Tor Grønsund

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Disruption: Toward a Toy Theory of Innovation

startup toy theory

Nevermind high-tech. Instead, build a toy. At least that is an emerging idea among leading techies and theorists alike. Essentially, 'the Toy Theory' seeks to explain why the next big thing starts out being dismissed as a toy.

Consider this from Stupid Apps and Changing The World by Sam Altman:

There are two time-tested strategies to change the world with technology. One is to build something that some people love but most people think is a toy; the other is to be hyperambitious and start an electric car company or a rocket company.

In closing, I have two pieces of advice for the “arrogant fucks” who make the world go round. One, don’t claim you’re changing the world until you’ve changed it. Two, ignore the haters and work on whatever you find interesting. The internet commenters and journalists that say you’re working on something that doesn’t matter are probably not building anything at all themselves.

While the honesty in Sam's post is admirable, the toy analogy is its real strength. Because most entrepreneurs cannot afford to be hyper-ambitious, especially if they, like most, didn't already made it to series x. The toy analogy first appeared in Clay Christensen's extension of creative destruction. He argued that disruptive innovations always look like toys and that most breakthrough innovations are designed to be good enough (i.e. disruptive) rather than to outcompete competitors along existing performance trajectories (i.e. sustainable). For this reason, incumbents (competitors) tend to dismiss startup creations as toys.

As Chris Dixon argues in The next big thing will start out looking like a toy:

The reason big new things sneak by incumbents is that the next big thing always starts out being dismissed as a “toy.” This is one of the main insights of Clay Christensen’s “disruptive technology” theory. This theory starts with the observation that technologies tend to get better at a faster rate than users’ needs increase. From this simple insight follows all kinds of interesting conclusions about how markets and products change over time.

Indeed, Christensen, Altman, and Dixon's take on innovation bares similarities to that of others. Elon Mush said: "good ideas are always crazy until they’re not." Consider Reid Hoffman's widely shared quote, "if you are not embarrassed by the first version of your product you've launched too late"; Eric Ries' concept of the Minimum Viable Product, "that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort"; Thomas Edison arguing that "to invent, you need a good imagination and a pile of junk"; James March's technology of foolishness; or as popularized by the french philosopher Voltaire, "perfect is the enemy of good." Historically, there seems to be some consensus about a Toy Theory among entrepreneurs, investors, academics, and philosophers alike.

Here are some examples of successful innovations that started out as toys:

  • Facebook started as a simple hot-or-not dating application on the web
  • Kodak launched its first consumer camera, transforming the photography industry by making it simple and easy for individuals to take pictures (“you push a button, we’ll do the rest”)
  • Toyota's cheap Corona model was dismissed by Detroit auto manufactures when it first hit the US market
  • eBay began by selling simple collectibles that were very difficult to trade before the Internet arrived
  • From modern telephone companies to Skype
  • Zappos and Groupon both launched with a simple WordPress website supported by manual, analogue work behind the scenes
  • In the 1970s, personal computers started out far from perfect

To this end, we all start out with toys.

Why Every Entrepreneur Should Write: Lessons of Paul Graham, Jeff Bezos, Jason Fried, and more

Inspiring entrepreneurs Jason Fried, Paul Graham, Jeff Bezos, and Fred Wilson, all have discovered one thing that makes a difference; Writing.

They believe clear writing is a critical entrepreneurial skill. One that would help you generate new ideas, clarify your thinking, hire the right people, inspire the direction of your company, or even find your stride.

But writing can be hard. It takes time. So why not spend that precious time on building actual software, pulling hours from consulting, or running your company?

If writing in fact is today’s currency for good ideas, it should help you become better at all the above–a better programmer, a better marketer, a better leader–or more importantly, a more interesting human being.

Here are five insights on why writing matters for entrepreneurs, and beyond.

From Rework by Jason Fried:

Clear writing is a sign of clear thinking. Great writers know how to communicate. They make things easy to understand. They can put themselves in someone else's shoes. They know what to omit. And those are qualities you want in any candidate. Writing is making a comeback all over our society...Writing is today's currency for good ideas.


From Writing, Briefly by Paul Graham:

I think it's far more important to write well than most people realize. Writing doesn't just communicate ideas; it generates them. If you're bad at writing and don't like to do it, you'll miss out on most of the ideas writing would have generated.


Jeff Bezos in a 2012 interview with Charlie Rose:

When you have to write your ideas out in complete sentences and complete paragraphs, it forces a deeper clarity of thinking.


From Writing It Down by Fred Wilson:

I toiled in the VC business for close to twenty years before I hit my stride and the reason I found my stride was my adoption of blogging. As all of you know, I write every day. It is my discpline, my practice, my thing. It forces me to think, articulate, and question. And I get feedback from it. When I hit publish, I get a rush. Every time. Just like the first time. It is incredibly powerful

And another one from Jason Fried in Why Is Business Writing So Awful?

