Developing commercially viable products in startup and corporate settings can be difficult. Up to 75% of venture-backed startups fail. Throw in those that didn’t get funding and the failure rate is even higher. It’s harder to get reliable data on corporate projects. Nevertheless, failure is common in corporate innovation.
Why It’s Hard to Deliver Innovative Projects
There is value in innovation. A new product that delivers exceptional value to its users can have a big competitive advantage. However, the barrier to success is high. If it was easy to conceive an idea users will love, gather resources and deliver the project – the value would be lower.
Advice to any organisation approaching a new product: expect challenges and stay patient. You can find our take-away on ways to deal with this in “The Inside Scoop On Selecting A Partner” .
Why do we tell you this? Because there is a process that considerably improves the chance of success. If the process is followed, an organisation will be sure to make progress. But more on that later.
Why Is It So Hard?
- There is no obvious pattern – You can’t learn from the mistakes and successes of others. A blank canvas can be exciting but it greatly increases project risk.
- Things change – Venture projects rarely go as planned. They need to always be ready to react to new and strange circumstances. This is extremely important.
- Outcomes and requirements get confused – Outcomes are like destinations. Project teams will often set off in a direction (i.e. creating a list of requirements) without describing the destination (i.e. the outcome).
- Hard to resource – There is an inherent problem in starting a project where the delivery process may change. How do you know what resources to deploy? You may encounter some problems that need solving, also requiring more resources.
- Misaligned incentives – The team delivering the project should have a shared vision – focused on the outcome. This can be surprisingly hard to achieve, as the involved parties often have other incentives (e.g. job preservation or profit).
- The right expertise is hard to find – Considering that incentives can be aligned, you’ll still face a lack of expertise. Not many small teams have the experience necessary to execute complex projects. Most agencies are set up to deliver according to a specific scope or set of requirements.
What a Venture Partner Does
Venture partners specialise in helping organisations that undertake complex and uncertain projects. Their expertise and processes are designed to deliver difficult projects. There are five key actions for the venture partners:
- Get clarity on outcomes – Spend time understanding what the project is trying to achieve for the user and the business. Don’t jump into discussing product features and the technology required to deliver it without fully defining its purpose.
- Quantify the outcome – Defining the most important metric of success is difficult. It’s not easy tying a project to a metric and a measurable level of success.
- Build a plan to achieve the outcome. Agile development doesn’t mean you don’t have a plan. It is to incorporate your learnings into your plan. This is a level above an agile development process.
- Put experts in place – You need the right blend of people in your team to have your desired outcome realised. They need to have some experience in an outcome-based approach to projects. Every action has to be justified against a specific outcome.
- Iterate towards the outcome – Having worked on delivering many projects, you learn how to be able to ask the right questions at the right time. To deliver the right outcome there are many decisions that either add up to success or failure.
The Ideal Venture Partner Client
Having worked with several startups and larger corporate partners on projects with a high degree of uncertainty, we consider three things when partnering with a new business:
- There is a solid vision for the outcome of the project.
- The client is open to different ways of achieving the outcome.
- They understand there are unique difficulties in developing innovative products.
There’s plenty in this article to get you thinking. Sometimes in business, you often wish you’d had the inside track or prior knowledge. Especially after making a big decision on something. We’ve created “The Inside Scoop On Selecting A Partner” . You might find it useful in your thought process.