Hello.
My name's Tom Hulme and I work for IDEO. Before I worked at IDEO I did Physics then startups, here's my bio: http://www.ideo.com/people/tom-hulme
I'll share key links throughout this talk through my Twitter handle, @thulme
Launch to Learn
Tom Hulme (IDEO)
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Tom Hulme
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Tom Hulme
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At IDEO we help our clients grow, by designing: products, services, spaces, experiences and more and more often, complete business models.
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Tom Hulme
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We have 20 minutes together today and this is my plan of attack.
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Tom Hulme
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Let's kick off by talking through the Wired world, and specifically why it's so different to any other time in human history.
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Tom Hulme
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Technology, which underpins all of our lives, is accelerating.
To give a fitting example, given the terrible news last week, this is the Macintosh 128k, it was launched with one of the most iconic advertising campaigns of all time in 1984.
How many of these do you think you would need to match the processing power of an iPhone 4?- Open discussion
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Tom Hulme
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You'd need 78 128ks to match an iPhone's processing power, given that each would have cost you $2495 in 1984 that's just over $200k worth of beige computing action.
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Tom Hulme
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Or, sticking with the iPhone theme, it has more processing power than that of the whole of NASA when Neil Armstrong was the first man to step on the moon's surface in 1969.
We have to use this power for more than whacking pigs with angry birds!- Open discussion
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PeterBiggs 2011-10-13 12:09:48 UTC
I completely agree
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Donley P'Simer 2011-10-15 21:55:14 UTC
Correction: It was Neil Armstrong who first walked on the moon. 2:56 UTC July 21, 1969.
I do agree with your statement, however.
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Tom Hulme 2011-10-18 12:04:17 UTC
Agreed - thanks Donley - I'm not sure how I missed that up given the iconic phrase ""That's one small step for [a] man, one giant leap for mankind" - I'll change it in the notes
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Kristy T. 2011-10-17 23:13:55 UTC
Its hard to fathom that the iphone is more powerful. I do agree there are better uses than Angry Birds.
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Tom Hulme
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In the main we are, in part to power the iPhone's array of sensors.
In fact, many clever people think that current tech progress is outstripping Moore's law. (The idea that the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years, this has held since 1965.)- Open discussion
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LunaTik by MNML 2011-10-13 13:48:35 UTC
More on Moore's Law on wikipedia: http://en.wikipedia.org/wiki/Moore's_law
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Tom Hulme 2011-10-13 21:36:32 UTC
oops - 2 people this evening pointed out that it was Neil Armstrong that took the first steps on the moon - I should have known that given his famous words "That's one small step for man, one giant leap for mankind."
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Tom Hulme
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We're creating more data and pushing it willingly and unwillingly into the world continuously, and once it's out there it's everywhere.
These are the social networks that I use, when I update one I essentially am updating them all - as a result, new ideas spread faster than ever.- Open discussion
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Tom Hulme
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And new ideas disappear faster too.
A few weeks ago bitly (the URL shortener) wrote an interesting post on the 'half life of a link online', on average it's about 3 hours.
For the recent earthquake in Washington after only 5 minutes this link had seen half of the clicks it would ever see. Cultural latency is approaching zero.- Open discussion
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Christopher Kahler 2011-10-13 13:44:29 UTC
Qriously posts on Twitter are worth about 5 minutes...
Curious about the double bulge on YouTube.
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Ivo Vos 2011-10-13 14:21:03 UTC
From OpenCanvas About section: "In our interconnected world, we hope Social Canvas will extend the half life of ideas." Curious to see the half-life of this talk..
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Tom Hulme
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All these data trails and instant dissemination across the web place everything out in the open eventually-witness Wikileaks.
Even Apple, one of the most secretive companies in the world has had forthcoming products leaked, after all it's tough to design around the source of most security failures, people.- Open discussion
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Even entire Apple retail stores have been copied, a total of 22 fake Apple stores have been uncovered in Kunming City, China.
In one case, the employees actually thought they worked for Apple.- Open discussion
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Tom Hulme 2011-10-13 14:12:21 UTC
more on the fake Apple stores:
http://birdabroad.wordpress.com/2011/07/20/are-you-listening-steve-jobs/0 votes
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Tom Hulme
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So, this all combines to create a spectacularly complex world, and that complexity is only going to increase.
