Corporate Startups are becoming more and more popular. Many companies choose the Lean Startup method, as used by Uber and Airbnb. Because that means success is guaranteed, and we’ll just keep going until it’s time for the champagne. Right?
The aim of every startup is success. Of course, we all know the statistic that nine out of ten startups don’t make it, but “Hey, that’s all those loser clubs on the second floor, right?” And when I speak to one of those starters two years later, and it turned out he was one of the nine, that same statistic is used as an excuse. And that’s fine. Two years of eating peanut butter sandwiches won’t kill you. And you probably learned a lot.
Luckily, in most cases, you don’t have to muddle through for two years before realising your innovation has no chance of succeeding. If you follow the Lean Startup philosophy, then you will often know quite early on in the process that you cannot get the right problem-solution fit. In other words: you will discover that nobody wants your product.
What are the tell-tale signs — apart from hard numbers — that you are heading for a dead end? When you and your team find you stopped taking your ambition seriously . When you put off important presentations. When you notice you are not comfortable talking about it at parties. When nobody puts in any extra hours anymore. When you would not want to buy or use the product yourself. When you don't believe it anymore when you tell yourself you are working on a really good proposition.
By the way, many startups ignore these signs. Because not ignoring them would mean they would have to smash their dreams to pieces. Because it would feel like quitting. Because they wouldn’t have a story to tell to the outside world at parties. “So, Jason, that idea of yours turned out to be complete trash? HAHAHAHA that’s so funny!” So back with the head in the sand, and on with developing.
And it’s not only independent startups that behave that way. Corporate Startups do the same. There are signs that it’s a wrong fit, but they keep going anyway. Stopping isn’t really an option. Because a lot of people in the organisation, including the board (oh no!!) are looking forward to the solution. In fact, the MVP demo has been scheduled for seven months. And Susan gave up her cool job as a marketing manager to become product owner and she can’t go back now. And the person in charge of the budget is going to say: “Wait, so you spent 50 thousand euros on that product-market fit phase and now you have found ... no demand?!”
Better to go back half way
In Dutch we have a saying that goes “Better to go back halfway than to get lost completely”. However, in practice, organisations prefer to develop a platform for half a million euros that they can proudly show to the Board of Directors (but which is destined to remain unused forever), than to spend one hundred thousand to find out that they can keep the other four in their pockets. That’s just good accounting, right? And you've learned a lot.
But you won’t hear a manager or a Board of Directors say “Wow, that is so valuable! Now put what you've learned in a presentation and share it with all your colleagues. Spread the word!” They prefer to see a working platform, product or service. Used or unused, it doesn’t matter.
Stopping has to be an option
Innovation does not thrive in an environment where there is a collective knowledge that all available resources are being put in the wrong thing because stopping simply isn’t an option. Innovation only thrives in a setting of energy, optimism and belief in a solution. In an open culture where choices are made on the base of validation and not based on emotions like fear, embarrassment or worry about losing a job. But it should not be a blind belief, where we prefer not to even think about a negative outcome.
Stopping should always be an accepted option. Only then will continuing be a real choice. How you do that? By addressing this at the budgeting stage. By discussing possible outcomes beforehand and working out their impact, and by formulating possible solutions ahead of time. Also by discussing what a premature ending would mean for people personally.
And don’t forget: stopping on time should also be celebrated with champagne, because there is no quicker way to save money for your organisation and to open yourself up for new adventures and world domination.
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