Students crowded into the Harvard innovation lab Thursday for another session of "Startup Secrets," a series led by long-time entrepreneur and North Bridge Venture Partners' Michael Skok. This week’s class focused on honing in on, evaluating and building upon a business’s value proposition.
Ideas are free-floating.
“There are so many great ideas that never see the light of day, because they really aren’t oriented toward solving a fundamental problem,” said Skok. Rather, it’s best to build technology to solve an existing problem. Actifio CMO Mike Troiano noted, as well, that having an intimate familiarity with a business problem is key to sizing up different business ideas.
Tackle problems that fit the '4Us': Unworkable, Unavoidable, Urgent and Underserved.
When mulling over the definition of an idea’s potential impact, Skok suggested that teams pose the question, “What if we never solved [the problem]? Would it never matter?” Many of the best ideas stem from satisfying the most unworkable problems. Go after problems so unworkable within the current system that someone gets fired because of it, said Skok. A booted employee means you know someone owns the problem, feels its pain acutely and can offer you advice on how best to remedy it. In other words, you already have your first customer lead and product consultant.
Test, test, test your idea in the market.
“Everything is irrelevant unless you get out of the building and go test with the consumer,” said Skok. Listen to what the customers are saying: Are they starting to tell your story back to you? Or are you having to push the idea on them? “Young entrepreneurs tend to have so much enthusiasm, that when they go into the market, they push their solved problems on the consumer,” explained Skok.
Pick a big fight.
As a startup, you have just as much to lose going against the big dogs as you do going against the little ones – nothing. When entrepreneurs are just starting out, they don’t stand to lose by taking the big risks because they essentially have nothing to gamble with, explained Skok. Whereas the larger, developed players are held back trying to appease stakeholders, lean companies have the space to become game changers.
Create a disruptive innovation with a non-disruptive adoption.
In order to make a solution stick, entrepreneurs need to make the gain of adopting the new way at least 10 times greater than the pain of breaking habit. “Two-to-one does equal success,” shared Skok, “the default [for the customer] is to do nothing...Almost every startup fails to think of the customer experience.” While proud of a technology or solution, entrepreneurs must have the courage to make their idea simple and “get it to a place where people can actually experience the pain without it,” explained Troiano.
Be a humble entrepreneur.
While a solid reminder for most everyone, Skok offered this bit of wisdom specifically for the passionate, big-picture-brained innovator. “It’s hard to retain the core [of an idea] yet be flexible and adapt to the market,” followed Troiano. You must be willing to tweak your ideas to solve grander underlying problems, not just their symptoms, and be able to do so quickly. “Big fish don’t eat small fish,” Skok warned, “but fast fish eat slow fish.”
Find the full presentation here.
