Insights – Full Posts

All

Viewing posts from the All category

Innovation Weekly: Disruption, Paranoia & the Indispensable Need

Why Entrepreneurs Should Care Less About Disrupting and More About Creating

This article is a brief review of Tim O’Reilly’s latest book entitled WTF? What’s the Future and Why It’s Up to Us. It features an excerpt of Chapter 16 of the book which discusses on why entrepreneurs should shift their focus from disrupting the status quo to creating new markets and possibilities.

The excerpt explains 4 ways to achieve this: First, entrepreneurs should focus on what they value the most; no, it’s not the bottom line. Instead, Tim encourages its readers to have “big hairy audacious goals”. Secondly, entrepreneurs should create more value than they capture. This essentially means that entrepreneurs should always strive to give back more value and serve more people, instead of having self-serving goals.Thirdly, entrepreneurs should focus on the big picture and long-term outlook: what is the role of your entrepreneurial drive in making the world a better place. Fourthly, entrepreneurs should aspire to have an unwielding idealism in order to set an example to oneself and others.

Complacency or Innovation: You Decide

“Only the paranoid survive”, a quote made famous by Andrew Grove of Intel Corp. will be more fitting if changed to “only the paranoid innovate”. Complacency can happen to any businesses, particularly when business is doing well. All indicators and metrics are glowing and nothing can seem to go wrong.

This is particularly true with customer experience. Businesses tend to get complacent with their customer experience, especially when all customer-related goals have been met. But customer experience is a journey, not a destination, and to stay ahead of the competition, you need to continually innovate. Why? Because the landscape is always changing: customers change, customer needs, desires, and expectations change, and the business itself changes. As Tom Fishburne of Marketoonist says in his : “If you want to remain number one, you have to think like number two.”

4 Ways Leaders Can Get More from Their Company’s Innovation Efforts

A recent McKinsey study points out that although 84% of C-suite executives think that innovation is important for growth, only 6% of them are happy with the innovation performance of their companies. This huge gap between expectation and result is partly because that most companies regarded innovation as tertiary rather than an indispensable need.

Another reason for this gap is that innovation can be slow and difficult to measure. Unlike other conventional strategies, innovation tends to move in an S-curve, moving at a slow pace until it bursts exponentially. Thus, innovation might go against C-suites’ interests for linear and measurable growth. However, C-suite executives can follow these four recommendations in order to improve innovation performance: 1. Don’t get trapped in your P&L; 2. Focus on problems, not ideas; 3. Classify the problem before you decide on a solution; and 4. Build for the few, not the many.

If you have recommendations on articles you’d like to see featured, send them to insights@goboomfactor.com.

Innovation Weekly: How it Works, Post-It Notes & Slow Adoption

Data From 3.5 Million Employees Shows How Innovation Really Works

This article is based on a 5-year longitudinal study of 154 companies and over 3.5 million employees on their use of an idea management system called Spigit. The system was used for different purposes by different companies; some use it for process innovation, others for product development, and so forth.

The key finding of the research is that the higher the ideation rate (number of approved ideas by management divided by number of active users of the systems) in a company, the higher the growth and net income. This is hardly surprising, because this indicates that the company is not risk averse to new ideas, and are more likely to execute on them. However, the researchers point out, contrary to popular beliefs, that there are 4 conditions that must be met in order to sustain high ideation rate: Scale (more participants), Frequency (more ideas), Engagement (more people evaluating ideas), and Diversity (more kinds of people contributing).

What Do Post-It Notes, Amazon Drones and Gmail All Have in Common?

Post-It, Amazon drones, and Gmail may look like three seemingly unrelated products, however they are the fruits of innovation born out of the same key underpinning: intrapreneurship. What makes intrapreneurship so powerful is that the route to innovation is reversed. Whereas conventional method commands a top-down approach, intrapreneurship is a bottom-up movement.

The article goes on to explain a three-step approach on how to encourage intrapreneurship, and the importance of creating a company culture that looks beyond short-term goals, such as quarterly earnings in order for intrapreneurship to flourish which in turn will foster innovation within the organization.

The 30 Year Rule – How Long Does Innovation Take?

This article boldly claims that as a ‘rule of thumb’, major innovations generally take 30 years to catch on. Just observe the past, the author continues, and one will see a recurring pattern that this rule of thumb holds true. From Edison and his electric distribution system in 1882, to Xerox’s ‘Mother of All Demos’ in 1968, up to the first successful experiment of quantum computing by IBM in 1993. All of which took or will take roughly 30 years to be impactful.

On a side note, there are endless articles/videos explaining why sometimes ostensibly useful innovation are slow to be adopted by the general public; one good example is this video by HBR. However, not many articles attempt to draw a conclusion that it will take roughly 29-30 years for the next major innovation to have an observable impact.

If you have recommendations on articles you’d like to see featured, send them to insights@goboomfactor.com.

Innovation Weekly: Necessity, Market Enablement and Agility

Necessity is indeed mother of invention—regardless of resources, study shows

This article addresses a common misconception that people who live in extremely low resource environments are unable to create impactful innovation. The whole article is based on a case study research by the University of Notre Dame and Lulea University of Technology, which focuses on the concept and impact of “jugaad”—literally means “hack” in Hindi. Jugaad or “frugal innovation” is a concept prevalent in India where resources are scarce. The whole concept of jugaad relies on what the researcher called as “assertive defiance”, an unwillingness to be limited by the lack of resources, thinking, and behavior. The types of innovation that come out of these resource-scarce environment are so unique that it can only be thought out of scarcity and necessity, useful daily innovation from a natural water cooler to a gas-based water pump.

Innovation Requires Market Enablement

Innovation doesn’t happen in a vacuum; it requires an ecosystem where competition is widespread. However, as the market segment becomes mature, key players will dominate and begin to limit the movement of their competitors. Eventually, smaller players will only end up getting acquired by market leaders. This is not ideal for innovation.

The article argues that instead of controlling the market, market leaders should enable the market, by sharing technologies (IPs) and enabling competition. In this way, they can influence the market even further, and also grow their market segments. One good example of this is the smartphone industry where more than 200,000 active patents are shared and innovation is flourishing. New market segments in IoT, AR, VR, autonomous vehicles, deep learning, and AI should also follow suit.

