In the last blog, we talked about how rarely a new product or service is created to meet the market’s needs, and how the combination of business model innovation and design thinking can be leveraged to overcome this. Even with these tools, however, you can’t build a company to scale unless you commit to learning lessons the hard way and letting the market be your guru.
Often referred to as the invisible hand, the market is seen by some as the omniscient force that runs the world (of business that is). Never spoken to or heard from, it ebbs and flows (or booms and busts) in natural cycles over time.
Over the years, a number of people have decided to ignore the market and play by their own rules. The group shares the same thought, consciously or not: their invention is so exceptional that the market will change to suit their needs (or their product). Ignoring the market has allowed many to stay up in their cozy ivory tower, where their idea is like a warm blanket. When they come down to share their creation with the world, the market provides a cold, hard landing to help the realities set in.
There is no shortage of examples to prove this point, but perhaps the most prominent one in recent memory was WebVan, an online grocery service started at the height of the dot-com bubble. Relying on the revenue projections from a fairytale business plan, the WebVan Group managed to burn through $830-million in 18 short months to try and convince people that online grocery shopping was the revolution they had been waiting for. The problem, naturally, was that very few people were ready for or wanted the WebVan revolution to take place. Many other companies have gone by the wayside in similar fashion — it happens on a daily basis in the startup world.
Ignorance is bliss until the day you face the music, and in no realm is that more true than entrepreneurship. Staying inside your head, dreaming and hyping your own idea, is like skydiving off a cliff without a parachute – the view is phenomenal until you hit the ground. Equip yourself with a parachute by opening yourself up to market feedback right from the outset and let the market forces guide you.
It takes some tenacity and courage, but getting out there is the key to building a successful business. It’s the first step toward letting the eternally wise market determine whether a business can be built around your idea.
So how does one start?
- It starts with a value proposition. For people to be able to assess a new product, idea or service, they have to understand what it does, why it exists and what makes it unique. Clear, concise communication of the value proposition is the first step.
- Next, build something off of the value proposition. Whether it is as simple as a rough sketch to illustrate the concept or a complete prototype, create something that people can see, touch or feel.
- When you have something tangible, it is time to listen, ask questions and encourage different viewpoints, even if they conflict with your own. Staying open and facilitating an honest dialogue is the key.
- If the response is great and there is some measureable progress, move to the next step. If not, make some changes and try again until you have something concrete to build from.
- When you have some real market knowledge in your back pocket, it’s time to move to the next level. Create the business model, develop a business plan and get ready to move it into the market.
Obviously this process is slightly oversimplified, but the core idea is easy to understand: get out there and validate your idea with a reasonable amount of feedback before investing time and money into it.
No product or service will make it in the long term without the market’s approval. You need to ask the right questions and take the necessary measures to see if an idea really has what it takes to build a business around. The best thing you can do is the simplest — put your idea out there and let the market be your guru.
Check out the final part of our series on Spurring Innovation, when we take a look at Wesley Clover to analyze their model of innovation and the success it has yielded in the marketplace.