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Today is a must read!

📜 AMAZING insights into early startup strategies by Carey Ransom with Operate Studio 

✔️ A one question poll to help me understand your startup efforts

Carey Ransom is the co-founder of Operate Studio located in Costa Mesa, CA. He is an expert on the ‘game plan’ for startups in the very early stages. Carey has funded and helped incubate some awesome companies like: Smerf, SailPlan, Souq, Mustard and Grin Gaming.

If you want to listen to an AI text-to-speech version of the interview, click the YouTube video below. You can read the interview below in 3-4 minutes. The AI video is 8 minutes.

Here is the link to the audio if your email program won’t open the video:
Interview of Carey Ransom with Operate Studio - YouTube

Let’s jump in. Anything written below, in bold, is my emphasis for the readers.

Aron: What led you to create a startup studio and what success have you had so far?

👉️ Carey: After a career of serial startups (8 of them), I decided to try to do it in parallel with the next generation of amazing founders, and created Operate to partner with them in the areas where they each needed help - capital, strategy, product, go-to-market, team and other necessary, non-strategic areas. We’re willing to get involved super early, even first, from the idea to concept to prototype to first product and customer stages; or what the market often calls pre-seed to seed stages. We invest in founders we can love, working on problems we can get excited about, where we know we can be a force multiplier to them. So far we’ve done so with about 30 startups in 3 years.

Aron: People often come to you with just an idea and a dream of being an entrepreneur. Can you take me through the process that you use in order to assess an entrepreneur and their idea?

This paragraph below is everything by the way 👇️

👉️ Carey: I always start with the founder(s). What is it about them, in this time and place, that of all the things they could be doing, they need to focus in this area? Do they have a compelling "why"? And do they have insights and intelligence about this area that could give them an advantage? Then I delve into their views on the potential customers, their problems, and their perceived value of the problem, its importance, and the potential benefits of better solutions. Have they gone deep enough to understand and articulate these things? Do they have a good sense of their customers' needs and motivations, and if there is a desire to change, try something different and pay for it?

Often, they want to start with a pitch that pretends that they have it all figured out, yet there is no way that they have - they don't yet have a product, customers, or anything close to a business. I want to identify their approach to learning; how intellectually honest they are and how they'll react to new information and data as they collect it. I believe that the best advantage that early founders have is their speed of learning and reacting to it, so I want to anticipate if these founders are open and humble enough to use that advantage.

I prefer a framework like Jobs To Be Done (JTBD) which focuses on a set of users and "jobs" they are regularly trying to accomplish, as well as how they currently do it, and also breaks down the tasks and tools included in the job, and the relative importance of each, as well as whether current approaches are satisfactory or not. Doing this work creates a more objective framework for assessing how people think, act and consider whether to change or not. It's not focused on the solution or product, but rather the humans trying to do things, which I believe is a better place to start as an entrepreneur.

Aron: Let’s talk about that Jobs To Be Done (JTBD) framework. What questions are entrepreneurs asking to find out this information. What is JTBD exactly?

👉️ Carey: Some of the questions I'm likely to ask them, which I find are not as common as they should be include:

1. How do your ideal customers describe what they’d trying to accomplish (or what I might call “their job”)?

2. What are they using today to get the job done?

3. What would they say most frustrates them in their process?

4. Can they quantify or articulate the cost of the inefficiency/problem?

5. Do you know the relative importance of various steps to getting the job done?

6. What is the entire job and are you solving that or just a small part of it? (most startups are only helping with a part of it).

What I find is that far too few founders have thought through or done the work with their potential customers to understand these questions above. And it undermines their credibility as an obsessed founder who is passionate about making their users’ lives more awesome. I’m confident that doing this work will help them.

Aron: Interesting. How do you recommend an entrepreneur find out this information? Do you recommend any style of conversation that a founder should have with potential customers?

👉️ Carey: I’ve been known to ask them how they could immerse themselves with their ideal customers, in a way that was useful for gathering this information, and ideally unbiased in pushing what the entrepreneur thinks the ideal solution might be today. Sometimes, they have a good approach, and other times they might be better off hiring a researcher to help them (which might keep them more objective as well).

Aron: So, you advocate for an entrepreneur having deep knowledge of the industry they are looking to disrupt. Yes?

👉️ Carey: Industry knowledge can certainly be helpful, but I’d also suggest that they need to see things differently enough that they see the opportunities of dissatisfaction that are valuable enough to do something about them. Part of that could be industry experience and credibility, but a deep enough understanding of customers to assess that a group of them has similar needs and a willingness to change. Some industries may require more technical expertise than others, so that is certainly a factor that an entrepreneur should consider if they have it or not.

Aron: Ok, so, in the rare instance that an entrepreneur does have this intimate understanding of the customer, their problem and the industry - it seems like they might be on the right track, how do you like to see the entrepreneur proceed? Do you like to see them build an MVP and test it with their target market, or something else? What progress should they make next?

👉️ Carey: If they have the right insight into an industry, job or jobs and key customers and their most important, unsolved problems, then they might want to test a few potential solution ideas before building anything. I prefer to resist building something until it's as apparent as possible what it should be and that once it is built it will be used and valued. Sometimes an MVP or first product might be necessary to get the needed customer feedback, but more likely an entrepreneur wants to build something and starts doing so way before they probably should, and they end up throwing a lot of work away.

Aron: How dangerous is it for an entrepreneur to fall in love with their initial idea? Because, we’ve all done it!

👉️ Carey: Super dangerous. It's rare that the initial idea is the best, most valuable idea, yet we love to hold onto our ideas because they're ours. I often use the analogy of the idea being a hammer, and when you have that tool, everything out there looks like a nail, since that's mainly what a hammer can add value to, but it's not the best tool for a lot of other jobs out there. I try to push entrepreneurs to love the users / customers and their problems and obsess about making them more awesome and super happy. If you do that, you may just find a solution to something that's valuable enough to build it and a business around it.

Aron: I would imagine, many times, a person comes to you with an idea that they are in love with - because they conceived it and they are proud of it. But, you find out they haven’t done the steps above to understand the problem or the customer. How do you get them turned in the right direction after this disappointing talk?

👉️ Carey: I try to be as supportive as I can be of all entrepreneurs. It's a noble thing to commit oneself to creating something new in the world and trying to push us forward in a positive way. My questions and feedback (like the many thoughts above) are mine, and I offer them as mine, and give the recipient the opportunity to judge the value. If they don't value it or want to hear it, that is totally their choice. And I find that in some cases they disagree, and I don't hear from them again. I always wish them well and ask them to share their journey and learnings with me. If they can show me that my views and opinions are wrong, I welcome that opportunity to learn, as I definitely grow more from those experiences.

➡️ Thanks Carey! It seems that obsessing over your potential customers and their problems is the right first step in entrepreneur. Resist the urge to go spend money and time building something, without first understanding the customer, their problems, the current solutions out there and what value customers might place on your solution. ⬅️ 

If you want to follow Carey, do so here: Carey’s Twitter

He is always sharing his learnings and insights.

In taking Carey’s advice, please answer this one question. I am also trying to find the right solution to help you make progress with your startup journey.

Best of luck out there!

Let me know what you’re working on.

Aron

PS: Please send this newsletter to a friend that wants to start something and follow us on social media below! 👇️