Rapidly test and validate any startup idea with the 2-day Foundation Sprint (from the creators of the Design Sprint) | Jake Knapp & John Zeratsky (Character Capital)

48:50Thank you for having that So mellow lands on mobile first and works out of the box if there are two differentiators and they're trying to differentiate from You know gum loop and open a i sort of generalized tool and latch it They're gonna differentiate on And we're pulling it up if folks aren't watching he's pulling up the mirrorboard To show us where they landed. Watch it. They're gonna differentiate on helps you grow and cooperative So when they compare against Etsy when they compare against Shopify or setting up your table at an art fair They're gonna differentiate on helps you grow and cooperative and they think none of the competitors does both of those things well That is cool.

49:33Thank you for sharing that and to your point The this is where they think it will work and then the next step is actually test this in the market which is Where we go from here So let's move on to the next step in which is the final step of the foundation sprint Yeah, so closing off differentiation and is a short step that Is just to create some project principles that'll help you Make decisions in line with that differentiation and you know You're just talking about superhuman and differentiating on speed and when John and I worked at Google back in the 2000s There was this list called Tim things we've found to be true And one of the things on that list was fast is better than slow and what was interesting is this is a mantra that you would actually hear people using in meetings to help dictate decisions You know well, we're considering This approach to this view or this approach this approach renders You know 12 milliseconds faster that's probably going to be the one we're going to take as you say You're really compelling reason for us to not go with just the one that renders faster or the one that gets the user to Their benefit with one less click and This notion that you can have a decision -making guide We think we've seen it be so useful for for us in those contexts We think hey, this is an easy moment You've got your differentiators kind of loaded up in your mind Let's take a second here and just think what's a principle?

50:58How can we turn that into a principle? So if we take a look at Latch it, you know, they've got help sellers help each other So if they're trying to make a decision between two approaches Well, which one of these help sellers help each other or do the thing that makes sellers more money If we're choosing between two things, let's do the one that helps make them more money And so we we then left we've kind of moved on we've got a mini manifesto We call it which is that differentiation chart and these principles and the notion is This page the the basics page was just kind of the core Simple stuff you need to know about this project the mini manifesto in one page is your decision -making guide this is so cool and This looks like it would take a lot of work But again, this is just a day or two of sitting around Working through this framework.

51:48Yeah, you'll get to this in you know, four -ish hours with your okay By the end of the first day you'll have a mini manifesto that describes how you win essentially as a company in a startup Yeah, or how you believe it's gonna work and of course we're gonna test it Yeah, now the next phase of the foundation sprint is is Locking in on the approach. We're gonna start with so we'll continue the story of Latch it here to it's easier to use an example Then to describe this in the abstract so coming into character labs Latch it had sort of four approaches in mind But they weren't sure which one to take so they might build an app.

52:23That's one approach they could take They might build a sort of a newsletter platform. That's something. Obviously they knew how to do They might build a Shopify plug -in That's a simple way to kind of piggyback on something people are already doing right there number one competitor Shopify Or they might have to build the full stack and I think a big question for them was Which of these and how much do we have to build before there's enough value for customers that they're actually gonna adopt it We're actually gonna get some traction and get this thing going and it's important to call out here that all four of these Approaches solve the same problem for the same customer and They are all likely to differentiate from the competition in the same ways Based on the unique advantages that the founders christen james bring to this company So these are not like wildly different product ideas or company ideas These are just different approaches.

53:15You have the same destination in mind But you say hey, which path can we take it's like pulling up directions on Google maps This one's a little faster. This one uses less fuel. This one avoids tolls What's the right approach for us to take and I love that the what you the work you did on that first day eliminates a lot of ideas You probably had that you would have probably spent time building and then realizing okay This doesn't make any sense. It's just like whatever in else has totally totally yeah And We usually see teams starting projects in one of two states and one state is the state that latch it finds themselves in where Gosh, there's a few different ways we could do this.

53:52How do we decide? We can discuss a discuss a discuss, but you know that could go on forever So that's state one. We know there are some options It's state two is we're pretty locked in on one approach already. We think we've got this figured out In either of those cases we think it's worth taking again like about you know for hours as to Be really careful to lay out the options if you think there's only one option to sort of force yourself to think Well, what if this doesn't work? What's another alternative or is there another alternative that we have previously considered and dismissed that we should maybe reconsider just to make sure And end with a situation where you've made a decision clearly about okay, we've considered alternatives This is our first choice and you've also identified.