The Case Against Agility

This article attempts to persuade readers to be caution against agility, first-mover advantage, and minimum viable product. Agility can be good in volatile times, but may be counterproductive in complex and uncertain situations. The first-mover advantage is an outright myth; giants like Google, Amazon, and Facebook weren’t the first to market. MVP is simply not viable for high tech companies, such as GE, or Boeing.

As a conclusion, the author offers three suggestions of how we can improve the way we create products and services. Firstly, ask these two questions: “If we are wrong, how quickly can we fix this and at what cost?” and “What’s our policy for testing the core idea at each stage?”; secondly, create simple messages to make your case; and thirdly, search for the “just right” middle between speed and tardiness.

If you have recommendations on articles you’d like to see featured, send them to insights@goboomfactor.com.

Innovation Weekly

This is the beginning of a weekly series of Boom Factor’s top picks in conversations on innovation.

Overcoming Innovation’s Roadblocks: Poor Prioritization by Nick Partridge

This article is the first part in a multi-part series for LPK Lab’s Roadblocks to Innovation, a set of tool in the form of a deck of cards that helps teams anticipate the leading project pitfalls and overcome organizational barriers. The article provides four simple steps that will help readers power through indecision. The author also provides a downloadable matrix that will help the process of prioritization, ideation, and decision making.

10 Deadly Sins of Corporate Innovation by Sergio Paluch

In this long format article, Sergio Paluch outlines what makes or breaks corporate innovation. He explained ten of the most common pitfalls that corporate–established companies and organizations–usually face in the path to innovation. It captures the struggle of leading a product innovation project from ideation to product-market fit, and the mistakes one should avoid during this journey. All in all, this long form article is worth reading, and it will surely strike a chord with those who are into the world of startups, innovation, and product management.

Government Innovations: Past, Present, and Future by Phil McKinney

Some may argue that government and innovation is like oil and water. The public sector is synonymous with rules and regulations, and long-winding red tape. However, Phil McKinney made a compelling argument in this article by stating that the government was, has been, and will always be at the forefront that spurs innovation. The article points out that policies set out by POTUS has been instrumental in determining the path of innovation in the US. Some influential presidents are mentioned in the article, including Woodrow Wilson who was key in aviation innovation, President Nixon who saw the need for the US to invest heavily in national defense, George W. Bush who ‘popularized’ LED lights, and President Trump who deliberately set up a department of innovation within the White House. In closing, the article explained some of the challenges which are likely faced by future administrations.

If you have recommendations on articles you’d like to see featured, send them to insights@goboomfactor.com.

10 Deadly Sins of Corporate Innovation

According to one of the most highly regarded innovation experts, Clayton Christensen, about 60% of corporate innovations never see the light of day and another 40% of those that are launched into a market never see a positive return on investment (The Innovator’s Solution, page 73). That means that only one in four innovations released by established companies are successful. After having worked on over fifty innovation projects for various companies and organizations, I started to see a pattern of constraints impeding successful innovation no matter the size of the company, the industry, corporate organization, or talent pool. Time and time again projects lagged, products got diluted, and useless solutions were built despite the best efforts of team members. A combination of outdated methodology, risk-averse culture, and office politics create a hostile environment for good solutions to take root in a market. This article lays out the ten most common and deleterious factors that I’ve seen suffocate successful innovation in established companies and organizations.

1. More than one person creating the vision and making decisions

When most people think about the most innovative companies in recent history, they tend to equate those firms with their leaders. Apple had Steve Jobs, Microsoft had Bill Gates, Tesla has Elon Musk, and Facebook has Mark Zuckerberg. We do not often think of groups of people when we talk about esteemed businesses or breakthrough products. Instead, we equate those companies and products with visionaries. Apple had Steve Jobs that brought to the world the iPhone among other disruptive innovations. Even though there were clearly huge teams behind the most famous innovations and many people contributed to their design and implementation, they were often driven by one visionary leader rather than a committee of corporate elites.

At the same time, many of the most challenging innovation projects that I’ve seen involve multiple product owners. This results in a disastrous dynamic for a number of reasons. The first common issue is that multiple product owners often do not agree on a single vision or on product decisions, and the more product owners there are, the less likely they are to see eye-to-eye. Every disagreement leads to substantial amounts of wasted time and halts the entire implementation team, which is hugely disruptive to productivity and moral.

Even worse than the wasted time is the outcome, which is the second impediment. Imagine if rather than Steve Jobs leading the vision for the iPhone, Apple had a committee of product managers and executives that set the product strategy and design. We’d probably end up with some kind of clunky mashup of a BlackBerry, a Motorola Razor, and the Apple Newton. (How many readers actually remember those products?) That is exactly what often happens in many corporate settings. Rather than empowering one product owner to lead the vision for an innovation, there are other executives or stakeholders that waltz in and impose their own ill-conceived changes and requirements without having immersed themselves in the need and solution design. The result is either a Frankennovation or a watered down, forgettable product that has no chance in the market.

Many of the innovation leaders that we admire founded their companies on disruptive innovations for which they provided the vision and around which they rallied their team. Indeed, it’s no coincidence that most startup businesses have three or less co-founders. Some investors and accelerators won’t even invest in startups with more than three co-founders. Moreover, even those startups that have more than one founder, one is usually entrusted with the product strategy and implementation, while the other founders focus on running the business and marketing the innovation.

Of course, having one product owner that is responsible for the product vision and decisions does not mean that nobody else has a voice. One of the central roles of the product owner is to listen to his or her stakeholders, process their feedback, and decide what to act on and what to disregard. There are exceptions to this rule such as Larry Page and Sergey Brin leading Google, but there are almost never more than two leaders, and even two rarely produce successful innovations. Any organization that does not empower its product owners to own the innovation vision and make product decisions is setting its efforts up for failure.

2. Product owner working on other projects concurrently

How many founders do you know that are working on multiple startups at the same time? Did Bill Gates create the Microsoft operating system while working part-time on another innovation? You would be hard pressed to find examples of innovation leaders successfully creating multiple breakthroughs at once. There is a simple reason for that. It’s hard enough to create one successful innovation that trying to lead two such successful efforts at once is basically impossible. Innovation just takes too much time, energy, and mental engagement to leave any extra capacity for a second or third innovation.

