We recently hosted a webcast conversation with Sukh and Hisham about how Code Naturally teaches students to code, and how they’ve grown their business model using Lean Startup.

Don’t have time for the full webcast now? Below you can catch the highlights and tips from their talk in our companion blog.

If you’d like to read the full transcript of Hisham Ibrahim’s conversation with Sukh Singh, you may download it.

Code Naturally’s CEO Sukh Singh explained in a recent webcast with Lean Startup Co. faculty member Hisham Ibrahim that his startup, which teaches Bay Area kids to become problem-solving computer coders, began in an entrepreneurship class at UC Santa Cruz, where Sukh’s teacher, a fan of the Lean Startup, introduced his students to the book and its ideas. “We had to go out and interview customers,” Sukh says. In that process, he says he found the value in Lean Startup because communicating with customers was easier than he expected.

“Often they would give me ideas that I never would have thought of that were just completely out of range of what I thought my potential solution might have been.”

His big epiphany from that process was that “people will happily tell you how to make money if you’re just willing to talk to them and ask.”

Coding Is the Language of the Future

Sukh breaks coding down to its essence, calling it “a process of giving your computer instructions,” and reminding us that “it’s what makes up our favorite application, powers our smart fridges, our iWatches.”

Even more important, Sukh says, coding is “the language of the future” and has become an integral part of what students need to know. “It’s like a 21st century kind of literacy. It’s almost as important as learning a foreign language.”

Hisham asks if it’s a skill that only software engineers or programmers need to learn, and Sukh sets him straight. “Programming is really fed into every kind of field.”

Additionally, Sukh says that for many students “it’s a form of self-expression and an opportunity for them to be creative”—a skill he believes will be helpful no matter what field they end up in.

“People will happily tell you how to make money if you’re just willing to talk to them and ask.” Click To Tweet

Closing the STEM Gender Gap

Coding may be useful in every field, but Hisham worries that it’s still not attracting as many girls as boys.

Sukh confirms that’s true but says that the gap appears to be narrowing. “In the last three years that we’ve been doing this, the amount of girls that are interested in programming has increased dramatically,” he says.

He’s happiest when their coding camps are split 50/50 between boys and girls, but female enrollment is still low. One of the answers may be providing an all-female environment for girls to learn in, which, Sukh says, studies show enables girls to perform better.

Ironically, Sukh says, “Often the girls tend to be some of our best programmers and tend to really have this attention to detail that makes them especially great engineers and programmers.”

Learning from Failed Assumptions

Every experiment begins with assumptions, and even those that fail can bring valuable lessons. When building the Code Naturally app, their first assumption was that students would want to handwrite their code, Sukh explains, “because it’s a little bit more natural for them.” That was actually the origin of Code Naturally’s name.

That assumption did not prove true. “It was very clear they hated handwriting, and they were faster and better at typing.”

The second assumption was that all teachers would want to teach computer science, with STEM’s rising popularity. Also untrue. “As soon as we started talking to teachers we realized how much they actually have on their plates,” Sukh says.

This led to a business model that began simply as a packet proposal to a school principal where they offered to send a computer science instructor to the schools instead. “That worked out fantastically.”

The teachers got a break in their day, didn’t have to teach programming and “their kids got that enriching experience.”

After they obtained funding from Microsoft and Driscoll’s to do the program, other schools came calling.

What began, essentially, as a way to test the app became much more. “It wasn’t something we expected to be very scalable,” Sukh says. Quickly they ran out of the educators necessary to send them to all the schools that desired one.

However, it wasn’t all a loss—before the sales packet about 400 students had tried the app. After they rolled out the teaching business model, the number of users rose to 3000. “It opened up our curriculum to all these students.”

“Often they would give me ideas that I never would have thought of that were just completely out of range of what I thought my potential solution might have been.” Click To Tweet

Follow the People, Not the Money

Hisham asks how Code Naturally designs and runs experiments. Sukh explains that most of their experiments are around “getting parents into the door at our Santa Cruz code center” or getting teachers in schools to approach them for professional development or software purchase.

“We start with a hypothesis of—‘if we put this much money into this mode of marketing, we’re expecting to get a following.’” However, Sukh says that rather than focusing on the dollars from a specific experiment, it’s more valuable to focus on the number of leads, or number of people coming into the center.

Sukh and his CTO consider hitting even 70 to 80 percent of their expectations a success.

Since they opened the code center, the number of experiments they do has increased, to about 25 per month. However, Sukh explains that an experiment can be as simple as a piece of print marketing such as a local flyer that goes out in the mail. He says they’ve found that their ROI on manual marketing to be much more effective than spending the same or more money on a Facebook or Adword ad.

Of course, measuring success among their three customers—students, parents, and teachers/schools—always comes back down to the students.

“If we can make them happy and excited about making something with code, then that’s successful for us,” Sukh says.

On that note, Sukh made a point of mentioning just how impressed he is with students. When they gave kids quizzes from the class at UC Santa Cruz, “the fourth and fifth grade classes actually did better than the college students.” That was mind blowing to Sukh.

These kids didn’t beat themselves up when a project wasn’t running yet. They seemed to understand “that it just meant they weren’t there yet,” Sukh explains. “they were developing a growth mindset through programming.”

The Business of Relationships

When Hisham asks Sukh to talk about how Code Naturally engages its customers in different cycles and iterations of building the product, Sukh shares a lesson that he learned from his father, a life-long businessman. “Business isn’t just taking people’s money…selling something. It’s these relationships that you have with people.”

He feels they’ve developed “fantastic relationships” with local teachers and principals as part of their model for building the application. They consult with them on a regular basis and get their feedback.

“When we bring on new educators, we emphasize to them to listen to parents, to listen to students. If they’re frustrated, ask them how it could be better.”

He credits parents for having led to much of the business that they have today because they often make the suggestions that lead to positive change.

“My biggest job as CEO is to listen to [our customers] and figure out how can I make their lives easier.”

“When we bring on new educators, we emphasize to them to listen to parents, to listen to students. If they’re frustrated, ask them how it could be better.” Click To Tweet

Providing Value to Build Revenue

They continue to experiment on building their customer base by applying Lean Startup principles but Sukh makes clear that “the return on investment (ROI) isn’t going to be immediate.”

Sukh credits Lean Startup for about 20 percent of their revenue. “These business models…came directly from our customer’s mouths.”

He stresses that it’s more important to give value up front to the customer before expecting that ROI.

“You can’t just push to sell, sell, sell. You have to show them you’re doing this for the kids, and give them an opportunity to try out the application before just having to purchase it,” he says.

The Power of the Pre-sell

However, he does recommend “if you can pre-sell, do it” by asking customers: “‘Would you pay for this now if I give you a discount while we get this ready for you?’”

Sukh says that getting money up front “before that thing even exists,” can validate that it’s worth doing.

This, and almost every other lesson they’ve learned along the way, can be summed up, in one final thought: “Nothing can be more important than talking to your potential customer.”

Thanks to Jordan Rosenfeld for contributing this piece. If you seek to bring the entrepreneurial spirit to your organization, Lean Startup Co. can help.

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