Technology and Sephora are two things I love. News about Sephora “doubling down” on tech intrigued me. They've revamped their site with a new look, more features, and “Pin it” buttons on their product pages; updated their mobile web and iOS apps; and planned to roll out iPads in some of their stores this year.

While Fabric works mainly with start-ups, it never hurts to take a tip from the big guys.

The first item I want to note is Sephora's site brought up a page over the homepage that describes the changes:

1. The most targeted search in beauty. Very clear and straightforward and benefit to the customer. (And much awaited, on my end. I was getting tired of being able to search only once and then needing to manually filter after that!)
2. Faster, simpler shopping experience. Quick view, more color views, quick check out. Anything that makes it easier for the customer to learn about the products online.
3. Pre-shop for your trip in store. “Instantly check in-store availability” — I'm honestly not sure why this one is here considering this feature existed previously.
4. The ultimate beauty resource. Lists, solutions, expert advice. Sephora doesn't just offer mascaras and foundation. Sephora is a resource for your intangible beauty needs, too. On a broader scale, businesses usually provide the “need” for one major “problem.” There are peripheral solutions that businesses provide as well.

The world's favorite social networking site is infamous for rolling out changes unexpectedly and there is almost always an immediate backlash. I attribute this to the lack of warning in the early days (now, Facebook is a lot better with guides and tips on how to use new features). As someone who works behind the scenes on web sites, I know how much we in the industry rely on users to just “get it.” We say that the changes are better and more user friendly so everything will explain itself. I encourage everyone to take a look at Sephora's approach in first outlining the main changes, and then guiding the users to the new features and pages:

Lastly, I'd like to point out the reason for the increase in technological integration: according to Mashable, Sephora has seen an increase in mobile shopping at its web site, namely from iOS devices. Take time to learn about your customers, and you'll have, at the least, a starting point for reaching them.

Links:
http://mashable.com/2012/04/09/sephora-makeover/
http://gizmodo.com/5900218/sephoras-new-site-is-crack-forbeauty-junkies
http://techcrunch.com/2012/04/08/sephora-doubles-down-on-tech-in-store-ipads-revamped-website-pinterest-tie-in/
http://pinterest.com/sephora/

If you work for a big brand, lean principles can be a bit scary. The definitions for product development are fluid from the beginning, meaning you can’t really “sign off” on a detailed spec. Specs and deliverable sign offs are your friends in big co. It’s safe and easy. You list what you need, get sign off from the boss and then build it. It’s the tried and true Waterfall model. The priority, often, is lower risk and job security for you.

But big brands should adopt lean principles and, if you work for a big brand, you should be a lean champion. Here’s why:

• Lean is about building better products for people. You want better products because it makes your job more secure.
• Lean is about minimizing waste and maximizing results from the work you DO. You want that because that’s how you increase job security for yourself. Be productive. Get results. You win. Your company wins.
• Lean is about figuring out, in the most cost effective way possible, how to beat your competitors. That’s what your company wants, right? It’s all just education.

I get it thought. The spec and feature lists may be safer in the short-term. You will probably keep your job. At least as long as you are protected by big co. And big co manages to stay in business. But for you, for the long-term, Lean is your friend.

Brands and startups tend to compare Fabric to other development shops. Some of this is fair. Often, we add engineering resources or act as an extension of existing in-house teams. Much of our work is in user experience, design, and almost always front and back end development. This is what we do, but it is not the core of the value we bring.

Let's talk about startups. While Brad Feld, Fred Wilson and other VC's are right when they say you should have your core product team, your engineers, your experience designers, and your designers in-house, the truth is that most pre-Seed stage startups cannot find quality talent in all these positions. From the pool of startups we've worked with, most are somewhat inexperienced entrepreneurs and often lack deep product development experience. Often, startups that do have technical co-founders often lack customer development experience or user experience design knowledge.

Most importantly, it is very difficult for startups to hire and develop strong teams fast and to adopt a solid grasp on the chosen development methodology instantly. When founders are young, as they often are, many product development mistakes are often made. This “learning on the job” can be very expensive.

These are some of the reasons Fabric is a good collaboration partner for many pre-seed stage startups. Unlike most development shops, we contribute experience and talent in several areas:

We Add Complete Product Focused Teams With Experience Working Together

Everyone on our teams have worked together for at least one year. That means they have strong communication and faster execution paths than a new team. They are strong collaborators producing more output per Sprint than a new team who just met or have never completed a project together before.