Now ask me how many times I’ve seen innovation leads and product managers working on two, three, even four innovations projects at once in a corporate setting. It happens all the time! If your company truly wants to create meaningful and viable innovations, you absolutely cannot allow your innovation leaders to work on multiple projects at once. If you do, you might as well write them all off. Instead, ensure that your product managers and intrapreneurs (internal entrepreneurs) only need to focus on one breakthrough at one time to allow them to truly live and breathe the problem, solution, implementation, and go-to-market efforts.

3. Product strategy and design are created by committee

Early on in my career, I was leading the strategy and design for an innovation project for a large government organization. Our team kicked off the first day of the project by gathering all the official project stakeholders in an auditorium; there were well over thirty people in the audience. Unfortunately, the expectation had been set that all the stakeholders would have input on each deliverable as the project went on.

This turned out to be a Titanic disaster as each review cycle took weeks and the design process seemed to never end. Our team would finish a round of product design, and then we’d spend the next week or two just getting stakeholders in the room for a design review. We would gather everyone’s feedback and incorporate it in the design. Then we’d have to spend another week or two getting everyone in the room again to review the revised design. In the process, those stakeholders that could not make the first review would send their feedback separately, so we’d have to reschedule the review meeting to incorporate the last-minute feedback. This pattern went on for months. Not only that, once we started building the solution, some stakeholders insisted that we stop because they felt that their feedback was not fully addressed.

It’s simply a matter of probability that the more stakeholders you have, the smaller the chance that you will be able to get everyone in a room or get everyone’s feedback in a timely manner. At the same time, it becomes more likely that stakeholders will disagree or will try to torpedo your efforts if they are not happy. Yet are internal stakeholders the true customers of the innovation that you are creating? Unless you are making an internal tool, the answer is probably ‘no.’

The primary stakeholders to whom you should be listening are customers. It is critical to set the expectation internally that unless internal stakeholders are the beneficiaries of the innovation, they are not guaranteed a say in the product strategy, design, or implementation. Once again, they should be welcomed to provide their feedback and insights, but the timing and direction of the project should not revolve around internal stakeholders if your organization does not wish to innovate at a glacial speed. The challenge is that this is often a cultural shift for established companies and this shift in thinking often needs to come from upper management.

It’s also important to note that although the above example was clearly from a waterfall based project management approach, the same inefficiencies and risks exist for agile product development efforts. In fact, they are often worse because instead of stopping just the business or design team in their tracks, stakeholders would be stopping the entire implementation team including project managers, business analysts, designers, engineers, marketers, etc.

4. Product owner never experiencing the problem firsthand

One of the key questions that venture capitalists and angel investors ask of entrepreneurs is what personal experience do the founders have with the problem that their solution is seeking to solve. This is because the founders bring a mission to the company and a vision for a solution, so they need to have completely internalized all the details of the problem. The best way to truly understand something is to experience it yourself, if possible. Although observations and interviews are great, they cannot substitute the thoroughness of understanding that personal experience affords you. It’s no coincidence that some of the most innovative products that we know today such as AirBnb and Mint started with the founders intending to solve their own challenges.

Many innovation leaders at established organizations that never take the time to experience the problem themselves. Indeed, I was guilty of skipping this step many times early in my career until I saw that lacking the insight and intuition from first-hand experience really stymied my own problem solving capabilities and intuition. I often found myself architecting solutions based on assumptions that eventually turned out to be wrong, and those product designs tumbled like a house of cards. When product owners have personal knowledge of the problem and solution space, they can build their innovation on facts rather than assumptions leading to a much higher likelihood of success.

Of course, it’s very rare that the market opportunity that the company wants to pursue exactly matched the innovation leader’s personal challenges. Instead, it’s much more likely that the product owner has to simulate what it’s like to experience and solve a certain problem. For example, long before I bought my first home, I was working on an innovation project for a large financial institution and was responsible for leading an innovation project to help bank customers find out about and apply for a mortgage. Even though I didn’t actually need a mortgage, I went through the application experience starting from square one: needing to learn about different kinds of mortgages. As MIT innovation expert and author Luis Perez-Breva states that sometimes innovation leaders need to prototype the problem, so they can experience it firsthand.

5. Product owner not leaving the building to talk to and observe people

Clayton Christensen recounts the story of Sony in The Innovator’s Solution. Christensen asks why Sony was so incredibly innovative in its early years, spawning a number of market-defining breakthroughs such as the Walkman, while it struggled to create disruptive innovations later in the company’s history. He explains that the main difference seems to have been a change in culture and approach to innovation. In the early days of Sony, the founder, Akio Morita, focused on observing and questioning people to understand what they were really trying to get done in their everyday lives. Steve Blank, another top innovation expert, coined this approach as “getting out of the building.” This approach helped Morita and his team find day-to-day challenges that people faced that could be solved for them with innovative engineering.

As Christensen points out, this period of innovation ended around 1981 after which point Sony did not create another disruptive innovation for another eighteen years. The main change during this period was a shift to hiring product leaders with MBA training to lead innovation efforts. Christensen writes:

In the early 1980s Morita began to withdraw from active management of the company…. To take his place, Sony began to employ marketers with MBA’s to help identify new-growth opportunities. The MBA’s brought with them sophisticated, quantitative, attribute-based techniques for segmenting markets and assessing market potential. Although these methods uncovered some underserved opportunities on trajectories of sustaining improvement in established markets, they were weak at synthesizing insights from intuitive observations. (80)

Indeed, in my own experiences I have witnessed a great number of product owners conceive solutions without ever personally observing or talking with customers. Quite to the contrary, those innovation leaders build complete product strategies based on spreadsheets, PowerPoint presentations, and summarized second-hand research. Once again, the typical way that leaders in corporations formulate their mission and product vision is based on generalities and assumptions rather than on detailed first-hand knowledge. It’s perhaps no wonder that a great majority of innovation efforts fail given this kind of a genesis.