54:39This is our backup plan so that Failure doesn't seem quite so scary when we start to run experiments and we're really able to pivot fast if should that happen So what we're gonna do on the second day of the foundation sprint through this sort of third phase Which is the approach is to identify those different paths. So for latch it here They've got abc and d options We're gonna color code those and then we're gonna plot them on these charts So we've got these different lenses. We call this activity magic lenses And the notion is if we had a discussion about it and we could as investors if we could imagine like waving a magic wand and putting the perfect Team of advisors in place to counsel the founders on this decision We would love for them to have a customer expert somebody who's just you know brilliant vision for the product and the customer experience And they're you know hammering their fist on the table saying the customer the customer the customer make the decision That's best for the customer and so we'll plot those options on these axes of easy to use Versus hard to use and perfect solution to the customer problem versus you know This is just an okay solution to the customer problem And then similarly we want some an advisor who's gonna pound their fist on the table for Building something cheap and fast getting it out into the market being pragmatic get it out there as fast as possible That's the pragmatic lens we want somebody who's gonna advocate for growth What's the way to reach the most customers get it in people's hands as fast as possible easy to adopt We want somebody who's gonna advocate for for money for the financial health of the business So what's gonna create long -term value for the customer is where's where's the biggest audience of these folks We want to look at differentiation which we spent you know the first half of the foundation spread establishing Well, we want to consider these approaches through that lens as well And so what the teams will do is to plot these options on these lenses They'll you almost always create some lenses of their own some custom lenses that matter to them You know, they might have one about their conviction I think there's in it.

56:47There's sort of a humorous one for mellow where it's like Which you know founders like? Yes, exactly when I wanted when I want to build and on the other end of the spectrums like you know Nah, just kind of the the sort of heat of excitement that she feel that might be a really important decision That feels really important like that feels like that should be one year you call these the magic lenses Yeah, yeah, yeah, it probably should be it probably should like how excited are you to build this? It feels like a really important piece. Yeah, we saw that one in this is the our cohort of labs It's going on right now and I'll bring that one that one up for For context if we add it we can call it the Lenny lens.

57:24Oh, when he lends. Yeah, that's a good idea Yeah, so yeah, so here it is and You can see that Marie is more likely to swear than than been apparently, but That it's it's crucial right and many founders. They'll have different one of the challenges is that for each founder I think each set of founders there's maybe a different way that they phrase what that means what conviction means to them And sometimes and maybe it's as simple as this. It's just I just feel it. I just know and sometimes it's a little bit more like well I'd you know, it's it's a it's conviction, but it's also What's the data that we have behind it and and that's what forms my my intuition about it Awesome.

58:03I love that lens. I love that your asterisk out So it's not a little bit a little bit a little bit a little a little slightly concealed That's the part. Yeah, do you zoom in? It's actually not censored so the Cool thing about this lens is thing is at the end you've done all that you've plotted it all out And if you're having a conversation like that you just have to sort of maintain and memory What did that person say what did that other person say? What's that conversation? I had you know a week ago Whatever Here it's all laid out and sometimes you zoom out and it's honestly as simple as like oh, hey look You know the the blue one is in the top right quadrant of almost every single lens like what what does that one?

58:46What's going on that might just be an easy decision Sometimes you zoom out and you say oh clearly like nothing wins in every lens And that's actually really reassuring because then you know there is no perfect decision There's nothing that checks all the boxes and that's going to help us decide because now we decide Which is the most important lens? Which is the most important view point to take and you can you can actually move forward in either Either way either situation you get in where there's sort of consistency across all the lenses or there's not You either pick a lens or you just pick the the consensus winner I love that this step Answers a question that's been the back of my mind that I think a lot of people wonder is they're hearing this is just Why don't I just build something and launch it and learn and like what am I spending all its time sitting in a room and This is and this to me is a big part of the answers just like spending an hour or two thinking through here's the ideas we have How do they compare on the how do they look on these magical lenses which makes so much sense like how do they just filter on what customers will Love most will help us grow the fastest will drive the most money things like that like it's such a simple quick exercise that will save you So much time building a launching and having to spend time learning like that is weekdays months of work versus a couple hours can save you so much of that time And it's also the case that you start building something It's exciting you can move fast.

1:00:15It's easy to Easier and easier to see progress now with AI tools and that active building and starting to create something has a momentum of its own that can be hard to stop and if you're headed in the wrong direction You can spend a lot of time building and making progress But it's just if it's not progress in the right direction It's it's actually hurting you And that's why we we want people to pause and and take this it's really But as you said earlier the ROI is high But it feels very unnatural to pause when you're so excited at the beginning and ready to go to pause and say Let's make sure we're taking the right path but you know you just imagine your You know your Gandalf your Frodo you're starting off you trying to get to Mordor.

