A View

Personal blog by Daumantas Dvilinskas
Recent Tweets @daumis2475
Posts I Like
Who I Follow
Posts tagged "innovation"

Disclaimer: The purpose of this paper is not to bad-mouth or point fingers but to shine light on what I think is the core problem blocking innovation in Lithuania. Only when you identify the core of the issue can you try solving it, right?

In this paper I will argue that the majority of problems in our country, especially the ones associated with innovation, are connected to a single denominator. My goal is to shine light and articulate that underlying problem, which I’m sure is at the back of your mind as well. Let’s try to raise it to the surface and start the discussion.

I think most Lithuanians (and foreigners who have lived here) would agree that there are many issues floating around our home country. Weak economy, corruption, foreign pressures, talent leak, emigration, etc. I could go on but that’s not the point. What’s interesting is that I think all these problems and many more are just symptoms of an underlying systematic misconduct.

It all comes down to this - We Don’t Invest In Great Talent.

Innovation happens when you give the right resources to talented people. Both startups and innovators have proved that. Even more, sometimes great people make stuff happen with marginal resources all together. That’s why it’s absolutely vital to find and engage with them.

Most innovators would agree that talent acquisition is the most important thing in building successful innovation.

  • With great talent you can make average ideas successful.
  • With great talent you can pivot accordingly to changes in the market.
  • With great talent you can build something, which haven’t existed before. That’s exactly what we need to do.

Now, what do I mean by the Great Talent?

To my mind, and again I welcome debate on this, there are three main parts of a puzzle, which makes Great Talent: passion, domain knowledge and relevant experience (PDE).

  • You need passion because people will only put in long hours if they truly believe in the bigger picture of the task in hand.
  • You need domain knowledge to deliver quality results. That’s what we especially lack in Lithuania.
  • You need relevant experience to know what not to do and make the sure the long hours; dedication and knowledge don’t go to waste.

So… Innovation happens when you assemble enough people with strong PDE and build them into action teams with a unifying goal.

However, finding the right talent is probably one of the hardest things to do. It requires resources, time and determination.

But most of all it requires a culture which appreciates the importance great talent and gives it the highest priority.

Current culture in Lithuania most often than not unfortunately has other priorities. We Don’t Invest In Great Talent but we are happy to waste time & money on…

  • Real estate - building new unnecessary walls has become almost a must. We’ll build another innovation center, which means we are innovation. Bullshit.
  • Bribes – no comment necessary.
  • Quantity over Quality – more average is better than a few great.
  • Irrelevant experience – people who have done something somewhere but on in the area necessary.
  • Useless business development programs with irrelevant mentors.
  • Local vs Global – we ignore the potential of utilizing talent mobility. Choosing average locals over talented foreigners with great PDE.
  • “Milking” the EU… for more “walls”, “Real Estate” and other stuff we have plenty off.
  • And much of other crap that only allows certain people to fill in the necessary ticks and get following access to funding but doesn’t improve the status quo.

In a country where it’s easier to fund-raise a few million of another building than raise a few hundred thousands to pay European salaries and facilitate suitable support structures for a group of great talent - innovation can’t really flourish.

We Don’t Invest In Great Talent!

We just don’t understand exactly how important it is because it’s not embedded in our work ethics.

Let’s get back to Lithuania/Estonia analysis and the startup world whilst keeping the previous thesis in mind.

Since 2005 Estonia has managed to strengthen its position as the leader in the Baltics both overall and in startup industry.

Key facts about Estonian startups:

  • They have two startups in the 500 Startups.
  • They have a strong accelerator with kick-ass alumni raising millions.
  • They have mandatory coding lessons for first-graders.
  • They have a strong startup-orientated co-working and events center in downtown Tallinn – Garage48 Hub.
  • They have the President present at every single significant startup event in country also traveling around the global promoting Estonia as a startup nation. Heck, he even pitched Zerply on the Seedcamp Tallinn stage.
  • Very important. They have Jon Bradford heavily involved in shaping the eco-system and invested in that. That’s your domain knowledge & unrivaled experience in the area.
  • Most important. They have a few right people with strong PDE driving the leading startup initiatives (Government tools, incubators, lobbyists, accelerators,), who really know a lot about startups and are passionate about what they are doing.