Imagine if great innovators such as Mark Zuckerberg, Steve Jobs, and Akio Morita conceived their breakthrough products completely from within a boardroom. How likely do you think it would have been that a Facebook, iPhone, or Walkman would have ever been implemented as we know them? Certainly Facebook is not the only social network of the era, nor was the iPhone the only mobile phone that customers could buy. It was the details of their implementation that made Facebook and the iPhone stand out from competition and eventually dominate their respective product spaces. Can you imagine any survey or market segmentation providing the insights necessary to conceive of an iPhone or Facebook? Innovation leaders that do not get out of the building and speak to the people they are trying to serve are only setting themselves up for failure.

6. Never validating that the need actually exists and is big enough

According to one CB Insights study, about 42% of startups attributed lack of market need as a key reason the venture failed. Although I haven’t seen a similar study for corporate innovation efforts, I’m willing to bet that even fewer solutions conceived and implemented by established companies find a market need. It is exceedingly rare that product owners in established companies validate the market need in the field by speaking to and observing people, and projects often get green-lighted without convincing indications that a particular problem actually exists and that it is acute enough to address with a new product or service.

Moreover, those same innovation leaders often do not spend enough time with potential customers to understand the underlying details of the problem or why other existing solutions fail to address those details. Instead, they often rely on general market research that asks sweeping questions such as “Are you currently satisfied with your current mobile phone?” but does not provide the detailed information needed to truly understand an opportunity space and how a new innovation can improve on existing solutions. Of course, it’s not possible to answer those questions with absolute certainty, but all innovation leaders should seek to validate the need through conversation and observations and not just high-level surveys or other generic marketing research tools before leaping into a multi-million dollar innovation project.

7. Starting to build before validating solution

Does your company need to spend millions of dollars and years to validate whether your solution might be viable? Certainly not. In fact, it is often possible to get insights about a proposed solution from real people without building anything. Often times, showing people a product design or simulating a service is enough to get meaningful, actionable feedback. There is certainly a time and a place for building prototypes and minimum viable products to test solutions in truer contexts, but it’s often worth it to consider ways of testing a solution in ways that would require little or no engineering. In many cases, it’s enough to show people product designs or to manually simulate automated tasks.

For example, let’s say that your company is a financial institution that identified a need to help customers choose financial products, and the solution your team came up with was to create a chatbot with artificial intelligence (AI). Rather than actually building an AI-powered chatbot, you might simulate it by allowing customers to type in questions and return answers manually rather than using AI. There is no need to build an expensive AI engine to validate whether or not an AI-powered chatbot would be a good solution to this problem. Perhaps you’d find that a chatbot is just not an appealing way for customers to make such important financial decisions. It’d be good to know that before embarking on a costly engineering effort.

Often times, innovation teams will launch right into building under the guise of calling their work an “minimum viable product” or MVP. However, even though this term is in vogue, just calling something an MVP does not mean it’s actually minimal, and a multi-year, multi-million dollar project is almost certainly not a “minimum viable product” unless your business is a pharmaceutical company. A minimum viable product is meant to be a market-ready implementation that captures just those essential features to satisfy early adopter customers. An MVP is not meant to test the viability of a solution; prototypes are meant to do that. Creating an MVP should follow validation of the solution rather than being an instrument for the validation itself.

An even greater misstep than building solutions before they are validated is building solutions without really defining the problem or understanding the details of the problem. It is very common for companies to approve projects based on ideas rather than real market opportunities. They almost always start out with “our customers will love this product” or “our customers need this product.” Once again, successful solutions are built on the details of real-life challenges and not on assumptions.

8. Focusing on details that don’t really matter to customers

During one innovation project where I was leading the design and engineering teams, the product owners debated what shade of blue to use for over two months wasting hours of meeting time and stalling implementation. On another project, a product owner went through at least a dozen designs of one tiny icon that was found on a page buried deeply on an online tool — an effort that lasted in excess of three months and required many days of revisions and review. In both cases, our innovation teams were working on “minimum viable products.” I wish that I could say that these kinds of practices are uncommon on innovation projects in established companies, but unfortunately I have seen this pattern repeated constantly.

Customers will not choose a product simply because it is turquoise blue or sky blue or because some icon that they will rarely see satisfies their sense of aesthetic. Instead, people have limited time, attention, and cognitive bandwidth in a world where they have to process 34GB of information, make 35,000 decisions, and evaluate probably dozens of product options every day.

Many prominent entrepreneurs focus on just two or three key features that will distinguish their product from the competition. For example, Paul Buchheit, who led the invention of GMail at Google, chronicled how his team focused on just three key features when creating the first version of the breakthrough web-based email client:

  • Outstanding search for email (something Google was already great at)
  • Threaded email conversations
  • Practically unlimited storage (initially 1GB, which as more than nearly anyone needed in 2004)

Stewart Butterfield, the founder of Slack, followed a similar ethos in creating the wildly popular business messaging app. The Slack team likewise focused on three key features:

  • Outstanding search for conversations
  • Synchronization across devices
  • Seamless file sharing

Buchheit and Butterfield didn’t build products with just three features, but they focused their team’s efforts to perfect those features that would make their solutions stand out from the competition and made everything else good enough. Later on, as GMail and Slack gained plenty of traction, their respective teams could focus on the other details and fine-tuning their products as they went on to dominate their markets.

Unfortunately, the opposite is often true with regard to innovation projects at established companies. Rather than focusing on two or three key features meant to squarely meet a customer need, corporate product teams tend to spend too much time on second-order details that don’t really matter to most people. Even worse than that, those teams spend time and resources on making everything perfect before validating the core problem is substantial and their solution is better than alternatives. This mentality is what gives rise to multiyear, multimillion dollar “minimum viable products” and leads to unimaginable inefficiency and loss.

9. Not continuing significant product improvements after launch

A common practice among startups is getting a minimum viable product to market quickly and then iteratively improving it once people use it in a real-life context and can provide feedback based on reality rather than conjecture. This approach let’s startups adapt quickly as they receive fresh input from customers. At the same time, they can build new features incrementally rather than spending tons of resource on creating feature sets that might turn out to be poorly implemented or just not useful to customers.

Unfortunately, corporations tend to launch innovation projects and directly go into maintenance mode rather than treat the launch as the beginning of empirical product development conducted in a real-life context rather than in a lab or conference room. This misstep is often driven by spending too many resources going to market with the initial implementation and running out of runway to iteratively perfect the product after launch. It is critical, therefore, to launch early and build into all innovation projects a period of iterative product development once the minimum viable product has been launched in the real world.