1:01:05It's a long trip You don't want to take the wrong path you want to take the you know think before you start marching through You know the swaps or whatever One phenomenon we've seen when teams are building things really quickly with AI is that the more AI generated or assisted They are the more generic they tend to turn out which makes sense if you think about how LLMs were developed you know they're all basically pre -trained on the same data And so in this excitement and this rush to say wow look at how fast we can build it You actually end up with something that is less differentiated than what already exists in the world And then you know let's say you launch it and that you know takes longer than building sort of a clickable prototype But you launch it because you're moving so fast And then you get data from the people who managed to find that thing about what they did with it But you don't get any data about what they didn't do with it And you certainly don't get any data about the people who never found it who never you know tried it Maybe they landed on your website and they're like blah another like Another generic AI generated thing like that's that's not worth my time And so we think it's really helpful to Basically put yourself in a situation where you can slow down a little bit and do some like Some some hard thinking some deep thinking about what's actually going to make your product unique And then you can switch into this mode of like okay great now let's go as fast as possible and get that out into customers hands but If you don't take this step first It's actually kind of counterintuitive that going fast can actually slow you down in the long run Yeah, to build on that I had this guest recently you bought backslade Yeah, I was a lab okay, so he has this really Interesting insight he calls he calls it I think he calls it the primal mark essentially his feedback is Wait as long as possible to start any sort of sketch or prototype because as soon as you start drawing what you're building It now everything you do will be a response to that And so the more time you can spend before starting to concept out the solution the more likely art of land on something that works Yeah, that is super interesting and You know, it's It is counterintuitive.

1:03:17Yeah, and I find myself challenged to think about it in the context of the sprints that we run with founders But I think one way to interpret that in in the work that we do is that We used to just run design sprints with with every team like that was our hammer and and you know everything looked like a nail And part of what we found so valuable about doing the foundation sprint is that it it keeps you away from Ideation for just a little bit longer and it it forces you to think about You know Why you're unique and and the market that you're going into before you get to that moment of creating something that looks realistic and then maybe Being a little bit locked into to that approach That's such a like I love that that this emerge out of that like you guys are so Design sprint oriented and it's just like cool.

1:04:07It's just make prototype. Let's design. Let's make it real Let's show people and that's like I think where a lot of people's minds are at more and more or and maybe as a result And then this is almost like a okay, maybe that wasn't the right approach to start Maybe it's actually better to think a little bit of what we want to design and build before and so just the fact that you guys Spent so much your life and time on that and then realize this is actually potentially even more important to do Is it says a lot? Well, and I ideas always get to still down to like one thing that people grab onto and they they focus on and I think with the design sprint It got to still down to Just build a prototype like just just quit messing around and build something But you know the reality is when you run a design sprint It's five days and you don't build the prototype until the fourth day, right?

1:04:56So you do you do a bunch of work to figure out You know, what is how does our customer learn about this thing? You know, what are the different ideas that we're bringing to what our solution could look like? Which of those are the most likely to work and only then at the end of the week are you building a prototype? But I do think that as the that method has become really widely known People just think about the you know, let's build something and then once you multiply that times the the power of AI It definitely creates this narrative that the the only way to build something new is to just create the product as quickly as possible And that it doesn't really match our experience, you know, that doesn't really Kind of fit the pattern of what we've seen working best across the few hundred companies that we've worked with I think this validates in some ways the role of a product manager Where the PM's job is to help the team figure out what should we be building and are we all aligned on what we're building before we start designing and building and So this is almost like like this process is almost like the product requirements document of a of a company Which I think a lot of product people listening to this will feel really good about yeah, we see this as a great tool for product people it's a way to give you a structure for leading your team through those decisions and A way to give the all the folks on a team including the the person who's the the product leader But the person who's the engineering leader the person who's the marketing leader the sales leader the design leaders The exact right opportunity to contribute and participate in forming the strategy The exact right opportunity as we get into design sprints following the foundation sprints to then make it real and You know Turn that that idea that hypothesis about what might work into Hopefully evidence that it does work I feel like it's actually more helpful than to engineers Like non -product people because I think a PM my brain would be like I want to do this Intuitively whether they do it right or not I think it's other functions almost they're like now Just jump jump straight to design straight to prototyping Let me ask you like what we're in this tangent we're on this wild tangent out of this process, but I want to As this question has been my mind Because I recently had a founder on the podcast Mayor who built this company called base 44 you built it it sold in six months for 80 million dollars two weeks And this journey of that is he just had a problem he wanted to solve for himself for his girlfriend for a scouts program He built it people started using it.

1:07:36You kind of evolved it from there And obviously he didn't go through a process like this Thoughts on just like is it okay to just do that when should someone think about okay? I should actually set a site time to do a foundation sprint versus like I'm just motivated to solve a problem for my friends. I'm just gonna build it Evolve it iterate with them kind of go from there one of the observations from our Hundreds of experiences Working alongside founders in the early days of their projects and Watching them make decisions and watching them try things and succeed or fail is that There are so many founders who are incredibly bright incredibly capable They have great insights about the market about an opportunity And yet their startup does not work out And we there's a problem with selection bias that we you know we we hear from the folks who They were brilliant.

