How to learn as an organization — a CEO’s perspective on experiments

27.03.2018

Jarosław Pilarczyk
CEO
Jarosław Pilarczyk
An IT leader running multiple enterprises for over 10 years. Seeing the bigger picture is his routine. In his spare time, he supports the Software Craftsmanship Silesia Group initiative and is a passionate wakeboarder.

As CEOs, we are always busy and it is hard for us to find time to learn. I had the same issue until I watched this TED talk from Eddie Obeng that you should start watching right away click.
The question I immediately asked myself was “how to learn as an organization?”
That is why my employees and I began to experiment.

Validate faster than you develop

People, not excluding myself, tend to have a lot of ideas that they put into motion right away, instead of validating if they are true for today’s market.
We spend a lot of money on implementing our ideas, only to then find out that they fail. Actually, in most cases, it is possible to verify the value of our concepts and products much quicker and spend a lot less money on them . How? Look into your idea and check the assumptions that your idea is to build on. If the base assumption is false, then does it still make sense to pursue the idea?
Check the riskiest assumptions canvas.

The first principles reasoning

I have learned about Charlie Munger’s approach to mental models as a tool to validate our ideas. One of them that I like the most is similar to the first principle’s reasoning that is used by Elon Musk within his business.
If you look into what is behind the Tesla Secret Master Plan, you will learn that the main idea behind mobility is energy that is required to travel a given distance like 1 km. If using electric vehicles would require more power than current petrol vehicles, would it be still worth to build electric cars just because it is more eco-friendly? Maybe you personally would, but our world does not work that way, unfortunately. So it is not about building electric cars that Tesla is chasing for, it is about the more efficient way to power vehicles.
“So if you like fast cars, you”ll love this car. And then oh, by the way, it happens to be electric and it’s twice the efficiency of a Prius” — Elon Musk.
I can see almost the same pattern of using the Mental Model when I am looking at SpaceX’s business. What was the main reason for space travel to be so expensive? Rockets, or rather launchers, were used only once, which is why SpaceX put their full focus on making them reusable.

Don’t wait for a miracle, experiment!

Whenever we see a business that started to grow very fast, we ask ourselves why we didn’t come up with this idea in the first place. It is almost like regretting that we haven’t won the lottery. There are millions (or more) ideas that people are fulfilling every day and in some cases, they hit the jackpot or in other words — they win the lottery. But is your business a lottery?
If you study the history of a few success stories, for example Thomas Edison’s, you will learn that he didn’t have the best ideas, but he was running the biggest number of experiments that led him to nail the best ones. “What was the key to Edison’s incredible success? In two words — deliberate experimentation. For Edison, building a company was synonymous with building an invention factory.”
Just take a closer look at big enterprises like Apple, Facebook, Amazon, and you will see that all of their leaders are talking about experiments, especially Jeff Bezos. What makes them possible? They have a vast database of users to run those experiments on, which gives them an advantage that nobody else has.(1)

Are experiments only for the biggest companies?

They are definitely not! Experiments are just a universal mode of learning through practice. In many educational systems, we are taught to avoid failure and mistakes (this is also quite deeply rooted in our nature, since preventing failure used to be a better evolutionary survival strategy than taking bold risks). But the changing-faster-than-ever world creates a place where without dangers and failures, we simply learn too slowly. That is why we have incorporated experiments in our everyday work at Skyrise. And our focus is to help our Customers experiment with their businesses, and especially software products.
It’s good to verify the riskiest ideas quicker and reduce the project’s risk of failure.
We focus on Riskiest Assumption Testing now. Maybe soon we will say — MVP is dead. Long live the RAT!

If you need help to start experimenting with your ideas, let me know! You can reach me via my LinkedIn.

Jarosław Pilarczyk
An IT leader running multiple enterprises for over 10 years. Seeing the bigger picture is his routine. In his spare time, he supports the Software Craftsmanship Silesia Group initiative and is a passionate wakeboarder.
Jarosław Pilarczyk