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!

Lean start-ups are like playing a special type of Plinko.

For those of you who aren't familiar with Plinko - see Plinko

In Lean Start-up, the process of building a sustainable business involves two primary types of movement, the test - involving a hypothesis and a testable, actionable metric (Really, the test isn't movement. Instead the action taken as a result of the test is the actual movement. See my post The Anorexic Start-up), and the pivot - a change to a core philosophy about how the product works, who it serves, etc.

Generally, a start-up takes an informed idea - something pre-validated with some level of interest by potential customers and builds an MVP (minimum viable product) to prove that product will build a sustainable business.

The business proves, validates, by testing their MVP against a set of base hypotheses with a set of desired actionable metrics. These base hypotheses are called the leap of faith hypotheses, the ones without which, the product as it is envisioned is doomed to failure.

Should some of those hypotheses prove false, it may be time for an immediate pivot, but that's not the subject of this post.

Once the initial concept is proved viable and their is evidence of some traction, the team begins iterating. During this phase, the team works to improve the product by bringing it more in line with the desired metrics. This is accomplished by creating experiments consisting of a central hypothesis against a set of actionable metrics. E.g. Changing the messaging on page x will result in higher percentage of behavior y. These tests are carefully constructed to ensure the results are verifiable and repeatable - generally by a/b testing.

Eventually these tests start producing diminishing returns. When it becomes clear the ultimate business goal will not be reachable with the given product, it is time for a pivot.

The price is right.

Instead of a ball or round disc, your product is a slinky. It's sitting at the very top of a special Plinko board. That board is design so that instead of pegs, their are platforms just big enough for your slinky to rest on that each pivot around the peg as an axis. When you start iterating, you drop your slinky onto the top platform. It draws out quickly from the start, generating big results. But, as the rear of the slinky starts to compress, so too does your progress towards your goal - a particular metric set at some stage down the Plinko board. Now, for most businesses, you're still not where you want to be and you make the decision to pivot. At this point, the platform rotates, launching your product or decision process in a new direction, allowing you to add value in different ways.

The crux is that YOU are in control of when your platform rotates. If you rotate too soon, you risk losing potential gains, throwing your slinky into a wild swing (banging into other platforms, etc) with no clear path. If you rotate too late, you've let your product stagnate and lose momentum. Just right, and your product moves like, well, a slinky down stairs.

Eventually, you reach your goal.

Or do you?

Most businesses don't end up quite where they imagined they would. On the great Plinko board, there are a lot of different platforms to land on, each a different business model with a different level of success. Remember, your goal is a sustainable business - it just might not be the one you thought.

Recently, entrepreneurial consultant Eric Reis published his book, The Lean Start-up as the culmination of his lean start-up experiences and a summary of the tenets of the lean start-up movement.

Here at Fabric, we've been following our own lean philosophy for years. We advocate Minimum Viable Products (MVP) - I'm still baffled that this is now a “buzz word.” We encourage iterative testable development in small batches. We encourage our clients to change direction when they or their product have hit a wall; in lean, this is called a “pivot.” I like to call repeated pivots “walking”

We're big believers in lean thinking and the lean development framework. Each of its central tenets are both common sense business practices and productive guidelines for building a successful business.

There are dangers lurking in lean.

There is a certain evangelical thread that permeates Eric's book and the Lean community. When I'm faced with evangelism for any system, I immediately grow skeptical. Generally this behavior tends to blind one to the faults in a given system or behavior. This danger lurks in lean development.

Learning for Learning's Sake.

Central to the Lean Start-up belief is that learning is, in and of itself, the goal of building your product. “Our goal in building products is to be able to run experiments that will help us learn how to build a sustainable business” (p201, Reis, The Lean Startup).

Is it really our goal in business to simply learn how to build a business? This message pervades the book; that learning is the ultimate goal. While I appreciate this high minded approach, it is a fundamentally flawed message. Learning is an integral and inseparable component, but a step on the path nonetheless. The goal of your product is to build a sustainable business, not simply to learn how to do so.

