“We are not a Startup…”

Lessons from my Entrepreneurial Journey #13

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The other day at an event a gentleman asked, “What does your startup do?” “We are not a startup anymore. We are a 4+ year old company, focused on healthcare software,” I quipped back, as we exchanged our visiting cards. That took him by surprise, as he was wondering why I am steering away from the word  “Startup”, when it’s considered so cool to call yourself one.

The definition of a startup, as per Steve Blank – who is considered the pioneer of Customer Development methodology, a bible for startups – is “A startup is a temporary organization in search of a scalable, repeatable and profitable business model”. It is conducting experiments to get this right very fast.

So once you get it, you should not call yourself a startup anymore.

A human being runs through various phases of his/her life with different labels – a new born, a baby, toddler, boy, teenager, adult, senior citizen – You wouldn’t call yourself a baby when you are a 4 – 5 years old.

So I have sometimes wondered why this affinity amongst entrepreneurs to call themselves a startup for as long as possible.  Some of them have products, business models and raised massive funding – but still tag themselves as startups.

Is it because:

  • The word denotes that we are attempting to do something that no one has done before & it’s considered cool to run a startup or join a startup.
  • The word conjures up entrepreneurship. Messages like “Startup.. It’s never too late” may make you feel that you are missing something in life if you haven’t “done” a startup.

In my view, the word startup sends a lot of uncomfortable messages subtly to various stakeholders.

Customer perspective:

  • Hmm..so you are new. It means your products are untested…
  • You are a young company and not seen the challenges yet. We do not know if you will be around long enough if we buy your products/services.

Employee perspective:

  • I have heard that startup X folded up last month. Is my startup too similar? I am not sure.
  • Will I have a long term career? What if our investors pull out?

Coming back to our story, we took a call not to call ourselves a startup when HealthMacro turned 3 in October 2015. When you are a 1 – 2 year old, it’s acceptable to call yourself a startup.

“We had a market fit product, a relatively large addressable market, paying customers and a business model. We only needed to scale”. So why call yourself a startup was the thought process we had.

We believed that if we called ourselves a startup even after 3 years of existence, we may end up doing silly things to fit into the mould of what a startup should do that could seriously jeopardize our growth.

I put together a comparative list of what a Startup Vs a Growth Stage company does:

 Early Stage Startup (0-3 years)Growth Stage Company (3 years + )
1Competes in startup events & attempts to win awards.Participates in Industry trade events marketing its products.
2Showcases its startup awards won & media coverage received.Highlights its key customers, references and testimonials.
3In search of the right paying customer & business model.Has a clear business model, target segment & customer profile.
4Depends on few early customers.De-risks its dependence on few customers.
5Woos customers with discount and other freemium models.Clear value proposition. If this customer says no, move on to the next customer quickly.
6Anyone interested can join. Will check fitment later.Hires with a clear Job Description, with a strong interview process.
7Informal Performance Reviews.Formal Performance Reviews.
8Competes with other startups.Competes with companies bigger than itself and works to beat them.
9Seeks informal feedback from customer on product and service.Monitors every customer touch point to experience the “moment of truth” for the customer.
10Focuses on Vanity Metrics & Social Media.Focuses on proposals sent, invoices raised.
11Seeks Funding.Raises seed funding and runs with it frugally to have a long runway to take off without another round of funding.
12Mindset: Let’s get the product out and generate early revenues.Focus: On predictable revenues month on month. Attempts to get to break even and profitability faster.
13Spend on marketing & ads.Word of mouth referrals.
14A very flexible culture.Work culture balancing Company Results & Employee benefits.
15Has assumptions on problem definition and customer mindset.Has strong understanding of Industry value chain and customer pain points.

We have gone through all the phases outlined in the “what early stage startup does” table.

Now at the 4+ year mark, we regularly check against this list to validate which bucket we are operating from & correct ourselves if our mindset is still that of an early stage startup.

