Just Do It!

Agile development, lean startups, probe-and-learn, and effectuation all describe a rapid-prototyping-like process of simply (1) putting a “minimal” product into the market, (2) observing results, (3) learning, and (4) doing another iteration. In other words: Just Do It!

Nuances include keeping the “bet” small, so that you can afford failure and future iterations. And having a vision and discipline so that the iterations are more like controlled experiments than random evolution. 

Marketing’s role is thus to be agile, to collect and understand data, and to adjust product vision. Forget the formal market research and business plans.

Brave new world for marketing and product innovation!

An aside: Origin of Nike Slogan

As an aside, do you know the origin of Nike’s slogan Just Do it! ?

Hint: It was inspired by the phrase “Let’s Do It.”  Not the Cole Porter song made immortal by Ella Fitzgerald; that would hardly fit the edgy image of Nike! (This is the company that was still running commercials using the imagery of dog fighting after their spokesperson Michael Vick had been arrested.)

Let’s do it! were the final words of career criminal and serial killer Gary Gilmore before he was executed by firing squad in Utah.

1. Thought pioneers should receive proper credit. But more importantly…
2. The experimental iterative has been known in the product development literature for over 20 years, so it should be a robust theory.
3. The process originally emerged in studies of discontinuous hardware, so the principles should apply universally, not just to web-based businesses or software.

Lean or Not?

One interesting contrast between the “Probe and Learn” article and the writing of Eric Ries on Lean Startups is that the former actually go to great lengths to contrast their procedure to the Lean Process. Lynn et al. cite The Machine that Changed the World several times and note that their Probe and Learn procedure is for discontinuous innovation not for the mundane innovation described in that book (which is one of the original works on Lean). Ries also stresses that Lean Startups are doing discontinuous innovation…

Interesting issue! The authors of “Probe and Learn” viewed it partially as an antidote to Lean Thinking while a promoter of the process for startups views it as a Lean process…

I have thought about it and conversed with a friend at the Lean Institute and I think Lean Startups is OK and that “Probe and Learn” could have been called lean innovation: What do you think???

For more information I recommend:

• 1996 Article (Gary Lynn):    ProbeAndLearn
• Eric Ries blog: http://www.startuplessonslearned.com/
• Lean Startup Book (Eric Ries, upcoming): The Lean Startup
• Steven G. Blank book: The Four Steps to the Epiphany
• Steven G. Blank blog: http://steveblank.com/

In his articles Eric Ries describes how web entrepreneurs launch “Lean Startups.” He focuses on the need for a new style of management and metrics to conduct careful experiments on “minimum viable products.” Bringing radical or discontinuous innovations to market can be described as:

• Build a “minimum viable product” to take to market as a controlled experiment
• Measure results
• Learn
• Iterate with followup experiments

This experimental, iterative process is ideal to bring discontinuous products to the market. Most examples Ries cites are web-based services or software but he asserts in several articles that the process can be applied elsewhere.

TWENTY years ago…

Gary Lynn published his dissertation in 1993. He had collected data from manufacturers of high-tech business and medical devices that had or were bringing a discontinuous new product to market. He found that the process was vastly different from incremental product innovations that depended on traditional marketing research. He and his co-authors found a process they called Probe and Learn defined as:

• Probe – bring an “immature” product to market as a controlled experiment
• [carefully study the market results]
• Learn
• Iterate with new experiments 

Do you feel you have seen the “probe and learn” process before? I certainly do!! (Of course both also strongly resemble Lean improvement, E.W. Deming’s change model, and the scientific method…)

It seems fair that Gary Lynn and his co-authors get credit for the process that they discovered, but even more importantly for our purposes it is useful to note that he found the process by studying goods-producers. Therefore iterative “Build-Measure-Learn” using “minimum viable products”, or iterative “Probe and Learn” using “immature products” are indeed generalizable far beyond the world of internet services and software.

In a future article I will look at the subtle differences between Probe and Learn and methods of Lean Startups and the contribution that Ries and Blank are making beyond the Probe and Learn model.

