do. Even when you are right. We all know that we need the ability to understand and maybe adopt different points of view. Easy to say but not so simple to execute.
Yet people do it. It is a natural process. This is how teams work when they work well. A group of people with a common goal but different approaches, skills and experience. When it is harnessed it is the most powerful human engine. Any theory of early man will tell you this is how our species survived. Subsistence hunting in teams. Get it wrong of course and conflict and stress are the result.
Team building is a separate subject. The challenge of looking at things from many angles is the subject of Six Thinking Hats by Edward De Bono.
What is it?
De Bono is famous as a kind of alternative philosopher of business. He uses psychology and human behavioural science to construct ways of tackling business strategies and problems. His work is about how you think rather than what you should do. Perhaps his most famous book, Lateral Thinking is a classic. A unique approach sets him apart from other leading thinkers.
Six Thinking Hats has also become a staple of the corporate library. It is described as a self help book on many lists. But it is the basis of many workshops, brainstorms and strategy sessions. It can stand alone or integrate into a wider learning and development programme. I have even seen it used as an icebreaker to help people get to know each other.
The basic idea is that humans are capable of six different modes of thinking about a question or a problem. By putting on a different hat for each mode we can encourage the full range of perspectives on a question. Each hat is a different colour to distinguish it in our minds and in practical exercises.
Effective use of the hats will give a complete and rounded view of the problem. More important de Bono argues that it will also spark innovation. All six modes of thinking can provide the new angle that illuminates the solution.
Let’s look at the ways a startup might use each of the 6 hats:
Blue, Managing - This is traditional structured, task focused thinking. The standard modus operandi expected in large enterprises. Although not many people behave this way in practice. As a startup, don’t be afraid to adopt this mindset. Your world may feel random but the effort of ordering your thoughts can produce results. It may not be the first thing that strikes you. When you are swamped by data and options though it may be the best.
White, Information - In this mode you deal only in known, hard facts. In a startup these are often few and far between. But it is vital to know what you do know. Confusing what you think with what you know has led to many errors and missteps. Your judgement will improve when you separate fact from assumption. And deduction (or just guesses!). On occasion reducing things to the bare facts will also make the way forward clear as crystal.
Red, Emotions - The exact opposite of Whit. What is your gut reaction? What makes you want to laugh, cry or scream? Bring your passion to solving problems. This is often the default mode for a startup. But it can slip away as the reality of running a business bites. Don’t forget it.
Black, Discernment - Not a great description. The author means risk averse, cautious and conservative thinking. Analyse the threats. Ask what can go wrong, what should you avoid. By convention startups embrace risk. This does not mean you should ignore it. Thinking through the downsides will help cover your bases. And be prepared if the worst happens. Solving a problem in a way which evades or minimises risk may also be the best answer.
Yellow, Optimistic Response - Again the opposite of Black. Keep in mind that things might just be good. Or great. How could things take off? What would life be like in an ideal world? Do you have the resources to cope with explosive growth? If you hit the jackpot, what comes next? This is the thinking a startup can use to inspire the team and the world.
Green, Creativity - The hardest hat to define. Think the unthinkable. Think different. Even if things are going well, could they be better? Turn your product into music. Make your software into a spoon. Whatever. Most startups are rooted in some level of creative, maybe crazy thinking. Like optimism this attitude can disappear early. Beaten down by the challenges of execution and survival. Keep going back to it and opening your mind.
The beauty of the 6 hats is that it is a simple, easy to grasp model for a complex concept. There are lots of ways to use the model Any time you are struggling with a problem. Or trying to develop a plan. Come back to this it may help. It is not an every day habit. Too formal and time consuming. Startups should consider this approach in three main situations:
The Not So Useful Stuff
De Bono has distilled complex thinking and deep ideas into a clear conceptual framework. The Six Hats model is brilliant in its simplicity. Unfortunately he has written a book that wraps it back up in some abstract language. It is not the easiest read but it is worth taking time to understand his model. There are plenty of guides and tools if the whole book is too tough for you. Once you get it in your head, the framework is excellent.