We are working very hard & smart to scale up and get to profitability fast…as “We are not a Startup…”

 

This is the thirteenth part of a series by the author. Find the previous post here.

shashi

[About the Author: Shashi Bhushan is the Founder & CEO of HealthMacro Technologies.  He plunged into entrepreneurship to explore his dream of building something that touches people’s lives. HealthMacro were TiE’s AnthahPrerana 2013 winners. He can be followed on twitter at @ShashiBhushanHR]

TiE Startup Showcase: New Frontiers in FinTech

Financial Technology or FinTech, is a booming industry right now, with investment flooding into companies reinventing the way we do payments, lending, investing and more. Valuations in this sector are also burgeoning, as more money floods in. Many companies are now reaching the fabled ‘unicorn’ status.

TiE Startup Showcase is a monthly event organized to help entrepreneurs pitch their products in front of TiE members, investors and charter members. The showcase for this month was hosted in partnership with NUMA Bangalore and Excubator to help entrepreneurs showcase their FinTech solutions.

Meet the Panel:

Product Showcase Format:

  • Panel discussion
  • Hardware Product Showcase of curated startups
  • Networking

Entrepreneurs from 4 start-ups pitched their ideas in front of the jury panel and the audience.

#1

eloan-originators

Eloan Originators is a FinTech company providing easier and faster loans through loan originators. It provides online loan comparison, customized loan documentation, loan application and loan processing on a single platform, which aids ease of doing business.

Eloan Originators strives to provide all available options to loan consumers, so consumers can avail the best suited loans. It aims to reduce the cost of loans through loan portfolio management and enable loan originators with bank products and processes.

 

#2

frs

AnthahPrerana 2015 winner FRS Labs is a software engineering company specializing in fraud risk and security products. FRS Labs develops and sells the following products: Orpheus – Subscription Fraud Detection System, Atreus – Application Fraud Detection System, Prism – International Revenue Share Fraud Detection – Cloud System, Vistas – Visitor Access System and Atlas – Voice Biometrics System.

From a humble start in 2010 with just two Engineers, FRS Labs has steadily added more talent, products and an impressive clientele including two of the biggest Telecom companies in the world.

 

#3

initcodes

InitCodes is an R&D IT company that specializes in Fintech Innovation, Data Protection and Futuristic commerce. The Products wing is currently building a Unified Intelligence Platform for Digital Transactions.

The Consulting wing, on the other hand, provides high-end Technology Consulting in Data Science, Data Warehousing and Analytics, especially in the Life Sciences domain. The focus is on creating efficient solutions, each tailor-made with the customers’ business needs in mind.

 

#4

srishti2

Srishti ESDM focusses on designing indigenous and cutting-edge electronic products. They aim to revolutionize the art of digital human identification through their products.

PayHind, by Srishti ESDM, enables easy and fast payments through a single platform. With the growth of the service industry in the country, PayHind is emerging with innovative solutions to make payments easier for customers, providing Aadhaar based services, money transfer, paying off insurance premium and travel based services.

Takeaways from TiE EdTech Day: Masterclass on ‘Building a Brand’

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Masterclass on ‘Building a Brand’ with Ameen Haque, Mohan Kannegal, CS Swaminathan and Dr. Chhaya Shastri

Brand is the perception of a product, and perception will match reality over time, says Elon Musk. In essence, a brand is more a reflector than a representative of the product or the service one offers. Therefore, a product acts as the instrument at the hands of the scheme laid out by the brand. With players emerging day in and day out to offer the same service or a product with the same function, it’s the brand that plays the differentiator in making the choice of one over another.

A major setback in the startup industry and more importantly in the EdTech startup industry is the lack of resources that goes into branding after exhausting them on building the product. As visibility in the ocean of players is paramount for success, Dr. Chhaya suggests one to plan a proportionate divide of resources for the build and the marketing.