Proven Methodology = Successful Products

You don't have to buy into everything we preach. We're still wrong about stuff all the time. That said, we have spent years optimizing our Product Development process and, if you follow along, you're guaranteed to learn more faster with less waste. We've also seen what happens when you don't have a solid process. Very expensive.

We've probably made more mistakes than you - we'll help you avoid all those

We can spot mistakes early. We've seen success and we've seen failure. We have been “in” failure and we've been “in” success. Our teams have made 100's of mistakes and learned from it. You will also make mistakes, but with us, you will not make the mistakes we made. This can save you 500 hours of programming time or 100 hours of design time. Fewer mistakes also is less expensive.

Development shops build what you want them to build not always what you should build

We ask hard questions. We challenge your assumptions and push hard on the edges of your idea. Will it stand up or fall down? What are the major assumptions that have not yet been tested? How many customers have you talked to? Throw away your feature list. Throw away your spec. Now, let's start over: what is the minimal product we can build to test the #1 assumption?

One question we always ask is: How can we do that for LESS? It seems counter-intuitive right? Shouldn't we just build and bill? No. That is what most development shops do. That is what agencies do. That will not help you raise money, which for most of you, is what you need to do. To raise money, or get to profitability for some of you lucky bastards, you need product/market fit and traction. To get that, you need to spend the minimum amount possible on things that don't matter. What are those things? (Polish your design… probably. Feature #13? Definitely.)

Venture Development and Startup Experience

We have raised capital and pitched VC's. We've run our own businesses and we've started several companies between us. We've been through the hard times, we've run out of money, and we've been in “partner fights.” We have created business plans, 100+ pitch decks, financial plans, and jockeyed CAP tables. When you work with us, you tap all this experience. You can get it from others too. Incubators, accelerators, and entrepreneurs all add this value. You won't get it from most development shops. It's not in their “wheel-house.”

Deep Brand, Media, and Agency Relationships

Most other development shops are deep on the engineering side. That's great. However, they have limited or no relationships with brands, media, and agencies. We've spent 10 years working with some of the biggest brands in the world: IKEA, Toyota, Redbull, and Hachette. We understand selling to these brands and agencies. For all our startups in our family, we've been able to make direct introductions to C-Level contacts sometimes enabling the startups to win major contracts - a major value add for any early stage startup.

We're different. To find out how different? You should call us now.

We spend a lot of time working with web/mobile entrepreneurs and we're super lucky to be working with amazing people with cool ideas, tons of energy, and a lot of passion. For the past six months, we've tried to pull our clients, both startups and brands, into following our methodology: Lean Product Development. The benefits with Lean are clear: better products from a science/testing approach, less time to market (or less time to get in front of users), and less waste.

For our clients, the “trouble” with Lean is that you never really know “what you will get.” You don't know what you will eventually build even when you've spent 25% of your budget. You cannot, and you should not, estimate the “entire” project up front and you should not spend time on specs and documentation of “features” that you may or may not build.

This can be unsettling to clients. We understand why. The traditional model, most often used by agencies is very clear and straight forward. It goes like this:

1. You make a range of assumptions - maybe 20 - about your users needs and then create a list of “features that fulfills those needs”
2. You build a detailed spec, estimate, and schedule of the exact hours/cost and timeline to build “it”
3. You then start by wiring up the experience, design the screens, develop the features, before you launch “it.”

In the traditional model, because you “know what you are building” up front - you can tell how much it will cost and “what you will get.” This is a great feeling. It seems less risky. I can touch it. It's a “deliverable.”

The problem is that this “method” does not work at all for consumer web/mobile product development of any kind today. The reasons are many, but the main one is: You will most certainly be wrong about “what you need to build” and you can be sure that what you build - the whole thing - won't really work or connect with users until you are well into future releases.

Despite this, this “waterfall” model, is the standard among most agencies and many development shops. Most of our clients who have interactive or agency experience are familiar with this model. We understand why it seems to “work.” The problem is: We cannot build products that way, because it is wrong. We know that it doesn't work.

The truth is that you never know what you will build

You don't know what you need to build in the beginning of the project and you don't know what you have “left” to build when you are 50% “there.” It is wasteful to do big estimates and loads of documentation up front - before you get users engaged. It is wasteful to spend time on spec writing and requirements that does not center on specific assumptions, test cases, data from learning, and/or user feedback.