1:08:38They were you know they were they checked all those boxes. I just described they saw a great opportunity They were smart. They executed well. They had courage and conviction and they did it And it worked out and it's a tremendous success And I think that the danger in thinking like well they didn't fall in a process. So I don't need to And you know that may be true and you know that's that maybe maybe don't need it but What we believe is you have a better this just increases your odds This is a chance to to get more clear on is this a good opportunity to get more clear on will the thing I build click with customers And you know if you've already figured out that no this things my my product is taking off my product is working We've actually had founders and labs who why they started off character labs And they said you know I started selling this thing and it's already taking off I want to stop running experiments and we're like yeah stop running experiments You don't need to do this if you've got product market fit if you've got evidence that this thing is clicking and you're you have conviction run with it But if you're not there This is a great path to get you going and if you're not sure if the thing you're going to build is going to turn into that You know 80 million dollars exit in you know in six months We believe this is a good chance to improve your odds People hearing this might be feel like I haven't heard of any company doing this that has become a trillion dollar IPO success What what would make me believe that this is a the process I should follow versus just I'm just gonna do what I hear and Why see just build it launch it at a rate that kind of thing what can you share to give people confidence?

1:10:17This is the approach to take well the first thing I'd say is give us some time Where we're pretty new to this we started character labs about three years ago. We created the foundation sprint about three years ago But more seriously When we were creating this method one of the things that we did was look back across all the projects We've been involved in and the ones that were really successful and we look for patterns and while Those teams didn't have the foundation sprint they ended up having really clear Differentiation and a really clear view of what made them unique that they were able to build on and as we run Design sprints with them we were able to through Test and validate against that differentiation So we believe that this is sort of a key to success even if those teams didn't have access to this exact same methodology So what I'm hearing is this is essentially like alpha in Starting a company.

1:11:11This is a new process that companies are just starting to use you guys are working closely with founders And it's rooted in the success of many many many companies that you guys have were involved in early on and continue to be involved in Yeah, it's based off of this thing We've seen again and again in the most successful projects when we're inside the room In the early days and we're seeing people make decisions. This is what drives those decisions. It's differentiation and so if we look back across You know all of the sprints that we've been a part of over the years and John and I Have been inside lots of these rooms lots of these conversation and if you're not watching on YouTube By the way, there's a cool visual that the chick is showing yeah It spans across Google Google Ventures character capital and if you're watching on YouTube You'll see all these little white circles in each one sort of represents You know a company that we've seen inside of during these design sprints and There are a lot of really great success stories in there, you know We've had the chance to I mentioned the story of Google mead and being there and Figuring out what is it that's going to make this thing stand out?

1:12:19That was what made the project finally start to take off and to this day is still sort of what animates it Being inside of you know the early days of what became Google photos or Google trips and in some of the early design sprints And there's a lot of other on here But honestly, of course, we've also seen inside a lot that didn't work out If we looked inside the greatest hits though the real smash successes We looked inside all of those we realized there is a common element and that common element and all of them is Differentiation that there was clarity around This is what we're trying to prove to customers This is the promise we're making and so we've been on those teams or we've worked alongside those founders Who have this clear idea of differentiation and sometimes they're not right they run the experiments and they change it But the thing is they're keyed into differentiation as being crucial They're not just thinking about the product and trying to get the right Shape of the product or trying to make it you know usable or whatever They're really keyed in on differentiation And how do we find the right promise and deliver on that promise and express that promise to customers?

1:13:27So to explain a little bit quickly of what I mean by differentiation and how this is manifested in products We've seen if you go back to the early days of gmail in the 2000s You know if you had email you were probably using hotmail or Yahoo and it worked fine And you didn't have to think about it and this new product comes along and you're like, God I'm not going to want to switch my email address What a hassle you who wants to do that? No one Gmail's promised was hey massive storage great search and as we were Building the product out and you know marketing and explaining it to people and making decisions inside the project We had to continue to deliver on great search great search great search that was that was key to standing out You fast forward 2014 and we're working with this tiny company He's now competing with Gmail who's now like sort of the market leader people are used to using and you know in their teams And here's this new messaging software called slack and they're you know trying to reach new customers and gosh switching to slack Isn't even bigger hassle than switching to your email address because everybody on the team has to switch Well slack says hey If you believe that having fun and boosting teamwork is important It's going to be clear to you.

1:14:40This is a new way of looking at the world and when they were Making their decisions in their first big ad campaign their first big marketing campaign This was what they were trying to convey to customers So we kind of kind of see that from the inside Another one we didn't see this one from the inside But one that we're all sort of familiar with is what happened with with Chagg PT You know it goes from this trusted. I don't have to think about it I'm going to run a Google search to oh wow The new way of looking at the world. There's zero clicks. Just tells you the answer. This thing is great This is also something that we've seen in some of the early success stories from our own portfolio So 2019 this company called reclaim Going after calendar management and you know most of us manage our own calendars most of us don't have administrators helping us out with that and you know it's free.

