Last month as things started to wind down for the holidays and lecturing in classes slowed down, I had the exciting opportunity to host the CFOs from Zoom, Peloton, and Grubhub at the MIT CFO Summit and the CFO Leadership Council Conferences. This was a great chance to talk directly with leaders in some of the real rocket ships in this COVID crisis. These are three poster examples of companies who have seen effectively managed the dramatic market shifts to more digitalization as was highlighted on the front page of The Wall Street Journal at the same time.

Let me summarize six key lessons learned from analyzing what made them so successful:

1. Understanding how technological capabilities are changing.
   All saw the possibilities from the evolving technological advancements but that was necessary but wholly insufficient on its own.
2. Understanding changing consumer behavior patterns.
   Just because something is possible, does not mean customers will adopt it. You need to understand customer habits and if they are open to change, which generally they are not… unless…
3. Building an organization with the capability to realize this opportunity.
   The companies vision is that something will be possible and it will be adopted by customers over time. The question is “When?”. You have to put yourself in a position to capitalize on the changing trends in #1 and #2 above but not bet on a specific time. It usually takes much longer than it seems it logically should (in B2C and B2B). Put yourself in a position to capitalize with a strong organization and resources but not too many resources that you lose your muscles to listen to customers very carefully. Creating new markets and changing customer buying habits is very hard and takes time. You can’t just listen to what customers say they want in terms of product, you have to understand their *real* underlying problem and continually validate that you can address it even if their embrace of your efforts is not as complete and as widespread as you would like. Believe in the vision of what these trends are telling you but do not get ahead of yourself in counting on customer adoption faster than they are willing to accept. Push the frontier with a market segment (your beachhead market) but also have patience.
4. Recognizing a window of opportunity when it comes.
   Sometimes, luck will fall your way, and there will be something to disrupt the status quo. These often represent outstanding opportunities to change behavior and habits for the better. You must recognize them immediately and capitalize on them. We talk extensively about this in Step 13A in the Disciplined Entrepreneurship Workbook. Realize this is your time and you must invest to take advantage of this finite window and if you miss it, your investments in customer acquisition afterward will likely be at best much less efficient and likely a waste of resources. You must seize the moment.
5. Moving fast—clock speed is critical.
   The speed with which you can iterate with customers once you get the opportunity in this window is critical. One of my favorite quotes is from Thomas Edison who said something to the effect that the measure of innovation is how many times one can iterate on a new idea within 24 hours. You have this golden, perishable opportunity and you have to deliver, be responsive, and win their trust. Be humble, hungry, and even more hardworking during this unique time.
6. Being data-driven:
   In his book That Will Never Work, Marc Randolph talks about how “nobody knows anything.” All we can bring to the discussion to start is a well-reasoned hypothesis but we need to then test it with data. Great companies like Netflix, Amazon, Google, and others use data religiously to tell if the hypothesis is right (or what we call Step #23 “show the dogs will eat the dog food”). Peloton, Zoom, and Grubhub, not surprisingly, also strongly embrace this approach.

Now that I have given you the lead, let me explain how I got there and dive a bit deeper. (It should be noted that Marius Ursache is the editor of this website and when I first sent him my blog post, he wisely suggested that I not “bury the lead.” Maybe I am getting more academic without even noticing so I rewrote to bring the six points to the top.)

I agreed to moderate the fireside chats/interviews because I was interested to see firsthand if they had seen the opportunity coming and intentionally prepared in a way that would be instructive to others. I was also anxious to see what they did they separated them from their competitors. Lastly, I was interested in any other lessons to be learned that could be translated to other situations on how to be more “resilient plus” (the new term for “antifragile”).

On the first point, for all three companies, they saw the megatrends changing in their favor but even so were caught by surprise by how it was all dramatically accelerated by the pandemic. Weren’t we all! They had no special insight at the micro-level. They were all however completely committed to the future of dramatically more digitization so they had a head start for sure. So the answer to the first question above is that they did not succeed because they had brilliant insight with regard to a crisis like this happening, it just happened to support their existing thesis. Like everyone else, they were caught off guard.

