This week I read The Four Steps to the Epiphany by Steven Blank. The book details an approach to creating a valuable business through Customer Development. Customer Development is a process that runs parallel to (rather than in place of) Product Development.

Having seen and been a part of a number of businesses, I can appreciate the customer development process that Blank encourages. When a start-up fails, it is always due to one of two reasons. Some start-ups never find their direction. They keep a low burn rate, but are ultimately unable to find a profitable business. This is in my opinion the more honorable of the two ways to die.

The other way to fail is to scale up in the wrong direction – to go all in before you’re certain that there is a market for your product. This is what Blank calls the “Fire! Ready? Aim.” approach. I see a lot of people make this mistake. A young programmer comes up with a truly great idea and spends a few months coding it out. Only afterward does he take off the blinders and ask if anyone actually wants to use his product.

To me, the problem can be whittled down to the following – just because something is a great idea doesn’t mean it will be a great business. For example I find Gödel’s incompleteness theorems ingenious, but if you told me you were making a business model out of them I would laugh. Some business ideas just don’t make sense.

Accordingly, it is important that you develop your product with customers in mind. This is turn does two things for your business. For one, it ensures that when you release the product it is actually useful to somebody. Secondly, working with customers early on sets them up to be the first buyers to your product – the innovators and early adopters.

This past week I called many vendors trying to get a feel for a new direction for the business. I got a lot of great feedback and was able to validate and refine my model for how the business would work in the future. I also got a few vendors that were very interested in selling their products on the site which is very encouraging and gives us a way to test the idea.

This summer has really been a great experience. I’d like to revisit an idea I made (or wanted to make) in an earlier post that their are three types of knowledge: the things you know you know, the things you know you don’t know and the things you don’t know you don’t know.

The knowledge I gained this summer fell into the third category, things I didn’t know I didn’t know. This category is about more than just learning facts or new ideas; it truly bolsters your sense of self and puts you closer to a higher purpose. For that, I can only thank all the people I’ve met and worked with this summer.

I’d like to thank the everyone at Inventables especially Zach, Billy, Jeff, Alex, Candace, Phil, Mary and Lydia (that is the entire team ). Thank you to everyone at True and every speaker at their events. Thank you to all the random entrepreneurs I met on the streets of Chicago. And thank you to all the other interns who were a pleasure to work with despite being almost 2,000 miles away.

When I got to Chicago, I didn’t know a single person in the entire city. I’m thankful for all the people I met and all the friends I made including Kelsey, Katy, Mike, Christina, Ajay, Derren, Erica, Liz, Liz, Stephanie, Stephanie, Sammy, Erin, Julia and everyone who’s names I forgot.

Thanks to all of you. If anyone is ever passing through NC or DC let me know, and I’ll buy you lunch.

I guess this is turning out to be the long goodbye that I claimed not to care for, but then again this isn’t really a goodbye at all. I’ll be seeing all of you in the future, and you’ll all be seeing me on TV and newspapers (or whatever succeeds them) as soon as I make it big.

So once again thanks to all, and I wish you all the best of luck. Adios!

So on Friday, Zach and I revisited the idea of selling samples. As a reminder, our site currently sells sales leads to materials sourcing vendors. What I found though, is that the majority of buyers that submit inquiries are looking for samples. Furthermore, vendors say they spend too much time dealing with samples request. I think there is a great opportunity to be the middle man here.

We went through and called all buyers that posted on our site that were requesting a sample of a product we have (we keep a very small inventory of samples left over from the early days of the company). Zach called the new ones, and I called buyers that posted in the past as early as January. We actually made a comparable revenue for the day comparable to what we make selling sales leads. Now we did pretty much exhaust all our leads looking for samples in the last five months, but having said that it still may prove a viable pivot for the business. This week I’m going to look into it more procedurally as see how viable a business model it actually is.

One thing that I think that is vital about the way we operate is goal setting. More important, our goals are very explicit stated. A goal is never “improve vendors response on leads” but rather “achieve a response rate over 60%.” Something concrete. Something that you can definitely say at the end of the month either “yes, we achieved this” or “no, we did not.”

