“A startup is an experiment: An inquiry into how the world might lookunder the vision of the startup’s founders.”—Eric Ries, Co-Founder, IMVU.
Despite the eagerness and optimism of passionate entrepreneurs,there is no such thing as a sure thing. Each new venture is a learninglab in which the founder’s ambitions and ideas are tested against mar-ket realities and cold financial facts. The birth of a business is an in-herently creative process in which possibilities are generated, tornapart, refined, and reconstituted, all to adapt to environmental un-certainty that will persist long after the startup phase.
Passionate founders must especially guard against betting the bulkof their resources onto a singular, unforgiving strategy. As we moveinto the second decade of the twenty-first century, commercial mar-kets are increasingly turbulent due to the transformational effect oftechnology on all facets of business and life, redefining how productsand services are designed, produced, purchased, delivered, and serv-iced.1 Amid this uncertainty, executing with agility is more vital thanever.
In 2006 and 2007, Mark Williams and his team poured their time,energy, and capital into building out a range of learning products forApple’s click-wheel iPod, creating digital versions of well-known ti-tles, such as Netter’s Anatomy for medical students, Frommer’s TravelGuides for vacationers, and BrainQuest digital flash cards for kids. Theclick-wheel device would soon seem as ancient as the rotary phone,but in 2007 it remained one of the hottest mobile devices on theplanet.
As 2007 drew to a close, Modality’s early product sales were slug-gish—not nearly enough to cover its monthly burn rate—but Markand his team remained optimistic because of advances in several areas.The iPod’s internal architecture was virtually closed to third-partydevelopers, so Modality built software that would write content di-rectly to hidden database files on users’ devices.
Although technicalbarriers prevented Modality from selling products through Apple’siTunes platform, it created a web portal to allow iPod owners to di-rectly buy and install the company’s products. And, in a move thatsymbolized its growing support, Apple provided a spot in its popularretail stores for a test run of Modality’s BrainQuest learning products.
Thanks to the team’s passion and tenacity, Modality was begin-ning to gain momentum. It had finally figured out how to sell and dis-tribute early products, and relationships with Apple and publishingpartners were improving week by week. Mark Williams looked toward2008 as the year when his team’s innovation and persistence wouldpay off.
But in January of 2008, he learned that paradigm-rattling changeswere on the way. After years of closely guarding the operational gutsof its devices, Apple was preparing to open up the iPhone to softwaredevelopers around the world. The company planned to release a Soft-ware Development Kit (SDK) in March, hoping to spark a flood ofinnovative iPhone applications from both professional and amateurprogrammers. Mark had kept an eye on the iPhone since its releasesix months earlier, thinking it would be the next logical device for hisproducts. But Apple’s 180-degree shift from super secrecy to wide-open invitation caught nearly everyone by surprise.
Apple’s turnabout presented a painful choice for Mark and his team. Switching their full focus to the new iPhone would meanstalling, and ultimately abandoning, their hard-won progress on theclick-wheel frontier. But staying with the click-wheel iPod wouldleave them as undisputed masters of a once-great but forgotten tech-nology. Mark decided to give up his “bird in the hand” in hopes ofseizing what new opportunities might lay in the bush.
The next few months were a whirlwind of innovation, salesman-ship, and surprise for him: Trips to Cupertino, California, to share hisiPhone-based prototype with Apple; word from Apple that Steve Jobsloved the prototype; and then an invitation to join Jobs on stage atApple’s World Wide Developer Conference (WWDC) in June. TheJune 2008 WWDC functioned as a coming-out party for the AppStoredistribution channel and for the new generation iPhone.
When calledupon, Mark took the stage and made the most of his twenty minutes,walking the audience through a demo of the Modality Netter’s Anatomyapplication that featured high-definition, colorful, zoomable screenshots of human heart, brain, nerve, and bone anatomy. Apple’s onlineAppStore, the channel that would forever change the face of mobilecomputing, would soon make its debut, featuring Modality’s firstiPhone-based Netter’s Anatomy digital flash cards priced at $39.99.
Mark had bet big on the iPhone and the AppStore, and he neededa significant revenue payoff to make it worthwhile. “If we don’t get agood bump from this,” he said at the time, “we might need to talkabout how to close this thing down.” Fortunately, by mid-August, saleshad gone through the roof: five Netter’s Anatomy titles alone had grossedmore than $600,000 for the month of July. For the time being, Modal-ity had survived a dangerous blow, and had positioned itself as a forceto be reckoned with in the emerging mobile learning space.
Mark Williams’s story illustrates a common experience for entre-preneurs, who must often let go of cherished strategies or hard-earnedassets in order to seize new opportunities and deal with emergingthreats. With the benefit of hindsight, Mark’s decision to aggressively redirect his resources into iPhone development seems like an obviousmove, a no-brainer.
But at the time, it meant trading away a newly sta-ble platform for a disrupting dose of uncertainty. It required a psy-chological openness to change and a high degree of operational agility, attributes that would continue to be vital as Modality’s operation grewin size and complexity. The broader lesson here is that highly success-ful ventures almost always diverge from the founder’s original inten-tions, a fact that places a premium on openness, learning, and agility.
In this chapter I’ll outline two core attributes that drive strong andagile execution. The first is an ability to manage the paradoxical ten-sion between whole-hearted commitment and wide-eyed flexibility.The second is developing a healthy approach to iteration, meaningthat you rapidly iterate your business idea, capture lessons learned,and capitalize on your learning by making smart, tough calls abouthow to change your product, your business model, or, in certain cases,your venture’s core identity.