or the product. From Jobs to be Done, I like the customer interviews. It’s recreating the customer purchase timeline from what prompted them to start looking for a solution working towards the purchase. I like experimentation on the one end and customer interviews talking about the events that led up to a particular product purchase.

EG: Does the Job to be Done framework help feed the experimentation or is it more the reverse?

RB: I would say the the outcomes from Jobs to be Done research fit in very nicely in The Lean Startup. That’s why I like these two a lot. Also, Design Thinking addresses the question what jobs could our products help the customers get done. With Lean Startup, it’s more about should we build the product in the first place? The outcomes or outputs of Jobs to be Done research fit in nicely into experimentation. Are we addressing the right job here, the right thing? People tend to be solution-driven. They start off with a solution and then try to mend it to a customer segment instead of thinking are we addressing the right struggle in the first place?

EG: That’s a great way to sum it up: Lean Startup is should you build it, design thinking is what should you be building and Jobs to be Done is why would you build it.

RB: It will help you understand the issues we want to address as opposed to assuming somebody has a problem and therefore we have a solution. It’s really understanding that, first of all, we can go and experiment and find out whether what we believe is true is actually true.

EG: How important is innovation and innovation management to organizations today?

RB: If you ask anyone, whether it’s a CEO of a startup or the leadership team in a big organization, everyone will say that innovation is important, of course. We need to be innovative, we need to do innovation because startups pop up in our industry and eat our lunch. We want to defend ourselves against those. But, when it comes to giving people the time and space to implement an evidence-based innovation process you can see it all falls down. They actually don’t believe in it. They don’t give it the attention it deserves.

If it’s a public company, they have to think about their shareholders and make sure they hit their targets for the next quarter. People think very short term and, of course, innovation takes a long time. It’s not very predictable. The biggest struggle that these companies have is that they are very good at executing on the current business model, but they are not that good at thinking ahead and giving innovative ideas the space to maybe become the next product or service.

EG: In a way, investing in other lines of business that may not be showing returns already?

RB: That’s right. Innovation is not treated differently than the current business. They don’t have the people in place. They don’t have the patience. They don’t have the metrics to measure something more innovative. They’re using the current metrics that they have for the cash cow – the main line of business – and try to apply those to innovation projects. That’s when they fail and they say, look we had this lapse for two years and nothing has come from it. What have you guys been doing? We have just been wasting money. People get disappointed very quickly because they really don’t understand it.

EG: What do you feel are the challenges of innovators working in a B2B environment?

RB: From my perspective, it’s a different setup and it’s very complex in terms of decision-making. It’s not as easy as going to a consumer who has just bought an app. You must find out who can make the decision to buy. Who has the authority to actually get a project going? There’s buyers and there’s users and people need to have a way of reaching the right people and getting that started. That’s probably the biggest challenge. They might not actually understand the process in those companies because they have never spoken to anyone in those companies. They don’t know how those purchase decisions are being made. The last time the business bought a piece of software, how many people were involved, how many layers of management had to actually sign off? What’s the budget? All this intel they can get by speaking to people within these businesses.

EG: In other words, figure out what people’s wins are with your software and what value it brings to the company? I always find interesting how different those wins can be for different stakeholders or for the employee themselves. It tends to not even always be the software itself but what is around the software that they value.

RB: Yes, and the value of your software to the buyer or to the end user is actually determined by them. Can they make progress? Can they overcome their struggles? Can they get to where they want to be with that software?

Let me give you an example. I work with a company in the eLearning space. The CEO believes that this software that they are building and selling is about sharing with your team. What turned out is that the buyers were struggling so much with having time to do their work that they were “hiring” this online learning software to be able to push people to learn by themselves so that they could actually have time to do stuff that really matters to them.

They want to get work done. There are a lot of employees leaving all the time and it takes a lot of time away from the decision-makers. An online platform that can onboard a new employee or a new sales rep is really attractive to these people; it actually buys them time. It is not about knowledge-sharing or features, it’s about getting time back so I can do the things that matter to me.

EG: How have you been using the ideas from Lean B2B?

RB: I’ve been using the customer interviews and the advice on finding early adopters from the book. I have got this idea of who my customers might be, whom might have a budget or whom might be trying some solutions already, but they’re not really getting me anywhere. How do I find these people? Something that’s actionable and practical is really helpful. I am still sharing to this date. I have got other resources now but, you were one of the contributors to give people real hands-on practical advice on how to get started looking for people I want to be helping.

EG: Do you find that problem interviews and Jobs to be Done work together hand in hand or are they for different purposes?

