Most new ventures fail because they don’t have enough customers. Unfortunately, entrepreneurs often fail to address this problem, and focus more on getting the product right first. This is a mistake. Lean Startup tools can help you avoid this mistake.
Part 1 in a series reflecting on what we’ve learned after doing a bunch of lean startup work over the past year. First issue – how to use customer development interviews to build a business model.
The hype around innovation right now seems overwhelming. Does this mean that we’ve hit Peak Innovation? No – we’ve hit Peak Innovation Hype. To avoid the hype, we need to understand what is already known about the substance of innovation.
When we make something new, we often don’t give as much thought to building a business model to go with the great new thing. This is a mistake.
Big new ideas and big target markets are important to innovation. However, if we want to win big, we have to start out incredibly small. New ideas grow by dominating a small niche, and then spiralling out.
If we want to change the world, it’s not enough to have great ideas. We also have to have the managerial skills needed to execute our ideas. The baby incubator from Design that Matters is a great case study showing the obstacles we face.
When you’re attacking a large competitor, you can’t go at them head-on if you’re just starting out. The best way to win is to innovate your business model.
We’ve reached a point where startups can base their business model on the rapid testing of multiple prototypes. Scott Adams of Dilbert fame argues that this basically makes starting up a big psychology experiment. If we are in established firms, we need to build some skills to compete in this environment.
Great new ideas usually need great new business models to work. The Technology Readiness Level and the Investment Readiness Level are two tools that you can use to help you get your great new idea ready for the world.
Can large firms pivot? There are examples of firms that have, but not a lot of them. It’s a challenging process in the best of times, but they often try to do it in a crisis, which is even tougher. Your best strategy is to start experimenting now.
When people say that their organisations are risk-averse, often they actually mean that they are variance-averse. This causes problems over the long-term, but experimenting and innovation can help you avoid these problems.
If we’re evaluating markets, is it better to start with research or with talking to people? In part, it depends on whether we’re entering a completely new market or not.