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largo a gogo 2011-10-18 01:42:51 UTC
Saying that we are the constrain for technology is a bold assesment. What is the technology for, if not us? What could we possible be restraining? Maybe we cannot type fast enough to fill analytics in someone else hadr drive. Be ware of the dreams you dream!
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Tom Hulme
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Let's dive into 3 ways that we design both big and small, from governments to startups in this complex context:
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Tom Hulme
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We need to design flexible systems that don't depend on any specific feature; after all any individual piece can be copied.
Every aspect, whether customer-facing or not is a design opportunity.
Alex Osterwalder has been leading the idea of visualizing business models over the last few years - check out his work at: http://thul.me/osCMhS- Open discussion
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Tom Hulme
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Visualizing business models reminds me that the beauty is in the interdependencies and that great companies such as Amazon innovate on every part. That makes them incredibly tough to copy.
If you're interested, I'll happily build out a presentation here outlining why Amazon is such a great example?- Open discussion
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Robb Schiller 2011-10-18 00:59:20 UTC
Very interested!
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nathan guerra 2011-10-20 00:39:08 UTC
Yeah, I'd love to see that too
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Nicholas Evans 2011-10-25 23:04:38 UTC
I would also love to see the interdependencies Amazon or others have created and how they went about creating them.
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Vincent Van Der Lubbe 2011-11-18 22:53:58 UTC
Very interested. I am very impressed by Amazon's thinking and execution (see older HBR interview with Bezos).
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Ben 2012-04-18 08:44:18 UTC
Hi Tom,
Great presentation and interesting ideas, just watched your London Web Summit one and it reminded me to come back here and see if you were going to do an Amazon build out of the business model?
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Ben 2012-04-18 08:45:02 UTC
actually - it was TedX
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Tom Hulme
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So, designing whole systems sets us up for success in this complex world.
Should you visualize your business model?- Open discussion
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Tom Hulme
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But systems alone don't deliver value unless they're in the service of a real live human being.
Ideally more than one.- Open discussion
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Tom Hulme
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With that in mind, design every part of your system through the eyes of your customer.
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View all aspects of your model through their eyes, and optimize their experience.
After all that's where all of the value is created.- Open discussion
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Tom Hulme
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Amazon's Reverse Innovation approach delivers this.
Amazon starts every project by writing a press release to the end consumer; this forces articulation of the benefit.
Next step is writing FAQ, forcing articulation of concerns.
All this before a line of code is ever written.
Werner's blog entry describes this well: http://thul.me/roO35d- Open discussion
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Tom Hulme
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This approach can be comforting in this crazy world, because our needs remain the same.
Abraham Maslow, outlined our needs in the hierarchy of needs in a paper in 1943.
There's a reason that it's probably the most famous triangular framework still to this day, it still stands.- Open discussion
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Tom Hulme
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His idea was that once basic needs like food, shelter, and companionship are taken care of...
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...we seek love, belonging, esteem and self-actualization.
Self-actualization is the desire to become more and more what one is, to become everything that one is capable of becoming.- Open discussion
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The mere fact that we're in this room means we're lucky enough to have the bottom two rungs taken care of.
We've probably all spent a lot of energy signaling belonging, sometimes taking extreme measures.- Open discussion
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But technology provides us new ways to signal our belonging.
One of the most basic forms is simply 'liking' stuff in Facebook, that's one of the 'needs' that 3% of FB users were meeting by 'liking' Obama's page.
Technology is empowering us to meet long held needs in new ways.- Open discussion
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Kristy T. 2011-10-17 23:18:26 UTC
Interesting. I never associated liking to the need to belong, but it makes sense.
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Tom Hulme
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It's horribly unscientific, but Google Trends is a quick way to assess what needs we're all trying to meet, the top chart shows that we've all been searching for "How to" do stuff far more than searching for "Sales".
The bottom chart shows us that's not what media has been giving us over the same period.- Open discussion
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Christopher Kahler 2011-10-13 13:53:38 UTC
There IS a startup here. So much unexploited crap in google trends.