An iterative way to go about this would to be first build a minimum viable brand, similar to a minimum viable product, says Mohan Kannegal. A minimum viable brand would cover the bare essentials like the Brand Personality and Consumer/Customer Experience. Both these aspects ought to be reflective of the founders’/creators’ personality which would otherwise run the risk of leaving unfulfilled expectations among the customers. The final bit to this constantly updating process is identifying the emotional connect that one shares with his customers.

What is instrumental in holding up the minimum viable brand that is created to stay its course, and truly at it, is a clear strategy and precise differentiators as this has a major impact on the user experience of the brand and therefore its acceptance. Since, learning that is truly the epicenter of the EdTech industry, has not yet evolved into becoming a completely digitized process, it becomes also essential to cite linkages as often as possible to offline resources when the primary mode is online and vice-versa, comments C. S. Swaminathan of the Founding Fuel team.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]

“Can you mentor me..?”

Lessons from my Entrepreneurial Journey #12

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HealthMacro turns 4 this month. This post is dedicated to all those who have in some way or other mentored or advised me in my entrepreneurial journey.

I have been fortunate enough to have a wide range of people who have helped me through their guidance at times. Some of these have been important decisions.

As a technology person, I initially lacked expertise in finance, legal, fundraising and other matters. I would reach out to people who were experts, seek their views and get different perspectives.

Few ground rules:

  • Firstly, build trust by being transparent of your challenges.
  • A successful entrepreneur mentoring you is no guarantee of your success.
  • Your failure doesn’t reflect on your mentor’s abilities. He/she can only guide you. You have to execute.
  • It’s up to you to derive the best out of this relationship. You need to be clear what help you want from your mentor.

Mentors come in various forms:

  • Some of them come over as formal Advisors to the Co, the others due to their bandwidth challenges help you informally at appropriate times.
  • Sometimes I have learnt a lot through our vendors.
  • Few people I have met just once, but learnt a lot from those interactions.
  • Customers are your best mentors.
  • When some mentors are not reachable, I learn more reading their blogs and listening to them at events.

Why do you need a mentor?

  • Get a different perspective on a problem.
  • Someone who serves as your bouncing board for ideas.
  • Honest opinion on what to do next.
  • Industry level connections.
  • Connections to possible hires /investors.

Possible traits of a mentor:

  • Curious and learns from you as well.
  • Been there, done that person.
  • Expertise in certain domains.
  • Well networked person.

Who is a good mentor?

  • I earlier used to think that mentor is someone who is senior to me or has tons of experience, but I later realised that sometimes people several years younger than me, have good ideas and helped.
  • Always have a wide range of people who should be your sounding board.

Few Dos and Don’ts:

  •  Good mentors usually will be advising at least a few startups. Do not approach them to be your mentor. Just state that you need some feedback on your idea and get it. Asking them to become your mentor may even scare some people!
  • Build connections and show progress to possible mentor before asking them to be your mentor. Remember people like to mentor only possible successful people. Why would someone waste time on who they believe may not succeed?
  • Everyone is busy and time is key.  Ensure easy operating mechanisms to be connected and make progress.

In Summary:

  • Mentors come in various forms. Be open to receiving guidance.
  • Just 1 mentor is not good enough in this entrepreneurial journey. Seek more to enrich your growth.

Thanks to all mentors who have helped me in this journey…

 

This is the twelfth part of a series by the author. Find the previous post here.

shashi

[About the Author: Shashi Bhushan is the Founder & CEO of HealthMacro Technologies.  He plunged into entrepreneurship to explore his dream of building something that touches people’s lives. HealthMacro were TiE’s AnthahPrerana 2013 winners. He can be followed on twitter at @ShashiBhushanHR]

Takeaways from TiE EdTech Day: Masterclass on ‘How Schools and Higher Education Institutions Buy’

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Masterclass on ‘How do Schools and Higher Education Institutions Buy?’ with Murlidhar Surya, Dr. H Vinod Bhat, Vipul Redey and Priya Krishnan

The panel of speakers at the Masterclass on ‘How Institutions Buy?’ come from institutions with diverse administrative styles. With Priya Krishnan, founder of KLAY pre-schools, where decision making and administrative authority is more centralized on one hand and Dr. Vinod Bhat, Vice Chancellor of Manipal University on the other, where the authority is spread across various stages, departments and processes, the third speaker, Vipul Redey is the director at a global leader at education services where the audience, whom the administrative decisions are based upon, are the parents and the schools too.