If you care about your product, you should care just as much about how you describe it.  In nearly all cases, a company makes its first impression on would-be customers or partners with words -- whether they're on a website, in sales materials, or in e-mails or letters. A snappy design might catch their attention, but it's the words that make the real connection. Your company's story, product descriptions, history, personality -- these are the things that go to battle for you every day. Your words are your frontline. Are they strong enough?.

Bottom line: Writing should be part of any entrepreneurial training. Whether it involves writing dissertations, essays, or class notes, it is one reason why entrepreneurship education and academia in general is useful. But you don't need to enroll to get started. All you need from here on is pen and paper. Or a blog.

For more on writing for entrepreneurs, you should check out one of my most popular posts 7 Proven Templates For Writing Value Propositions That Work.

Minimal Viable Purpose: The New Minimum Viable Product?

3 ways to outline your Minimal Viable Purpose and be interesting

In wake of Peter Thiel's rant about the lean startup and Minimum Viable Product betraying a lack of ambition, consider the 'Minimal Viable Purpose'.

Your value proposition–the cornerstone of your minimum viable product–is about more than iterating your product on customer feedback. It is very much the big idea you'd use to guide your grand vision and ambitious long-term plan. Because in new markets there are few or no other products that users can compare you to. According to Steve Blank, it's simply too early for users to understand how you are different. Hence, your value proposition should communicate a vision for what could be.

Yet your value proposition brief is probably the earliest and minimum-ist viable version of your product that you'd develop as a lean startup. Ranging from an one-liner to a couple of paragraphs, it is the messaging you attach to whatever medium—it be an email, a news article, a website, a poster, a Google ad—that serves your minimum viable product strategy. It's that version of your product which allows for maximum amount of validated learning with the least effort, according to Eric Ries.

Discovering and cramming your true north into a MVP, however, is no simple task. So, here are three ways to make your vision and minimum viable product go hand in hand.

1. Understand the job your customer want's to get done

HBS-professor Clayton Christensen argues that a successful customer value proposition begins with genuinely understanding the customer's jobs-to-be-done -- the higher purpose for which customers buy your product. Out of the functional, social, and emotional types of jobs, the latter might be the most powerful one. Inform your user research accordingly.

2. Start With Why

Simon Sinek developed his very own movement by teaching us how to create movements through inspiration. Sinek's key argument “People don’t buy what you do; people buy why you do it” aligns with that of Clayton Christensen. When getting started at your value proposition brief, start with why.

3. Create a sentimental bond

Don Draper of Mad Men famously said: "Technology is a glittering lure. But there is the rare occasion when the public can be engaged on a level beyond flash, if they have a sentimental bond with the product." In delivering your value proposition, have the courage to touch upon feelings.

What these videos—fiction or not—have in common is, they want you to emotionally connect with your audience and get to know who your audience really are and what moves them. You'd want your story to be about them, not about yourself. Also, the best value propositions dare to be incomplete. They leave room for imagination. They focus on the bigger picture; problem, purpose, passion.

Whether it is in website copy, advertisements, slide decks or in good old fashioned elevator pitches, minimum viable product is not just about the product. It is an approach to finding product-market fit. For that you'd want a value proposition for what could be - a Minimum Viable Purpose.

Make sure to check out the 7 proven templates and examples for writing value propositions or let me know what you think on Twitter.

The Truth About Who Really Funded The Tech Behind Apple

Apple should recognize that the technology on which its success has been built can be traced back to government investments, reports Mariana Mazzucato and colleagues in a research article studying Apple's changing business model.

By now everyone should know about Steve Jobs' legendary visit to Xerox PARC in 1979. Sure, Jobs discovered the mouse, cursors, menus, movable and resizable windows. But apparently these were not his only inspirations.

In fact—as illustrated in the graphic above—the authors argue that virtually every technology in an Apple iPhone, iPad, and iPod originated in a government-run or -funded investment project.

This rises an important question; whether more of Apple's profit should be returned to taxpayers and the government to further help fund future technology innovation.

Although Apple's universe is very much a closed system, isn't this what we all want from scientific research - having it realized and made available for public good?

Maybe we're all standing on the shoulders of giants.

The Cheater’s Guide to the ‘New’ Entrepreneurship Books

New books for entrepreneurs and startups 2014There is no shortage of listicals picking up any number of books-every-entrepreneur-should-read. But every once in a while, new titles packed with inspiration and actionable advice arrive. And so it turns out, 2014 was a year of excitement and experimentation.

Following his Steve Jobs bio, Walter Isaacson partly crowdsourced his latest title, The Innovators. Peter Thiel's new book Zero to One builds upon class notes collected by a former student of his. There's a Playboy anthology blowing dust off old interviews with some of the most celebrated minds in business, and a free collection of essays curated and self-published by a venture capital firm.

