Ideas are easy. Ideas are free, they’re everywhere. The hard thing is turning ideas into value propositions that customers want, and business models that can scale.
How many projects do I need to invest in to create the next growth engine?
It turns out, you’d actually need to invest in 250 projects. You start with small bets first, and then gradually you filter out those ideas that don’t work, not based on a beautiful powerpoint presentation but based on evidence from the market. And gradually you’ll get to those that win. So the big lesson here is that you can’t pick the winners. You need to invest in “the losers”.
Where do I take this data from? … If you look at early stage venture investment, which is a great proxy, 65 percent of all ideas fail. 25 percent return a little bit of capital, so you invest 100 you may get 500 back. So where do the outliers come from? It’s from a small number … it’s basically four out of a thousand, or one out of 250 [that provide massive returns].
So if you want growth to happen, you need to create the playground, the boundaries, for these ideas to emerge. You need to allow people to experiment and have projects in parallel, so that you can win. That’s what strategy is about: creating the conditions for ideas to emerge. It’s not “hey this is a good idea, we make a big bet, and we execute.”
There are only a few companies in the world that have created these conditions, and it’s not a miracle or a coincidence that Amazon has grown so quickly, because when you have a leader who says “Amazon is the best place in the world to fail” and he admits that “invention and failure are inseperable twins,” you have a completely different culture for those ideas to emerge.Alex Osterwalder – Global Peter Drucker Forum 2018
My sister (let’s call her Sharky) bought me a book for Christmas.
Sharky lives in Argentina.
She bought the book from a shop in the UK.
I’m on holiday in a remote part of Indonesia.
She bought the book, told me about it, and I was reading it, in less than ten minutes.
This is the new reality – actually, not even that new anymore. Any information product (book, film, music, software, design) can go anywhere, in effectively no time.
The new possible consists of the things that this reality enables – not just instant access to information products, but information to go into products (3d printing designs, specifications) or for the delivery of products and services (your exact requirements or preferences, your real-time location, your purchase history, your credit rating).
What becomes possible in your field when the information is so relevant and so available, when the transaction becomes so fast, so frictionless?
AirBnB, and Uber are cannonical examples of the new possible, to which I’d add the fact that this year, Sharky bought me a Christmas present.
Steve Blank‘s recent post on the Apple Watch (The Apple Watch – Tipping Point for Healthcare) is another great analysis of how technological developments and business model innovation can come together to create huge value for society – and the companies that create them.
He identifies at least seven conditions that the new Apple watch should be able to monitor – from blood pressure and glucose levels to fall monitoring and UV exposure – and unpacks just how useful the huge data set from ill and healthy people could be in improving medical diagnosis and monitoring.
The most interesting part for me was on how this opportunity builds on Apple’s existing business incrementally while potentially opening the door to a huge – a really, really huge – new market:
Unlike other medical device companies, Apple’s current Watch business model is not dependent on getting insurers to pay for the watch. Today consumers pay directly for the Watch. However, if the Apple Watch becomes a device eligible for reimbursement, there’s a huge revenue upside for Apple. When and if that happens, your insurance would pay for all or part of an Apple Watch as a diagnostic tool.
You can listen to the blog in podcast form here.
This is one of the most useful tools I’ve come across for understanding how your business works (or might works).
It designed for lean-startup style customer discovery and validation, but I found it a fantastic lens for actually seeing different parts of our organisation for the first time, as well as how they fit together to make a whole.
I’ll do a series on this before long. For now, here’s a set of links to a video series from Strategyzer to give you the main ideas (youtube playlist here):
It’s so easy to want everyone to love what we do.
When we’re writing, we want everyone to think it’s great.
In our work building a service or product, we want everyone to buy in – to join us, or support us in some way.
This leads to problems:
- By trying to make something that pleases everyone, we end up making something boring and lukewarm. We’re not happy with it, and lots of people might think it’s okay… but no-one thinks it’s that great.
- Trying to make something that pleases everyone sets the bar impossibly high. Nothing is loved by everyone. And nothing will ever be ready to share if “universally adored” is what we’re aiming for. We’ll be paralysed.
The answer is to be clear in our mind who this is for – even if it’s just for us. Make something for the smallest possible audience, and build from there.
If you don’t like it, why should anyone else?
If no-one likes it – it’s either not very good or you haven’t found the your audience.
If some people like it – and you want to serve that particular “some” – then you’ve got something you can work with. Serve them well. Serve them again. Make it better.
And for everyone else – the people who don’t like it, don’t get it – that’s fine.
Its not for everybody – it can’t be for everybody. So you can smile when you say it: “It’s not for you.”
I’ve absorbed this idea from some of the thinkers I’ve found most helpful in learning how to do what I do well. On the one hand, it’s almost pure Seth Godin. But it’s also Steve Blank, Lean, and the mvp (more on that another time). And Tim Ferris riffs on this too. There are probably others but for now, thanks to the above.