I know what you might be thinking – “But they have Skype…”, “It’s only PR….”

Yes, Skype helped. Good PR helped.

But what’s going on in Estonia at the moment is a result of a coherent investment in Great Talent not a lucky fluke. Because it’s consistent and has logical sequence to it.

Several years ago in Estonia a revelation must have taken place when they understood that for a small country with limited resources there is no other option to become prosperous than fostering innovation and I assume startups seemed to be the cheapest way to do it.

So they’ve started building the local eco-system by acquiring great foreign and local talent with complimentary PDE. They’ve used the business network via Skype, Jon Bradford and many other influencers happy to help, to get in touch and acquire right talent. That’s how a smart startup would behave.

Don’t get me wrong. Estonia is not a perfect country. There is no such thing. However, what they are good in is prioritizing and focusing on what truly matter – People. Everything else follows as a result.

They were lucky enough to objectively evaluate their talent pool and understand that some positions will have to be outsourced in order to make sure that invested capital will achieve best possible ROI. They were comfortable enough to say: “We don’t have these people here. Lets find them elsewhere”. And they did. Afterwards everything what followed was logics and hard work, which equals to innovation.

To sum up, Lithuania is not innovating as well as Estonia because we don’t invest in Great Talent as much as we should.

I urge everyone to start looking at the Lithuanian startup eco-system as a startup itself.

  • Startup, which has raised some capital yet remains very much bootstrapped. (Governmental support via Enterprise LT)
  • Startup with a few successful evangelists (Eskimi, Campalist, etc.).
  • Startup with a few poorly coordinated nevertheless operating departments under development (Startup Highway, HubVilnius, StartupSpace, Practica Cap, etc.).
  • Startup with a very strong competitor in the North who was first to market and continued to innovate after acquiring the right people for the job.
  • Startup with not enough domain knowledge and relevant experience yet.
  • Startup with smart and open management capable of objective self-assessment.
  • Startup with a 12-18 month runway to prove the market and settle as a proven business proposition (i.e. a structure, which delivers investable startups competitive on a global scale.)

Currently so many of us depend on a very few working for Enterprise Lithuania and other structures set up to create a foundation of Lithuanian startup eco-system.

With this paper my hope is to start a discussion on how should we change our approach to building the eco-system in order to make a leap and catch with the rapidly developing world.

We must make talent acquisition the priority and start taking everything from there. It’s a cultural paradigm, which we need to start changing together. And it’s not just startups. It’s society as a whole.

In my next post will focus on actionable solutions on how I think we can build an eco-system more efficiently starting people-first.

I hope these ideas will resonate with you guys and again I encourage sharing your thoughts on my blog or Facebook.

Best,

Daumantas

Entrepreneur

@daumis2475


Disclosure: I’m a startup guy, business developer, events organiser and advisor @ TransferGo. Here I express my views and encourage others to debate them. Thank you for spending your time reading this.

I want to talk about the first 1% of your startup – that’s the idea.

Entrepreneurs come up with many ideas, which at the moment of inception sound exciting enough to give you that much-awaited portion of dopamine surge. You know what I mean, right? Like most of us I tend to write my “dopamine” moments on a special notepad. By now I have more than four of them filled up.

Surprisingly enough (or maybe not), after a while majority of my old ideas don’t seem to look that creative, smart or innovative.

  • Some successfully implemented by others.
  • Some sound boring.
  • Some…Well I must have been using something strong when I came up with that…

Yet a few of them still ring a bell.  So how to pick the one and try running with it?

I believe that the sole purpose of technology/innovation is to make the future more productive, more social, more entertaining, more… etc. In a word – better.

I think startups are one of the most powerful tools out there able to tangibly improve people’s lives. That’s what they are all about. Money should be treated as a by-product, right?

So how to think about the few decent ideas left on the notepad. I’d like to construct a simplistic framework for entrepreneurs on how to do it.

I’d like to categories “the few notepad survivors” into three categories.

  • Idea that solves a really painful problem for enough people.
  • Idea that adds real value for enough people.
  • Idea that’s really addictive - sticky, which to an extent is a combination of the two above.

Out of the last few ideas-survivors on my notepad I’d choose one, which would potentially do good in one of these categories and then go on testing if it will.

