I cannot count the number of times I’ve heard that phrase: “think like a startup, act like a startup”… I guess you stopped counting too.
But this imperative calls for a deeper question, why is it so hard for existing businesses to do so?
And aren’t we underestimating the harshness of being a startup?
You need to start with the definition of a startup: A startup is an organization formed to search for a scalable and repeatable business model (according to Steve Blank, in “The four steps to Epiphany”)
Read it again. The startup is formed to seach…
The establish organisations isn’t formed to search – it’s designed to execute.
Startup entrepreneurs undergo tremendous pain and agony through the growth process between idea and product/market fit and revenue generation.
They will have to go through the hard questioning, doubting, hole-poking and criticism inside an accelerator to make the venture even stronger. I haven’t met any manager or executive in established businesses willing to go through such pain… because they don’t have time to do so, and they have no incentivized to do so.
So maybe for established businesses to think and act like startups, they need to institutionalise some time to doubt, to assess wrongful assumptions, challenge their limiting beliefs, articulate their intuitions, raise questions (see leads of belief change in one of my previous posts).
Dare to doubt
As I write these posts and continuously research and read about contexts and behaviours enabling innovation and creativity, I have found doubt/skepticism and questioning at the foundation of most approaches.
It is the framework which changes with each new technology and not just the picture within the frame (Marshall McLuhan)
To harness doubt in a positive way I often suggest this framework:
1. the things you know you know: norms, rules, bright spots, best practices…
check that these facts are still valid or true against data (see my previous post here)
eg. This mobile carrier brand is destined to young adult and teenagers (Sosh by Orange)…
when it actually observed great take-up with unemployed population.
2. the things you know you don’t know: these are the additional questions and assumptions you’re trying test.
Try to answer the question through further analysis with the data you already have…
eg. How sensitive are our Mom consumers to the presence of this ingredient in our recipe, given growing negative buzz around the topic.
3. the things you don’t know you know: that’s you’re intuition, your know how
Try to identify and normalise it to improve effectiveness, efficiency and transferability, Turn your hypothesis into evidence
4.finally the things you don’t know you don’t know: that’s you blind spot.
This is the area where you need to accept to doubt and put your discovery skills to practice (the why? the how? the if?)
This is also where the opportunity awaits.
It is a huge task. Startup entrepreneurs have to do it, or they will fail to find a market/product fit and scalable business model or pivot to new markets.
Established businesses have a market/product fit and business model but are alienated by them, and will fail to survive if they don’t adapt to a fast moving and uncertain environment.
Data informed vs Data Driven
In both cases – this framework has to be data informed.
I’m purposefully writing “data informed” and not data-driven as I’ve encountered many data-driven-ish companies loosing sight of the bigger picture, trapped in analysis paralysis or worshiping irrelevant KPIs in the scorecard. I have so many stories it is embarrassing.
The reason I suggest data informed framework is because good metrics change the way you behave, they are a driver of action and incentive specific behaviours to create better alignement with strategy. They make you accountable.
As Jedi Master Yoda would say: “Good metric is the path to the Force. Good Metric leads to clarity, clarity leads to accountability, accountability leads to alignement”
If you have found an nugget, idea, insight or opportunity during this discovery process it is either in line with your current product/market fit and business model – … or not:
If you’re a startup, that’s the opportunity to pivot it into a new market…
if you’re in an establish business, good luck: you are kryptonite (unless you work a P&G) – get an executive sponsor and make sure everyone else knows you’ve got one.
Measuring what matters: Debunking a few myths
– Brand Awareness/Top of Mind:
Actually consideration is a better proxy for sales and marketshare in most industries I’ve been working with
– Number of Fans, followers, Likes:
that’s a typical vanity metric. If you can’t get them to do something useful for you, they are useless
– Number of contacts in database:
as previously, useless unless you know how many will open an email for eg. and act on what’s inside.
– Number of visits / Market Share:
is it one person who visits/buys a hundred times or a hundred people who visit/buy one time?
– Number of downloads:
Downloads alone have no value. Activations, ARPU do.
Now ask yourself this question – and feel free to contact me if you wish to discuss this further:
– What are the metrics you are working towards?
– How are they aligned to what your business – startup or established is trying to achieve today, tomorrow?
– How many help you make business decisions?
– Can you kill the ones not adding value?
– Some industries use a single or aggregated success metrics for e.g.. NetAdds or CLV or ARPU… would it be possible for you?