How to build a startup in Silicon Valley style? Find answers in Oulu on Nov 9th!

When discussing how to build your market understanding and how to build your business with entrepreneurs, there are lots of different opinions how to do it. But this latitude, there are not too many people who know how to do it in Silicon Valley style.

My friend Saku (at the University of Oulu) was a visiting scholar at Stanford University for a year, and since he returned back to Finland, he has been talking about the differences of mentality and culture between Silicon Valley and Finland. He got infected by the Silicon Valley style, and can’t get rid of the infection. Because I have the same disease I understand why.

Saku has been saying that while he was living in Silicon Valley, he saw tens of Finnish companies, and hundreds of other companies from all over the world pitching to business angels and VCs. In too many cases, it became clear that Finnish companies were lacking market understanding. They could not articulate who their customer is, what is the pain they are solving, or how do they provide value. I think this is common to Finnish companies because they focus so much on technology and their domestic markets, which is by the way 0,5% of the global market, and also our business ecosystem supports more building technology than building market understanding and business. And aggressiveness … people just don’t get it how fast you have to bring your solution to the market place in Silicon Valley.

I have to say that I can’t say it better. We have also been discussing how to enable more people to be aware about how the businesses are built in the Valley at the moment.

In there, a great proportion of startups are established by university graduates and researchers, and their average age could be something like 25 years. There are lots of reasons for why young people establish startups; they don’t have too many responsibilities in their life yet, they have nothing to lose, they can invest all their time to things that they are enthusiastic about (coding games etc.), and there is extremely viable business ecosystem around them. Besides being tech savvy, graduating engineers also start to see founding a startup as an interesting option, and so the number of startups increases.

A month ago in our meeting Saku said that he has an idea how to start tackling the problem; he would like to bring Eric Ries to Oulu (Finland) to give a presentation of his approach called Lean Startup. This fits perfectly to the operations of the Oulu Growth Lab which is part of Oulu Business School. What he did, he established an event which will take place in Oulu on November 9th [see link for the lecture Lean startup in Oulu , and a workshop for entrepreneurs Lean startup workshop for entrepreneurs]. Event is free of charge.

Eric Ries has been giving presentations and workshops in places like Facebook, Intuit, Hewlett-Packard, TechStars, O'Reilly, Stanford Technology Ventures Program, and other entrepreneurial events around the world.

According to him, today's high-tech entrepreneurs have at their command more than just the ability to invent new technologies. They have mastered the discipline and methodology required to harness those technologies in order to serve customers. Such a combination of new technology and new understanding is unlocking new opportunities. In order to maximize them, this generation of entrepreneurs combines extremely low costs with faster cycle times to produce what I call lean startups."

Ries describes that startups are established for learning. The importance of gaining market understanding is in-written to the Lean Startup approach and it is crucial for business success. It is not about starting a firm, but figuring out what is the right thing to do business-wise. The citation from Eric Ries's GigaOm blog post describes this well: "In parallel to this work by the “solution team” (engineering, ops and QA) there is a new kind of “problem team” (what we used to call business development, marketing, and sales) that is asking the bigger questions, such as: Who will our customers be? What problem does our product solve for them? How many of them are there? And how will we reach them?"

I do not want to sound rude, but it seems that Finland has many solution teams without market problems. The principles of Lean Startup are really relevant to Oulu region and Finland. We need to get students and startups exposed to this type of thinking that underlines the importance of figuring out what is the right thing to do business-wise, instead of focusing on doing the thing right, by this I mean perfecting the technology first. Startups are meant to be scrappy in the beginning, right?