For more information I recommend:

• 1996 Article (Gary Lynn, et al.):    ProbeAndLearn
• Eric Ries blog: http://www.startuplessonslearned.com/
• Lean Startup Book (Eric Ries, upcoming): The Lean Startup
• Steven G. Blank book: The Four Steps to the Epiphany
• Steven G. Blank blog: http://steveblank.com/

If you haven’t already, consider reading my feature article in the current issue of Social Media Marketing Magazine: http://dld.bz/SUdJ In that article I used a deep knowledge / engagement framework to categorize user research methods.

Getting at deep (or “sticky” or “contextual”) user information is the motivation of such research methods as ethnography and voice-of-the-customer.

Engagement is another dimension that draws users to tap their own creativity to improve the product or service. Examples of methods that both access deep knowledge and engage the users would be crowsourcing, open-source software development and the lead user method of Eric Von Hippel. The following diagram shows is my effort to map user research methods by deep knowledge / engagement AND show how social media is already having an impact.

Despite the effects already shown in this figure, this process is in its infancy! Totally new tools will be developed to enhance innovation; existing methods will be modified to the point that they are no longer recognizable by current innovators.

The dotted lines of course indicate contributions from social media. Communities of crowdsourcers or lead users are already contributing. And a new type of quantitative research, “netnography”, is being developed to analyze the results from data mining. I argue that existing methods are being pushed in the directions indicated by the dotted lines.

So, I would like to ask for your ideas:

1. Do you agree with this framework?

2. What new user methods do you see emerging from social media?

Please leave a comment!

Full article in SMM Magazine:  http://dld.bz/SUdJ

Lean Start-ups

Due to cloud computing and services available from online vendors it is possible for online and web-based firms to keep costs low in their early stages. DayOne will seed a new venture with $16,ooo and help them find cheap space. Ideally the next stage of financing can also be moderate and be done by a seed or angel firm, perhaps using convertible notes. There are two major benefits of avoiding venture capital funding in their early development:

1. The founders retain control and avoid dilution of ownership, and
2. The firm retains the ability to be flexible and change business model in reaction to market experience.

Not surprisingly both start-up speakers at the event, David Poteet of  Nomad Mobile Guides and Frederick Cook of Heyo, described an effectuation process: a small initial investment, rushing a “just good enough” early product to market, and changing the product and business model in response to market lessons. (Both firms seem to be making great strides – check out their links at the end of this article).

Slow-burn Entrepreneurship

For some years Lars Graf, a serial entrepreneur friend, has been advocating what he calls “slow burn” entrepreneurship. Lars is more colorful when stressing the benefits of avoiding VC money: the kindest thing I have heard him say about venture capitalists is to call them ”investment bankers without the heart” (ouch!). But the “slow-burn” process and the benefits are identical to what DayOne calls “lean startups.”

His current enterprise, VitalLink, a social media for institutional or elderly access, is gaining traction. VialLink aims to improve the lives of elderly or shut-in people by increasing their Internet access. VitalLink had a small startup cost with outsourced programming and hosting; brought basic versions to market; and has dramatically changed the product and business model due to market experience. VitalLink is getting traction in the marketplace (again see link).

More effectuation?

Lean or Slow-burn entrepreneurship should enable entrepreneurs to take advantage of the benefits of the proven effectuation process advocated by Saras Sarasvathy. Small bets, just-good enough products, responding to market input drives these firms. And perhaps as importantly, lean or slow-burn entrepreneurship allows them to continue to employ this process for a longer period of time and continue to change products and business models.

I plan to return to lean or slow-burn entrepreneurship in another post…

Any thoughts???

Links of interest:

• DayOne Ventures http://www.dayoneventures.com/
• Nomad Mobile Guides  http://nomadmobileguides.com/
• Heyo http://heyo.com/
• VitalLink http://www.vitallink.net/
• Modea http://www.modea.com/
• NCTC http://www.thetechnologycouncil.com/
• Rackspace http://www.rackspace.com/index.php
• Early blog post on Lean Startups LeanStartups

In an excellent blog post that I have cited before SonyiPod , David Aaker asked the interesting question: Why Wasn’t the iPod a Sony Brand? His conclusion was that Apple timed the technology:

“The answer is timing. Apple got the timing right by entering the market when the technology came together. Of course, the Apple design flare, its brand, and its iTunes store were all important, but the timing was the key.”