The notes from the Masterclass are as below,

Get your introduction before you get there

As it is with mundane day to day activities, one is more prone to trust somebody that they know or believe in. This is pretty much the sutra the ad campaigns with celebrities have been thriving on for ages. Similarly and in a downsized manner, it will always work to your advantage when who you are going to pitch to can bank on the trust of somebody they already know and are more probable to believe in. Quite often than not, the right person to pitch to is at the top of the hierarchy and going through the degrees of separation gives one a fair idea of how the organization and its processes work, leading to a better understanding on what the business’ specific need is and/or avenues for development lie in and how to pitch it in a way that connects with the buyer.

 

Solve a business issue that fulfills a latent demand

With technology overwhelming every facet of business solutions, even in the ed-tech industry, it is tempting to fantasize and exploit the possibilities that it holds in creating services and products. However, the heavily invested and two sided interaction between the buyers and the institutions in the education industry, creates strong animosity and repercussions when the buyer doubts the legitimacy in the need for such a service or product. Therefore, it is imperative that one engages with one’s customers and understands what could cause a significant value addition to their world, builds the service one intends to provide on it and pitches these ideas as solutions addressing the customers’ pain points that could take the business to the next level.

 

Have a well-structured and logistically well-handled pilot

As important as it is to sell an idea, it is even more so important to execute the idea. A pilot is the testing ground where one has the opportunity to encounter issues that one could have only known through execution. While this is true, it is also this that will determine whether the buyer buys into the business. Have a pre-planned structure for the roll out of the product or the service into the pilot environment that is easily absorbable at the schools or colleges through trainings, feedback sessions and quick quirk-fixes while making sure the logistics run smooth. With all the planning in place, the last mile delivery is a definitive constraint that can be addressed through a champion, either from your side or the buyer’s side, who is well-briefed and trained.

 

While updating your pricing, upgrade your product too

The business matures when one is ready to take on a long term commitment with a buyer and this essentially comes about when one sees an upward gradient in the quality and/or the number of services provided. While any kind of an upgrade requires funding and resources which translates into the pricing, it is necessary to also keep an eye on whether the upgrade is truly seen as a considerable value add by the end customer and business too.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]

Takeaways from TiE EdTech Day: Panel Discussion on ‘Dancing with the Giants’

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Panel at ‘Dancing with the Giants- How and where can startups collaborate with enterprises?’ with Anand Sudarshan, Satish SukumarGV Ravishankar, Sachin Torne and Ninad Karpe

There are at least 9 out of 10 people saying that only 1 out of 10 startups succeed, whatever the definition of success is here. With the sheer number of startups, overlap in ideas and challenges with funding and scaling, a time-tested way has been to associate with established brands and players in the industry, be it in the form of a collaborative service or as one under the flagship of such a brand. Although, the idea of an already reputable brand working for your product or service sounds lucrative and gives you credibility, a not-so-clearly thought and laid out plan at this could turn counter-productive, at the least.

Starting from whom to make the initial pitch to, to identifying the ideal exit point, the panel discusses the dynamics and the nuances that go into such a partnership. While it is necessary for such a partner to buy into the idea, the panel agrees, it is more important to buy into one’s organization’s operational style. This makes it all the more imperative that the person who is introduced to your idea speaks and understands the language you do. If the crux of the idea is in its technology, it would hardly be possible to completely appreciate the idea for one who is clueless of the technology being spoken about. While the conventional methods suggest one to pitch and re-pitch, working one’s way up the ladder of hierarchy with approvals at each stage, the issue lies in the authority these stages command in making decisions and a job role that mostly looks at the operations rather than the vision and future.