Let me give you some examples of companies who represent these categories quite well.

The pain ideas.

Skype – made international calls accessible to everyone by substantially cutting down prices. Sorry if the examples look a bit boring.

All of us should remember the pre-Skype world when calling abroad was a luxury reserved for larger business or wealthy people. Skype removed the barriers and made global communication available for all. They made the world smaller, more inclusive, and dynamic. But most importantly by solving a huge pain they’ve disrupted an old-fashion telecommunications market and opened new horizons for businesses and global connectivity.

The good news is that unlike the “real value” or “addictiveness” ideas you can test if the problem hurts your target audience enough so they’d pay for the solution.

  • Identify people who you think are your target audience.
  • Develop a pitch.
  • Go and talk to them. If your pitch is at least half-right you should be able to see signs of approval and hopefully excitement that the problem will final be solved.
  • Real pain points tend to resonate rather well.

That’s why I think “pain” solutions are an ideal pick for first-time entrepreneurs:

  • They should be relatively easy to communicate with customers.
  • They should be relatively easy to prove.
  • They should be relatively easy to market.
  • They should be relatively easy to impact many people if the pain is big enough.

Don’t get me wrong. Bringing “pain” idea to the market is as difficult as any other idea. But at least you’ll know fairly early if it’s something people want to use/consume/pay money for.

Important detail. Keywords here are “real” and “pain”.

When you start testing the good ideas on your notepad be open and objective by picking the one with serious problem to solve in a market that’s long overdue for disruption, especially if your goal is to build a business out of it. Only if the problem is serious enough and the solution is good enough will people pay you money for it.  

Let’s move on to Real Value creators.

AirBnB added a lot of real value to millions of homeowners and is now evaluated north of $2B.

For those who don’t know AirBnB is an online platform where you can rent out a room or bed in your house for a certain time period.

So what’s the core difference between pain and value ideas?

If you’ve got an unused room (bed) in your house it’s not really a huge pain, right?

Yes, you may be paying a bit more in utilities than you should but that’s not painful enough. However, with AirBnB you can earn an additional $21k annual income (that’s how much an average AirBnB host earns annually in NYC) which is live-changing value for majority of homeowners..

$21k additional income is a tangible value offer, which is relatively easy to sell and comprehend. Nevertheless, this value proposition became accessible to homeowners when AirBnB achieved traction, grew loyalty and confidence.

If you’re excited about another social mobile location app, which re-adjusts my-social-graph-in-an-interesting-way sort of value idea, think critically about how much value will it really add to your users. Ask them. Be open.

Testing value ideas is it a bit harder because you have to have a working product or prototype in order to test. With value idea it’s common that the real value only kicks in after certain user adoption thresholds are met, which makes it that much difficult.

Keep in mind that most of us are willing to do more to decrease pain than to increase pleasure. Not sure where I’ve heard this but it’s certainly not my idea.

Let’s finish with the addictive stuff.

That’s Facebook.

Some might argue but I don’t think it solves a painful problem or delivers so much value we couldn’t do without. It has improved our lives, made the world “more open and connected” but as a business it’s not yet great because it doesn’t really fit well in one of the three categories. That’s way Facebook is and will remain free.

Stickiness of the idea is very difficult to predict until your product or services becomes sticky. Imagine if you’ve brought the first version of Facebook prior to launch to a bunch of investors and promised it will grow like wildfire their response would have been predictable. Even when Facebook started growing like crazy only the brave and the visionary decided to chip in.

I know many people, especially from Silicon Valley will roast me for what I’m about to say but here it goes. If you have an idea left on your notepad, which neither solves a real pain nor adds real value I’d save it for a side project after you’ve failed a few times or done exits. This is specifically true when you’re not launching from Silicon Valley or similar eco-system.  Twitter started as a side you know.

To sum up, picking ideas is not as black and white as I’ve portrayed because decreasing pain and increasing value are two sides of the same coin. However, if you are a first-time entrepreneur or planning to bootstrap heavily focus on the pain ideas or pain relieve part of your idea.

It should give your first-venture a better chance to run the longest distance or fail fast – either way learn the most.

Best,

Daumantas.

Follow me on Twitter: daumis2475

I’m also on Quora.com

Advisor @ Transfergo.com