Last weekend, inspired by Watson’s Jeopardy win I pulled out Kurweil’s ”The Singularity is Near” – his take on the eventual triumph of machines over man. On page 3 famed inventor Kurweil notes that:

“I realized that most inventions fail not because the R&D department can’t get them to work but because the timing is wrong. Inventing is a lot like surfing: you have to anticipate and catch the wave at just the right moment.”

I shared that  quote with David Aaker and he said: “I love the catch the wave metaphor. It suggests also that there needs to be a way to predict when the wave will occur.”

How do you catch the wave? For those of us who study co-creation and user engagement:

Catch the Wave with Users?

Among the user- or market- driven schools of innovation I am aware of two approaches to “Catch the Wave”.

1. Probe and Learn beta-testers and effectuating entrepreneurs would keep the bets small and keep participating in the market so that they are in the market, flexible and able to capitalize when the wave crests.
2. von Hippel suggested included non-users but purveyors of the key technologies in his Lead User method to project when technologies will advance to key levels.

Those are two user-based techniques that address the need to Catch the Wave of Technological Development! Of course all user-engagement innovators actively scan the market and are open to outside innovation….

Am I missing other user-based approaches????

@CharlieSheen NEEDS a Klout score! I loved this tweet and blog title from the chief product officer of Klout. Charlie would seem to need: (1) counseling, (2) a 12-step program, (3) guidance to “true north” or to simply get sober but a Klout score…Then his life will have meaning… “@CharlieSheen Needs a Klout score WheresCharlie RT @ckburgess @PhilipHotchkiss”

This led me to reminisce that: If we had only had Klout scores for Jesus and the Beatles in 1966, we would have known who was “bigger”!

The CPO tweeted me “@ProfessorGary you know that Headline was a tongue in cheek reference to a Mashable story reported yesterday afternoon right? from @PhilipHotchkiss “

Well… the article was referenced in the Klout blog…but still…I think the over-the-top headline while humorous did catch some of the silly earnestness being paid to an inadequate measure… As @maniactive tweeted “@ProfessorGary According to Klout, I am most influenced by people I have never heard of.”

I continue to worry that the clout of Klout threaten Twitter – Beware of inadequate measures taken seriously! KloutsClout  (last week’s lead off)

Innovation articles or postings of interest this week:  

#Revolt of the Creative Class – New post NewClass by @richard_florida  @TheAtlantic RT @Jabaldaia @Digitaltonto I don’t find this real convincing but I try to read Florida’s stuff…

Why Creativity Matters (and what to learn from LEGO trends and Jazz Music!) — ItMatters via @CKBurgess @maxmeilleur

Why Creativity Matters Most – http://is.gd/aIcpsY #creativity RT @ckburgess

How to Test a Brilliant Business Idea KISS @Co-creation RT @DotSauce  

Marketing expenditures generally have no impact Zilch by @davidaaker

“Construction will be the growth industry of the Information Age.” Read this @BillDavidow article in @CSMONITOR: HardHats RT @OpenRoadMedia

The awful truth: education won’t stop the west getting poorer | skyISfalling via @guardian || must educate to innovate RT @lmdapper

China: Intellectual Property Battleground: Entrepreneur & inventor J Dyson… IPSchmpee #fb RT @chinabiznowfb

Co-creation and effectuation

value co-creation, contextual variety & means drivenness in tech use [academic article] CoCreation RT @ireneclng @spirospiliadis  

Follow @roeklips blog on groundbreaking Dutch TVLab experiments in #transmedia & audience co-creation and participation FeedBack RT @ianginn  

VIA @novusJ @ProfessorGary Scarcity: The mother of innovation? Scarcity Consistent with “affordable losses” of #effectuation RT @fschlegel 