10. Never finding product-market-fit

No matter how great an innovation is, it is worthless if the business does not effectively find and reach a group of people that will use it or buy it. Any impactful innovation needs to provide a superior solution to an acute problem. Additionally, the company needs to find and effectively reach the corresponding market. Product-market-fit is when the right solution meets the right market. However, companies often just launch innovations and fail to find traction for them in the market. Worse, some companies never even try to validate whether or not the company has found the right market for the innovation and if it meets people’s needs well enough that a significant number of them will pay for it or will use it regularly.

Many established companies launch innovations but never ensure that they can effectively reach the right customers. Instead, those companies launch solutions without organic product-market-fit — traction with customers that is not bolstered primarily by the company’s brand or marketing spend. Why engage in costly efforts to create innovations if they are left to drift along and sap the company’s brand equity or marketing resources? Creating a solution is just one part of product-market-fit. Without spending resources to ensure that the solution reaches traction in the market by measuring adoption and iteratively improving the solution, companies miss the other half of what is needed to create a viable innovation that adds to — not detracts from — the company’s bottom.

Avoiding the 10 deadly sins of corporate innovation

There are a number of pitfalls along the long journey of innovation in established companies, but it’s possible to avoid them and increase the probability of creating successful solutions. To a large extent, the above challenges can be mitigated with good planning and setting the right expectations. For example, it’s important to plan for project phases aimed at understanding the problem and validating solutions early. At the same time, by setting expectations that the product owner will be solely responsible for the vision and major strategic decisions, leaders can ensure that their innovation efforts won’t be stymied by design-by-committee and endless review and feedback cycles. We will cover specific tactics to address the innovation challenges mentioned in this article next week, so be sure to check back then.

Why We Changed Our Name to Boom Factor

We recently changed our name from Montparnas to Boom Factor. As with any name change, it wasn’t just about the name; it was about capturing a new vision for our company. Having seen numerous clients struggle with building viable, innovative products, we saw an opportunity to combine our experience building startups and leading innovation teams to help solve this problem.

The problem is that established companies often spend too much time and money building products that either fail once in the market or simply fall short of being a breakthrough innovation. There are many factors driving this problem, and many agree that a critical missing element is a leaner approach to the development process. It is a key reason why startups are able to disrupt more established companies with smaller budgets and teams. So, what is the lean startup process? It’s best summed up by Steve Blank:

The Lean Startup is a process for turning ideas into commercial ventures. Its premise is that startups begin with a series of untested hypotheses. They succeed by getting out of the building, testing those hypotheses and learning by iterating and refining minimal viable products in front of potential customers.

– Steve Blank

A startup’s ability to disrupt is why bigger companies end up acquiring these startups or even investing in early stage ventures. However, larger companies will always need to be able to build products on their own that can break through. Considering our clients’ innovation problems and the experience we had building and growing products in startups using the lean methodology, it was clear what we needed to do. We needed to offer our services as a lean startup that could build viable, breakthrough products in market spaces indicated by our clients.

Before I explain what we do, let me summarize the issues we saw that we are addressing.

Innovation Mistakes Companies Make

Not Talking Face-to-Face With Customers

A key misstep companies make is simply not talking to enough customers face-to-face. This is often overlooked at the most critical point in the process: at the very beginning, before massive investments are made. This step is necessary to validate that the problem exists and that it is worth solving.

Getting out and talking to people is a simple step that reveals the nuances in the customers’ lives, how frustrating they perceive a problem to be, what workarounds they use, and whether that extra effort warrants buying into whatever solution the company puts forward.

1. Starting with the Solution

Another common issue in the innovation process is that companies fall in love with a solution before validating that it solves a problem their customers actually have. In the absence of objectivity and proper validation, the company dives straight into a multi-year development cycle to build out the “perfect” product, while product owners are taxed with contriving a customer problem to justify the product. On rare occasions, the solution can stumble upon a problem, but often it is all wasted effort that could have been avoided.

2. Building Unnecessary Features

After identifying the problem and deciding on the solution, the next big hurdle is getting the product out and in the hands of customers. Again, this is where a company and product owners can be their own worst enemy. Instead of focusing on the features critical to proving out the solution, they often prioritize excessive features and try to build to scale before they know whether the core features solve a real problem.

3. Building for Perfection

Quality is important, but perfection has always been the enemy of speed. I’ve seen “MVP” projects span past three years for something that could be created in 3 months. Meanwhile, competitors steal market share with what are considered sub-par products. What tends to occur in the end is that the product is rushed out the door since it has taken so long to launch, and is then released as a poor quality, over-engineered and stale product that stands little chance of success.

4. Designing by Committee

In many companies, there is no clear single product owner, and even when there is, that person’s decisions can often be overridden. Product designs and features are created and recreated to suit the opinions of many internal stakeholders, and the larger the group, the harder it is to reach consensus, the longer the review cycles and the more shifts that are taken. Many cycles are wasted and sometimes work thrown out when trying to cater to all these varying viewpoints. It frustrates the team, elongates timelines and can leave everyone feeling dizzy.

5. Ignoring that Failure is Part of the Process

At its core, innovation is risky and success is never guaranteed. The failing to acknowledge this is best broken down by process and structure, and culture.

Process and Structure: Innovation needs to be done in baby steps to stay nimble and iterate with new information all along the way. Many of the aforementioned issues are a manifestation that the company has not structured itself or its processes in a way that supports innovation.

Culture: We’ve heard many times that the most innovative companies celebrate failure. This is a key missing element in many companies that try to innovate. How many times have we seen a company aim to create something innovative, and then slowly pull back risky features until they are left with an ordinary product that matches the competitive landscape? If incentives and culture do not reward risk-taking, even when they are not successful, innovation will continue to be out of reach for that company.

 

All of these problems may seem insurmountable as they require fundamental changes to how a business operates and thinks, but what if viable innovative products could be produced with an outside partner — one that already employs the Lean Startup approach? This is what we at Boom Factor offer: a startup for hire.