RB: They are very complimentary. Jobs fit in very well in the beginning when nobody is sure what kind of struggles they want to help solve. It also helps to have some questions similar to yours that you can ask in conversations with your prospects and early adopters. I pick and I let my customers also pick the questions that they think would help in getting the most out of these interviews.

EG: What innovation advice would you give to organizations operating in competitive industries today?

RB: The key for me is in the word competitive. I would like people to rethink competition and markets fundamentally. Because competition is not only restricted to the products that look similar to yours; it is defined by customers using it. Whatever they are using today that helps them with the struggles they have to make progress is your competition. It doesn’t have to be the product that’s in the same category. It can be calling my friend or pen and paper.

Understand what your customers use today, that’s your real competition. Unless you can help them make progress, they will not give up what they’re currently using. Secondly, I would say to become a bit more customer-centric by really spending time studying the customer’s lifecycle and how they experience their jobs and work. As opposed to saying: we have been in business for 20 years… we know what they want, we will build this thing and they will buy it.

EG: Thank you for your time.

RB: Thank you.

How Cobrainer Used Consulting to Bootstrap and Validate an Enterprise Product

Amelie Spath on scaling Cobrainer as a Lean B2B startup

Cobrainer is a machine-learning data analytics company focused on the analysis and visualization of expertises in organizations.

What started out as a project for academia in Munich, Germany soon found traction in project management, product collaboration and innovation management.

Now, their clients range from Deutsche Bank to Boehringer Ingelheim. Although Cobrainer co-founder Amelie Spath had worked for large enterprises before, she had to learn how to target enterprises from the outside to push the company forward.

I caught up with Amelie as her team is re-focusing the product and preparing for scale.

I got a lot out of our discussion. In it, you’ll learn:

  • How Cobrainer transitioned from being an academic project to targeting large enterprises
  • How they got their first customers and how they motivated early adopters to work with them
  • How the business got its start bootstrapping and the challenges they faced
  • How they conducted problem interviews to identify the best customer segments
  • How they raised funding and pivoted the product to be able to build a scalable business
  • How they focused on understanding the enterprise reality and the impact it had on their growth

You can listen to the full interview below:

Etienne Garbugli (EG): How did your team go about selecting a product/market opportunity initially?

Amelie Spath (AS): Three of my co-founders are researchers. We always found that for any research project at Universities you need an interdisciplinary team. How do I find the expertises I need to make my project a success? There was really no mechanism to learn from past projects, which expertises they combined to make it work and which people have those expertises.

My co-founder, Martin, who is a machine-learning scientist said, well that’s a problem we could actually analyze with technology. And this is how we started out analyzing all the research projects at our University here in Munich and creating an expertise map. And then we pitched the whole thing at a conference where there were a lot of enterprise managers from large companies in the audience. And one of them told us: “Hey, what you’re doing for academia is actually really interesting for the enterprise… but they’d pay you money. So, why don’t you pivot and go in that direction?”. That was pretty much the start of the company.

EG: How did you go about validating the opportunity?

Amelie Spath (AS): This manager became our first customer and then we found a second customer, and with these two, we started developing the product. There was a lot of collecting requirements, understanding the enterprise context, getting feedback, iterating with the users and this is how we got started. We built the first version of the product with paying customers from the start. They took a big leap of faith.

EG: How did you motivate early adopters to work with Cobrainer initially?

Amelie Spath (AS): So, they really had this problem of not knowing which expertises were in the organization, how to best leverage all of this implicit tacit knowledge that is there. But employees cannot access this (data) and there’s no real strategic way or no direct way to collaborate with people you don’t know in your organization. They realized that with digitization, new business models and shifting dynamics in the industry, they really had to do something. They could also position themselves as thought-leaders trying new technologies like machine-learning. So, they really felt like okay, we take a leap of faith here but it’s extremely relevant for us.

EG: What were the core challenges faced by Cobrainer in the early days of the business?

Amelie Spath (AS): We started out bootstrapping and basically being revenue-financed from the start. On the one hand, that was great for us because it forced us to deliver a product that is useful to our customers. But on the other hand, we were really prone to accepting customization requests. It destroyed our focus because, when you have to make revenue, you have to make revenue. And if you have to stretch or go a bit outside of what you actually want to do to make those revenue, you do it. The real challenge was feature creep. Machine learning and AI, it’s a powerful technology. Almost everyone we talked to had new ideas of where to apply it or new use cases that we could do with expertise analytics.