1:15:26We're in control reclaims Argument was hey we can Automatically we can use AI to help you focus and automatically prioritize your calendar and that animated enough people to take the plunge and switch and try it out that they were able to build up an audience of you know tens of thousands of users and dropbox acquired them last year a great answer to my question You guys will prepare it for for those skeptics Uh part of our motivation our self -suffice motivation with this foundation sprint is that You know now that we are Investing our own money into companies and we're working with all these founders We want them to have that same clarity on differentiation You know we saw how important that was to gmail and to slack and to all these other companies And we want to bring that we want to sort of give them that same advantage and help them avoid The you know the pitfalls that all the other unsuccessful teams and companies that we've seen have fallen into So that's that's kind of what we're trying to do here is bring the the lessons from these really successful teams into You know any team that reads the book and runs this process And the special sauce that john and i bring is that we're obsessed with the The sequence of decisions that you make and how you work together With your team to make good decisions quickly and That specificity about the the method is something that we We do have a lot of evidence behind it working well because of what's happened with the design sprint and with how many Successful teams have ever owned that at those companies who are you know Trillion dollar or whatever kind of giant except team all kinds of teams run design sprints This is that same methodology around how we work together at high velocity and high quality And it's just brought to a different part of the process excellent answer Speaking of the method we went on the world's most epic tangent i want to bring us back We haven't finished actually going through the process I think we're towards the tail end of it.

1:17:25So let's just finish that what else do you do so you have this this uh Yeah, I guess yeah, let's catch us up. Let's catch up with latchet. So as a refresher for you Forgot latchet are building this tool for artisans they want to help them Sell with the community networking features Like you might find one sub stack and they've identified their differentiation They've identified their approach now using magic lenses and all of this is going to come together to create a founding hypothesis So if we help artisans solve online sales growth With a social sales app and then they've also got their backup plan or we could build the full stack solution if that doesn't work We believe they're going to choose it over Shopify and Etsy because our solution is cooperative And easy to use and in this single sentence we've laid bare their strategy And now they're going to try to find out was that work So that is so cool.

1:18:22So the output of the sprint is the founding hypothesis And I love that the term hypothesis is a part of this because it's not Telling you this will work. It's this is the thing you will now test absolutely and Every Project has at its core every new product has at its core Hypothesis they had there is a founding hypothesis It's just usually not explicit It's usually hidden and different people on the team may have different ideas about what it is and because it's not explicit It's very hard to interrogate it and test it and find out if the the different variables in it the right variables I'm curious what's in that photo to the right as you're showing the youtube.

1:19:02Oh, yeah If you're on youtube so that this is just we did this sprint together in person and so on latchets board here And you're going to see that like here's where they wrote it out and took a photo of it and dropped it in and then later filled it out on the mirror board Beautiful and I it has their old name there there. Yes, right. Yeah, yeah, we're rebrand that lyric which it turns out is not the easiest for SEO So a lot of lyrics out there. There's a lot of lyrics. I know some lyrics And just to understand is the next step the design sprint and that's where you actually start testing exactly So we zoom out now.

1:19:36We see now they're going to head into a sequence of design sprints running one after another each of those designs print starts with the founding hypothesis Then the team is going to say okay, what are the biggest risks that you know that hypothesis not being true What do we need to assess right now? Gonna make a map of how customers discover the product what that core experience looks like and then figure out using that map Where's the where's the key moment for assessing that risk? That so for them the biggest risk is do people even well these artisans even want this thing Are they actually going to want to have a community sharing sort of sales platform And they decide the key moment for us to test that it's actually on the landing page They figure we can prototype landing pages that describe the product and learn a lot for our first experiment just just with landing pages They're going to sketch solutions This will be familiar to anyone who's you know heard about design sprints I guess each person sketching their own proposal for how that key moment should work Choose the strongest of those in this case they choose they're going to actually prototype three things So they test three things head to head against each other fake brands for each one so they look like three different products And then this is a really key part at the end of the design sprint We've got a scorecard and this is actually a new innovation.

1:20:52This is not in the sprint. Oh shit Here we go. New thing out of the presses design sprint Improvement so this scorecard is going to break down the founding hypothesis Hey, as we talk to each customer was this the right person as the right kind of customer for us Do they have the problem that we think they have Was this the right approach for them? Did they choose it over the competition? They're going to test these prototypes head to head and also show people like okay Here's Etsy here's Shopify now out of all these five options Think about out loud about you know What do you what do you how do you compare these?

1:21:26So do we believe they they'd actually choose it That the differentiation actually work for those differentiators valuable and motivating to them Does it click so our new book is called click and you know the idea there is you can see When a product clicks with one person and that's a that's a helpful signal now granted these interviews are kind of a simulation It's not like the real world, but there are helpful signal that we're on track for product market set If we see it gosh This product seems to be clicking with customer after customer That's a really strong signal and that's when people start to get the confidence that it's time to build That's a really good term by the way.