How We Address The Innovation Problem

We address the above problems for our clients by creating our own startup teams geared toward building a viable product based on the challenge provided to them. These teams apply the lean startup methodology: using rapid iteration cycles and experimentation to develop, test and grow a given solution. In the end, we deliver a product that has not only achieved product-market fit, but also shown traction and scalable growth.

Getting Out of the Building

Rather than jumping into solutions, our startup teams first dive into understanding the details of the underlying challenge and the customers better than you or any of your competitors. We do so by getting out of the building and talking to as many people as we can in real-life situations rather than in a lab or focus group room. In this process, we seek to validate a given problem before considering any potential direction.

Develop the Product Vision

Once the team has talked to and observed dozens of people, they formulate several product ideas. They then select the one that most clearly addresses the problem, seeking additional input from potential customers, if needed. Once a direction is set, the next step is to quickly get a minimum viable product in front of real customers.

Test the Solution As Early as Possible!

Our teams truly seek the fastest way to validate a given solution: if the team can test the solution with a paper prototype or manual process, they will! If not, they focus on one to three main features to build a strong MVP and get it in the market in a matter of weeks or months, not years. At this stage, rapid iteration then becomes the focus.

Iterate to Product-Market Fit

Our teams launch early because the product development process really starts once a product is in customers’ hands. It’s only once real people start using the product in their everyday lives that we can identify what is resonating and where gaps exist. The startup team obsessively listens to customers’ feedback and questions and constantly monitor behavior patterns and measure key metrics to help guide the next iteration. They continually improve, and change course as needed.

Our clients are kept involved in the process along the way, seeing how the product evolves and sharing in the insights; however the design and product direction is owned by the startup team who stays close to the product and customers all along the way. Only once we see steady, sustainable adoption and engagement, do we gear up for handing over the reins.

Grow and Hand Off

Once product-market fit is reached, we help build out the growth strategies and lay a solid foundation from which our clients can take the business forward. The startup team works closely with the client across disciplines to transfer any gaps in knowledge and learnings from each of the iterations of the product. They review key metrics and explain critical decisions that helped steer the offering. Finally, they work with the client to identify key opportunities for growth and features to explore for future iterations.

 

So Why the Name “Boom Factor”

We needed a name that captured what a startup can bring, and for us it was Boom Factor.

Boom Factor alludes to our ability to move quickly and the way we can accelerate a business. It captures the fact that we go beyond just designing or building things, and instead deliver the ultimate resounding artifact: a product with proven traction.

We hope that you like it and will join us on this journey. We love to hear from our readers so do tell us what you think in the comments or by dropping us a line: hello@goboomfactor.com.

Biggest Mistake that Product Managers Make

Entrepreneurs can be considered the ultimate product managers, taking an idea from just a concept, and building out a product without the help of existing brand recognition and boundless resources. In many ways, product mangers within companies can learn a lot about how to develop a successful product by examining what successful entrepreneurs have done in building their own products/businesses. In practice, there are several things that overlap, such as, iterating the design, prioritizing features, measuring performance, etc.; however, a key missing element for product managers in established organizations versus entrepreneurial product mangers is actually talking to the customer.

 

Whenever an investor is looking at an entrepreneurial venture, they often evaluate the potential success by understanding how the founders have gone out and validated their idea with potential customers. They want to know that the idea has pivoted based on real information from real people. Of course too they want traction, but numbers can also be deceiving and they often invest in the team over the idea. In the end, seeking out what your customer needs, experiences, feels goes beyond all the market research one can conduct and can add qualitative validation that put the numbers in perspective.

A Second-Hand Account

If we look at how organizations evaluate the success metrics of a product owner, we’ll see a wide-range including number of products released, level of engagement across products, market penetration and post-launch sales. Whether these are the right metrics and how to measure them is a separate issue, but to meet these goals product managers employ all sorts of research and tools.

 

When it comes to hearing from the consumer, the sad truth is that it is often that they are consuming second-hand information. For example, customer service tells them that so-and-so is the issue, or a third-party vendor has conducted some research and say X is really what people will pay for. How many product managers have you known to actually call or step out of the building and talk to the customer? Why is this not the standard?

 

In the startup realm, you just won’t make it very far not stepping out of the building. Almost every entrepreneurial guide (or success story) tells you — you must talk to people, evolve your idea, get other people’s perspectives. When you consider that significant product development is often a year plus investment, it’s incredible to think that a small portion of that time is not taken to really speak to (and listen to) the very people to whom we plan to sell.

What About Traditional Research?

Traditional research certainly helps to provide information about consumer perspectives and it is not to say that these should not be done. However, let’s consider the power of the first-hand account. I’ve met several marketers who have watched focus groups and said things like ‘wow, I didn’t know that kind of perspective existed’ or ‘I had no idea that this was a problem’ or the list goes on. In the same way that user experience professionals insist on doing testing as the product evolves — you don’t know what you don’t know! Without speaking to people and constantly seeking their thoughts, how do we know we’re on the right path.

 

Also, let’s consider how often traditional research is done. It’s never cheap and waiting for traditional research to occur at various spread out times in the development cycle is really missing the opportunity to get some first-hand accounts. Doing so allows you to continually adjust your product roadmap and keep you in touch with your customer in ways that could even build more loyalty.

 

But It’s Unreasonable to Keep Talking to People!

Well, is it? Consider the entrepreneur who surrounds himself with early adopters and creates panels of early testers who feel involved in building the product. How can it be that such enthusiasts can be built from zero, but established brands can’t do the same. Making these panels accessible to real product managers who make the decision could be extremely worthwhile! The insights are there waiting to be harnessed as customers like to be involved (and those that don’t will opt out). More and more companies are building these bases, but often under-utilizing them with impersonalized surveys that show no results to the participants. This is setting up a takers-only relationship when a conversation and follow up on ideas could be much more mutually-beneficial.

 

So, what are you waiting for.. get out there and start talking to your customer. You may be amazed by what you find out and how happy they may be to speak with you!

Customer Journey Mapping

Customer journey mapping is not just a technique for big-budget projects or companies, but a critical step in understanding your customers’ needs, desires and pain points. They allow you to stay focused on the consumer, and to identify the ways that you can better serve them.

So what are customer journey maps anyway?

