Transcriber: Akinori Oyama Reviewer: Takahiro Shimpo
Hey there. My name is Tom Chi.
I'm here today to talk to you about the radical experiment
that I've been conducting over the past year.
It's an experiment that has taken me to 13 different countries,
running dozens of workshops, and working with some amazing organizations.
In short, that experiment was to see
whether the concepts of rapid prototyping could be used to reinvent entrepreneurship
and potentially all of business.
In order for you to understand that, I'm going to give you
a quick little run-through about what rapid prototyping is about
so you can see what those concepts are.
Now up here is a product called Google Glass.
What it allows you to do is
it allows you to see digital information overlaid on your real life
and be able to stay in your real life as you walk about.
3 years ago I joined Google
and had the opportunity to go work on this product but nothing existed.
I have just one simple question for the audience at this point.
Don't shout it out if you already know the answer,
but how long do you think it took
to build the first working version of this experience
seeing digital information on your physical world as you walk about?
Any guesses?
(Audience) A month? (Tom Chi) Anything else?
(Audience) 3 months. (TC) 3 months. Ok. Great.
Well, the actual answer is one day.
And the way that it looked is exactly right here.
You may or may not know this person, just anonymous person.
We actually used this really basic household materials
I think actually upon seeing it
almost anybody in this room could build this.
So, it's a coat hunger which allows you to hang around the neck
and the other parts rests on your chest
that supports the little thing that comes out holding a plastic sheet
which allows you to see. It's the screen.
Then, there is a little laptop which is powering a small projector
so that the digital information is in front of you as you walk about.
This helps me highlight a couple of different concepts of rapid prototyping.
In rapid prototyping, it's important
to go as quickly as possible to get a direct experience
because only from the direct experience, -- you've got to take the quickest path --
do you learn the thing that you need to learn from the work.
The second rule kind of related is that doing is the best kind of thinking.
We are so used to thinking before we do a thing.
A normal thing in a business would be
to sit down and have 3 months of planning meetings.
That's why it takes months to do actually.
But if you were to sit down and start building that day,
not only would you start having your plans come together
you would be able to learn what the real problems were.
And, this is what we did.
Now if these are rules of an individual prototype,
then this is the purpose of the prototyping process over all.
Encapsulated in just a single sentence, the purpose of the prototyping process
is that maximize your rate of learning on a difficult problem
by minimizing the time to try new ideas.
What we are now going to do is we're going to see what happens
when we bring the simple concept into the world of entrepreneurship
to try to go change what the entrepreneurial experience is.
So in the first example we're going to examine
what happens when we take the time to try new ideas down
in the context of improving a business.
So a lot of you work in business or know people that do.
You would be really lucky if your business tried something new every 3 months.
If you are very, very lucky, maybe, once a month.
But in this particular situation,
we brought people together and we made them try a new business idea every hour.
This is what it looked like.
So these numbers on the side are minutes.
And within that number of minutes they needed to come up with the idea,
build a prototype,
test it with people that didn't know about the prototype,
and record everything that they learned.
And we did this with 20 different teams
in an auditorium like this actually, broken into 20 different teams.
And each one of them had to do this process
not one time in a day, but 4 times in a day.
So what happened?
Well, I am going to just do a summary because too many amazing things happened,
but Devi over there in the top left,
he invented a new approach to pasteurizing milk at a small scale
to be able to help rural farmers in India.
This happened in one day.
Over in the top right, Shane was able to reinvent his product offering.
It's an educational offering for green architecture
and log 1,500 new sales in the same day.
Probably the most amazing story is Sheikh
whose business was to grow chocolate beans
using the labor of former child soldiers.
So convert child soldiers into farmers.
He's able to produce these beans
but what he did in that day was launch a new company
to take those beans, turn them into chocolate
under the brand Liberation Cocoa.
In that same day, he also set up the website,
created a board of directors,
was able to go and take orders on the website.
So one week after that event I was able to eat that chocolate.
It's delicious.
All-right, so let's move on to another example.
What happens when you reduce the time to try around raising an investment?
I don't know how many of you are entrepreneurs,
but you can imagine what it's like to borrow money, right?
So if you ask a friend for maybe 100 dollars, not a big deal.
If you ask for 10,000 dollars, it starts to get a little bit iffy.
But as an entrepreneur, it's not that unusual to go in there
and have to raise 1 million dollars.
Because of that, it takes a long time.
It usually takes 3, 4, or 5 months.
You have 50 meetings with investors.
Maybe a handful of them are interested
and you get investment from maybe 3 or 4.
Now what happens if we can take that time to try and bring it down dramatically?
Well the way we did it is we completely changed the format
of the investor meeting.
Normally it looks like something over here
where an entrepreneur sits across from an investor
and they ask for what they need and they give a pitch.
Like I said it takes many meetings and most of the time the answer is no.
But in this case our meeting looked like this
where the entrepreneur, -- this is Jamila from Kenya --
is surrounded by three investors.
Their goal is not actually to figure out whether they want to invest in Jamila.
Their goal that day was to pretend to be Jamila's board of directors.
And their mission was
to make Jamila's company the most investable company it could be
by the end of that session.
Not only did they do it one time
every one of the entrepreneurs had 4 sessions like this.
So they got to meet with about 10 to 20 investors.