1:22:04I feel that's a such a good way to describe what it feels like It doesn't just click with them just kind of clicks. Yeah, and if you look across Latchets first scorecard. There's a ton of red. It's it's a lot of things that didn't work Yeah, yes the the conclusion at the end in this last column. There's a conclusion. Hey, we interviewed this case the interviewed four customers Well, it looks like this is the right customer. It looks like they have this problem But everything else kind of didn't work about the hypothesis approach wasn't working differentiation wasn't working There's so many hypotheses kind of about the prototype itself just lots of red on here So they spread again And just zooming out for a second.

1:22:43This is a team who just started working on this new company And you know, sometimes it can feel slow we talked about it feeling slow to go through all these steps But they're only a weekend and they've already built three prototypes And they've tested those three prototypes was four real customers And they have this super detailed scorecard of here's what's working here's not what's not working That's after a week So it's interesting how what can feel slow in the hour to hour actually can really speed you up in the the weeks and months Time scale that was such good context because I was feeling that and to your point most founders do not do this much Testing iterating learning in the first few weeks of their Yeah, they might spend a few weeks just talking to customers without showing a prototype And then they might spend a few months building an mdp and then they might if you know Maybe they're going to spend some more time talking to customers while showing them the mdp Maybe they'll do manual onboarding something like that But yeah, that plays out over months and it fits with what founders tell us You know, it's of course it's a subjective Measure but founders who go through this process with us.

1:23:50They say that they're able to accelerate three to four months of work into the three or four weeks Back -to -back sprints that we're doing together in character labs Excellent context. Thanks for throwing that in there and these conversations with customers are so much more fruitful and pointed When you've got the context that I know exactly what my hypothesis is and you have prototypes to show them We have a founder in our group of startups and character labs at the moment. I'm thinking of Maruti John. He was He comes from doing sales at rippling and we had been talking to tons of customers while starting off The his company and he said you know I had 50 conversations over the past month But I learned so much more from even the first conversation when I had a hypothesis and I had a prototype or a couple prototypes To show them it's like night and day That is a great example.

1:24:43This this all makes sense as you guys describe it like you're You're actually testing something very concrete that your entire team is aligned behind and actual prototypes and You've thought about different directions. So it's you're testing something very specific versus just generally Testing at your general concept as we go into the second design sprint for Latch it They're making some edits to their founding hypothesis now They're you know revising a few things making new sketches new proposals for what this solution might look like They've learned a lot in that first sprint a new prototype That got a prototype that has more detail now.

1:25:26So they are engineers They're starting to actually write some code and put some more detail behind the product It's more robust and again. They're trying to fix that positioning Here's their scorecard and if you're watching on YouTube you'll be able to see it But again, there's a lot of red here at first blush. This the scorecard is is bleeding But there are some promising signs. There's like maybe a few little sun breaks. There's some spots where Some of the red has started to flip to yellow and so if we look at the conclusion on the far right They're starting to believe their differentiation is dialed in and they're starting to believe that this could be the right approach They may be able to get people to choose it to the competition even though they haven't done it yet So those are starting to become yellow lights on the scorecard And now they'll take what they've learned and now we're into the third consecutive week of design sprints Again, they're going to sort of review that founding hypothesis.

1:26:21They're going to sketch. They're recruiting a new slate of customers as they do each week a new prototype again More code in the prototype. It's it's becoming more and more robust more realistic as they're also adjusting The marketing and the positioning at the same time So all of these things kind of go in concert the product itself and the marketing are sort of one as they're as they're moving along And this is an extreme example of what Everything is green everything's green if you can't see every single one is green Oh my god, and this is this is extreme But it is a pattern that we see this is real again and again.

1:26:57This is a real example. Wow. How do I invest to get us in this round Yeah, this is great. So So we see this again and again and I you know, I can share a couple of Other boards of ones that are in progress. We're also constantly adjusting the template so you can get to see a little bit more How the how people will edit their They're founding hypothesis from sprints to sprint So you know mellow who we were talking about here's their first prototype And you know, here's their first scorecard lots of lots of yellow for them Maybe they're a little bit more likely to use yellow than red and then Here's the edits to their founding hypothesis after the first sprint, you know, so you can kind of see in red They're changing slightly changing the definition of their target customer from the first week Slightly changing the the problem that they're solving slightly changing the approach slightly changing the competition They've dialed in they've gotten more crisp on who are we up against They've gotten a little bit more crisp just a tiny tweak on what how do we explain this to people to get them excited about it What's the differentiation?