Slides 3-25; Great example of myth of #entrepreneurship. The rest, we can argue about. e-ship @sgblank #effectuation RT @effectuationHQ

Richard Branson on Business: It Doesn’t Cost Anything to Listen (Video) – Listen #entrepreneur RT @CollegeGradOH

Social Media Marketing  

7 Missed Social Media Lead Generation Opportunities http://t.co/VJAMJpW (via @hubspot) RT @EeeGeee

How Social Media Stole Your Mind, Took Advertising With It – PodPeople via @adage  RT @laurelschirr

FB a key part of college marketing ItsComplicatedLinkedIn: How to Properly Plant It into Your Social Media Marketing Landscape http://t.co/UZRo56M

The Power in Your Profile: How LinkedIn Can BeLeveraged to Lead a Fruitful Job Hunt GetAJob

Why can’t we be friends? How Social Media is Helping Marketing, PR, and Sales Become Better Friends LetsTweet  

Is a Blog Still Important in 2011? Good analysis. So2007 RT @wendymarx  @ckburgess

Behavioural targeting,grouping people by Mobile browsing behaviour DoItInTheRoad RT @LauraPotvin @qrcodestickers

News organization to move all content to Facebook JoinEnemy via @ckburgess     

How to do Twitter in 15 minutes a day @TreyPennington AndGetRichAndPickup #socialCMO RT @TheSocialCMO

To @Fortin: We published a blog post about that: “Do CMOs Really Understand the Value of Twitter?” ImWorkingReally RT @SMMmagazine

Storytelling/Qualitative work

The Art of Purposeful Storytelling WhenNumbersBad HarvardBiz RT @Jabaldaia @lisduarte @spirospiliadis  

RT @professorgary: #Buy-ology. Short video on brain-scan marketing: Buyology #branding #neuromarketing RT @theWebChef

More Countdown to the singurality?

Will machines transcend man? (video): This will happen in 2029… Scary RT @SciNewsBlog #singularity

As noted last week…Ray Kurzweil and others have been talking about a target date of about 2050 when computers/machines pass humans in all meaningful skills and abilities. Did we see step two of the singularity on Jeopardy where Watson, an IBM computer, handily beat the human competition?

HeCheated Why I Lost to Watson

Bummer We Lost on Jeopardy

è Watson Doesn’t Know It Won on ‘Jeopardy!’ Dummy

 è Kurzweil: Why IBM’s Jeopardy Victory Matters WereNumber2 via @pcmag

Effectuation is a prescription for innovating when the risk is unknown and unknowable. Effectuation comprises four principles presented in contrast to the causal model of marketing strategy (Sarasvathy 2001): 

1. Affordable loss rather than expected returns,
2. Strategic Alliances rather than competitive analysis,
3. Exploitation of contingencies rather than exploitation of preexisting knowledge, and
4. Controlling an unpredictable future rather than predicting an uncertain one.

In other words: just do it! Get in the ring and start fighting… But how does a budding entrepreneur actually use this procedure? How can you enter a market on a shoestring, effect its development, and develop a product? Many people find it hard to visualize how effectuation can be put into action.

How to effectuate?

There are multiple ways to effectuate. One way that I observed is to consult in a promising area and get paid to solve problems that users are experiencing. A decade ago I worked for and with a number of firms that were supporting the transition of financial trading from manual to online transactions. There was a need for online trading platforms, real time risk management tools, and online clearing. A number of firms that started as consultants or custom software solution vendors realized that their solutions would suit multiple users and reformed themselves as product companies.

Search or Discovery?

Interestingly some of the firms had started doing the custom work with the goal of eventually entering the market with products while others had fully intended to do custom work but realized that their solutions were of value. In entrepreneurship research a clear distinction is made between opportunity search or discovery; in practice the only way to tell the difference in these startup firms was to know their intent in advance.

Consulting or custom work enabled these software or internet firms to enter a promising market with very limited  financial risk, to ally with leading users, to exploit the opportunities the users brought to them, and to shape the future in those markets: classic effectuation.