Now what were the results?
I was working with Unreasonable.
You guys have seen Daniel's presentation.
You have a sense of what Unreasonable does.
In the previous year, they'd tried traditional approach.
And the result, unfortunately, despite having some amazing entrepreneurs,
was zero percent of the entrepreneurs during that event
got either investment or serious follow-up
for conversations about investment.
Using the new rapid prototyping approach, 90% did.
Beyond the fact that we went from 0 to 90%,
the way that investors felt about it was completely different.
Instead of the investors being sort of serious gatekeepers
trying to protect their money,
you saw them joyful, engaged, trying to create something to improve the world.
They were so happy about being able to help.
I had entrepreneurs come up and tell me they had made
3 months of fund-raising progress in one day.
So about a 100 times faster.
All right, last example.
So what happens if you can minimize the time to try
when you're serving a community?
And this example comes from Aguascalientes, Mexico.
Most of you probably have not been there,
but there is a sizable community in near Aguascalientes
which is living on fewer 2 dollars a day.
Unlike the other sessions I've shown you so far,
in this case we went right out and next to where the customers were
in that community working with them throughout this process.
What we did in this case to rapid prototype is
we were based in the community center
and all these houses were surrounding us.
Here is an example of a house.
It's a little bit tough out there.
But we tried a very interesting approach to iterating the business model.
Instead of doing the normal MBA thing of sitting down,
creating a business model, doing a lot of Excel models,
and spending months and months obsessing about it,
we said, "Yeah, we will make a business model,
but we are going to make it, and we are going to test it in 20 min."
So as soon as the business model was drawn,
-- the team in the community center was drawing it --
they would call on the cell phones 2 teams that were out in the community,
and they would ask the teams in the community
to find the people that were represented at the business model and interview them
to see if that business model made sense.
Would they be willing to participate in the business model as described?
I'll show you what that looks like.
So here is the "home team",
right here is a model, a business model drawing,
and here is the cell phone with a speaker phone.
They are connected with these 2 teams
that are out in the community talking with individuals in the community.
I'll share a specific example.
I think this will help you understand how quickly this happened.
So, the previous day, we had interviewed folks in the community,
and we found a carpenter who was very skilled,
but he couldn't get a reliable work.
So, that next morning,
when these business models were being drawn,
they came up with a business model
where -- you have this carpenter, maybe, what he can do is
he can train some of the youth
like boys between 13 and 20 years old how to do carpentry.
That would provide a steady stream of income.
They went back to the carpenter, talked to him about it.
He was very excited because he said,
"Well, if you could get that to happen, my income would triple.
It's amazing."
The "home team" was excited.
So they called the other "away team", and they said,
"Go find us some men between 13 and 20 years old
see if they would be interested in interested in this class."
So they found some boys hanging out on the street, talked with them.
And they were kind of interested in carpentry,
they might pay 10 pesos for a lesson in carpentry,
but the boy said, "You know, what would be really exciting
is if we could learn how to fix cars and motorcycles."
What 15 year old boy doesn't want to learn how to fix a car or motorcycle.
So, the "home team" said, "Great!"
Now, we need to find a mechanic, so they called their 1st "away team"
and found a mechanic in town.
Every time they called, they only have 15 to 20 min
to find somebody in the community that fits this role.
So they found a mechanic within 20 min talked to him and said,
"Hey, if we could bring 10 boys that would pay you 10 pesos each
in order to do a lesson in how to fix cars and motorcycles
for a couple of hours, how would that sound to you?"
And, he said, "That's amazing. That would double my income.
And it would be more stable for me. That would help my family so much.
But, you know, actually there is a problem.
I don't have a lot of extra cars and motorcycles for them to work on.
I don't even know I can really teach this class."
So the "home team" getting this information,
they called the "away team" again and said, "Find us people
in the community that have broken cars and motorcycles in their front yard.
Ask if it's ok to lend it for couple weeks to get those things fixed
under the guidance of an expert mechanic and their students."
And so on and so forth.
You can see how every 20, 30 minutes,
the business model was adjusting and adjusting
until it became more and more real.
By the end of 3 hours
-- 4 different teams were doing this process actually --
at the end of 3 hours on average,
they had updated the business model 6 to 8 times.
Not in an arbitrary way, in a way that became so real
that at the end of 3 hours we had people coming in from the community
ready to fill those jobs, ready to serve each other in that new way
that they had never imagined before.
And the one thing I forgot to mention about this particular experiment was
the majority of these teams
were just college students from a local college.
They weren't brilliant business people.
They weren't serial entrepreneurs.
They didn't have any training in business even really.
I just taught them how to draw a business model before we started.
What I saw in action that day was almost the essence of entrepreneurship.
What it means to truly serve a community.
What it means to truly create value by people interacting with each other.
So with that in summary, we've seen 3 different experiments
bringing rapid prototyping and entrepreneurship together.
We've seen new businesses launched in the single day,
startup fundraising speeding up by a 100 times,
and the creation of new opportunities for the poor out of nothing.
With that, I would encourage the people in this audience
to think about a significant problem or challenge
that they see within their own lives and ask themselves the question.
"What would it take for me to minimize the time to try new ideas in the space
so that I can maximize my rate of learning and create my own destiny?"
Thank you.
(Applause)