1:28:00They sprint again they prototype again and if we just jump down and just looking at hypotheses They learn a bunch and out there's another slight tweak to that founding hypothesis and so Week after week you're learning, but you're also really able to able to track exactly what is it that we learned and how does that affect our our strategy Okay, guys, this was incredible. I think we've we've covered the entire process I love that you also covered the design sprint pieces which Which isn't part of this book, but it's such a core if you clearly these things are very connected and meant to work together So you go from here's the thing we should be building to had actually test it Let me ask you before we wrap up is there anything else that you think is really important for people to know before they start trying this process at home And is there anything you can point them to to actually try this at home One thing we didn't talk about you we yo we use an example of a company who's Not building an AI first product latchets building a you know this this networked community Sales platform for for artisans If probably interesting to look at how people use this when they are building a very technical product when they're Vibe coding prototypes.

1:29:13That's a question. We're getting all the time What's the influence on this of the speed with which you can build something that's an awesome idea Let's definitely do that. Yeah, okay, so let's jump in here and take a look at a company again in our current group of labs teams Actually on orbital it's called and the founder dinej is actually running this whole process solo Which is pretty cool too. He's a he's a remarkable guy We have a couple of solo founders right now and who are you know able to generate you can see just give like a sneak peak He's generating when we talk about customers all these sticky notes himself and making the decisions himself about which is the right one But to ground us in this story his founding hypothesis is He wants to help geospatial devs solve these sort of complex workflows with a browser -based no -code development environment So we'll we'll take a look just really quickly at what his prototypes look like and in the first week I can show you this prototype right here And it's a marketing page and on this marketing page there's a link to a To a video so if I click find out more I'm going to see this video and this video it's going to kind of Here dinej talking over it and it's going to kind of walk through a screen share of a very rudimentary version of what this product might look like Now if you're watching on youtube and you see this prototype you might think boy that marketing page and the demo itself Fritibare bones not the most polished looking this is This doesn't look super compelling So he was focusing in that first sprint on the messaging you know on finding those those people who actually have that role testing it with them And he learned a lot So if we you know sort of go back to his his scorecard we'll see okay that was Yeah, that was a pretty good one actually a lot of green on his first scorecard But he also felt like what he tested was was pretty incomplete Now one thing that's cool here We saw the big leap with latchet from one week to another in terms of like their learnings in the score cards One of the things that's interesting here is to go from vinyj's first prototype here to his second prototype And it's obvious he's been able to just build a ton in uh in the next week and he's using you know AI based tools he's doing a lot of work.

1:31:30He's also just a terrific engineer But here we've got like a much more real looking marketing page very detailed And an important thing that he's done here with this is He's built out a lot and created a video of something so that the product while not fully functional You can see exactly how it works So if we sort of play this video He's created this demonstration of what it looks like when you type in a query into the engine And exactly the kinds of results you get and by doing a combination of vibe coding Real coding all of which is based off of you know Pencil sketches we can go back and see the sketches he's doing on paper to define This is what I think needs to be in there to make this compelling to deliver on my differentiation And then he's using a product video so that the entire thing doesn't have to work fully free form That's what it can look like when a team is building something that's that's you know More AI centric when it's a more sophisticated tool when people are gonna be curious about the sort of the ins and outs of it So along those lines where do you find people are leveraging AI most in helping them through these sprints through either the Foundation sprint or the design sprint is and mostly just vibe coding prototypes That's definitely the first and biggest use of AI in sprint so far is in you know making prototypes that look More realistic faster and you know, it's kind of like You know having an entire prototyping team on standby right so that you don't have to just make it yourself and sort of piece things together But you can have you know a ton of people ready to jump in make something look really realistic But it's also really critical we found that while you're outsourcing that prototyping work You don't outsource the thinking like you don't kind of skip over the the part where you think about Well, what is the actual copy on the website?

1:33:26How do I actually describe what the product is how it's differentiated? And so It's it's one of the reasons why doing the foundation sprint first and then doing a design sprint can really help you and and You know because it it allows you to spend time Working on that harder part of What it means to design and build a product and then once you have a clear view of that Then you can use AI tools to go really fast and you know in this example that Jake is showing of axian orbital People get really clever about which parts of this need to be real which parts of this can be vibe coated Which parts of this can just be a static figma mock up And it's all about kind of creating a simulation Something that looks realistic that you can put in front of real customers to help you answer the the key questions That's a really good point that you're making and again, it's just a reminder You will move faster if you slow down a little bit at the beginning that because prototype is so easy now and just things that look It's so easy to make something it looks really nice and kind of it's doing what you want But spending a little time making sure you understand what you're testing and what you want Uh, it becomes more important.

