Speaker – Author – Disruptor

5 Steps to Find $10s of Millions in Impact

5 Steps to Find $10s of Millions in Impact

According to the Duke University/CFO Business Outlook survey, the longest-running and among the most respected research of financial executives, nearly half of the CFOs surveyed believe that the United States will enter a recession by the end of 2019, and 82% expect that a recession will happen by the end of 2020.
For those of you out there running your company’s innovation program, you know what that likely means. Despite the fact that mature innovation programs are constructed in such a way to protect against downturns, they are often the first programs to be cut. Worse, despite the increase in uncertainty concomitant with economic downturns, businesses forget what they learned in their innovation programs. They revert to entrenched execution behaviors, trying to squeeze blood out of the turnip.
I would like to offer a different, proactive strategy; one that demonstrates the opportunity cost of not investing in innovation far outweighs the immediate cost savings. The strategy is derived from our experience guiding clients through uncertainty.

For those of you out there running your company’s innovation program, you know what that likely means. Despite the fact that mature innovation programs are constructed in such a way to protect against downturns, they are often the first programs to be cut. Worse, despite the increase in uncertainty concomitant with economic downturns, businesses forget what they learned in their innovation programs.

Feedback versus Insights: A practical example for building a successful MVP

Feedback versus Insights: A practical example for building a successful MVP

“Feedback” is a loaded word. Asking for it in the wrong way not only will result in poor information, it can actually hurt your business because more often than not it’s predicated on opinions and not actual facts. Bad feedback sends you in wrong directions, provides false positives, and false negatives.
So how does one get valuable, actionable input from users, potential customers, and other stakeholders?
Focus on insights, not feedback.
Understanding the problem
Filtered.ai is a Techstars startup led by CEO Paul Bilodeau and Derek Bugley, whom I had the good fortune of mentoring as part of the 2018 Techstars Anywhere cohort.
Filtered got its start as a data science consulting firm trying to solve their own recruiting problems. Seeking to hire software developers, they received hundreds of unqualified resumes from recruiters. In response, they developed a simple coding test to be used as a filter.
Their minimum viable product (MVP) immediately paid dividends. Recruiters could only send resumes of engineers who achieved a specific score on the test, dramatically cutting the time and cost of recruiting new developers.

Why customer feedback is killing your innovation efforts

Why customer feedback is killing your innovation efforts

feedback (fēdˈbăkˌ)
n.
The return of a portion of the output of a process or system to the input, especially when used to maintain performance or to control a system or process.

Feedback is not what people think it is. Originally, feedback is an electronic signal received in response to an electronic output. The signal received back can help determine if the outbound signal was “right” or received properly. Today, the term can be applied to non-electronic and non-automated processes, too.

Feedback is good for improving or correcting a process. It’s not good for measuring the impact of the process. Feedback on a product feature, for example, may tell you if it works as expected, but not if the feature contributes to some larger desired outcome. If you want to know about the desired outcome, you have to ask explicitly for that.

How to find early adopters

How to find early adopters

The toughest part about practicing customer development is getting started.  You already know that customers are not going to magically find you because you have a great product, work hard and are good looking.  Now that you’ve realized how big the world is and that using a megaphone from your roof top is a poor method of user acquisition, what’s next?

Presumably if you are committed to the principles of customer development, you are already committed to “getting out of the building.”  Before you can interview potential customers, however, you have to find potential customers to interview.  Unfortunately, there are no magic bullets.   This is painstaking work.  Just as with other portions of the customer development model, to find early adopters you make assumptions, test, and iterate.  If you are having trouble getting started, try these steps:

Who owns the vision?

Who owns the vision?

I love the work Eric Ries is doing with Lean Startup.  (IMO, coupled with an investment model where funds are predicated on implementation of lean startup principles and achieving specific customer development milestones #leanstartup could revolutionize the start-up and investment landscapes.)

Words are powerful and and the intent of catchy phrases can be lost when removed from their original context.  I brought this up before a few weeks back, when the “Fail Fast” meme was cruising through Twitter and among some cheerleaders, it seems, failing itself had become the best means to success, as if it were the end objective, as if tripping your way to finish line will ensure you are the winner.

So it goes, IMO, with this quote about the customer’s vision:

Early customers are often more visionary than the startup they work with for that product.

I’m not so sure.  So while the initial intent of the phrase is not to misplace ownership of the vision, I fear (perhaps unwarrantedly so) that upon oft-repeats or retweets, that the wrong message emerges.  Not to repeat myself, but one has to treat customer input carefully.

#CustomerDevelopment by Company Stage & Product Type

#CustomerDevelopment by Company Stage & Product Type

Customer Development must be tailored to what type of business you are and where you are as a business. All businesses, not just Internet-based ones, can benefit from customer development principles, but the ease/difficulty varies quite a bit depending on product, business model, and your knowledge of the market, etc.

Clearly an Internet based product has advantages both in terms of customer development and fast-iteration product development, over software applications.  I’ll go out on a limb here and rank difficulty based on product type this way:

b2c internet -> b2b internet -> b2c software -> b2b software -> hardware

No great revelation here.  I’m going out another limb and say the significance of customer development increases as you go from left to right, while the significance of fast-iteration product development runs from right to left.  This is not to diminish applying both principles as much as possible in all cases, but that the nature of the product determines which will predominate.

Products toward the left are less expensive to develop and deploy and customer learning is more inherent in their nature.   The cost/failure is lower.   If you haven’t practiced customer development principles, e.g., interviewing customers about a particular issue’s pain level, you will learn soon enough whether your product solves a real problem.   Practicing Eric Ries’ lean startup principles can serve in lieu of practicing some of the customer development steps.  Further, many assumptions are actually facts.   IMVU’s customers are online.  They can be reached online, they use web sites to learn about products, they reference online users who are similar to themselves, and they buy online.    You don’t have to interview your online customers to determine those basic facts as you must for other product types.