I would add a seventh hat. It would be called “Put Yourself In Your Customer's Shoes” and the colour would be gold. If you can understand how your customer thinks you have achieved the gold standard for a startup. Or for any business.
Of course hat 7 does not fit with the science and logic behind the original book. And your customers could be wearing any or all of the original six hats when they respond to your product. So perhaps number 7 is a summary rather than integral to the model. A startup should aim to find the customer’s perspective in any case.
The fundamental concept of Six Hats is good. It has great value for a startup. Understand that there is no single right way to think about a problem. People approach things from different angles. Different perspectives are the fuel of innovation. They also help catch and avoid mistakes.
Use the 6 hats to approach complex problems. Or to reflect on progress and help make better plans. But don’t forget the seventh hat!
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Benchmarks are a popular approach to business improvement. They provide an insight into how peers and competitors are performing. And identify areas for potential improvement. But they are an average. They highlight the status quo and undervalue innovation. The metric driven nature of SaaS makes it a great model for benchmarking. Think of this data as useful insight. You can learn from how others perform but don’t copy it.
This is another in my series exploring how ideas used by large enterprises might be of value to startups. In this post I am going to explore Benchmarking. Benchmarking or comparison shopping is a popular technique. Many enterprises us it for business performance improvement. It is a big business in its own right. With a subscription model just like SaaS. Gartner and Hackett are built on benchmarking as a service. Every large consulting firm has offered the service at one time or another.
The basic principle is simple:
The potential to add value for a startup seems clear. Often founders have little or no data about the market they are entering or their competition. Limited networks and experience create open minds. But they are no substitute for experience of the sector or the business. Used well benchmarking can offer:
The Not So Useful Stuff
This all sounds great. But in my experience benchmarking is no more than a way in. It provides an interesting snapshot but not a yardstick or a basis for measurement. I used to have a global client that spent millions every year on industry specific commissioned benchmarks. They cancelled after a few years because they could discern no performance improvement.
There are several reasons for this. It is worth thinking about the following whenever you look at a benchmark or similar report.
There is an emerging industry in SaaS around benchmarks. The metric driven nature of the business model lends itself to this approach. I would suggest a startup pays little attention to this stuff. It is nice to see something and think you are doing better than the competition. But after the warm glow its adds no value.
The best way to view this is like an insider blog post. Useful background and a point of view but not the absolute truth. Learn from benchmarks but don’t copy them.
If you are entering a market with established competitors it may be a handy way to learn about the competition. But don’t pay for it. Money is scarce and this will not be a good use.
Focus on finding the metrics that drive growth and development in your startup. Work to improve on those measures and the competition will not be a problem.
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A big percentage of the press coverage around the release of iOS 9 has been about ad blocking. Apple has made it possible for consumers to stop all those annoying banners and pop ups. Cue much consternation about the future of revenue generation on the Internet. Content blogs and sites which depend on advertising for all their revenue are predicting a bleak future.
All this noise has made me think a bit more about the growth challenges facing SMB SaaS startups. Most of these businesses rely on the web in various forms to reach potential customers. The obvious impacts of a reduction in general online advertising would be:
Short Term Windows Will Close
Fine and good. But the reason for fearing ad blockers is more fundamental. People don’t like being bombarded with ads. There is a limit to how far Facebook and others can push. Content marketing which is just brochure ware is also seeing its audience dwindle. Over time direct advertising channels will narrow and become much more expensive to access.
The good news is that there is a different approach for SMB SaaS. Distribution is the answer. I used to think of distribution in an old fashioned model. It was about getting the product to the customer. With cloud based SaaS this could never be a problem?
A New Definition For SaaS Distribution
Correct in the physical sense. But in SaaS distribution now means reaching the audience. Advertising channels may shrink but the audience - the market for SaaS products - continues to grow. More consumers have access to a reliable connection and a smartphone every day. Software is eating the B2B world. Whole sectors are being transformed by digital.
So if distribution is the key how does your SaaS reach this growing audience? Modern software has unlocked this door. The key is integration. The ability to link SaaS products together makes every product a potential channel for others. Most SMB SaaS solves a narrow well defined problem. In startup mode there is a minimum feature set so this is even more pronounced. But integrate your product with the forest of other exciting new software. Each SaaS becomes the gateway to a whole ecosystem of solutions.