1:34:33We had a couple of teams in this current group of character labs where they jumped to vibe coding prototypes like right away like at the very beginning and You know when you when you generate something using an LLI I'm using an AI tool like It looks pretty real like it looks you know, it looks believable And I so I think there's a temptation to say like okay like this is this is good to go like it looks close enough that I'm just gonna You know show that to customers and then what they found was like actually the You know, it was so it was super generic like it didn't really describe what the product was it didn't really describe how it was different because You know, it was it was generated by a model that Is trained on you know sort of existing products and so in that second sprint That was when they really took a step back and said okay, let's think through this and then shift into prototyping mode So it's definitely helping people speed up But we also think there's an important lesson here that while you're outsourcing prototype Prototyping don't outsource the thinking as well I see pulling something up Jake that might be yeah, I imagine you want to show Yeah, I think it's kind of interesting to see the sketches that went into dinej's prototype the axiom orbital prototype We just looked at because they are super detailed and this is Doing this level of thought where you're you're pausing you're being really intentional about what does the customer need to know What needs to happen for them to find a solution to their problem on you know and within the product That's a way of doing your prompt engineering if you end up Coding this prototype, but you start off with a very clear plan about this is what the thing needs to look at look like Rather than going immediately into a conversational mode where you're sort of co -designing with the LLM and going back and forth via chat conversation This is much like clear to yield an opinionated Product that makes sense that's very clearly defined around the the problem that you're trying to solve the tasks that need to happen to solve that problem And the right messaging the right wording.

1:36:34It's really crisply aligned with what you know about your customers what you know about what they care about That's such a good point again just the Concept of the primal mark is ringing in my head as you talk about this just as soon as you make that prototype Everything from that point as a response to that First idea versus have I actually thought the route? It should be Guys we did it. This is uh incredible. I think this is gonna help a lot of people think through and actually save a lot of time Is there anything else that you want to share leave listeners with maybe a last nugget or something you want to I don't know just doubled down on to lead folks with before we wrap up Well one quick thing is that we've we've shared a lot of examples in this uh in this conversation and we actually have a template uh mirror template that folks can use if they want to run their own foundation sprint It's the template that we use you know when we're working with founders taking them through these sprints We we do our work in mirror even if we're in person with them We're usually working in mirror or maybe working on paper and then capturing it in mirror because it's it's just such a great canvas to work on Um and and we'll make that template available so anybody who's who's listening or watching can Can grab that and and use it to run their own foundation sprint.

1:37:47That's amazing You answered the question asked that I forgot to come back to Uh, can we give people your all put in the show notes? But should they is it at your yeah, I guess where can folks find it? You should find it at character .vc and you can uh Go there. We'll have we'll have a page for you to okay. It's amazing. Yeah, so easy That is awesome. I'm so that's all some of the guys are doing that Obviously you can also read the book and that goes through a lot of this process But I think the template is just like a plug -in play. Let's just do this at home Obviously if they want to give deeper they can work with you guys have you it's such a win.

1:38:19They take money You give them money And you help them figure out what they have to build What a deal and that's also character dot vc. Yeah, they want to explore that. Yeah Amazing. Okay. Uh, is there anything else Jake that you wanted to share before we close up Now just you know if if you made it this far Hopefully your your mind and heart is is open to this idea, but We know it's a lot to ask to clear the calendar and follow these these steps, but if John and I weren't so convinced that beginnings are essential to Getting your best efforts in the hands of people and to achieving the the things you want for your customers We wouldn't be doing this.

1:39:02We wouldn't be going to all the trouble There's simpler things we should be going after The kind of cool thing we've found about working in this way Though we've we've focused a lot on finding product markets and building your business getting started getting momentum Getting alignment all these things that tactically are important that business wise are important But another part of it that's a nice Side benefit that actually maybe is the most important thing of all Is how close it brings you to your customers to the people who you're building for because you're interacting with them You're focusing on them as you plan and you're interacting with them on a weekly basis when you work in this way and how close it brings teammates together in a very authentic way We're working together on the most important things and we don't have to navigate the usual Social dynamics of conversations where one person has an idea and they're pitching it We don't have to navigate the constant context switches of the calendar that dominates our days We're just working on the most important thing and the structure takes care of a lot of the the difficulty of the The process of what we should do and we just find people come out of it with renewed motivation renewed energy and renewed enthusiasm around the fact they get to work on what actually matters to them Yeah, and it just feels like really fun just this part of the process is so fun And then not having to decide how to approach it having someone just give you here's a framework to follow It's like a yoga class, right?

1:40:30It's like I don't know how to do yoga, but tell me explain to me step by step Yoga for startups that'll be That's it Guys, this was awesome. I'm gonna skip the lighting around just because we've gone long And I guess just work info explaining online and how can listeners be useful to you? You can find me on LinkedIn. John, I think you find you on LinkedIn too. Yeah And we'd love for people to apply to character labs or if you know a founder apply to character labs apply get in touch with us character .vc There we go. All right guys. Thank you so much for being here in for sharing Yeah, thanks.

1:41:05Funny. Thanks, Lenny. Bye everyone Thank you so much for listening if you found this valuable you can subscribe to the show on ample podcasts Spotify or your favorite podcast app Also, please consider giving us a rating or leaving a review as that really helps other listeners find the You can find all past episodes or learn more about the show at Lenny's podcast .com See you in the next episode