“Corporations take more than a year to develop a product that startups can develop and launch in less than 3 months.”
― CB Insights
…let that sink in for a while.
It’s a fact published by CB Insights, renowned venture intelligence platform. There are many comparisons of startups and corporates. Based on research, personal experience or opinions.
Difference mentioned are usually in areas like risk-return ratio, go to market strategy, revenue-generating potential, a strength of the brand, team size and structure… and the list goes on.
But, speed. Speed is the most important difference.
Although in life speed is often not a virtue, why does speed matter in innovation?
“The ability to learn faster from customers is the essential competitive advantage that startups must possess.”
― Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
It’s not about the speed of execution, but the speed of learning.
By learning, I mean learning about the market, your customers and their needs. In addition to learning, it’s about the speed of adapting to new learnings.
Fail fast but learn faster
It’s a misconception that good products come out of good ideas. Good products represent good solutions for important problems.
Identifying and articulating an important problem is harder than it sounds. Designing the right solution for the problem is even harder.
Pursuing a single idea will lead to a single, but massive failure. Like executing a bad business plan which you don’t know is bad until it’s executed.
Pursuing multiple ideas one after the other, performing small tests of each, will lead to many small failures. Each small failure is a massive learning.
It might not be comfortable, but if you observe each failure as an opportunity to learn, it makes sense to fail more often than you would like.
In average corporate surroundings failure is not warmly welcomed. Failure is viewed as an opposite, instead of a stepping stone to success.
The predominant business culture seeks to create new offerings around known business models where there is no room for failing fast and often.
Product development is very different than product scaling, and should be guided with different principles: principles that encourage learning from fast failing within a controlled environment.
What does all of that have to do with speed?
Guiding your product development process in small iterations that test assumptions about the problem, solution and the market will improve your overall product development time. Learnings gathered from small failures will result in the correct solution and its market placement much sooner than the traditional waterfall product development in ‘stealth mode’ which is prone to massive failure.
The race of innovation is not about who will bring a product first to market, but who will reach product-market fit sooner.
For a start, test yourself and see if you know how to answer these questions:
- Why problem hypotheses are important and how to correctly define them?
- Do you know who are your early adopters, why they matter and how to find them?
- Have you heard about the customer development methodology?
- Do you know how to manage a customer development process?
- What is the difference between qualitative and quantitative customer experiments and how do you measure their success?
- How can you tell the difference between correct and incorrect customer interviews and why does it matter?
- Is the product you have been developing for the last 6 months an MVP?
If you are not sure about the meaning or what is the correct answer to any of these questions, take a look at our Startup Drill events and join one when there is an opportunity. It will help you to kickstart this innovation race the right way!
Learn more about beginning of customer validation process with problem assumptions and get a free template >>> https://startupdrill.co/blog/problem-assumptions/
Interested to learn how you can better understand your customer’s problems and create products they will love? Then join next edition of Corporate Startup Drill in Oslo!