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Tom Hulme
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So, designing for real human's needs and optimizing for them can give us some comfort in this crazy world.
Ask yourself, what human need do you meet?- Open discussion
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Tom Hulme
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But even though human needs are constant the world is still fast changing and highly unpredictable...
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Tom Hulme
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...which is why we find more and more we're launching to learn.
I'd love to spend the remainder of our time together sharing a few examples.- Open discussion
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Ivo Vos 2011-10-13 14:12:30 UTC
http://www.fastcodesign.com/1663558/design-thinking-is-a-failed-experiment-so-whats-next
Is Launch to Learn next? :)
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Tom Hulme
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Any new venture is a series of unanswered questions.
There isn't one route to success, or failure.
There isn't a right and wrong strategy, just better or worse.- Open discussion
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Tom Hulme
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And the unanswered questions invariably span the whole business model.
To make it even more difficult many of them are interdependent, for example changing the offer will always change the optimum pricing, or even the right team.- Open discussion
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Tom Hulme
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The recent Startup Genome Project, which audited 3200 startups globally, demonstrated that the most common failure in startups is premature scaling.
This is growth prior to the startup resolving enough of its pressing questions.
View the report here: http://thul.me/nwBp1R- Open discussion
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Tom Hulme
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Instead of blindly aiming for growth, the best founders understand their big questions, and prioritise the order in which they ask and answer them.
I was reminded how much this approach is like the scientific method by Eric Ries' wonderful work around Lean Startups: http://thul.me/o0vzVE- Open discussion
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Tom Hulme
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The scientific method teaches us that great experiments have specific characteristics...
They're designed to test a specific hypothesis,
They're important, i.e. the results are likely to really create impact
And they're feasible, i.e. they yield actionable results.- Open discussion
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Christine 2011-10-14 09:23:16 UTC
I love the idea of applying the scientific method as a means to experiment to new ventures.
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Robb Schiller 2011-10-18 01:18:48 UTC
Totally agree.
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Tom Hulme
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And like great scientists, great entrepreneurs need to answer questions efficiently.
That's accurately, at low cost and in a controlled way to make the results accurate.- Open discussion
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Tom Hulme
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So, with this in mind, is a business plan a good experiment?
Nope, because it doesn't tell you if you have a great business.
It is neither accurate nor efficient.
As Steve Blank says "the answer is not in the building".- Open discussion
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Tom Hulme
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The good news is that authors seem to be taking heed, by now the references of 'business model' in books that Google has indexed has probably finally outstripped 'business plans'.
That's something to be celebrated.- Open discussion
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Christopher Kahler 2011-10-13 13:56:25 UTC
This is awesome.
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Robb Schiller 2011-10-18 01:24:14 UTC
VERY AWESOME!
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Tom Hulme
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We believe that every part of a business plan can be launched to learn, both consumer facing or not.
This is more than just creating MVPs, it's about creating Minimum Viable Experiments
I'd love to use our remaining time to share some examples I find inspiring.- Open discussion
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Tom Hulme
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Zynga, the social games developer, prioritises new game concepts by creating a five-word pitch for each and advertising them to relevant users on high-traffic websites. If the pitch is clicked on, the user is diverted to a survey that harvests e-mails and additional information.
This approach, which it calls 'ghetto testing,' validates the market before a line of code is ever written.- Open discussion
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Tom Hulme
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Amazon Kindle launched lending as a feature on December 30, 2010, mainly to compete with a feature already in place with the Barnes and Noble Nook.
Within a couple of weeks, Catherine MacDonald from here in the UK launched a Facebook Group, believing there was an opportunity to match lenders and borrowers.
Interest in the group exploded, and MacDonald realized that Facebook just didn't offer the scalability needed for such an undertaking. She had validated the market need.- Open discussion
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Amy Bonsall 2011-10-13 20:03:02 UTC
This is such an inspirational company. By mid-January she had already facilitated like 1000 loans. http://abcnews.go.com/Technology/kindle-lending-club-plays-matchmaker-bookworms/story?id=12634353
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Tom Hulme
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Less than two weeks later, MacDonald had pulled together $12,500 in angel investment and a development team, to launch the Kindle Lending Club (rebranded Booklending.com more recently because of copyright laws).