As important as it is to get a pitch bought into and conjure up possibilities for the future, it is equally important to plan long term commitments and keep them because trust beats success, comments G.V. Ravishankar.

Often, when one goes into such a venture, the idea one goes in with goes through iterations to fit the customization requests and lands up as something that is almost unidentifiable with the original idea. This calls for an exit strategy that makes sure you have exploited the partnership just enough to not make it sore for either party. With a call out for everybody to come in with a spirit of jamming, while dancing with the giants, the giants suggest, that you dance from the front and dance in sync.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]

Takeaways from TiE EdTech Day: Panel Discussion on ‘Future of EdTech’

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Panel at ‘Future of EdTech’ – Bala Girisaballa, Manish Gupta, Amruth Ravindranath, Arvind Nagarajan and Sathya Prasad

As the power over tools and the methods to learn are shifting from the institutions of academia to the regular learner, a major opportunity is presented in creating avenues for accessing effective and qualitative material suited to the learner’s needs and goals. Effective as a product or service that is accessible in terms of price and span to learners who are the consumers and their parents, the customers. Qualitative in the topics addressed and the worth of the knowledge and/or its application to learners while exploiting the growing digitization and alternate learning methods. Thus, concurred the panel.

While there are a vast number of resources available, thanks to mobile technology, internet and networking and with learners taking upon a self-curated learning process, a growing gap shows up in the number of these self-curated courses seeing completion. For instance, while MOOCs are cited as a game-changer in the way people learn with its multitude of topics offered and ease of access, the sheer difference between the number of people enrolling and finishing a MOOC represents the lack of emotional engagement, which is the next important turnkey. In light of this, a personalized learning assistant driven by machine learning and data analytics, making the learning process both emotionally engaging and cost-effective, is the need of the hour, says Manish Gupta.

Key Takeaways:

  • While you have a strategy to sell to schools and colleges, have one to sell to the end-customers, the students and their parents too.
  • Opportunity lies in designing backwards from skills required for employability, the ultimate goal of education as of today, in harnessing creativity over rote learning.
  • Consider alternate learning methods through visualization techniques, experiential learning, etc.
  • The next big thing is to exploit machine learning and data analytics to create a personalized, emotionally engaging and cost-effective learning assistant.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]

Takeaways: Keynote Speech by Mohandas Pai at EdTech Day

TiE Edtech Day took place on September 24 at The Leela Palace, Bangalore. The primary goal of the conference was to bring together key players of the EdTech ecosystem to provide insight into the shifting dynamics and critical needs in the EdTech sector and highlight the trends and opportunities. With 31 speakers,10 sessions and over 250 participants, it was an action-packed day of insights shared and networks built.

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The keynote speech was delivered by TV Mohandas Pai, Chairman, Manipal Global Education Services and Aarin Capital. The following are the takeaways.

An average of 24 million and 9 million students are enrolled into schools and colleges respectively each year, Mr. Pai broke down the numbers citing his association with various educational initiatives. Even with a downward gradient in the fraction of students after every year relative to the number enrolled due to dropouts and detainments and a major negative offset factoring the affordability in, the addressable market is a figure between 55 to 60 million students. Considering the increase in the average expenditure on educational resources exclusive of the institutional schools and colleges, the spending capacity grosses about forty five stretching to fifty thousand crores.

As the gap between learner needs and what the schools offer widens, and accessibility and networking becomes easier through mobile technology and the internet, a significant disruption is possible in the learning component of education, he asserted. Following his recent success with Byju’s learning app through Aarin Capital, he commented on the B2C space being more welcoming and far-reaching, while also forewarning about the risks involved with poorly planned marketing and growth strategy in the B2C business.

Key Takeaways:

  • The education industry has a constant addressable market with expected growth while also being disparate socio-economically.
  • Opportunities lie in the learning area rather than the regulatory area of education.
  • Keep track of your bills. While raising funds is important to grow, plan to break-even earlier; this might attract investments and can be used for development rather than to survive.

