Are you wondering if your team or even you personally possess the creative gene that would enable you and your team to innovate? Should you be looking to hire the next Steve Jobs?
Innovation and entrepreneurship can, in fact, be taught.
Here’s the proof provided by Prof. Bill Aulet of MIT:
“As of 2006, over 25,000 businesses have been started by MIT Alumni at a clip of 900 new ones each year. Those companies employ over 3 million people with aggregate annual revenues of approximately $2 trillion. To put this in perspective the total annual revenue from MIT alumni-founded companies taken together would make them the 11th largest economy in the world.”
What’s interesting is that 90 percent of those companies were not built using MIT licensed technology or discoveries coming out of MIT research labs.
Prof. Aulet makes clear in his recent book “Disciplined Entrepreneurship” that it is because MIT teaches the tools of innovation and entrepreneurship.
By working with Wisconsin companies across the spectrum I have learned that the biggest single weakness is that many Wisconsin management teams do not have the tools necessary to drive innovation in their companies.
These management teams are composed of very bright, smart people. However they lacked a basic understanding of the tools that drive innovation in new products and services.
BizStarts has a continual deal flow of new and innovative companies started by entrepreneurs who are looking for capital. But before we allow them to present to our accredited investors, they are required to be trained in the 24 steps of Disciplined Entrepreneurship.
We can all agree that tools are necessary to build a house. So why would anyone hope to drive innovation without having the basic tools that drive innovation?
Every company, whether big or small, whether manufacturing or service provider, needs a basic toolbox to drive innovation and it needs a disciplined approach to innovation.
Obviously, the innovation process has to be more sophisticated for a company whose products or services reach beyond the local market. But even smaller companies, like restaurants and hair salons, also benefit from this disciplined approach.
Therefore I would like to pose key questions that apply to all businesses hoping to succeed in a new product launch, whether local or those with national markets. I will do this in the form of a basic checklist that can be utilized by your company every time you offer a new product or service. It does not encompass all 24 steps but it does give you a basic understanding of the key components necessary for success:
Checklist to new product launch:
- Have you defined your target market and the end-user of your product and conducted face-to-face interviews to learn their reaction to your product or service?
- Have you defined a “beachhead market?” When the Allies landed on Normandy Beach in 1944 the game plan was to conquer Nazi Germany. However they had to start somewhere. Where will you start?
- Now define the persona of the person who will use your product initially. How will they find out about your product, and how will they acquire or install it?
- Now describe your value proposition. What qualities of your product or service will convince your target persona that it will improve their lives?
- Who will make the decision to buy the product? Frequently the end-user is different from the person needed to authorize the purchase.
- Have you mapped the customer acquisition process? You need a methodical roadmap showing the costs of each step in the selling process. What will it cost to buy brochures and sales material? What will be the cost of salespeople and trade shows? How much money will be wasted on customers that will not buy?
- What is the cost of customer acquisition? My experience is that most entrepreneurs underestimate the sales cycle, both in length and cost.
- Have you built the “minimum viable product”? By this I mean the least expensive way to construct a product or service that you can test on your target customer base. In an era of 3-D printing and Internet tools, the options of keeping your investment in prototypes and models has never been lower.
- Have you determined that the target customers on your beachhead will buy this MVP? Can you acquire letters of intent or other evidence before you launch the product or service?
- Lastly, what is your game plan to drive product sales after your beachhead market has been successfully conquered? Who will be the next logical customer base, and what will you have to offer to reach those different adjacent customers?
You certainly can recognize there’s no magic bullet here. Innovation is a discipline. There are no guarantees, but this schismatic approach using the tools of innovation can reduce risk. Plus having a systematic process such as these 10 steps will help dramatically improve the success ratio for your new products or services. Print them up and use them to guide your team.
Dan Steininger is president of BizStarts Milwaukee, president of Steininger and Associates and teaches the tools of innovation to existing companies. He can be reached at: Dan@BizStartsMilwaukee.com