Secondly, what separated them from their competitors seems clear to me was their attention to the data signals and the clock speed with which they adjusted. It was also very reassuring to see that they all did so with empathy. By this I mean, they were not trying to profiteer but really thought hard about the impact it was having on their customers and broader society. Zoom made its platform available for free to over 100K schools very quickly. Grubhub thought deeply about the ramifications on their restaurant owners as well as the consumers and made the conscious decision to forego short-term profits to help the communities deal with their very deep and serious challenges.

It should be noted that all of these companies had sufficient resources – cash on the balance sheet – to think longer-term which is a luxury but one earned by disciplined execution. This had put them in a place where they were not vulnerable or fragile to sudden challenges. Very smart and not an accident. It should also be noted that they did not have so much money – see WeWork as the grossly extreme case of this – that they had lost their discipline. They were financially frugal but also had built a buffer so they could be resilient. This kept them hungry, humble, and in touch with the market place.

What was strikingly clear in talking to all of these companies is that they were not some sort of super visionary led companies with a Steve Jobs-like character at the top talking about dramatic changes that no one else was seeing yet, they were driven by data. The most important data was with regard to customer engagement and adoption by market segment. They also noted that dramatic changes in CAC/CoCA as well. In the heat of this crisis, the story of success on these gold standards of excellence is not some special crystal ball or insights by a futuristic guru making big risky bets, it was about understanding the market place and adapting quickly.

A great example of this was Zoom and security. While sales were taking off for this company early on, there were competitors chomping at the bit to take them down. Product and service shortcomings were certain to be exposed and highlighted by analysts and competitors. The newfound spotlight created more scrutiny than they had ever had before. There were features and usability shortfalls that needed to be taken care of and Zoom did an outstanding job addressing these rapidly.

The existential threat came with the security challenge. Starting in April, the media questioned with great intensity and great specificity the security of Zoom and it was not clear if Zoom was going to survive this valid question. The company responded with speed and force not by attacking the messenger but by addressing the problem. They made security a top priority and systematically came out with new features (including buying a security company) at a pace unimaginable just a few years (if not last year). While the issue has not gone away and should not, it is no longer the proverbial Sword of Damocles dominating every conversation about Zoom. Honesty in reading the market, willingness to acknowledge weaknesses, speed to address and disciplined execution are what have kept Zoom on top.

So this is how I got to the six lessons above in the lead.  Knowing the principles above and executing them successfully, no matter if the crisis is COVID or anything else, is good counsel to help make you and your organization more “resilient+” (the “artist” formerly known as antifragile).

What a year 2020 was!

With my basketball friend, we often end emails with the phrase “stay in your stance.” This is what basketball coaches say to their players so they are always “ready” for anything and don’t have to “get ready,” because if they have to “get ready,” it is probably too late.

With all the adversity and challenges, it has become clearer that entrepreneurship needs to be more broadly embraced beyond just startups. It is crucial for society and not just the individuals doing it. The concept of antifragility (now we call resilience+) took hold in an amazing way. For example, we have already had over 30K views (and that number goes up every day) of our Antifragile Entrepreneurship Speaker Series with literally zero market dollars spent to promote it.

It was a year that tested us and made us stronger in the end. I am completely confident that these newly enhanced (and maybe found) muscles will make us more successful when we get to the other side of the awful pandemic. While we would never wish for a crisis, good can come out of them if we approach them properly.

With that perspective, what were our favorite articles of this past year on this web site? There were so many great ones but my personal favorite was “What Gives Me Confidence That We Are Successfully Teaching Entrepreneurship.” It was so important to me because it really proved to me that what we are doing has a significant impact. I always believed strongly that it did because I see the examples every day with my own eyes but it was good to have such concrete and compelling data to prove this. I must admit as well, while I was very confident, the numbers exceeded even my high expectations.