Here's a shortcut to the most interesting entrepreneurship books of 2014, including reviews, teasers, and freebies.

The Playboy Interview: Moguls, by Playboy is an ebook anthology featuring interviews with legendary business minds such as Steve Jobs, Bill Gates, Lee Iacocca, David Geffen, Malcolm Forbes, and Ted Turner. For a sneak peek, see the Steve Jobs interview freely available on

To celebrate the interview’s 50th anniversary, the editors of Playboy have assembled 13 compilations of the magazine’s most (in)famous interviews—from big mouths and wild men to sports gods and literary mavericks. Here is our collection of 12 interviews with the most lucrative executives.

Amazon Digital Services. 289 pages. Via Amazon.

The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution, is Walter Isaacson, author of the Steve Jobs blockbuster biography,-s latest title, and it is nominated for 2014 National Book Award. Isaacson went online to crowdsource the early editions of the book, making the early Adam Turing and Ada Lovelace edits available on Scribd and LiveJournal. Prior to mainstream media's reviews – The New York Times, Washington Post, and Wall Street Journal – published a behind-the-scenes interview with the author. Isaacson even published an excerpt and essay drawn from the book on

Isaacson begins with Ada Lovelace, Lord Byron’s daughter, who pioneered computer programming in the 1840s. He explores the fascinating personalities that created our current digital revolution, such as Vannevar Bush, Alan Turing, John von Neumann, J.C.R. Licklider, Doug Engelbart, Robert Noyce, Bill Gates, Steve Wozniak, Steve Jobs, Tim Berners-Lee, and Larry Page. This is the story of how their minds worked and what made them so inventive. It’s also a narrative of how their ability to collaborate and master the art of teamwork made them even more creative.

Simon & Schuster. 544 pages. Via Amazon.

Zero to One: Notes on Startups, or How to Build the Future, by Peter Thiel with Blake Masters. I've been following Blake Masters' blog notes from Peter Thiel's CS183: Startup classes at Stanford University. It is a must-read filled with clever entrepreneurial advice and creative inspiration. And now it is all packed into a 200-pages book. Both The New Republic and The Atlantic published their reviews. In the latter, Derek Thompson wrote that Zero to One "might be the best business book I've read".

Thiel begins with the contrarian premise that we live in an age of technological stagnation, even if we’re too distracted by shiny mobile devices to notice. Information technology has improved rapidly, but there is no reason why progress should be limited to computers or Silicon Valley. Progress can be achieved in any industry or area of business. It comes from the most important skill that every leader must master: learning to think for yourself. Doing what someone else already knows how to do takes the world from 1 to n, adding more of something familiar. But when you do something new, you go from 0 to 1. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace. They will escape competition altogether, because their businesses will be unique.

Crown Business. 256 pages. Via Amazon.

The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, by Ben Horowitz. Sarah Lacy called Horowitz's new book "the most valuable book on startup management hands down". And after reading the reviews of Wall Street Journal, The Economist, and The New York Times, I would understand why. For a behind-the-scenes look at the book, Inc. published an excellent interview with Ben Horowitz here.

While many people talk about how great it is to start a business, very few are honest about how difficult it is to run one. Ben Horowitz analyzes the problems that confront leaders every day, sharing the insights he’s gained developing, managing, selling, buying, investing in, and supervising technology companies. A lifelong rap fanatic, he amplifies business lessons with lyrics from his favorite songs, telling it straight about everything from firing friends to poaching competitors, cultivating and sustaining a CEO mentality to knowing the right time to cash in.

Harper Business/HarperCollins. 304 pages. Via Amazon.

Creative Entrepreneurship, curated by the kbs + Ventures team, is a collection of articles from some of today's finest tech entrepreneurs, investors, and writers. Among the contributors are Tim O’Reilly, Paul Graham, Sarah Lacy, Felix Salmon, Mark Suster, Steve Blank, Fred Wilson, Charlie O’Donnell, Chris Dixon, Andrew Chen, Seth Levine, Babak Nivi, Dave McClure, Dan Shapiro, Adam Penenberg, among others. Here's a Forbes interview with Taylor Davidson from kbs+ Ventures – the co-curator along with VC partner Darren Herman.

"Creative Entrepreneurship” was born out of the desire, want, and curiosity of kbs' staff to understand the crazy world of entrepreneurship. “Creative Entrepreneurship” curates the perspectives of leading entrepreneurs and venture capitalists as a guide for people interested in learning more. Each writer graciously contributed their work to create a curated resource for creative entrepreneurs. This book is the teaching and inspirational aid for our kbs+ Ventures Fellows - a highly selective group of kbs+ staffers from all levels and areas of the agency - who go through a six month educational program to immerse themselves in the startup and venture capital world.

