An interview with Ben Yoskovitz on his recently launched Highline BETA, a new Toronto “startup co-creation company” that works with large companies to identify areas of opportunity, recruit founders, provide pre-seed capital, and co-create new startups.
I got to know Ben Yoskovitz in 2009 when we were both early participants in the Lean Startup community of practice. He had a number of insightful comments in the forum and some good posts on his blog, I highlighted one in “Ben Yoskovitz: Start with Passion For Solving a Problem.” He recently launched an interesting new initiative, Highline BETA, and when I asked if he was open to an interview about it what follows is the result.
Ben Yoskovitz on Highline BETA
Q: Can you talk a little bit about your background
Sure! I’ve been in the Web/digital space since 1996, when I started my first company (which was a web services/agency business). I’ve done a variety of different things since then, including co-founding a few companies, angel investing, working as VP Product for a couple startups and more. Here are a few highlights:
In 2010 I started an early stage accelerator called Year One Labs. We invested in 5 startups (they were all consumer startups), and one of them, Localmind, was acquired by Airbnb. Year One Labs was a unique program–we offered up to 1-year of hands-on help and put startups through a Lean Startup process/methodology. This was very early days for the world of startup accelerators.
In 2012 I joined GoInstant, a B2B technology company that was acquired by Salesforce. I spent 2 years at Salesforce, which was an awesome experience. I learned a great deal working inside a large company that still moves quickly and aggressively.
In 2013 I published a book with Alistair Croll (who was one of my partners at Year One Labs) called Lean Analytics. The goal of the book was to take Lean Startup principles (which were very new at the time) and expand upon them in significant detail. We found that a lot of people stumbled on the “Measure => Learn” part of “Build => Measure => Learn,” proving that the Lean Startup process is in fact very difficult to execute effectively. Lean Analytics explored what to measure and when, in an effort to make the Lean process easier for people to deliver on successfully.
Q: Can you talk a little bit about what led you to found Highline BETA, what was the problem that motivated you?
Highline BETA is the culmination of everything I’ve done over the last 20 years. Having founded, worked at, invested in, and advised many startups, I (along with my co-founder, Marcus Daniels) came to the same conclusion (basically at the same time): that working with large companies from the outset could improve the chance of creating a better startup.
Highline BETA is a startup co-creation company. We work with large companies to identify areas of opportunity and risk. We then recruit founders (from outside of the large companies), provide the pre-seed capital, and co-create new startups. The hypothesis, as I mentioned above, is that we can create better startups through a combination of large companies, venture-backable founders and pre-seed funding.
On the corporate side, the problem that interests me is twofold: (1) they struggle to innovate internally; and (2) they have tons of great assets to leverage. Large companies are investing hundreds of millions of dollars to innovate and transform their organizations. I don’t think they have a choice: you innovate or you die. But at the same time, I think startup co-creation, layered on top of those efforts, can provide an extremely fast and relatively inexpensive way to instigate and spark disruptive innovation that works.
Q:Earlier you had founded Year One Labs to help entrepreneurs through their first year of a startup, what did you learn from that experience that you are applying to HighLine BETA? What are you building on and what are you doing differently?
After Year One Labs I wrote a number of posts around lessons learned And one of the comments I made back then was this, “Accelerators are a terrible way to make a living.” That’s not entirely true (certainly accelerators like YC and TechStars are demonstrating meaningful returns), but for Year One Labs, we were too small to even pay the bills. Accelerators are hard to scale. It becomes a volume game and to get really high quality volume you need to have some amazing differentiator. Tons of accelerators popped up after Year One Labs (and many still exist), but I doubt many of them are making money.
We’re approaching Highline BETA differently. By working with large companies we have a revenue model. This is vitally important to our success and how we scale. Co-creation also doesn’t scale through a massive number of startups–it’s a more time consuming process and commitment to deliver. But we fundamentally believe the quality of startups and the likelihood of a positive outcome for everyone (the founders, us, investors & the corporate) is higher.
I think the rigor of our process at Year One Labs worked. We applied the Lean Startup methodology and learned a great deal from that (and part of that is reflected in the book Alistair and I wrote after!) Highline BETA is going to take a similarly methodical approach to how we mentor and guide founders & startups through the earliest stages of their existence.
