Roominate: a Lean Launchpad success story

By Adam L. Penenberg , written on July 1, 2013

From The News Desk

Recently, the New York University Entrepreneurial Institute, courtesy of a grant, sent me – and three other faculty members – to Palo Alto to attend Steve Blank’s Lean Launchpad Educators conference held at Stanford. There I joined more than 90 other educators – mostly business school instructors; I was the only journalism prof – to learn about teaching Blank’s Lean Launchpad methodology in my own classes.

A successful entrepreneur, Blank has become kind of a startup guru who has been trying to take the guesswork out of product development. As he pointed out in one of his seminars, most companies don’t fail because they couldn’t attract a management team or gin up a product. They fail because they didn’t create a product that will sell.

In Blank’s classes, students break into teams, each of which concocts an idea for a product – a hypothesis, if you will – that they test by interviewing potential customers, competitors, and partners. Teams present their findings to the class each week and receive intense criticism from Blank and other mentors. At each step, based on the feedback a team receives, the product changes: Perhaps the members realize no one would buy what they want to sell, or maybe they’re looking at the wrong market segment. In the end each participant is exposed to the challenges of commercializing new products and ventures.

Instead of my talking about it, though, I’ll show you how it works through the experiences of one of Blank’s former students, Alice Brooks, who did her undergraduate work at MIT in mechanical engineering and her Masters at Stanford. Brooks, who is now 25, took Blank’s 10-week course at Stanford that started in January 2012 and afterward, based on her experiences, launched, with a friend, Bettina Chen – also an engineer ­– a toy company called Roominate, which sells an ingenious DIY wired dollhouse building kit.

Before Brooks was allowed to enroll in Blank’s course, she had to organize a team, conceive of a product, and apply. She approached Chen and they talked about how few women were in their field. As a kid, Brooks played in her father’s robotics lab, and when she was 8 asked for a Barbie doll for Christmas. Instead, he gave her a saw, which turned out to be the greatest gift of all. She used it to build her own wooden doll with a triangle head and body, nailed together with color pushpins for its face.

“We realized toys had a huge impact,” Brooks says. “The saw was not a traditional toy for a girl but I really loved it. I wanted to make engineering more accessible for girls and realized toys were a good way to do it.”

They just didn’t know what kind of toy to make or what it would look like or do. “That’s why the class was so useful,” Brooks adds. “You’re going out to talk to customers” and find out what they want.

In the first week, Brooks, Chen, and their teammates talked to parents at youth basketball games. They felt a bit at sea, as they were not really sure how to go about the customer interview process and only had a vague idea for a toy based on building blocks. When they gave their presentation that week they received harsh feedback.

“We didn’t understand what talking to customers meant,” Brooks says. “We didn’t know that everything you do has to be validated by your customers.”

They were told to get these customers to talk openly, to soak up as much information as possible, to record interviews or take notes. They realized that a basketball game was not a good venue for this because they were inconveniencing parents. Changing tactics, they went to homes, where they could entertain children, watch how they play, and interview the parents at the same time.

At the beginning Brooks' team tried to learn about value proposition. They asked parents how much time they spend playing with their kids, where they shop for toys, etc. A lot of parents, they learned, like coming home to spend time with their kids but didn’t want to be hands-on; they have to able to make dinner, or do something on their own, and don’t want to have to go over and help their child every step of the way. This led to Brooks and her team gravitating toward a standalone toy that would be interactive, keep a child engaged, and offer parents the possibility of helping out when needed.

After deciding on a car building kit, they cobbled together a model for testing from existing products, which consisted of three wheels, a car body, battery, switch, motor, rubber band, and stickers. They took it to some kids to try out, as well as testing out a snap circuit motor to power a disco ball, where girls at a sleepover got to play with it. The kids seemed enthusiastic, but Brooks learned from the girl’s mother that she told her she probably wouldn’t do it again but didn’t want to hurt Brooks’ feelings. She realized she couldn’t rely on what the children said for honest responses. They needed to take themselves out of the equation.

In week four the group produced 12 car kits by taking the motors from those propeller-like hand fans, wheels from potted plant liners, and a hodgepodge of parts from various other places, turned them into a build-it kit with instructions and colorful stickers, and sent them to 12 sets of new kids referred to them by those they had already interviewed. The goal was to assemble a car that had a little animal body outside that you decorate and put around the rim of the vehicle.

They waited a few days then went to some of the houses to see what happened. Five out of 12 kits had been successfully assembled. Three had started building but stopped because the instructions were not clear enough. Four had not even opened the boxes. Further research revealed that the kids who successfully completed the kit had a lot of help from parents. Lesson learned: “We should test everything before we show it to the kids,” Brooks says.

The team had spent so much time focusing on the product that its members neglected the other parts of what is known as the business model canvas, which includes nine components, such as “value proposition, customer segments, channels, customer relationships," and other facets. Over the course of the next few weeks they tried a test on a Facebook product page and did a toy giveaway that linked to their website.

“The first time someone tells you they’ll pay money for your product is an exciting moment,” Brooks says.

The rest of the course Brooks and her team looked at business strategies and then the course ended. They could gotten their grade and moved on. Instead, Brooks and Chen split off from the other two members of their team and applied to StartX, Stanford’s accelerator, which started right when class ended.

They took to heart feedback they received from one of their new mentors who was also a dad. He told them they hadn’t had an a-ha! moment. Brooks experienced this first hand when she took the latest iteration of their toy car out for testing with two girls. One of the girls showed Brooks her toy hamster, which ran around the floor and squeaked. The kid was much more excited about that than the toy Brooks had brought.

“Our prototype would never be as exciting as this toy,” Brooks says.

That’s when they decided to scrap the car in favor of a dollhouse. They quickly created a prototype out of foam core, and made a couple of tables and chairs. The girls could then cut out a circuit, an LED, and a plastic gray piece that could cut and fold into a box to design a TV screen. This allowed kids to take the dollhouse environment, throw in some basic electrical engineering and a dash of creativity. The kids used it to create houses, restaurants, amusement parks, and schools.

"They kids didn’t want to go home [because] they were engrossed,” Brooks says.

She had her a-ha moment.

They then did a Maker Fair and a couple hundred kids played with their toy. The response was fantastic.

This led to a Kickstarter campaign that raised $86,000, which was three times their goal, and an angel round last fall of $275,000, which they are using to expand their retail presence, design more products, and hire more people. The kits are manufactured in China and the electronics are made in the U.S.

“When I entered the class I didn’t understand what starting a company meant or how hard it would be,” Brooks says. “Taking the class was essential in getting us started. It helped us build a product that customers want.”

And the core lesson?

“Test everything,” Brooks says.