Another related point is the importance of collecting the right kind of data and the perils with it. Collecting data is important. You need to know what features are being used and how well they are working. Sometimes, collecting that data can be quite expensive (time is money). In those cases, it is useful to ask yourself “If I collect this data, what actionable steps will this allow me to take?” Say you want to look at keyword density on your pages as part of your SEO campaign. The deliverables would be a profile of all the pages on your site and the keyword densities associated with each. To me, this would be fairly interesting to look at. But you have to ask if you had this data, what would you do with it? Even the most compelling data can be useless in giving you direction.

Also, a lot of business decisions are inherently low data. Especially when looking for new markets or directions to push the business in, the data is never going to suffice. Even if you have data, oftentimes it is worthless. First rule when working with data: correlation does not imply causation. That is where true leaders step in, the ones who have the intuition to pull the business where it needs to go despite the lack of supporting data.

So in short data is great, but it can really only hint at answers. In my opinion, data can never really prove anything. It can only nudge you in the right direction and bring to view some things you have never considered. Hence in the business world the “gut feeling” is always king.

Only one week left and there is still so much to see and do. I still have to get to the top of the Willis (formerly Sears) Tower. I feel like I am leaving Inventables at the most exciting time. I wish I could stay longer. I guess there is only one option for me at this point – to end on a high note and go out with a bang (hence this post’s title)!

Until next time, I’m Jeremy Schapp, ESP – wait no. Sorry. See you all next time – for my final blog post!

One interesting trend that I’ve been noticing is kind of the pullback of cloud computing. At first, there was a push to get everything into public clouds. Now that security and legal concerns are at the forefront of cloud computing, it seems private clouds will be favored over public ones. When a new idea comes along its easy to get excited at its potential for quick deployment, but its important to remember that things still take a while. Private cloud usage will grow and little by little clouds will become hybrid until the majority of servers operate in public clouds.

Back at the office, I’m focusing on Crossing the Chasm (reference to Geoffrey A Moore’s book by the same title). In the technology adoption cycle, there is essentially a chasm between the innovators and early majority. Basically, what it boils down to is innovators are looking for a product that lends a noticeable leap in productivity and don’t really mind having to change platforms. The early majority however is much for conservative and doesn’t want a product that they need new infrastructure for. These two groups don’t talk to or reference each other, so bridging the gap in marketing can be difficult. In his book, Moore outlines a strategy for crossing said chasm. I’m working to incorporate the strategies he mentions into our business model so that our business can flourish.

And that brings me to another thing – sometime last week I stopped referring to Inventables internally as the website but now call it our website. Interesting. I guess I really am part of the team now! Must get back to work – caio!

I haven’t visited any new pizza establishments this week – the rankings from last week still stand.

For the past two weeks, the Chicago has thrown the annual Taste of Chicago festival. This week I went twice but didn’t eat there either time! Its partly a food festival and partly a musical festival. On Friday we went to a (free) Rob Thomas concert there. It was pretty sweet! At first we had pretty bad seats far back on the side, but I managed to convince security to let us stand next to the 10th row as long as we try our best to look like we have seats there. It’s what I’ll call a strategic partnership.

Back in the office, I’m working on developing a new feature for the website. I don’t want to reveal too much, but it has the potential to really change the game. It sort of transforms the business model but does so in a way that’s not a major technological leap from what the business currently does. It funnels buyers’ energy on the site into sales while bypassing vendors’ inactivity on the site. Its the next logical step in improving the business – getting better at what we do well and mitigating some of the site’s deficiencies. Should be exciting moving forward on this.

This week’s True program was focused on getting funding. I really liked looking at my first term sheet. That experience will definitely prove valuable when I am looking at my own term sheets in a few years (well you never know).

Inventables received Series A funding earlier this year from True. The journey of Inventables and its CEO Zach Kaplan is quite an interesting one. Kaplan, along with one of his fellow classmates Keith Schacht, started a custom software development company called Lever Works his senior year in college. Zach told me that from an early age, he was always interested in building things. That is why he went on to major in mechanical engineering at the University of Illinois. He was frustrated by how much the curriculum focused on theory rather than application. That’s why he started Lever Works. The company was quickly sold to Leo Media. Zach tells me that he didn’t really know what to do next. He took a trip to Disney World; he was always fascinated by roller coasters.

