Innovation, Startups & Being an Entrepreneur (or Intrapreneur)
Dr Timothy Mansfield
Published on 15 May 2018
Good ideas power the world. But a good idea isn't enough to create change in the world. To create something new, something world-changing, a new idea has to take a form that fits the needs of enough people. Ideally, at least in a business, enough people who want to pay for it!
Technology and startup culture has transformed the world of innovation from gut hunches and experienced intuition to something more like science. Entrepreneurs in the 21st Century form hypotheses and test them to see if their hunches will survive the reality of the market.
Software Isn't Enough
Because we build software, we meet a lot of innovators – both entrepreneurs and "intrapreneurs" (working inside larger organisations) – who want to shift the world using a software idea. A new paradigm for a moving image museum? A way to build soundscapes for role-playing games? A heart-breaking story told in a new way?
In every case, we find we find that as well as talking about software, we wind up talking about how to think about innovation in a more disciplined way. We talk about Minimum Viable Products and Lean Startup Thinking. We coach clients in an Agile approach. And more and more we're getting into conversations about business models and how to evolve them.
Developed by Eric Ries, based on the ideas of UC Berkeley professor Steve Blank, Lean Startup is an innovation discipline based on forming hypotheses about a market and then testing them in iterative learning cycles. The approach focuses laser-like attention on locating and enhancing value.
Lean Startup is noted for several key ideas, notably: the iterative Build-Measure-Learn loop, Minimum Viable Product (MVP) and Product-Market Fit.
There are dozens of Lean Startup success stories, but two famous ones highlight the approach: Wealthfront and Eric Ries's own IMVU.
Minimum Viable Product
The MVP is the simplest articulation of your idea centred on the clearest value to your intended customer. Getting it right and staying focused on it is crucial to the Lean Startup approach.
- What is the Minimum Viable Product for a Lean Startup?
- Why Minimum Viable Product Matters
- Your Minimum Viable Product Failed: Now What?
For a web customer, our version of an MVP is the "minimum launchable website". We often coach clients to let us build the simplest version of their vision and expose it to internal staff or even carefully selected end-users for feedback. Alastair talks about our approach here.
Other Key Lean Startup Concepts
The focus of Lean Startup is on iteratively refining the core idea towards what your customer defines as value. This is crucial, but as Steve Blank observed a few years ago,
… we now understand that you need an agile engineering or development model to match the customer development that’s going on “outside of the building.” We know this courtesy of Eric Ries, my student, who had the insight to say, “Steve, you know, customer development is awesome, but if engineering is still building a product using [a linear approach like] waterfall development, that’s an impedance mismatch” which is a technical term for they don’t match each other.
That's because you have to have a development method that can cope with changing requirements and that work with the iterative experimentation of Lean Startup, rather than against it. You need some form of Agile Development.
We've used different versions of an agile approach since we started The IC in 2009. You can read our blog posts and other writing about it on the Agile Development topic page.
Business Model Canvas
Lean Startup forms an approach to finding a customer and honing in on what they value enough to pay for. Agile Development provides and approach to build software around that value proposition. The third piece in the puzzle is the business model – the structure of "how an organization creates, delivers, and captures value" (Wikipedia).
Our favourite tool for thinking about business models is the Business Model Canvas. Our writing about this is still a work in progress – we've just focused on teh two authors – but in the meantime, here's an explanatory video:
We've started with profiling the two authors, so you have some idea of why you should listen to these guys:
- Alexander Osterwalder: Who is he and why should an entrepreneur care?
- Who Is Yves Pigneur and Why Should Entrepreneurs Know?
This section of our blog will keep expanding. There's lots more to talk about – the Business Model Canvas, Wardley Maps and lots more – but our plan is to keep it simple and easy to understand.
We're building a map of how to think about innovation better, whether you're running your own startup or trying to encourage your venerable organisation to enter the 21st Century.
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