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What Can Corporations Learn From Startups And...Cattle?

4 insights from running a startup accelerator

7Sep

The Econic partners consult for startup accelerators. Brian even founded one,NMotion in Lincoln, Neb., which puts early-stage startups through a 90-day boot camp so they can validate, build and get their ideas to market quickly and smartly.

The accelerator surrounds startups with experts, information, mentors and other startups at a similar stage of development. The teams use NMotion’s techniques to test and validate their ideas, identify problems and pivot based on what customers and the market tells them.

We also work to create a learning culture that the team can take with them into the future, after they leave the accelerator.

Heading into our fourth year of operations, NMotion has many success stories. We’ve also learned a lot — things that can be applied not only to startups but also to corporate innovation. Corporations could learn a few things from what we’ve found. Here are a just a few…

Stop Building in a Vacuum — Your Assumptions Are Probably Wrong.

We’ve seen too many startups and innovators lock themselves in a room and start building. Stop! Breathe. Take a minute to get out of the building to test if you’re on the right path. Building too much, too fast can be a death sentence to innovation.

It’s tempting to immediately start building when you have a good idea. It’s also tempting to jump first into things like picking the logo, url, brand colors and office space. Those things are important at some point, but it’s more important to validate your idea with customers first and make adjustments on the front end before the build begins.

Unfortunately, starting with the superficial stuff feels like progress. Pumping out a lot of code feels like hard work. But it’s usually not work on the right things. Take all that effort and apply it toward understanding if you should even be building the things you want to build.

Real-life example: QuantifiedAg is an NMotion alum from the summer of 2014. The company makes ear tags that track the health of cows. Think Fitbits for cattle. It’s gotten a lot of positive attention from sites like Fast Company, Engadget and the Wall Street Journal.

But the founder of QuantifiedAg, Vishal Singh, originally came to NMotion with a different concept involving thermo-imaging drones.

During the NMotion process, he went out into the field (literally) and found that what farmers really wanted to know was when and why cows were getting sick. He’d discovered what we call the “hand grenade problem” (a big problem you’d better address or you’ll get blown up).

He pivoted from drones to non-invasive, biometric ear tags, which monitor the cow’s vitals and identify sick animals quickly, helping stop the spread of disease.

How many corporations stop to ask customers what they really need? Usually they think they know. After all, they’ve worked with these customers for years. But working in a vacuum rarely results in meaningful innovation.

Spending a Ton of Money Doesn’t Guarantee Success

In fact, you can get pretty far pretty fast without spending a lot of money.

We find ourselves frequently pushing the startups in our accelerators to build small and light. If a mocked-up prototype and some behind-the-scenes elbow grease works to move the ball forward, build that — a minimum-viable product (MVP) that delivers the value and solves a problem for the customer. Don’t worry about building that complete solution immediately; in fact, you shouldn’t until you’ve validated your ideas with real customers.

You can get feedback by using screen shots, or by building a web site that looks like it’s working but doesn’t yet have a back-end database. Then test and iterate and launch.

In the end, it’s not the amount of money spent on a problem, it’s finding and solving the right problem that determines success.

Real-life example: We know someone, not a client, who began building out an idea in 2011. He spent $500–600K to build it and brought it to a client who agreed to run a free pilot.

The client requested a lot of adjustments, and the developer rewrote the software three to four times, building a custom code. Now he’s five years into the project and has spent $1.5 million developing software that nobody really wants — or at least wants to pay for. He’s in so deep, he doesn’t know what to do: keep digging or sell it in a fire sale.

We see this a lot in corporate environments. Money alone can’t buy successful innovation. It’s better to spend some of that money getting into the field and talking with customers.

You Can Move Faster Than You Think

There are so many easy ways these days to test and iterate. New tools are constantly being developed that allow you to do things like quickly throw up a web page or design a mockup. Most corporations and startups don’t know about these tools or how to use them. They don’t realize how fast and cheaply they can get things started.

Real-life example: One of the exercises we do at NMotion is give our teams just one hour to put together a web page that can accept credit cards and contains an explainer video. We point them to a few free simple online tools to do it — like Celery,Unbounce, Squarespace, andPowtooon.

Within an hour they have a web page with a value proposition and can take real money from real customers. The resuts aren’t always “pretty”, but the exercise goes a long way toward teaching people that they can move very quickly with speedy hacks and existing tools.

This same speed, prioritization and tools can be used in the corporate environment. Too often, corporations spend vast amounts of time and money building and perfecting proprietary systems when something much simpler would do.

Surround Yourself With A Diverse Community

A key benefit of being in a startup accelerator is surrounding yourself with people who have expertise and knowledge. Being able to tap into those people, with their varied perspective and opinions, allows you to build a diverse community around your efforts, which will lead you to the best product. You don’t have to build it all yourself — nor should you.

This is especially true in corporate environments where often times all the answers are thought to be within the walls of the corporation. Reaching out spurs interesting insights, alliances and opportunities.

Real-life example: LiveBy is an NMotion startup that arose from a diverse collection of voices, including startup and corporate voices.

The Lincoln Chamber of Commerce sponsored the JumpStart Challenge, a competition for entrepreneurs to tackle a business challenge.

A real estate company stepped up with its problem: connecting buyers with homes in neighborhoods that they’ll like. The Fair Housing Act limits what real estate agents can tell homebuyers about a neighborhood, so those questions were going unanswered.

LiveBy had an idea to address that issue, won the competition and entered the NMotion accelerator. After 90 days in the accelerator, they came out with a digital tool that matches people with their ideal neighborhoods.

LiveBy’s discovery engine asks users a series of questions and then combs through dozes of data services to find and deliver neighborhood suggestions that best match the homebuyer’s wishes. It’s like a match.com for neighborhoods, and it’s helpful for people moving to a new town.

The company is monetizing their tool by selling it to real estate agents who can put the widget on their pages.

These four lessons (and more) are some of the things we’ve learned from startup accelerators that can be directly applied to corporate innovation as well. That’s what our newest arm Econic does, connects enterprises with startup-driven innovation.

Real-life corporate example: Recently Econic was called in to a work with a corporation that had spent seven figures on software it didn’t know what to do with. We were asked to help another of their internal product teams avoid making the same mistakes.

When we got there, we discovered that his team had a 10-page business plan. But it wasn’t written with particular problems or pain points in mind. It was written like this: “Scientists wish they could do this, so we’re going to make something that lets them do this.”

It didn’t ask or answer deeper questions like: Why is not being able to do this a problem? What dreams are scientists unable to achieve by not having this solution? What’s the actual issue that calls for the thing we are building?

So we took them into the field to ask the scientists what keeps them from accomplishing what they wish they could accomplish. They told us that funding and time kept them from achieving their dreams.

So every solution the team came up with had to address those two things.

In the end, the team found out that only one or two of the problems they were solving for were even necessary.

They’d gotten so carried away in the designing and dreaming that they hadn’t spend enough time finding the hand-grenade problem.

By applying the lessons we’ve learned working with startup accelerators, Econic was able to immediately impact innovation at this corporation.

Sources

https://medium.com/inside-outside-innovation/what-corporations-can-learn-from-startups-and-cattle-ae1dd464ccaf#.2aik5k4uc

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