He always set aside a budget to explore everyday. The concept of an exploration budget is still an integral part of Inventables to this day. I wrote about it in an earlier post. Long story short, Kaplan and Schacht started Inventables in 2002. The original business model was significantly different from what it is today. Originally, the company put together innovation kits and sold them to large corporations. Eventually the new business model was born and eventually led to funding. I think a big part of the Inventables getting funding was that their earlier business model showed that companies were interested in what they offer. That model however wasn’t very profitable and more importantly wasn’t scalable. The new model, an online B2B marketplace for materials sourcing, embodies the previous model’s idea of exploring whats possible in a profitably scalable way.

Alright that is all I got for this week. I cracked open Delivering Happiness by Zappos CEO Tony Hsieh today. I almost finished the entire book but decided to go to Joy Yee’s Noodles instead. Only the future will tell if this was the right decision.

First I must congratulate USA on a great World Cup! The last ten minutes of the Algeria game was absolutely sensational. Just amazing! Of course the game against Ghana yesterday was a let down, but we gave it our best shot. Not to jump on any bandwagon, but I think I’m going to have to back Argentina for the rest of the tornament. Messi is just too amazing.

Last post, I wrote about my first Giordano’s deep crust pizza and its spectacular. Since then, I’ve embarked on a personal quest for the best pizza in Chicago. Since then, I’ve had Giordano’s again (so good) and last night visited another Chicago classic called Lou Malnati’s. Although most would  rank Lou Malnati’s above Giordano’s, I have to disagree. So my current rankings are #1 Giordano’s #2 Lou Malnati’s. Hopefully it will be a more substantial list before summer is over.

Pizza aside, much of what I’ve been up to in the office has been motivated by a talk Dan Siroker, co-found of CarrotSticks, gave at Stanford last year. Siroker left Google to become the Director of Analytics for Obama’s campaign. One of his cardinal messages was that the assumptions you make about your business are not always true. On Obama’s website pre-campaign there was a button that people could use to donate. Siroker polled the crowed and asked which was the best text to use on the button: Donate Now, Please Donate, Why Donate?, Donate and Get a Gift and Contribute. The audiance overall thought “Donate and Get a Gift” was the best text to display. When Siroker collected data using Google Website Optimizer, he found that it depended. For first time visitors, “Donate and Get a Gift” generated the most money. For visitors who had already signed up to the mailing list however, “Please Donate” generated the most money.

This illustrates two important points. First, don’t assume anything. Just because you might think one of the texts option is better doesn’t mean that it necessarily is. I recently heard an entrepreneur say that his product would do well because everyone he talked to said they would buy one. Well, someone saying they would buy a product and them actually buying it are too different things. Don’t assume them to be the same.

Also, don’t over-generalize. All users coming into the site aren’t going to behave the same way. First time visitors are different from frequent visitors. People coming to the site from a search engine are different from those coming from an e-mail link.

So you shouldn’t assume and you shouldn’t over generalize. How do you avoid this? Analytics are the answer. It is important to build analytic into your web site so that you have data to look at to maximize the performance of your site. Google Website Optimizer is a great tool to run experiments to test what images and text works best to achieve your goals.

Ok, so that is all I got for this week! Next week among my plans are to attend the Taste of Chicago festival, get deeper into analytics and expand my Chicago pizza ranking. Oh yea, Fourth of July on Sunday! Should be a blast! Till then – hasta la bye bye!

In other news, on Tuesday we went to the Shedd Aquarium. It was decent – nothing spectacular. But afterward I for the first time tasted a true Chicago deep dish pizza at the world famous Giordano’s. For those of you who have not been graced by such ambrosia, Chicago is known for its delicious pizza. Its a layered masterpiece consisting of buttery crust, then toppings, then cheese and then the tomato sauce. Each slice is a meal fit for a king.