The Facebook page had proven itself to be a great customer acquisition tool so remains up, and has over 30k likes.- Open discussion
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Tom Hulme
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In both these cases real people give real expressions of interest.
This is not the case with the current trend of gaining signups without telling users your value proposition, that's just noise.
Too many startups mistake people signing up for an ambiguous offer as a commitment to purchase.- Open discussion
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Tom Hulme
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When Tim Ferriss was launching his latest self-help book he struggled to name it. He took 6 prospective titles and developed a Google Adwords campaign for each, serving ads when users searched for relevant words like '401k' and 'language learning'. Within a week, for less than $200 he knew that "The 4-Hour Workweek" had the best click-through rate by far and he went with that title.
His experimentation didn't stop there, he decided to test various covers for the book by placing them on similar sized books in the new non-fiction rack at Borders, Palo Alto. He sat with a coffee and observed, learning which cover was most appealing.- Open discussion
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Tom Hulme
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IDEO alum, Scott Wilson took this one step further.
He had a hypothesis that the Nano would make a great watch but didn't know whether enough potential customers would agree. To test market appetite he placed a short video describing his idea on Kickstarter.com, asking people to make contributions ranging from $1 and $500. Scott's goal was to raise $15K from these commitments but instead he raised just under $1M in less than 30 days.- Open discussion
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Tom Hulme
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Big companies can benefit too. For example, when Intuit wanted to create a text message marketplace to help Indian farmers reduce waste produce, it wanted real market feedback. Instead of spending months building the complex technology behind the trading platform, the company launched a prototype direct to farmers in just seven weeks. In place of the back-end technology, the trades were fulfilled by the project team themselves. They called this a 'fako back end'.
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Tom Hulme
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We always try to practice what we preach.
When launching OpenIDEO, our open innovation network, we wondered "do we have the convening power to bring people in to innovate?"- Open discussion
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In order to answer this question efficiently and accurately, we launched a Facebook page called Big Questions on which we placed discussion topics...
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Tom Hulme
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...and that gave us the confidence, and knowledge to launch OpenIDEO.
We're up to 20,000 users - please check out our current challenge with Amnesty International: http://thul.me/qNjlKt- Open discussion
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Tom Hulme
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It can even make sense to launch to build capabilities.
When launching moneylending site Wonga Errol Damelin had a hypothesis he would be able to predict chances of repayment by analyzing datapoints online.
Instead of theorizing behind closed doors Errol chose to disburse money and accumulate facts, it's now rumored to be the fastest growing company in Europe.- Open discussion
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Tom Hulme
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So, launching to learn can help you tackle your big questions efficiently.
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Tom Hulme
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My call to action!
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Michael Jackson 2011-10-13 14:02:27 UTC
to produce something that is USEFUL and MEANINGFUL
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Ivo Vos 2011-10-13 14:17:49 UTC
Experiment about experiments, very meta Tom. Great job all.
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Tom Hulme
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Thanks so much, it's been a privilege to share a few thoughts.
Please feel free to enter the conversation online...- Open discussion
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PeterBiggs 2011-10-12 20:00:25 UTC
Great talk Tom
3 votes-
Bobbie Brightman 2011-10-13 14:10:01 UTC
Cool Talk Tom :)
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Nathan Waterhouse 2011-10-13 14:58:59 UTC
Wish I was there, but reading this along I can imagine it went really well. Looks really interesting. Congrats.
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Kees Vogelesang 2011-10-13 15:00:20 UTC
Great preso. Logical things, but very true en rarely put into reality. Would love to receive the preso.
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Tom Hulme 2011-10-13 21:37:10 UTC
thanks guys!
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Kristy T. 2011-10-17 23:31:24 UTC
This was a really good talk. I learned a lot. It was also nice to have your commentary along side the slide. Added much more value.
Loving this experiment.
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Socialcanvas is sic. Tom Hulme (@thulme) is nailing it. #wired11
Tom, what's the software you're running to power this? Is this something you've built at IDEO? I'm loving this format.
Yep we built it - it's Ruby hosted on Heroku
It's lovely.
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