In the post-COVID-19 era investing smartly and reducing the risk of pursuing ideas that won’t be accepted by the market are more important than ever.
The questions that save budgets
Corporations, who used to be perceived as pretty flexible with their budgets, are now more aware than ever that they need to undertake new ventures and develop new products without spending millions on missed projects. But how to decide which idea is worthwhile, and which will end as a disappointment?
The most important questions that should be asked at every stage of the idea/ product development are:
- Is our general direction right?
- What are our basic assumptions upon which we build the idea? How well did we check if they are true?
- Do we have any direct insights from the prospect customers/ users? What are they? Are they incorporated into the idea?
- Do we have strong evidence that our business idea is very likely to work?
The old approach to searching answers
The assessment and testing can be done in many ways.
A more “classic” approach is outsourcing research – conducting focus groups, in-depth interviews and surveys – to a specialized research agency.
And although obtained data can be of great quality, this approach is usually time consuming, costly and quite inefficient when it comes to circulation of knowledge and its utilization in your organization afterwards.
But corporations start to acknowledge that there are faster and more innovative ways that can be used to obtain market and user understanding, and help iterate projects into the right direction.
The new approach to validate and test assumptions fast
There are several dozen tools you can use to effectively and accurately estimate the risks around your new project, let me name only several of them:
- building prototypes
- preparing marketing campaigns of different sizes and measuring their effectiveness before the product is built
- pre-sales campaigns
- explainer videos
- creating a concierge service for a small fraction of target group
- building a one-feature MVP
These techniques are most commonly used by start-ups and smaller, more agile organizations. No surprise then that corporations invest in such entities and buy these competences as part of the startup-DNA. Especially that acquiring another brand helps big companies protect their reputation – if the experiment or the assessed product fails, then it is connected to another brand, but at the same time lessons learned are shared.
Nevertheless, more and more corporations are daring to develop their ideas, and conduct tests and experiments with internal teams – to stimulate and embrace cultural change.
As Alex Osterwalder – the founder of a cult innovation consultancy company Strategyzer puts it: this is an approach of corporate innovators that understand that to be truly disruptive, I need a dedicated team who owns the work and is capable of creating their own evidence.
Building corporate culture for business resilience
I believe that having ability to ideate and experiment in-house is crucial to grow and stay resilient – no matter the size of the organization. As a company we have started to build such competences almost 5 years ago. The process was painful, and we have had our failures, but we have learned to embrace them and now test ideas and let them fail sooner and with less investment.
For more than 3 years we have been training also other companies to build and validate their ideas and products in a smart and agile manner. And they are doing great – thanks to this approach eg. Medim pivoted their new product idea and business model in just 3 months and bought into the market and over 10 big customers, saving more than 12 months of development (read more at www.skyrise.tech/medim-case-study/ )
I strongly believe that building business models and then establishing and testing hypotheses on product or service:
- desirability (mitigating the risk that customers aren’t interested in your idea)
- feasibility (mitigating the risk that you can’t build and deliver your idea)
- viability (mitigating the risk that you can’t earn enough money from your idea)
- corporate fit (mitigating the risk that the project will be stopped due to lack of alignment with corporate strategy)
are key to investing in the right ideas and creating products and services that are great success. And it will also help your employees cooperate more effectively with start-ups, by better understanding the start-up ways of doing things.
So what do you need to make it happen also in your corporation?
Build project teams, give them venture-style funding, hire internal or external process coaches to guide them through several initial cycles and then just let them do their job. Also let them fail, because it is unavoidable. And give them some time. The outcomes will exceed your expectations.
Author: Jarosław Pilarczyk
This text comes from the report that space3ac has created with corporate partners. Full content is available on the website www.space3.ac/reports/
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