What were the key issues they faced when they decided to launch as product startups? A big one one course was IP issues – did they own the products they had developed as a result of their consulting efforts. The “search” firms, who had intended to enter the market all along, often had an advantage here since they had structured contracts and deals with their future launch in mind.

Virtually all other key issues were Marketing, classic issues in branding, channels, segment, etc.

Marketing Issues

The marketing issues before launch included:

1. Is there a standard product? Is customization minimized?
2. Intellectual property issues and strategy
3. Branding
4. Target Markets and segments
5. Sales Channels: Direct, resellers, partners?
6. Sales and Marketing support, inside or out

Some of the best firms stayed flexible and were able to experiment with the marketing elements as they went forward, continuing the effectuation process.

First: Thank you for the recent increase in traffic to this site! If you missed any of them these three recent posts were popular (below or at links):

1. Catch a wave – Do the lessons of innovation in surfing apply generally? CatchAWave
2. Do users have a role in more innovative product or service development – Summary of a tweet discussion LeadUsers
3. Does the clout of Klout threaten Twitter – Beware of inadequate measures taken seriously! KloutClout

This blog usually updates on Tuesdays and Fridays: Consider subscribing (upper right by email or RSS) to avoid missing new posts.

Countdown to the singurality?

Ray Kurzweil and others have been talking about a target date of about 2050 when computers/machines pass humans in all meaningful skills and abilities. Did we see step two of the singularity on Jeopardy where Watson, an IBM computer, handily beat the human competition?

CrazyFlipperFingers Why I Lost to Watson

ComeOnHAL We Lost on Jeopardy

Watson Doesn’t Know It Won on ‘Jeopardy!’ JustAMachine

Kurzweil: Why IBM’s Jeopardy Victory Matters Singularity via @pcmag

Innovation articles or postings of interest this week:  

Scarcity: The mother of innovation? SkunkWorks #HBR

The normal reaction to really creative ideas is hostility FlattenTheMole

New Culture of Learning: is innovation possible in education? NEVER

Co-creation

Innovation ideas from surfing advances: Lead users on the edge…Catch a wave! CatchAWave

A Keyboard and Mouse? That’s So 1970s KillMice

Gr8 Advice on Open Innovation from P&G! – OPEN - S Lindegaard – RT @innovate

Tech Week – How social technology helps wounded patients. VitalLink @larsograf VitalLink

Social Media Marketing  

How to Measure Your Brand’s Online Influence InfluenceME (via @incmagazine) RT @EeeGeee

Interesting –> How’s the research industry using social media? @researchlive Research RT @Facecocreation

The 4 Strategic Steps To A Social Business SocialBiz @jeffbullas

Important! How Twitter impacts SEO: Here’s Proof – TwitterSEO RT @ckrohn1 @MackCollier

“Majority of social interaction will happen via mobile”: WhyDontWeDoItInTheRoad This should be obvious now, but still be stated RT @dhinchcliffe

Happiness and social networks @aaker Happy @aaker (Un)happiness over time Unhappy RT @smaxbrown @rbakal

Why Most Facebook Marketing Doesn’t Work” NoHardSell

According to John Hagel at Edge Perspectives, executives can benefit from six lessons derived from studying innovation in big wave surfing.

1. find the relevant edge. 
2. attract motivated groups of people to these edges to work together around challenging performance issues. 
3. recognize that the people who are likely to be attracted to the edge are big risk-takers.
4. recognize that the edge fosters not just risk-taking, but very different cultures that are also “edgy”. 
5. find ways to appropriate insights from adjacent disciplines and even more remote areas of activity.  
6. bring users and developers of technology closely together at the edge. 

Check out the article (now a couple years old) at:

http://edgeperspectives.typepad.com/edge_perspectives/2008/01/innovating-on-t.html

Hagel cites von Hippel’s two books. After his original work showing user innovation in B2B markets like scientific instruments, von Hippel did a number of studies on open source software and then extreme sport enthusiasts. Perhaps all lead users try to “catch a wave”!