You don’t have to be a mad scientist to benefit from experiments (courtesy of Cliparts.co)
Imagine that you’re an entrepreneur tasked to start a new business. Or perhaps launch a new product.
How would you go about doing it?
Well, I believe that there are three different ways to create and launch a business or a product. This would depend on who you are.
The strategic planners would draft a comprehensive business plan.
As a planner, you would conduct extensive and robust market research, ensure that your technology is foolproof, and come up with detailed manpower and financial projections.
You might also attempt to answer all the questions out there.
- Who would be running the business?
- What would you be selling and how many products will you have?
- How much could you expect to generate in terms of revenue?
- When would you start turning profitable?
- Where would your business be located?
- How will you raise funds?
- And so on, and so forth…
You may even try to forecast what your business is going to be like 5,10 or even 15 years into the future.
The marketing strategy of such a plan would include a detailed picture of who your future customers would be like, right down to his/her age, sex, address, religious beliefs, hobbies, hair colour, and lifestyle preferences.
Where possible, every conceivable product feature and customer need would be painstakingly brainstormed and crafted into the plan.
The gamblers, on the other hand, would throw caution to the winds. You’d probably go with your gut more than any amount of number crunching or fact finding.
Fans of Malcolm Gladwell’s “Blink”, you believe in “thin slicing” and would wing it as your business grows. Depending on where the winds blow, you might invest time, energy and money in what’s hot, novel, or unique.
Always evolving and always moving, you are a risk taker who does not want to be committed to a fixed path. If possible, every single facet of your business would remain fluid, flexible and dynamic.
Nothing is sacred in their constant dance with the marketplace. What this also means is that things can be very chaotic and messy in an organisation started by a gambler.
Finally, the empiricists would develop systems and processes that capture learning “on the fly”.
While you’d study the best practices and experiences of similar businesses, you also understand that the only way to gauge market sentiment is to bring a product to market.
Empiricists launch beta versions of a product. You actively seek real-life customer feedback.
Unlike gamblers, you act on facts and data, not guesswork or gut feelings. Like scientists, you know the importance of testing a hypothesis with actual results in the laboratory of the marketplace.
While an empiricist may be as detailed and meticulous as a strategic planner, you are also mindful of the fact that most forecasts fail.
Products that are “good enough” but timely are preferred to overdue perfection. The aim here is to propel your product as quickly (and cheaply) to the market as possible, learn from mistakes (and successes), and modify accordingly.
Such an example is best captured by the Lean Startup or Agile methodology.
Which Method Would Work Best?
In a stable and predictable environment, the strategic planners would probably come out tops. Familiar with the ins and outs of their trade, their projections and analyses could fall nicely into place.
However, in today’s wildly variable business climate, it is nigh impossible to predict anything. The only way to ascertain if something works is to put it out into the market.
In this regard, empirical testing and experimentation probably works far better than detailed business planning.
By pushing a product or a business out to market early (while ensuring that adequate risk management measures are in place), you can learn quickly, adapt quickly and improve quickly.
Making your prototype cheaper and faster helps you to reduce investment risks. It also allows your customer feedback to be incorporated into the next improved iteration of the product.
The next time you consider conceptualising, developing and launching a new product or business, consider embracing the tenets of empiricism. I assure you that it’ll improve your chances of success on the road of entrepreneurship – or intrapreneurship.