It is true, neither you nor we know “what it will cost” and exactly “how long it will take.” You don't know when you will be “done.” In fact, being “done” is not a possibility. You will never be done. (Unless you sell your product or exit in some way.) You have to get used to it. There are no “complete estimates” and no “complete specs.” You don't need it.

You should focus on what matters. That is not documentation. That is not estimates. Those are wrong always. What you need is what every scientist spends her time doing every day: EXPERIMENTS. Well structured experiments.

This is what we try to do with every client. We do it because we have tested the traditional model vs the Lean model and Lean wins hands down every time. We hope you do it too. Do you?

Working with entrepreneurs before they launch their first product is often exciting and challenging. For many, the most difficult part of building the first product is launching. Pushing the button. Saying “OK, this is it, now we'll put this in front of people today.” It's hard because your vision of what the product should be and what you've built in that first version will be far far apart.

You fear that the product won't work. That no one will use it. You fear that people will talk about you and your product in some negative way. You believe you won't get a second chance. That no one will care.

Of course, on some of these points, you are right. Few people will care. Most of those who see your product will maybe use it once and never again. Some people might even tell other people that your product suck (although few will remember to do so since they are too busy to be going around complaining to friends about this Alpha product they tried once.)

The fear of launching to “the market” seems reasonable enough. However, we've seen this fear of launching even with closed Alphas. For instance, we've seen weeks of tinkering with the first version of a product before pushing it in front of just 30 users. Yes, even at that stage, people are afraid of what users will think. They choose to hold off on user testing until the product is “in better shape.” We've seen products be in 100% stealth for six months. Most of the product works fine and we have 3 tests we could run with users right now, but because the design or experience is not “good enough” the product/user testing never begins.

This is human nature. Many entrepreneurs, especially successful ones, are perfectionists. They want the product to be really strong before they show it. They want to be proud of it. They want the design to be smooth, the experience to flow seamlessly, and they want optimized technical performance.

Lean Is Better But Not Everyone Gets It

The Lean Methodology was partly designed to tackle such issues, but it has been met with some resistance. For instance, in the past few months, we heard from one seasoned Internet/Mobile entrepreneur that this lean methodology is just hype. They don't buy it. They think “it works with some products, but not with ours.”  Some believe that you have to build most of the product before you put users in. Some have even mentioned Steve Jobs as proof that the way to go is to have a vision and then build exactly what you want - not what users say they want.

This is bullshit. First of, Steve Jobs was entirely in tune with the customer. He listened to users all the time. He was the user. He was also more in tune with design, product, and marketing then anyone else alive. He knew exactly what was needed to bring about success, but remember the first version of many of “his” products? Even he had to go through a lot of trial and error. It won't be any different for you.

So if you build 80% of your product before you bring users in, you are in deep deep trouble. The point of lean is not to build a poor product fast and launch it. The point is to figure out which of your core assumptions are right and wrong. The point is to learn - fast and early - what to build and how to build it, where to focus your resources, and what not to build.

To minimize waste and get answers from users - you must launch early. You have to get one version of your product in front of one group of users so that you can get to testing. Something magical happens when you talk to people who are using your product for the first time. You'll discover that they won't behave the way you intended. You'll find that people will do things that you didn't even think of. They will ask for features that you don't have on your product roadmap.

The fear of launching is irrational. Once you launch, you'll realize that most people won't care. They won't care because you didn't get the product right. There is only one way to get the product right: Launch early, test, measure, and iterate. Repeat. It takes time, but it's the only way.

For the past few months at Fabric, we've seen several entrepreneurs pitching Internet/Software concepts in the idea stage. They have brought investment decks, paper drawings, wire frames, and product descriptions. (Thankfully no business plans). They are all pre-Seed and they are all meeting with investors. Some of them have started building their product, but 50% have not.

The few that have not started building their product give different reasons for this. Common excuses are:

• We need to raise the cash first
• We have not “figured out the product yet” (read: we are in sketching mode)
• Our product requires a full build out to work and we can't afford that now

While these reasons seem to make sense, they raise a few flags with our team. Here's what we worry about:

You don't need to raise money to start to build your product

If you are committed, then you should put all your cash into product development now. That includes your credit cards and whatever you can borrow from anyone. We've seen Wordpress “products” built for $2k to test a hypothesis. The first version of Groupon was a Wordpress site. Why? Many investors won't even see you unless you have something live. That's a fact. (More reasons below).

