Over the course of the past six and some odd years, I’ve been involved in a handful of corporate innovation projects and seen many more go from concept to launch. As with anything, some were better than others, but they shared a few defining characteristics. Here’s what to look out for when executing your new digital venture strategy.
– They took too long to get to market.
– They cost too much money.
– There was an aversion to product risk.
Problematic for several reasons, so let’s break them down.
For venture strategy, time to market is critical.
Seasoned startup founders know, launch early, test, iterate – this gets lost once you get into corporate.
An unnecessary amount of time goes to the planning phases of the project. Validating research with more research is standard practice and often unnecessary.
In theory, it’s supposed to mitigate product and market risks. It doesn’t. It draws out time to market and allows to more agile competitors to move in and establish market presence.
Research is also expensive. You can spend the same capital on primary data post product launch, which would give you actionable insight. Instead, market research only leads to hypotheses.
Time is money, and money is money.
Some corporates will over-engineer their digital products, adding bells and whistles before knowing if any of those bells or whistles are worthwhile additions.
Digital products need to have a core feature, then once it’s mature, add another feature, then a third, etc. It’s an MVP (Minimum Viable Product) focused approach to building a product.
Focusing on the MVP gets you to market quicker, which carries with it a ton of benefits. Being in the market faster also means a straighter path towards monetization.
A project I worked on that executed the MVP splendidly was Elsewhere by Advance. They built a core, tested, then rolled out additional community features.
There’s a systematic aversion to risk.
I remember I was sitting in a room with the global CMO of a giant IT company giving a presentation about my human-centered design process when he asked me.
“How do we create the next iPhone?”
My response was simple “Understand what the market needs and take risks.” The conversation then went into shareholder value and why they can’t take risks, but to me, it was blatantly apparent. This company, with its current culture, was never going to have the next iPhone. Their venture strategy couldn’t support the innovation necessary for a leap this big.
Risks can be mitigated more effectively by launching products to the market. By learning what the market wants, you augment your offering to the market, making your customers happy and building loyalty in the process.
So how is someone at corporate supposed to fix this?
It starts with culture, and that needs to come from the top. If executives are focused on incrementally increasing shareholder value through M&A, that company won’t be a leader. It can do well, and many do, but it will never have it’s iPhone.
Creating an environment where it’s safe for people to take risks in furtherance of innovation should be a component of strategy. If that’s a no go, which is so often the case, then R&D / Innovation, etc… needs to happen independently of the corporate entity, typically in a wholly-owned subsidiary.
If you’d like to know more, reach out, let me know your thoughts and some of the challenges you’ve faced in defining your venture strategy.