But each of us probably has our different favorites because of our individual perspectives and interests but it is interesting to see what the top ten were from the consolidated “voting” (voting was done with your clicks specifically, what articles did you view). Without further ado, here are the top ten viewed posts of 2020 (let the arguments or agreements begin in the chat area):

1. The LTV Calculation Spreadsheet (Joe Gibson);
2. Teaching Entrepreneurship, Cultivating Antifragility (Bill Aulet);
3. Disciplined Entrepreneurship “vs.” Lean Startup “vs.” Business Model Canvas (Marius Ursache);
4. The MIT Antifragile Entrepreneurship Speaker Series (Bill Aulet);
5. How the Antifragile Entrepreneur Can Improve with Improv (Mike Grimshaw & Nate Lee);
6. The New Disciplined Entrepreneurship Toolbox (Marius Ursache);
7. What Gives Me Confidence That We Are Successfully Teaching Entrepreneurship (Bill Aulet);
8. That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea (Bill Aulet);
9. Using Disciplined Entrepreneurship with Established Teams (Mark Riddley);
10. The Best Technology Does Not Win. A Business Succeeds Because of People (Bill Aulet).

What one do you feel was overlooked? What do you agree with?

Congratulations to Joe Gibson of Clemson for getting #1 of 2020. We welcome your contributions for 2021 as our goal is to continue to build this global, electronic community. If you want to contribute, please get in touch!

Welcome to 2021 and be resilient+!!!

Berlin is a city that has always intrigued me.

When I graduated from college and had just played a season of pro basketball (don’t be fooled, the pay was not great but I did get paid to play basketball so I am not complaining) in England, I headed to the European continent to explore. I had never been so far from home before. As I hitchhiked across Europe, I headed to Berlin which was then behind the Iron Curtain, meaning it was in the middle of communist Eastern Germany. That experience blew my mind. I even traveled to East Berlin to see how they lived there and had beers with some locals, which was very interesting because I did not speak German and they did not speak English.

Berlin was absolutely bursting with energy on all sides. A wild frontier for sure. That was 1981.

Fast forward to 2010… I have become good friends with Thomas Andrae, the Director of 3M Ventures, and we are doing a lot of productive things together. One of his employees, Dominik Guber, comes to MIT and becomes an absolutely memorable student and successful entrepreneur who I use as one of my case studies in my class today. Thomas got me to travel to Berlin to see the burgeoning entrepreneurial ecosystem there and I was hooked again. The energy and heterogeneity were just like I had remembered it but translated into the current world of entrepreneurship. We had the Technical University of Berlin team in one of the first MIT delta v cohorts as a result.

I think of Berlin as a very unique city. Like London is not really an English city but an international city, the same is true for Berlin. It is a place of convergence for all kinds of people. I have gone back a number of times and it never lets me down. One of the visits was to give a talk for the opening of Signal Iduna’s new entrepreneurship and innovation center called “Signals”. It was an accelerator, incubator, educational platform, funder, and more wrapped into one. It was a very innovative ecosystem for entrepreneurs.

I was very pleased and honored when they asked me this year to speak at their annual conference even if I couldn’t travel to Berlin. Once again, it was very energizing and my talk is below – and as you can see from the picture, it was not a corporate outing at all.

Thanks to Signals, Thomas, Dominik, and all my friends in Berlin. As President John F. Kennedy said, “Ich bin ein Berliner“.

Last week, I had the opportunity to give a keynote talk at the Open Innovations virtual forum run by Skolkovo. It was a great chance for me to go back and not just talk about Disciplined Entrepreneurship but also to see the progress Skolkovo University has made in the area of entrepreneurship in Russia. On the panel with me was Kirill Kaem, SVP of Innovations at Skolkovo, and old friend Pekka Vilakainen, an Advisor to the Board of Skolkovo. When I first went to Skolkovo many years ago (I think a decade) it was just getting started and it was literally a potato field. The vision was to create a thriving hub for entrepreneurship like MIT but in Russia. On one hand, it was hard to envision but upon closer look, some key assets were in place. The technical talent was extraordinary. The work ethic was unsurpassed anywhere in the world. They had strong government support. They knew they needed entrepreneurship if they were to revitalize their economy and see their investments in research pay off. They were unquestionably lagging at the time in entrepreneurship skills and community relative to the rest of the world – especially in entrepreneurship education.