Q: You wrote Lean Analytics with Alistair Croll, what metrics are you monitoring for Highline BETA and for your portfolio firms?
It’s very early for Highline BETA (we announced in mid-July), so there isn’t a ton to track just yet. When we begin working with portfolio companies, they’ll be very early stage, which means we’ll be looking for early qualitative signs that they’re solving a painful problem (what we called the Empathy Stage in Lean Analytics), and then early usage/adoption metrics (think: DAU, WAU, etc.)
Q: there has been a lot of ferment in the incubator/accelerator/coworking space fostered both by the cloud computing revolution that allowed teams to “go Bedouin” and work with most of their infrastructure in the cloud as well as lowering the cost dramatically. What trends do you see at work you believe Highline BETA is positioned to take advantage of?
The trend that most interests me is around the actions that companies are now taking in terms of how they innovate. We’re seeing more companies trying more ways to disrupt themselves, which tells me that companies are more and more willing to experiment and push for results. For example, we’re seeing a number of companies run internal accelerators (such as Disney); or companies such as GE putting enormous effort into training employees on Lean Startup. The process may be slow and the road to effect actual change is bumpy for sure, but the willingness is there.
Q: Can you give me a brief overview of where HighLine BETA is today?
Well, we just started! Marcus and I spent a number of months working together before we officially announced Highline BETA in mid-July. We started working through the services we would deliver and how we would deliver them. We worked through the business case and business model. Now we’re “off to the races” working with customers at the earliest stages of our process to identify areas of opportunity and disruption where we can eventually co-create startups. It’s been awhile since I started a company (Year One Labs in 2010 and Standout Jobs in 2007 before that), and I’m more excited than ever.
Q: YCombinator and the TechStars are two well know incubators, the first is sui generis and the second operates more like franchise. Do you see the HB model as situated in the Toronto ecosystem or applicable to other cities or geographies if you get the recipe right?
Highline BETA is based in Toronto but we’re already thinking global. We’re working with global customers. Big companies have a presence in multiple countries, and often have different challenges in those different places. For now, we believe the co-creation work (when a startup is founded and begins) will be in Toronto, but we’ll work with customers all over the world. And there are tons of advantages to starting companies in Toronto in terms of cost, access to talent and more.
Q: What are the two or three things that you have been able to accomplish that you take the most pride in or satisfaction from?
Raising my kids (so far so good, I think!)
Helping other entrepreneurs & founders as much as I can
Q: What has been the biggest surprise? What was one key assumption you made, perhaps even unconsciously, that has caused the most grief?
For Highline BETA it’s too early to tell. I’m certain I’ll make mistakes–it’s inevitable–but so far I don’t think I have. But if you want to go down memory lane a bit, then the first thing that pops into my head is Standout Jobs. I wrote a post-mortem about Standout Jobs back in 2010 and just the other day someone thanked me for doing so; it encouraged her to share her own stories of failure. I definitely made more mistakes during Standout Jobs and made more incorrect assumptions than I’d like to remember! Of course it’s really important to remember those mistakes and false assumptions so I don’t repeat them.
Q: What development, event, or new understanding since you started has had the most impact on your original plan? How has your plan changed in response?
There hasn’t been one thing just yet with Highline BETA, but I can tell you that Marcus and I have iterated many times on the business model and our strategy since we first got together to talk about it.
It’s easy to assume when you see something launch that it looks “all put together and ready to go,” but the truth is that months of work and back-and-forth discussion/debate, etc. goes into anything you see that’s live. That’s certainly true for Highline BETA. We’re also very cognizant of the fact that nothing is set in stone and many things will change.
One thing we’re trying very hard to remind ourselves about is our purpose and mission for Highline BETA. It’s so easy to get distracted. It’s so easy to chase “shiny objects” and go in directions that ultimately don’t get you to where you want to go. You need a strong vision of what you want to accomplish. The path to get there will zig zag, but without a strong vision, you’ll get lost very easily. For Highline BETA the vision is to create an awesome portfolio of startups through the co-creation process and through partnerships with large companies.
Our vision is to accelerate corporate innovation in a way that’s never been accomplished. Our vision is to prove our hypothesis (corporate customers + venture-backable founders + pre-seed capital = better startups) and scale it. We’ll see what happens.
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