Developing commercially viable products in startup and corporate settings is difficult. Up to 75% of venture-backed startups fail, and if you throw in the startups that didn’t get funding the failure rate is higher. It’s harder to get reliable data on corporate projects but failure is common in corporate innovation.
We partner with startups and large corporates to help them navigate innovative projects that have uncertain outcomes.
Why it’s Hard to Deliver Innovative Projects
There is huge value in innovation; if you can make a new product that delivers exceptional value to customers this can give you a big competitive advantage. But the barrier to success is high. If it was easy to conceive an idea customers will love, marshal resources and deliver the project then the value would be lower.
The first piece of advice we give to any organisation approaching a new product is: expect to be challenged in ways you don’t anticipate, and stay patient.
Why do we tell organisations to remain patient? Because we know that there is a process that significantly improves their chance of success. We know that if an organisation follows that process they will make progress – more on that later.
So why are these projects so hard? Here are six reasons (there are many more):
- There is no obvious precedent – 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 – Mike Tyson famously tells us “everyone has a plan until they [are] punched in the mouth”, and this is true in venture projects because they rarely go to plan, so reacting to a new set of circumstances is important.
- Outcomes and requirements get confused – outcomes are like destinations, and requirements are the route. Often project teams will set off on a route (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 find that after some user testing you need three new features, meaning more time and money are needed.
- Misaligned incentives – a shared vision in the team delivering the project is important and everyone needs to be focused on the outcome. This is surprisingly hard to achieve, as often employees or external agencies have other incentives (e.g. job preservation or profit).
- The right expertise is hard to find – let’s say incentives can be aligned with employees or agencies, you are probably still going to be left with a lack of expertise. Any small group of employees is unlikely to have the experience of delivering complex projects and most agencies are set up to deliver a specific scope or set of requirements, not work alongside organisations to deliver outcomes.
What a Venture Partner Does
We specialise in helping organisations that undertake complex and uncertain projects. Our expertise and process is built to get difficult projects delivered. There are five key steps:
- Get clarity on outcomes – we spend time understanding what the project is trying to achieve for (i) the user; and (ii) the business. We understand where the business is before the project and where it hopes to be after the project. Quantifying this is surprisingly hard. Most organisations jump into discussing product features and the technology required to deliver it without taking the critical step of fully defining its purpose.
- Quantify the outcome – this is hard for three important reasons: (i) it’s difficult to even define the most important metric; (ii) once the metric has been defined, attributing a level of achievable success is hard; and (iii) it’s not easy to tie the project to the metric.
- Build a plan to achieve the outcome – What agile means to us is that we are focused on validating assumptions, and iterating our plans based on the new learnings we’ve developed. Agile doesn’t mean you don’t have a plan. Agile means incorporating as quickly as possible what we learn into the plan. This is a level above an agile development process because we are focused on how the whole organisation thinks about products as solutions.
- Put expertise in place – we have the right blend of experienced entrepreneurs, product managers, developers, designers, tech strategists and testers to get your outcome delivered. As well as being technically competent our team are all trained in an outcome-based approach to projects. Every action they take has to be justified against a specific outcome. Every member of the team feels like they own the product and question anything that doesn’t deliver the end goal.
- Iterate towards the outcome – because we have worked on (and successfully delivered) so many projects, and made plenty of mistakes along the way, we’re able to ask the right questions at the right time. To deliver the right outcome there are a hundred small decisions to make every day that add up to success or failure.
The Ideal Venture Partner Client
We work with startups and larger corporate partners on projects with a high degree of uncertainty. To get the best outcome on our projects we look for three things in a partner – we’ve found that if we compromise on these points the outcomes are worse, and both sides will end up dissatisfied.
- 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 to developing innovative products.
To discuss how we can help you please get in touch with Ben Blomerley on firstname.lastname@example.org.