Besides pizza, Chicago is also known for its jazz. Jazz started in Chicago (well the word did at least), and Wednesday night I found myself at one of Chicago’s greatest spots for Jazz, the Jazz Showcase. The set was Barry Winograd & the Alternatives Little Big Band. The tenor whose name I forget was absolutely sensational. The sounds that his saxophone produces were the auditory equivalent and perfect compliment to the previous night’s pizza.

Yesterday we went to the Oak Street Beach – yes there are beaches in Chicago! The weather was amazing and Lake Michigan’s waters rival that of any ocean I’ve been to. I must say its quite surreal coming out of the darkness of the subway and finding yourself on a golden beach with clear waters surrounded by skyscapers all around. We spent the rest of the day chilling on the sands and exploring Old Town.

This brings me to perhaps the funnest part of the week and an integral part of Inventables’s start-up culture. At Inventables, there is an exploratory budget set aside for things, well, exploratory. On Wednesday after lunch the entire office (seven of us) hopped into a cab and drove across town to play some WhirlyBall. Imagine playing lacrosse on an indoor court. Instead of a net, there is a backboard with a hole in it. Oh, and you have to stay in a go-kart the entire time. What ensued was crazy fun. The company split into two teams and ended up trading wins. After three or four ten minute periods, we took a break. Afterward, the company reunited for a round of lasertag against a pack of crazy little kids. It was great to bond with my co-workers outside of the office.

Well that is all I got this week. This week was an absolute blast. I am loving Chicago and the whole experience so much. Hopefully I can update you all we more awesomeness next week. Chao!

My name is Brian Solomon, and I’ll be a senior this fall at Duke University. I’m majoring in Mechanical Engineering with minors in Mathematics and Economics. I have been created things ever since I can remember. I like building things and figuring out why things tick. I also like to make music of all kinds. I also am pretty into lifting weights and excising. I’m in Chicago this summer for the first time – and its nickname “The Windy City” is no joke!

Back at school I have a fellowship which requires me to work 9 over the summer. Our summer break is exactly 15 weeks long, so that left 7 weeks free for me to do what I wanted. Because of 7 weeks is too short for typical internships, I had limited choices. The TEC program was posted on my schools recruiting website, so I decided to give it a shot. Although its 8 week longs, I couldn’t pass it up. After getting accepted, I started working full-time on my fellowship work during exam week so that I would have just enough time to do the TEC program.

Being an engineer, I’ve had plenty of opportunities to do very technical work. I’ve always had dreams of starting my own company but have had little experience in on the business side of things. I hope that this summer will serve as a bridge to connect my technical knowledge with my entrepreneurship site. Inventables is the perfect fit because its a start-up that is in a way based on the fundamentals of engineering.

Inventables, the company I’ll be working for this summer, is an online website that serves as a business to business marketplace for materials. Vendors like DuPont, 3M and RTP use the site to create product pages that include information about their materials like current and future uses. Designers then find these pages and can submit questions to vendors. If the vendor finds a worthwhile lead, they can purchase it.

A lot of start-ups get hot when a certain niche community finds them. This happened to eBay for example with Beanie Babies. eBay was the perfect tool for those looking to buy and sell Beanie Babies at it became the de facto medium for hardcore collectors. eBay never specifically decided that their target market was Beanie Baby enthusiasts, but rather the enthusiasts came to them. My goal this summer will be to help the Beanie Babies find us. More quaintly put, my role is to develop a marketing campaign that will cause a certain niche community to come to our site.

This methodology is based of the work of Geoffrey A. Moore as he describes in Crossing the Chasm. One of the points in the book is that in marketing you have focus all your firepower on a single beachhead. This means focusing on a single niche market before moving on the larger markets available. By focusing all your efforts into a single market, your changes of success are greatly improved. At Inventables however, we have yet to figure out what that niche market will be.

Working at the office is a lot of fun. There are a few things that go on that are really special and unique. We have standups, free point Fridays and an exploration budget to name a few. I’ll hold off dropping the details on them right now, and hopefully that will provide a sufficient cliffhangers for future posts. Until then, farewell!