Initially, we were thinking: “Hey, this is awesome. There’s so much opportunity, so much potential”. And then at some point we were like, “No. Hey stop! This is not going to work.”. And then our mantra became okay, what is the smallest product we can build.

EG: How did you know that Cobrainer had found product-market fit?

Amelie Spath (AS): We realized that the very core thing that we do is the data analysis and the expertise intelligence. We understood that this should be the core product. But then there came all of this enterprise customization on top. It was a full-stack product and then we decided to modularize it, build an API only for the core analytics engine and everything else was now coming from third parties. And now we’re considering that we have product-market fit. Before that, there was too much customization to really say this.

EG: What value did you get from reading Lean B2B?

Amelie Spath (AS): I think one of the key things is really how to properly do user testing in B2B. How to avoid lying to yourself when people say “interesting” and really drilling down on understanding the processes of the organization. The buying mechanisms, the buying centers, all of these things in the enterprise and how to engage customers even when you don’t have a product.

EG: How have you been using what you’ve learned from the book?

Amelie Spath (AS): I think one of the things we used the most extensively is the user journey. We conducted around 50 problem interviews. We had ideation sessions and design thinking workshops with the team to map out user flows, processes and come up with solution ideas around our technology. We went back to these 50 people to collect their feedback. It was now a solution to address their problems. And so we really full-on went through this process from the book.

EG: After having been through it yourself, what validation process would you recommend to entrepreneurs starting in B2B?

Amelie Spath (AS): I recommend for other machine-learning / AI companies wanting to go in B2B to really invest time and brains in understanding the enterprise processes and legacy systems used by your target users because that’s the reality your users have to work with. And even though companies are fed up with it and want to change, they cannot change it overnight. It takes probably two years to replace a legacy system. So, in the meantime, you either don’t work with that company or you accept that reality and make the product work in their context.

EG: What advice would you give to new entrepreneurs starting in B2B today?

Amelie Spath (AS): I definitely encourage new entrepreneurs to go talk to people in the enterprise. Even if you don’t know them, go to conferences, talk to relevant people, cold call if that’s the only way. Don’t be afraid to show a product even if it embarrasses you. Don’t make too many assumptions about how the people in the enterprise are, what they want or how their day is. Really understand the reality of enterprises; what’s a matter of life or a matter of fact in the enterprise.

EG: Thank you for your time.

AS: Thank you.

How Jupl Creates Better Healthcare by Building Products for their Customers’ End Users

Alan Brannigan on validating Jupl as a Lean B2B startup

I first became aware of Alan Brannigan’s work a year and half ago. At the time, his business was called Vigil Monitoring. Late last year, the company rebranded as Jupl.

Jupl provides independent living solutions for elderly people. It enables care from family members and professional carers through data analytics using triggers, looking for trends and setting up alert notifications. Their customers are fairly large enterprises like care providers, health insurers or medical alarm emergency response teams.

The company has been growing extremely fast this past year. After the successful launch of their Samsung Jupl watch at Cisco Jasper’s Mobile World Congress in March, they’re now expanding outside of their original market of New Zealand into the Australian market.

I’ve learned a lot from our interview. In it, you’ll hear about:

  • How Jupl got its start and how they raised their initial funding
  • How they partnered with large organizations early on and the impact it had on their growth
  • How they realized that their service was B2B2C and the challenges that came along
  • How they navigate politics and get to influence the appropriate stakeholders
  • How they design products for the enterprise
  • What being Lean in the enterprise means for them

You can listen to the full interview below:

Etienne Garbugli (EG): How did you guys go about validating the opportunity – validating the product and validating the market fit?

Alan Brannigan (AB): We came at it very much from a device perspective first; maybe that was my failing given my background as an electrical engineer. We knew it was meant to be a cloud platform, but it was hard at the time because in the healthcare and tele-care there’s quite a lot of standards that you have to adhere to. So even the gateway, the box that has to collect all that stuff in the home, there was nothing off the shelf that we could see that could do everything we wanted to do and also comply to these standards. So, we actually had to build it and we probably went a little overboard with that.

One of the big learnings is that we were taking feedback from our customers which were these enterprise organizations, expecting that they knew what they wanted. And not realizing that, we’re B2B2C, we actually have to go to their customers, the end users and figure this stuff out because these enterprises, they don’t know anything about Lean Startup.

We had assumed that the specifications they were giving us were what was actually required, and moving in, it wasn’t. So, about a year in, we reset everything. We ditched the whole idea of building the wearable, but we still had to build the box.