As you will see in the video above, our discussion talks about the usefulness of Disciplined Entrepreneurship but the conversation is much more far-reaching to what a difference Skolkovo has made in filling this gap and what the results look like today. It is very interesting to see the lessons learned and where we go from here. Many thanks to Evgeni Sheyenko, Head of strategy and analytics at Skolkovo, who organized and moderated this panel. It is also fun to have such a discussion with global colleagues where we can learn from each other, and personally, to share the stage with someone whose email account is “bulldozer” (that is Pekka).

Marius Ursache, a good friend, DE practitioner and trainer, serial entrepreneur, illustrator of the Disciplined Entrepreneurship book and workbook, master of the d-eship.com website, maker of detoolbox.com, and wearer of many other hats (as a true Renaissance man), also took part in an interesting panel on how to approach deep tech investing.

Hope you enjoy and gain some new useful insights from the videos.

We open-source all that we do at MIT for teaching Disciplined Entrepreneurship under a Creative Common licensing understanding – and this has proven very popular. I always felt bad that I had not documented it as well as it could be. I also wished I could update the materials I use in class and make them clearer and more complete. This was not as easy as I had hoped as other priorities always nudged it out of the things that actually got done.

Pushed by my friends at Purdue, led by Professor Nathalie Duval-Couetil, I spent a good deal of time at the end of the semester this spring and this summer finally getting to this task. I have cleaned up and put together a new and much more comprehensive release of my teaching materials. It not only has the most current material I use at MIT to teach Disciplined Entrepreneurship but it is also much better documented. It covers a bit more than the 24 Steps in the book (but not much more because we have only one semester) making it a very strong introduction to a “becoming an entrepreneur” course. It is not about entrepreneurship but rather it teaches the students what it is to become an entrepreneur through an experiential, “action learning,” project-based (I think all of these terms mean the same thing so chose whichever suits you best) curriculum.

I have included the syllabus, class by class summary with key points for each class, as well as slides, homework, and a detailed description of the deliverables for each class. It is customized to the MIT environment but hopefully, it will provide a lot of good materials for your courses and programs. It is made available at no cost and all we ask is that you include attribution of where the material came from and then make any derivative works available on the same terms to the community. This is the Creative Commons licensing agreement.

To get this new material, go on this web site to the “Resources” section and sign up for access. For those of you who already have access to the Dropbox folder for entrepreneurship educators, you should have already gotten an email about this.

Once you have looked at and/or used the material, we would love to hear what you think. Any questions, comments, enhancements, or just raving/whining is warmly welcomed in the “Forum” section of this website.

The world needs more and higher quality entrepreneurs now more than ever. If we can help in that cause, go forth and use the material with pride and we all will share in the benefits.

Another day in self-isolation and signs are that this is not going to end soon so here are some thoughts on what we can do that is constructive as entrepreneurs? (As just humans, we should do all the other things to flatten the curve like social distancing, washing hands, etc.). Here are some thoughts for today:

1. From the Boston Globe by Scott Kirsner, a survey of companies that are providing important services during this period, and probably after as we will be changed forever even when things
   go back to “normal”—“Coronavirus means opportunity for some companies” read full article.
   
   
2. An excellent slide deck from old friend Fotis Filippopoulos from Ogilvy that give great advice on how to think about things right now, “ Making Brands Matter in Turbulent Times and Beyond COVID-19” (view full slide deck).
   
3. Post from Paul Graham of YC on making a positive out of being stuck at home for students:
   

Hope all if this gives you positive energy to be productive when your community, society and the world need it most. Stay strong my friends and seek to be antifragile as hard as that can be right now.