Product development is different - and much harder - than sketching

We've had many people come to us with hand drawn wire-frames with very little detail. We're happy to see these things - it's better then nothing - but it's not enough. When you work on the details of your product through flows and mock-ups, you are forced to make decisions that you don't have to make when you are in sketch mode. For instance, you have to settle on database structure and priorities. You have to make left or right decisions in areas of your product that will impact other decisions down the road. You have to be super clear on your product description and you have to communicate the nuance of your thinking. You can avoid all that when you are in sketch mode. It's different. Very different. Who's telling you this? Dennis the Foursquare founder.

Learning fast is important

Many of your assumptions are wrong. (Einstein was wrong most of the time!) The trouble is, you won't find out until you put some part of your product in front of users and test. The longer you wait, the longer you stay in never land. It's nice in never land, but you'll have to get testing sooner or later. It should always be sooner because when you learn which of your assumptions are wrong you can correct - which of course is critical to progress. This is basic science and it's shocking to see so many people get this wrong.

Strong social products RULE the world and social products are different

To win today, you need to learn how to build social products. Building social products - or community products - is really different than building, for instance, a direct marketing product. You'll need to think about how to build context into your interface and, in many cases, where your growth model is dependent on viral coefficient you have to build loops - essentially social loops - into the core fabric of your product. The challenge? It takes time to learn how to build a solid product - a social product - for your users. You'll need to start as early as possible on this journey since there are many lessons to learn.

But what if my product requires infrastructure and complex architecture to work? What if it's a transaction product with a deep back-end?

It doesn't matter. Some of the coolest products was started without a backend. You don't need any of that stuff to prove some level of product/customer fit. Besides, never put a large part of your budget into tech until you are certain that you NEED that tech. You should test, test, test, before you invest in tech. If you worry about scale, just limit growth by capping your Alpha to x users. Also, you don't need real transactions to show investors that users would likely go through with a transaction. Be creative.

Traction

Most of the entrepreneurs we work with go after consumer Internet. They all need to raise more money to get past their next milestones and most investors care about traction. It's simply impossible to show traction without a product. To get traction, real traction, you have to figure out what makes your early adopters tick. You have to understand your different user segments and you have to identify your key users - the ones that drive viral growth. To do this, you have to build, test, learn, and iterate. You have to build a culture for rapid development and you have to train your product, design, marketing, and development team members to work on the most important aspects of your product. This all takes time.

So, get started on your product now. You'll need all the time you have.

It's really fantastic to see that people are pouring energy into the LA startup scene. Several new incubators have popped up and some, such as LaunchPad LA, are offering serious cash for young startup entrepreneurs. Thanks to people like Mark Suster, who has become a top five VC blogger over the past few years, the energy in LA is real and it seems as if the city might just explode with tech startups.

Working with entrepreneurs in the early stages (pre-seed) is very exciting. We're super lucky to have the chance to work on some interesting products with some amazing people. Watch this space for the next few months. I think you'll see a few strong companies unveiled. Thanks!

1. Impact. Focus on big impact and positive change
2. We are Startup. Do more with less and move fast
3. Active Communication. Prioritize open and frequent communication
4. Community. Help others grow and develop winning teams
5. Fun + Energy. Have fun and bring positive energy
6. Performance. Measure what matters

We want to build great products that change the world (even if it's just for your world). Our main challenge is that today there are so many areas of innovation and so many opportunities to choose from that focus can be a problem. Where do we spend our energy? Who do we work with? What kind of products do we build?

To help answer this, we look carefully at three things:

1. What people do (early adopter behavior)
2. What problems remain unsolved (ripe for disruption)
3. What problems are we well positioned to solve (what we know) and where is our passion

We've already seen some big shifts in behavior over the past five years. Think about:

• Twitter and social interactions (shorter, faster, one-to-many)
• Foursquare and increased usage of geo-location enabled apps
• Shifts in media consumption from single player mode (watching TV alone) to multi-player mode (sharing media with friends in real-time and hammering away on your mobile while watching TV)
• Facebook and Groupon - sharing as the accelerator of growth

We also know that software is one of the key disruptive drivers of change in the world and, since web/mobile software is our passion, we pay close attention to technology innovation from hardware to software.