On that journey, we came to the realization that our customers’ customers were in two part. There’s the end-user, who in this case would be the elderly person, and then there’s two groups of carers. There’s family members who for the most part are children. And then you’ve got your professional carer which might be a registered nurse, a GP or community care service provider. And so, what was the benefit for them?

It’s very, very hard to get continuous funding and make that work with the ever-eroding cuts to the health sector. And so, we were looking at what’s a sustainable model we can build this off, not only for us but also for our customers. So, we’ve actually started in that private payer sector. The children are paying for the most part, they just subscribe for these services, there’s 24-hour call center monitoring if Mom and Dad need assistance, they push a button or there’s some sort of alert generated. So, we really locked in on that. What’s in it for the carer? Or what’s in it for the child or family member?

We really did a lot of experiments and interviews around what a carer would want and we landed on that. And then bringing it back into the enterprise, we then had to provide an evidence-base to various stakeholders within those companies to show that actually this is what the industry wants and this is the price point, etc.

EG: How did you go about motivating all these people to work towards the same objectives that you guys were trying to achieve?

AB: We’re starting to learn now that the one who controls the balance sheet from the business is the one you need to win over really. And also, the one who’s in charge of implementing the IT systems. And so, you have to tick the boxes from a data safety and security perspective and also provide a strong business sense. So, it’s a typical group of 5-6 people you’ve got to win over and I think a lot of what I do now is very much commercial and critical lobbying within those organizations to get them over the line.

EG: Ok, so in that case if I’m understanding well, the bar for creating the whole solution is actually quite high. There seems to be a lot of things you guys have to build just to be considered as a possible vendor by these organizations?

AB: We’re involved in the startup community here in New Zealand and people who are developing apps very much B2C-focused, they don’t see what we do as particularly Lean. But in the world of enterprise, it is. There’s an education process where our design team who are focusing on the B2C are actually working with the product team and the marketing team within those organizations to teach them how to iterate. There’s a big education part. And there’s a willingness for them to get there – a lot of these organizations recognize they need to change.

Presentation of Jupl during the keynote at Cisco Live in June 2017 (Clip starts at 1:02:48)

EG: What brought you to Lean Startup in general if you’re operating in a world where that’s traditionally not been the norm?

AB: This is where I came across your book. Because we naively came in and said we’re gonna disrupt this industry and we’re going to do it in our own style and fashion. I had worked in B2B and very much in an electronics background that provide OER technologies into aircrafts. I recognized that we need to help clients in different ways so I was looking at all sorts of education avenues. And Lean B2B did seem to be a good fit, I gave your book to a number of the stakeholders within the company we were working with.

EG: What value did you get from reading Lean B2B?

AB: I think it was really just breaking it down and recognizing that there would be longer cycles. I need to iterate the business model with the CFO or the balance sheet owner, as much as I do with the marketing team. Recognizing that the system that they have is currently depreciating to zero and so what’s the compelling reason for them to change as much as the person who is excited about the new service and problem they can solve for their customer.

I gave them the book and said this is actually how we’re going to go about it. It helped me articulate to them what we’re trying to do rather than just coming in as a fluffy startup that was gonna throw every buzz word at them. It took it from a different approach completely.

EG: In a way, you were able to position yourself really as a partner in their success and walk them through the process to get them to adopt the solution?

AB: Yeah and I think by running them through it, it showed them that we were familiar with the issues that they were facing as much as just what overall the solution could provide for their business. And one of the recurring things, particularly with the champion that you get who is more often than not the person in the transformation business. You need to provide me with a collateral that I can sell this with within my own organization.

And once we did that, the CFO really just wants the numbers and you can make the numbers work if you got that guy over the line. The worst thing that you can do is go over them – if I learned anything is don’t go to the CEO. I’ve been introduced at the chairman and CEO level – that would have then a project killed because I didn’t work with the executive team who are ultimately responsible for delivering the project. A CIO killed it in one company and I had the head of independent living on a national scale kill it. It was a done deal at board level and CEO level, but then I got them off the side.

EG: Looking at that after 4.5 years, how would you approach the validation process differently if you could start over again today?

AB: I would spend more time with those coffees and pastries with the team before I even wrote one line of code or did anything. And just make sure we got all that right, make sure that they understand what the organization is trying to achieve. There might be one group within that business that has understood, but they’ve got to get other people over the line. That they also understand that we’re not going to deliver a final product in one go for a release. So, I would just spend more time doing that and really understanding the commercial and political nuances within an organization. You really got to understand the relationships between these people. Who doesn’t like who, who got passed over on that promotion from the other person. All that stuff’s relevant – ultimately people are people and we all have our biases and strengths and weaknesses.

