inRes 3rd WS: The Importance of Customer Research
Dave Mawhinney, co-director of Carnegie Mellon University Center for Innovation and Entrepreneurship (CIE), led the 3rd workshop organized as part of the 2014 edition of the inRes Program. During a two-day workshop held in Lisbon, Portugal, between July 17 and 18, 2014, the main topic of work was customer research. Paulo Marques, CTO of Feedzai, and Rogério Carapuça, chairman of Novabase and member of the Board of Directors of the CMU Portugal Program, were also present in different moments of the workshop, and shared their experiences as academics who became entrepreneurs.
According to an analysis of data for the four-year period (FY08-12), from the Association of University Technology Managers (AUTM), CMU ranks first among the Association of American Universities (AAU) in terms of number of startups per research dollar. Dave Mawhinney is very proud to say: “In 2013, CMU’s award-winning professors and students produced a record number of 36 new companies.” In his opinion, this is an important sign of CMU’s rich entrepreneurial environment where the four inRes teams - DISPLR, Followprice, WeTruck and Xhockware -, will be immersed in October and November 2014.
Knowing Your Customer Inside Out
|“More than 90 per cent of startups fail in the U.S.,” said Dave Mawhinney explaining: “One of the most critical success factors is knowing the customer early on.” To illustrate this, the co-director of CIE shared some successful stories of entrepreneurs who spent several months doing customer research by watching potential customers, talking to them, and interviewing different stakeholders in order to understand the viability of their product idea. “You have to get out of your comfort zone, and talk to the customers to get to know who they are,” said Dave Mawhinney stressing the importance of doing ethnographic research.
One of the examples presented was from an entrepreneurial team that had developed a plumbing technology, and at the end came up with the idea to develop an innovative stroller, with different functionalities comparatively to the ones currently on the market. This example showed that at the beginning the team was mistaken about their product idea, but today they have very successful products. In this particular case, they had an “evolutionary and not revolutionary mindset,” said Dave. The co-director of CIE showed videos with statements from companies like ANIKI, 4Moms, Google Nest, BlackLocus, Dropbox, among others, to illustrate the importance of doing a strong customer research. “The customer should be part of your team,” highlighted Dave.
Managing a Startup is Like a Marathon
Six years ago, Paulo Marques, CTO of Feedzai, left academia to become an entrepreneur. “I knew a lot about technology, but almost nothing about business,” Paulo Marques said. Nevertheless, he and Pedro Bizarro, also a researcher at the Universidade de Coimbra and co-founder of Feedzai, invited Nuno Sebastião, a friend and a manager, to join them on this successful adventure. Already becoming profitable, the company specialized in applying machine learning and big-data techniques to fraud prevention, it has Fortune 100 clients in several countries outside of Europe including the U.S. market where it launched last year.
During his presentation, Paulo Marques shared some key thoughts with the inRes teams: “Learn a lot, and learn fast,” “embrace all the opportunities that come your way, from meetings to big fairs, where you get exposed and you are able to get numerous contacts,” “stay strong, trustworthy, adaptable and optimistic,” and “hire the best human resources you can, because they will be key for your business.”
As final remarks, Paulo Marques said: “Managing a startup is like a marathon, because getting a deal can take 12 to 18 months,” adding that “the sun never goes down when you have a global startup.”
Hiring the Best Human Resources
||Rogério Carapuça, chairman and founder of Novabase, the Portuguese leader in Information Technologies, left academia to become a successful entrepreneur in 1989. “Once in a while I still return to the university to teach some classes,” he said. During a dinner with the four inRes teams, Rogério Carapuça stressed the importance of having extraordinary people working for a company. “You need to have people that combine hard and soft skills,” the Chairman of Novabase said adding that “you can have a very knowledgeable person, but if he is not sociable, he can disturb the good work carried out by a team.” Another important idea left by Rogério Carapuça was that when you are giving birth to a company, it is fundamental “to identify what you don’t want,” adding that “this will make the decisions easier.”
Leveraging Your Network and Building a Strong Board of Advisors
“The secret is to minimize the downside and grow the upside automatically,” said Dave Mawhinney explaining how important it is to always “build, learn and measure.” For Dave Mawhinney there is no formula to know if a startup will succeed or not, but he is certain that if the team does its homework in terms of market and customer research, the chances of being successful increased massively.
Other topic also addressed by Paulo Marques, and emphasized by Dave Mawhinney, was the importance of having a strong Board of Advisors to leverage and help the business to be successful.
The second day of the workshop included one-on-one meetings, as well as lectures on pricing, revenue models and customer interaction techniques, among others.
Suzi Pegg, vice-president of the Pittsburgh Regional Alliance, led the 4th and last Workshop organized in Portugal as part of the 2014 inRes Program, before the teams travel to the United States for their immersion. The workshop was held in Porto, in September 11-12, 2014.
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inRes, short for “in Residence,” is a very early stage acceleration program for entrepreneurial teams working in Information and Communication Technologies (ICT), in Portugal, offered by the Carnegie Mellon Portugal Program.