A customer journey map is an illustration of a customer’s experience engaging with a company and its product or service. The map can tell the full story covering the entire customer lifecycle from initial contact to activation, engagement, and beyond or focus on only a part of the story that lays out interactions or touchpoints critical to part of the customer’s experience. What makes these maps unique to traditional funnels is that it focuses on the customer and the questions and motivations behind his/her behavior. This helps to humanize the problems and thus put the consumer at the forefront of a company’s mind and strategies.

These are fairly easy to construct (depending on the level of sophistication you use), and require you to do something you should be doing anyway: observing your customers and talking to them!

There are several forms of journey maps to be aware of, based on the scope of the visualization:

  • User Experience Journey Maps: to chart the digital experience
  • Sales Journey Maps: to chart the path through the sales funnel (awareness to purchase)
  • Customer Journey Maps: to holistically examine the full experience

We will focus on the last of these as it is the most expansive, most used, and often the most impactful in identifying big impact areas, and understanding your consumer’s full experience (which is what they will remember).

Another set of customer journey maps depends on the stage of the product. They can be either:

  • Retrospective Maps: in the case of existing products and with actual users where we map existing behavior OR
  • Prospective Maps: in the case of new products where we map how expect a consumer will behave

Here we will be focusing on retrospective maps.

Read More

Growth Hack Your Site in 3 Steps

Do you want to hack your site’s growth, but don’t know where to start? Well, this article is for you! Growth hacking can be very complex, but it doesn’t have to be. It doesn’t matter if your site is an app, a marketing site, or an ecommerce site. In this article, I will show you how to improve your registrations or any other conversion metric in three steps with leading tools in the growth hacking tool belt: Google Analytics, CrazyEgg, and Optimizely. Let’s get started!

Step 1: Tracking your goals with Google Analytics

The first thing that you need to do is identify your main goal and figure out how you are going to measure it. Let’s say that your goal is to improve the conversion rate of user registrations. Most sites will have both a registration page and a “thank you” or confirmation page after they have submitted their registration. The simplest way to track this is to use Google Analytics to track how many times users land on the registration confirmation page. To do this, you first have to set up a goal in Google Analytics. (Follow the instructions for setting up a destination goal in Google Analytics https://support.google.com/analytics/answer/1032415?hl=en.)

Setting up goals in Google Analytics

Setting up goals in Google Analytics

Now that you have set up your goal, Google Analytics will start tracking what percentage of all visitors end up on the registration conversion page. Let’s say that you have 1,000 users that came to your site. Out of that 1,000 users 20 clicked on the “Register” button and landed on the registration page. Of those 20 that landed on the registration page, 10 actually completed the registration and landed on the registration confirmation page when they submitted their information. That means that the conversion rate on the registration goal was 1% (10 out of 1,000).

You could also set up a second goal to track how many people get to the registration page in the first place. If you were tracking the second goal, the conversion rate of all the people that came to your site and got to the registration confirmation page would be 2% (20 out of 1,000). If you wanted to increase the overall conversion rate for registrations, you could both increase the number of people that get to the registration page (goal 2) and make the actual registration form easier (goal 1). It is often best to break a long process into small parts and optimize them one-by-one.

Let’s say that we first want to optimize how many people get to the registration page. In other words, we will optimize the conversion rate of people navigating to the registration page. We can take a look at the conversion rate for goal 2, which is how many people, out of all those that visit our site, get to the registration form. (You may not have statistics right away, so you have to let the analytics to run for a period of time.) Imagine that you let your analytics run for a week on goal 2 and you find that the conversion rate is 2% as in the example above. That’s your base rate–the number you want to beat.

The next step after you get your baseline is to get a better idea of how folks actually use your site, so you can come up with some intelligent experiments to try. One of the best ways to do this is to use a click tracking tool like CrazyEgg.

Getting intuition with CrazyEgg

Even after over a decade of designing interactive products and conducting user testing, I am still continually surprised by how little I can anticipate. Users are incredibly complex and have needs, tastes, and whims that are very difficult to anticipate. Not only that, people tell you one thing and do another (not an earth-shattering revelation). That’s why nothing beats actually seeing what people will do on your site when completely left to their devices. Click tracking software like CrazyEgg is brilliant for this. You can see exactly where your users are clicking or, more importantly, not clicking.

CrazyEgg Heat Map

Courtesy of CrazyEgg

Let’s say that you studied your analytics and you found that the main way that users get to your registration page is from the home page. Therefore, you will want to know how your users are interacting with the home page. In particular you will want to see how many people are clicking on the registration buttons and links. That means that you’ll have to set up a “snapshot” in CrazyEgg for your home page. If the majority of your traffic comes from desktop, you’ll want to capture the snapshot as users with a desktop would see it. If most of your traffic is from mobile, you’ll want to start with the mobile view first. Usually, you can start to see patterns after only a 100 or 200 user clicks. (Follow these instructions on setting up a snapshot in CrazyEgg http://help.crazyegg.com/articles/68-adding-a-snapshot.)

After running the CrazyEgg snapshot for a couple of days, you might find that most people are clicking on the big banner image in the center of your home page, but not on the registration button at the top of the page. With this information in mind, you can think of ways that you can get more people to click on the registration button. You posit that you could make the registration button more prominent by making it orange and a little bigger. You also think that you might get more people to click on the button and go to the registration page if that button is moved from the very top to the center of the page, perhaps over the big banner image that everyone seems to be clicking.

Running experiments with Optimizely

You come up with a few other ideas about how to get more of your visitors to click the registration button and are excited to try your ideas, but how will you know which of these experiments is actually going to increase the proportion of visitors that navigate to the registration page? You could track the weekly change in registration traffic or even the conversion rate for your goal, but you know that the amount and composition of traffic varies wildly from week to week. Given that, how can you be sure you’re not making deleterious changes to your home page? One of the simplest ways to test your hypotheses is A/B testing, wherein you try two versions of one page that are exactly the same except for one thing. One of the leading platforms that allows you to do A/B testing is Optimizely (https://www.optimizely.com/).

The benefit of using Optimizely is that it has a very user-friendly interface and does not require your to actually make different versions of a page yourself. Instead, Optimizely makes changes to your page’s HTML on the fly, allowing someone with even limited HTML knowledge to test variations to a page. There are other great A/B testing tools out there, and you could even do A/B testing with Google Analytics, but they are not as user-friendly and powerful as Optimizely. (Follow these instructions on setting up an experiment in Optimizely https://help.optimizely.com/Get_Started/Get_started_on_web_optimization.)