I'll venture to guess Reis wants you to build a sustainable business, and that learning is what gets you there. However, that's not how the message is framed. Instead, it seems he's battling bad start-up behavior so strongly, that his message is a little right (or left) of center in an attempt to bring people back to the fold of good business practice. Ironically, this behavior is something he addresses specifically in his book in regards to individual developers and teams.

The book contains one other example of a mis-framed idea - that the experiment is 'movement.' In this context, movement is defined as progress towards your goal. If you assume learning is your goal, then indeed, any experiment that results in learning is progress and hence movement. But, since learning by itself isn't our goal, that it is movement doesn't necessarily follow. Remember, our goal is to build a sustainable business, not to learn. Instead, think of your informed, validated decisions that result from the experiment as movement.

Perhaps I'm splitting hairs. This is, after all, potentially just an issue of semantics. But, there is a simple way to validate: test it. Go up to your potential clients - in our case start-ups and businesses with new products - and ask them if they are in business to learn or to build a successful business. I've done this. Unless your respondent is already a lean evangelist, their answer is universally to build a successful business. Now, follow up by telling that same client they're wrong, that they are in the business of learning. When the client gives you that look - you know, the “you're crazy, did I really hire you” look, you'll have your answer. Of course, don't do this with clients you want to keep… mis-framing scares your clients for no reason.

While it's true that every decision made about a product should be a validated one, the central goal of our business is not to learn. That goal is reserved for academia. Instead, our goal is to build a sustainable business. What we learn along the way is crucial to informing our path to that goal. But we must be careful not to frame learning as the goal itself. Else you risk alienating potential clients who aren't initiated, or falling into the trap of learning for learning's sake.

Remember, we want a lean business, not an anorexic one.

Every day, we answer questions about how we work - our process. While our process has been adopted from our work with start ups, it's a process that has been proven to work with all kinds of digital projects - from small websites to major apps built for global brands.

At Fabric, we use a process that mirrors the “Lean Product Development” methodology. There are several core concepts at the center of this methodology that frames everything we do:

• Identify the hypothesis or assumptions that the client has made about their customers needs, desires, and wants - this is part of our definition work
• Design a test of the most critical (leap of faith) assumptions and execute tests with the least amount of waste possible (Minimum Viable Product)
• Enter into Build, Measure, Learn loops where the goal always is to learn if assumptions are correct by actually putting the product in front of real customers
• Get the first version of the product in front of customers as fast as possible

So, how is this approach different than what we've seen used at most agencies?

• First, most digital agencies spend months in the lab before they put the first version of a product in front of customers
• Second, most of the agencies we've worked with have built their assumptions of what their customers want entirely without actually testing their digital product with real users

(An important note: I'm not saying that they don't perform research or hold focus groups during early stages of product development. I'm saying that most agencies we know spend too much time and too much of your money working in their shop on tons of features that they do not know users want or will use. After 12 weeks, they launch the app or the website with 90% of the budget spent and then realize that users don't use most of the features they built).

What we do is quite different. Fabric sets aside the (often long) feature list in RFP's from clients and identifies the specific assumptions and the core hypothesis that the project is supposed to test. After we define exactly what we want to learn, we enter into a short (as short as possible) loop:

Build > Measure > Learn (return to build)

For each loop, we build the minimum of what we have to build: wireframes, designs, HTML, of dynamic product/forms - to TEST with customers. Only when we have data - either direct customer feedback or metrics do we move forward into the next loop.

Every process, every task, every bit of code we do is entirely focused on learning. We should never design or code anything that does not allow us to learn something. This means we have to always have to clearly define what we want to learn before we build.

While most digital agencies will push you into this linear workflow. (Hey, we used to do that too.)

Phase 1: Define
Phase 2: User Experience
Phase 3: Design
Phase 4: Develop
Phase 5: Test/QA
Phase 6: Deploy

Fabric's teams will go through these steps in fast motion. We compress work into numerous cycles with intent to learn in each cycle. Each cycle of learning should be days not weeks.

Why do we do this?

Because we've found that it is the best way to build outstanding products, websites, and apps that customers will actually use and LOVE.

What's your opinion on this process? Do you think this is the right track for your company?