Make Your API Your Sales Force
Your API can become your best sales tool. Integration with other SaaS can open up distribution through a bunch of channels:
Will Integration Led Distribution Work For SaaS?
The strategy is right. Reaching a big customer audience that is already open to using SaaS in their business manse sense. It must be more effective than battling with rising costs from Adwords or Facebook. And falling conversions.
It will not be free. As the number of apps on each platform grows the fight for attention will rise in cost. We might also see some of the big platforms exploiting their app centres as a revenue stream.
As always the key will be execution. Choosing the right platforms and doing the right work to maximise the benefit will deliver results. I expect that better insight on this will emerge in time. Right now, I am working with one SaaS company. They are experimenting with this approach. I will let you know when they crack the code.
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Business is about people. How do competitors think? What will they do next? How do customers decide? Pressure to succeed and an uncertain world tempt us all to think others are stupid or malicious. Teams and leaders believe decisions are made because of stupidity. Or that the competition is out to get them. Thinking this way leads to bad decisions. And a stressful life. It is almost always wrong. Put yourself in others shoes. And do the right thing for your business.
I spotted this recent article by Y Combinator partner Aaron Harris . He raises part of an important mindset that is needed to succeed in business. His article points out that it is naive and dangerous to assume that the competition is stupid. I would go much further.
People love to attribute motives and rationale to third parties. Whether it is bosses, colleagues, customer or suppliers. It is one of the biggest mistakes in business. No matter how someone’s behaviour looks, you don’t know why they act in the way they do. Repeat that. You. Don’t. Know. Why.
Don't Fall For Conspiracy Theories
So many discussions centre around stupidity. Even more often I heard people explaining badness. How and why customers or competitors were acting with deliberate malice. I am a big believer that the best approach to the market is to put yourself in your customer’s shoes. Believing others are stupid or bad fails to achieve that. Identifying malicious or stupid motives works against you in three main ways:
Stress Is The Only Outcome
Number 3 is important. It arises because this kind of behaviour always ends up focusing on the negative. It is a symptom of paranoia. “Why are they out to get us?” is the basic mentality.
It is human nature to fear that others will do us harm. In a group situation jealousy and malice add fuel to this fire. I saw most stress and distress caused by this downward spiral in my time in the corporate world. Teams have a special vulnerability. Another human instinct is to defend the tribe. It is so easy for members of team to become convinced that management are working against them. Failing to reward success. Giving more money to other people.
Stress in the workplace is a major problem for society. Negative spirals based on mythical animosity are a major cause. Startup founders and teams are vulnerable to these challenges at least as much as anyone else.
Your Fear Is Wrong
The flip side is that these motives are almost always wrong. Grand conspiracies and complex schemes don't exist in the real world. Your competition don't think only about damaging you. Even isolated or individual acts of malice tend to be carelessness or misunderstanding. People are not bad. They are different from you. They have different goals and pressures. But true nasty, evil people? I can think of at most two in the last 32 years. And I may be wrong about those.
One area where this does extra harm is when working across cultures. Normal behaviours and just common courtesies are different across cultures, countries and continents. Small areas can contain many different cultures. We recognise this in Europe but forget that it is also true in the Middle East, Africa or Asia. Experiencing different cultures is the real joy of working across international borders. Software and startups give us a historic opportunity to enjoy this experience. Don’t spoil it by not taking the time to understand.
The summary is simple. Listen to what people say and watch what they do. This is all the information you have. Be honest, smart and professional in your responses. Base your actions and communications on the best information you have. If you are dealing with another culture, do some research and find out what is normal.
Don’t speculate. Don’t assume. People want to be nice and to be liked. They are striving to achieve their own goals. Sometimes these will conflict with yours. That’s business life. Finding a way for everyone to win is much more rewarding than stressing about non existent attacks.
Avoid this kind of thinking. Start from the basis that others are just like you. Except maybe smarter and nicer. It will be better for your business, your peace of mind and your health.
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Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.