Download the book for free here via kbs+ Ventures.

What are your experiences reading these books? Are there any other must reads? Let's chat on Twitter.

What Everybody Ought to Know About Social Entrepreneurship

From Entrepreneurship by Meltwater founder and CEO Jørn Lyseggen (edited):

I think the term “social entrepreneurship” is misleading. It is belittling the contributions to most entrepreneurs out there while singling out others in an awkward way.

Entrepreneurship is in my opinion actually a way to express oneself. Much in the same way artists express themselves in making paintings or other pieces of art, entrepreneurs express themselves by building companies producing new and improved solutions.

At the core is a desire to contribute and essentially make the world a tiny bit better.

For this reason I am not so fond of the term “social entrepreneurship”. I believe any or at least the vast majority of companies aspire to impact the world positively. At least they did so when starting out. Pharmaceutical companies are obvious examples, but if you think about it companies in any industry are trying to make the world better by improving the status quo in their way. Better communications, better solutions, better something.

Couldn't agree more.

The Distorted Perception About Startups

From The myth of the overnight success by Chris Dixon:

Angry Birds was Rovio’s 52nd game. They spent eight years and almost went bankrupt before finally creating their massive hit. [..]

You tend to hear about startups when they are successful but not when they are struggling. This creates a systematically distorted perception that companies succeed overnight. Almost always, when you learn the backstory, you find that behind every “overnight success” is a story of entrepreneurs toiling away for years, with very few people except themselves and perhaps a few friends, users, and investors supporting them.

Truth is, entrepreneurship is not very romantic. But it is rewarding in every sense.

It Might Take 100 Ideas Before One Pays Off

We have all been told to let one thousand flowers bloom. Here Simon Singh in The Code Book, quoting Martin Hellman, one of the inventors of public key cryptography, puts it practice:

You have idea number 1, you get excited, and it flops. Then you have idea number 2, you get excited, and it flops. Then you have idea number 99, you get excited, and it flops. Only a fool would be excited by the 100th idea, but it might take 100 ideas before one really pays off. Unless you’re foolish enough to be continually excited, you won’t have the motivation, you won’t have the energy to carry it through. God rewards fools.

Remember "Stay Hungry, Stay Foolish" from Steve Jobs' commencement speech at Stanford University? There are some parallels ..

Diffie [co-inventor] and Hellman spent month after month attempting to find a solution. Although every idea ended in failure, they supported each other and persevered. Diffie often went through long periods of barren contemplation, and on one occasion in 1975 he became so frustrated that he told his wife Mary that he was just a failed scientist who would never amount to anything. He told her that she ought to find someone else. Mary told him that she had absolute faith in him, and just two weeks later Diffie came up with his truly brilliant idea.

In other words, entrepreneurship–invention as well as innovation–is very much about learning from failure and keep going until you connect the dots.

How Nordic Leadership is Different from Silicon Valley-style Leadership

Mårten Mickos, former CEO of MySQL and Eucalyptus, here answers to What makes Scandinavian leadership different from say "Silicon Valley" style leadership?

I talk about Scandinavian-inspired leadership, but I must start by noting that it is nothing uniquely Scandinavian. You find it all over the world.

There is a notion of “people first” and a principle of egalitarianism. We are all human beings, we should be respected for our opinions, and we all have something valuable to contribute. For practical purposes, we specialize and we are given various job titles such as “assistant”, “developer” and “CEO”. We also have different salary and bonus levels. But we are still just a bunch of people who are trying to accomplish something together.

We speak up. It’s OK for one in a senior role to be wrong, and one in a junior role to be right. It’s OK to contradict someone and it’s OK to challenge an authority. At the end of the debate, we all need to align behind a decision. But before such a decision, dissent is welcome.

What’s not specifically defined as closed will be open. There are always pieces of information that need to be kept secret. But there is a ton of things that can be shared. We need to be as open as we possibly can. We must share the true state of affairs with our employees. We must have a fully open dialog with our customers, not hiding or obscuring facts.

We are not victims and we don’t put blame on others. We know that success is up to ourselves. We know that we may live in a harsh climate and that we may have to work a little harder than the rest. If we fail, we pick up ourselves, learn from the experience, and have a new go at it.

We take broad responsibility. Perhaps we were hired just for one task. Perhaps we are paid a bonus just for specific accomplishments. But we all need to think about the company as something that we are collectively in charge of. For that reason, we must step up and step in whenever the situation calls for it. The CEO must be ready to answer the door bell. The accountant must be ready to answer the phone and engage with customers. We are “us”, not “me”.

I've been fortunate enough to interview Mårten Mickos for my forthcoming Startup Vikings piece. And, of course, he shares inspiring approaches to not only to building category leadership but also on leading by open source culture.