 

Watch the full speech here.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]

Stanford Ignite – Bangalore

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The Stanford Graduate School of Business is returning to Bangalore in January 2017 and is now accepting applications for Stanford Ignite Bangalore, January 20 – March 26, 2017.

About Stanford Ignite 
Stanford Ignite is a certificate program that teaches innovators how to formulate, develop, and execute their ideas. The program is taught by leading Stanford Graduate School of Business professors, who teach in-person and through live video-conference in Bangalore. Participants learn core business skills and experience working on a team to develop a business plan around a new product or service for an existing organization or a new venture. The curriculum is adapted for the Indian market and all instruction is conducted in English. A sample schedule is available on the website.

Stanford Quote

Admission Information

  • Applications for the Stanford Ignite Bangalore 2017 program must be submitted by October 21, 2016
  • To be considered for admissions, your application must include the online application form, your current resume, three short essays and two recommendations submitted via the application website

Tuition

  • Tuition cost: USD $8,500
  • The cost of attendance includes course materials, program events, and some meals
  • Accepted applicants will be eligible to apply for one of four 50% tuition scholarships

Click Here to Apply

Website: www.StanfordIgniteBangalore.com

Designing Innovative Business Models

While everyone in the tech industry focuses on innovation of their product, one great way to create value is considering innovation of your business model. In past few years, we’ve witnessed a number of technology companies creating or completely transforming entire industries. Some examples include Amazon Kindle, Apple iPhone, Google Android and NetFlix. If we see in all these cases, their success was not the result of new or disruptive technology advancement, but rather a unique technology application based on a business model innovation that was disruptive in some way. An innovative business model can create a new market or allow you to exploit new opportunities in existing markets. Your business model can make the difference between world-leading success and dismal failure.

Examples:

  • Just ask the people behind the Xerox 914. In 1959, the first dry-process, plain-paper copier was a potential game-changer — but it cost six times the price of alternatives. Potential partners wouldn’t touch it. So the company developed a new business model. Rather than selling the machine, they leased it for $95 a month and charged a few cents per copy for copies in excess of 2000 a month. Thanks to the 914′s speed and convenience, customers soon were making tens of thousands of copies in the same period, and the copier that couldn’t be sold suddenly became a huge revenue generator.

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  • Apple’s iTunes, like iPod, was not the first product of its type on the market for purchasing music online, but innovated the business model to sell more iPods by enabling single song downloads for 99 cents and removing all of the listening restrictions that had existed before then (except for DRM). They innovated again with iPhone and the App Store, not by having these products first, but by creating an app ecosystem that was managed outside of the mobile operators.
  • Dell disrupted the computer industry by making computers to order exemplifies this opportunity.

dell taco

 

  • Taco Bell, which did not create a large-scale disruption but innovated business model design by sending food in precooked bags to restaurants. This allowed them to price their food less than competitors.

 

Multiple ways companies can innovate their business models:

  • Add innovative activities through forward or backward integration. This is referred to as new activity system content.
  • Link activities in cutting-edge ways; this form of business model innovation is new activity structure.
  • Change one or more parties that perform any activities, or new activity system governance.

 

The Power of Business Model Innovation

As companies become successful with a business model and as they mature, they refine and hone their skills and processes to optimize their model. This helps them to achieve scale and high growth and profits. It becomes corporate DNA. Industries tend to be dominated by a single business model, and the market leader will continue to enjoy leadership as long as the business model satisfies the majority of the segment needs. This is why a new entrant attempting to attack a market leader head on using the same business model will likely always lose, regardless of a few interesting feature enhancements.

 

[About the author: Pinkesh Shah, Executive Board Member, Institute of Product Leadership. Pinkesh specializes in Product and Business Line Management, New Product Development & Launch, Business Development and M&A, Product Management and Product Strategy.  He is currently helping build IPL, the world’s first B-School focused on Product Leaders.

Website : www.productleadership.com ]

(Originally published on productleadership.com. To go to the original article click here.)