EG: What advice would you give to new entrepreneurs starting in B2B today?

AB: I would say first understand the cadence of the industry you’re in. It just might not be the industry or the world you’re currently in. And understand that the scale or the inertia that’s required to overcome within the company that you’re selling to. And it might be that you’re selling into small or medium enterprises and that’s fine. Or it might be you’re selling into Blue Chip or Forbes 500 organizations. And if you’re transparent about… and that’s the other thing, just don’t bullshit anybody. You don’t have to share how weak your balance sheet is, but you explain the issues you’re facing and demonstrate that you understand the issues that they’re facing and usually there’ll be a way forward.

EG: So, in a way it’s building that trust relationship with your stakeholders?

AB: Yeah, absolutely. If you break that, you’re done. Cause you do need all those stakeholders over, and they all have their own reasons.

EG: Thank you for your time.

AB: Alright! Thank you for the book, it really helped.

How to Reengage Prospects When Your MVP is Ready

There’s always an excuse to get in front of a customer and show something.Michael Wolfe, Vontu Co-Founder and Startup Advisor

It’s best to always keep the initiative with prospects. Don’t expect to be called back to meet again.

If you’re tackling your prospects’ top two or three problems and you left a good impression when you met; getting another meeting shouldn’t be too difficult. Prospects like to see progress; they like to know that the information they shared had an impact.

Perhaps for the first solution meeting you’ll share your insights from the market to make them smarter in their job, and for the second meeting you’ll show more of the product (screenshots, prototype, demo, etc). There’s always a reason to get in front of a customer.

To avoid sounding like every salesperson in the world, the best thing to do is tell the prospect that you’re looking for advice or coaching. You value their perspective and you’re looking for mentoring. This is how you turn business stakeholders into coaches.

You should reach back to every prospect that shared the problem that your solution is solving regardless of your initial impressions. You can share your one-pager with a short message:

Good morning Mr. Smith, (Personalization – this message is from a real person)

Thank you again for taking the time to meet with us. We were able to make good progress on a solution to help you reach local customers more effectively. (Where we’re coming from, problem tackled – what came out of the last discussion)

We’d like to hear your perspective and advice on our solution. Would you be available for a quick 20-minute chat in the upcoming weeks? (Ask, call to action – what are the possible next steps)

We also collected a lot of market intelligence that I’m sure, would be useful in your work. We’d like to share those insights with you. (WIIFM – what’s in it for me)

Thank you, I look forward to catching up.

[Your Name]

If the prospect is not willing to meet to look at the solution or have a product sold to him, you can ask them to help validate the pitch. These prospects can often connect you to new leads.

However, if the prospect accepts the meeting, you move on to the pitch. Time to put your best foot forward…

15 B2B Entrepreneurs and Influencers You Should Be Following

Entrepreneurs get bombarded with advice from friends, investors, family, founders and the media.

Receiving conflicting ideas and opinions has a negative impact on their ability to focus and make quick decisions.

Although too much advice can lead to decision paralysis, listening to the right voices can open growth opportunities for a startup.

To help founders along, I put together a list of 15 B2B influencers to help inspire the work of your startup:

Bill Aulet – Serial entrepreneur, managing director of the Martin Trust Center at MIT, Disciplined Entrepreneurship author.

Stewart Butterfield – Slack founder, Flickr co-founder, fellow Canadian.

Steli Efti – CEO at Close.io, sales expert.

Brian Halligan – HubSpot co-founder, Inbound Marketing author, MIT Sr. Lecturer.

Christoph Janz – SaaS investor, Point Nine Capital partner.

Jason M. Lemkin – EchoSign co-founder, VC, SaaStr blog creator.

Aaron Levie – Box co-founder, funny guy.

Mark MacLeod – VC partner at Surepath Capital, DJ.

Eoghan McCabe – Intercom co-founder.

Geoffrey Moore – Crossing the Chasm author, venture partner at MDV.

Aaron Ross – Predictable Revenue author, sales expert.

Hiten Shah – KISSmetrics and CrazyEgg co-founder, curator of the SaaS businesses weekly newsletter.

David Skok – Serial entrepreneur, VC partner at Matrix Ventures, forEntrepreneurs blog creator.

Tomasz Tunguz – Venture capitalist at Redpoint Ventures.

Michael Wolfe – Serial entrepreneur, startup advisor.

Happy learning!

And, while you’re at it, I invite you to join the #LeanB2B community on Twitter for weekly updates on B2B, SaaS, Startups, Innovation and Growth.