To sharpen our focus, we have identified a few key “investment” areas for Fabric:

• Mobile use: Consumer behavior is framed by rapid smart phone adoption and use of location aware social applications. Mobile is the most important touch point and we think: mobile first.
• Geo-location drives disruption in marketing and advertising worldwide. We see big growth and innovation opportunities in areas such as ad tech and big data. Advertising and marketing is super wasteful. More disruption in this area is inevitable.
• Social and the social graph has become a common layer for everything we do cross web and mobile. Now that sharing is the new media, open networks and API’s becomes the chosen path for fast growth and disruption.
• Personal data management and trust: We’ll see more open platforms and open networks grow through transparency. For these companies, trust is the key ingredient for communication and transaction. This is the intersection of identity, social, community, and transaction.
• Collaboration and crowd-sourcing enables new products, new markets, and new value creation. It is still early, very early, and we think crowd and collaborative models will infiltrate our work life in amazing ways.

Today, we think that the big challenges and the big opportunities remain in economy (jobs), health, and education.

This is why we're looking to work on projects that:

• Help people find jobs or make money in new and creative ways
• Help people make money by building platforms and networks for producing/selling
• Build better systems for trust between individuals and networks
• Reduce the cost of education or make it more available or more efficient
• Improves individuals health or reduce cost of healthcare

We are looking for passionate people who are building products on these macros. Despite the economic problems world-wide, we believe the opportunities to build amazing products - to make a difference - are actually expanding. It's not 1999. It's 2011. The good news? You have 10 more years of massive disruption coming your way. Are you going to be part of the past or the future?

It was my turn to read Eric Ries' (Ries's?) The Lean Start-Up. The very first thing that wrapped me in was his definition of a start-up. I think we all know what a start-up is, or at least have a vague idea, but there is a lot of gray area. It reminded me of an argument I would get into with an old roommate: he would always say that his company is a start-up, but I never thought that it was. I could never place my finger on exactly why. My arguments were weak: your company has many employees. Your company has been in business for six years. Your company makes a profit. MY company at the time, see, WAS a start-up; we had few employees, just started business that year, and were operating on rounds of investments much less making any profit. Needless to say, my angry blubbering hardly made for a convincing argument.

Mr. Ries describes a start-up in this way:

“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”

This old friend's company was not delivering a new service as it had been in business for six years (when something stops being “new” I guess is subjective, but six years doing the same thing isn't even in question), nor were they operating under conditions of extreme uncertainty: they knew exactly who their customers were and how to communicate with them. So pfft. Four years later, and I'm still right. (Or should I say, four years later, and I finally figured out why I'm still right?)

Two of my biggest takeaways from this book:

1. Work on reducing waste.
   How many times have you spent so much time doing something only to realize you were working on the wrong task the entire time? Like when I was in high school and I would do the odd numbered problems on my math homework instead of the assigned even numbered ones. I would be so mad when I thought about how much time I wasted. I would have gotten the same amount of learning in less time if I just did what was assigned in the first place. Similarly, in the example of start ups, focusing on the wrong feature leads to wasted time and money, and if this affected the company's customer base, it may also lead to a loss of a significant amount of business and a lower company morale.
   Reduce waste by asking why, why, why, why, why, until you get to the root of the cause of the issue. Fix the problem, not the symptom. Reduce waste by introducing features on a small scale and test it before you change the product for everyone. Start with a hypothesis — “If we add this feature it will make the register process easier and more people will register” — and test it with a small group until you're proven right or wrong. Work on getting these small changes out quickly so you get your results faster so your customers spend more time interacting with something that speaks to them. Don't spend forever putting together presentations and working on exactly what something should say or how it look if it's not integral to the new functionality. Time matters.
2. Your customer isn't always who you think it is.
   My biggest HAHA! moment in this book was the anedcote about a sandwich shop that started off as an antique store that sold sandwiches to get people in its doors. (Wouldn't it be funny if they started stocking up on antiques to get people to buy sandwiches now?) You may be trying to target one group, but another group you never expected may catch on (hungry people in antique stores). Then there's the transition from early adopter to mainstream consumer. When your product isn't “new” anymore (whenever that might be), your customer base changes and your product most likely won't be received the way it used to.

Here's to a new strategy and growth. Cheers!