Startup Thinking is Not Just for Startups.
We have now been teaching the completely retooled New Venture Discovery class (KIEI 462) at Kellogg for a 2 full years. Between us we have we have taught the course 16 times to over 600 students and have learned a lot about which aspects of the course/curriculum work well, which don’t, and which elements we might change to improve things going forward.
As we reflect, one theme has become clear to us: the process of New Venture Discovery (translating an unmet needs into new offers and business models) is as applicable/useful to non-entrepreneurs as it is to those aspiring to launch new companies. We see evidence of this in a few notable areas:
- The makeup of the students that take the class – about 2/3 of which are not sure that they want to be committed entrepreneurs, but find the process of New Venture Discovery interesting and useful
- The feedback that past students share from their experiences after graduating. We’re told that they are using these tools and methods and some companies, like Adobe, have their own lean start-up/launch-pad tool suite.
- The reaction we’re getting from alumni and other executives when we share the principles of New Venture Discovery with them. We hear quite a bit of: “This is a great approach for any company trying to bring something new to market or innovate on its business model – my company gets bogged down in ‘planning’, and it takes forever to get to the ‘doing’!”
The fact of the matter is that the majority of people we teach, present to and speak with are not, and will never be founders of companies. That being said – many of them are finding it useful to learn how to think like a scrappy, customer-oriented entrepreneur. This pattern has led the two of us to begin to use the term “Venture Mindedness”. It means adopting a discovery-oriented mindset when designing new business models – regardless of whether you are a startup founder, corporate executive, physician, marketer…whatever!
There are three areas of the discovery approach that serve as the foundation of the venturing mind:
The importance of spending time in the field, having first-hand conversations with users/customers
Most businesses fail because they never achieve product-market fit. Most businesses never achieve product market fit because they never fully understand their customers’ needs. Most businesses never understand their customers’ needs because they don’t spend enough time with them – in the proper context (especially when they’re experiencing the product/service)– and asking the right questions.
This is as true for established companies (of all flavors) as it is for startups.
The power of embodying questions with prototypes
“Leave prototyping to the engineers.” At least that is the common belief of most executives and managers. This has, in large part, been born out of the ingrained understanding that ‘prototyping’ is as way of presenting an early version a final product and NOT as a way of asking questions of users.
Our point of view is that a prototype is a “question embodied” – and that we can prototype almost anything (a product concept, services, experiences, business models…you name it).
Again – this way of thinking is as useful and appropriate for large companies attempting to create new business value as it is for founders looking to disrupt an industry. Just because you are big doesn’t meant that you need to spend like it.
Sometimes the cheapest, lowest-fidelity sketch can answer the million dollar question. Why spend more time and money than you need to just to arrive at the same conclusion?
Embrace experimentation, failure and the process of iteration
Those with venturing minds believe that early in new offer’s life action and experimentation are far more useful than planning and forecasting.
The path of achieving product-market fit is never a linear one. Its elliptical, and the more cycles of the ideate-experiment-evaluate-refine cycle you get through the better off the business will be. The key here is to learn as much as you can, as quickly and as cheaply as you can.
With more testing, you encounter failure. Then, with that failure comes new insights, which allow you to create a better idea/plan, leading to more progress… and on it goes…
Because this is the inevitable reality in the actual way a new venture is created (lots of ideas tested that don’t pan out), it’s important to: A) test A LOT; B) test rapidly; C) have an optimistic and resilient attitude, viewing a test that fails not as a “failure” but as a customer or marketplace insight.
New Venture Discovery as much a mindset as it is methodology.
You don’t have to be building a startup to engage your Venturing Mind. This discovery-focused lens is just plain useful for bringing new ideas to market – regardless of if it is a product, service, business model, marketing campaign or a new company.