 

Optimizely Screenshot of Experiment Results

Optimizely Screenshot of Experiment Results

Once you get Optimizely set up on your site, you can create and run experiments. You can add and hide elements such as buttons and images, change colors, text size, copy, and so on. Let’s say you want to see if making the button visually stand out more is going to lead to a greater proportion of visitors clicking on the registration button on the home page. To test this, you would create an experiment for the homepage where you would create a version with a big orange button. After running the test for some time, Optimizely can tell you whether the current small, blue button or the new big orange button leads to a higher conversion rate. It turns out that you were right, and the bigger brighter button is much better at getting people to click on it. You now move onto your next experiment. Perhaps you’ll try moving the registration button to the center of the page now.

Growth hacking is easy as 1-2-3

Congratulations, you are now a growth hacker! But this is just the tip of the iceberg of what you can do. Even thinking of just the registration process, you could optimize other pages leading to the registration page. You could try a number of ways to optimize the registration page itself. You could try different messaging and marketing. Not only that, user registrations are just one part of overall user growth. You can also experiment with ways to optimize your product, marketing, and operations to improve user retention and engagement. The possibilities are truly endless, and there are a plethora of tools that help you evaluate your experiments and track metrics.

Do you have any good examples of growth hacking that you’ve done?

 

What Goes Up, Must Come Down: Keeping Sane on the Startup Rollercoaster

One of the most important things that I’ve learned in the three years that I’ve been working on our startup, AtmaGo, is that it really is a rollercoaster ride. I’ve heard this many times before from experienced entrepreneurs, but nothing can really prepare you for the reality. At the beginning, your startup’s trajectory will be chaotic. The key thing is understanding the ebbs and flows of your startup and making wise decisions in an ever-changing landscape rather than making bad, emotional decisions.

 

Euphoric Space Shot

I’ll start with the less deleterious mistake that most new entrepreneurs make. You just launched your app, and you’ve had pretty anemic adoption for a few months. You have a few dozen users, and you’re starting to think that this entrepreneurship thing was a huge mistake. “Why didn’t I stay at Google?” you ask yourself. Suddenly, you get a few hundred user registrations in a couple of days. All of the sudden you feel like Mark Zuckerberg! You are the new startup hero. You’re gonna be bigger than Facebook! You have some seed money in the bank, and you’re convinced that you’re going to close a huge series A by demonstrating this great traction. You, your co-founders and your two engineers throw yourself a congratulatory party. Hit up the club, drop a couple K. You’ve made it.

The next day you’re posting a job requisite for a “rockstart engineer for a super hot startup.” Then you get back to actually doing your job and look at your metrics. Shit!! Your user registrations are back to a trickle. You scramble to figure out what happened. Your magical growth just evaporated. You feel like the biggest idiot on this side of the Mississippi. Did I really just blow nearly $2K at a club last night? What happened? Why did we get this huge spike in registrations? And, more importantly, where did it go? Upon some basic investigation, you find that you app was mentioned in a pretty popular tech blog, but now that the post is buried, you are too.

This is an exaggeration (I’ve never come close to blowing $2K at a club), but this story will resonate with a lot of new entrepreneurs. You get some great news such as your metrics spiking, a mention in a super-popular blog, a promise of funding, and you make decisions based on this new high. The problem is that with an early-stage startup, this high will almost always evaporate pretty quickly. Rather than going on a spending or hiring spree right during this whirlwind of euphoria, give it a bit of time. Wait for things to settle back down. If they don’t, amazing! You’re one of the lucky few. But things will probably stabilize back down at a new equilibrium, which will likely be higher than the old one, but not by as much as you hoped.

Startup Tip: When amazing things happen, celebrate them, but then quickly chill out! Remind yourself that it’s a long and chaotic journey, and there will be many more ups as well as downs.

 

Pits of Despair

So two months ago you had that amazing spike in user registrations (or your favorite metric), and since then basically crickets. You are feeling a combination of panic and depression. You’re back to questioning if this startup thing was the biggest mistake that you’ve made in your life. You’re stressing about all the people you’re disappointing. You’re thinking about dropping this entire product direction and making a huge pivot to a market space that you’re not that familiar with. Or worse, you’re planning your exit strategy.

You start second-guessing yourself. We can’t possibly have product-market fit, but what was that spike in registrations two months ago? Maybe we really do have product-market fit? If we pivot, we’ll be starting at square one. We might be worse than we are now. Maybe we have no idea what we’re doing and should fold up shot? Going back to Google might not be such a bad idea. But I have this urge to build something on my own, with my co-founders. Maybe my team is the problem? Maybe I’m the problem, and I should quit?

You should quit. Quit freaking out. What goes up, must come down. The reason why I think this is the more dangerous state is that those decisions seem to have bigger ramifications than a spending spree. Unless your startup is one of those exceedingly rare unicorns, you will have those troughs of despair. Don’t make huge decisions when you are in those dark places because you will almost certainly make a bad decision based on a temporary state.

If you do need to make critical decisions, try your best to imaging what the average state is likely to be. Perhaps before the spike you were getting a dozen new registrations a day, then you got a few hundred in a couple days, now you’re back to a dozen. If you keep working on your product, outreach, and marketing, you’ll likely grow it it a few dozen per day. Assume that’s your average trend for the next few months, and make a decision on that information rather than on your negative emotions. On the other hand, if another couple months go by, and you haven’t made much progress, it really might be time to make a bold move.

Startup Tip: Weather the storm before making bold moves. If the storm does not abate, you should consider a bigger change.

 

My Rollercoaster

For my part, I’ve been on this rollercoaster for almost three years with AtmaGo. I initially over-reacted when things were really good or really bad. But after a few blast-offs and after passing through some valleys of darkness, I know now that neither state is permanent and try to plan for the average case. It’s a very long journey, and you have to try to husband your resources as well as mental and emotional energy. Hope this post helps you keep things in perspective and make better decisions!

What are some euphoric  experiences or moments of despair that you’ve endured and what did you learn from them?