Venture Design, continued

Cereality is a new venture which seeks to Krispy-Kreme-ize that great American breakfast staple, cereal.  I’m more of a plain oatmeal kind of dude, but on the road I’d much rather slurp up some Lucky Charms than a greasy Egg McMuffin, eh?  It’s a cool idea.

I think these guys are going to make it, largely because they’re employing a prototype-driven process to figure out what their offering should be (as opposed to what they think it should be).  As mentioned in USA Today, Cereality has been running a prototype shop at Arizona State University for the past eight months, and are going to try and roll the concept out to more locations later this year.

By prototyping their concept in a financially lean way, and in a low-exposure setting (i.e. Arizona vs. Times Square), Cereality has undoubtedly gotten deep learning on the cheap, without a lot of drama.  Future iterations will be more and more dialed in, and customers will find it really groovy.  It’s a smart way to go about building a venture – you can truly prototype anything, even sugar pops.

You can prototype with anything

rubiks

A few days ago I was explaining the art of prototyping to some formally-trained businesspeople, and when I mentioned that Lego made a good prototyping tool, their eyes glazed over. I knew I had lost them. “Surely you can’t spur innovation with a stupid plastic toy,” their inner investment banker asserted. “Innovation has to be expensive and exotic.”

Not only can you prototype anything (see my Steve McQueen riff below for that discussion), you can prototype with anything.

While the CubeSolver isn’t a prototype of anything, it is an existence proof of how seemingly simple (but not simplistic) tools can be used to prototype quite complex systems on the cheap. How cheap? Well, if I asked a crack team of engineers from HP Labs to make me a Rubik’s Cube solver, I’m sure they would create something brilliant, but I’m equally confident that, compared to this Lego wonder, their solution would be complex, expensive, and require many, many man hours to complete. Those of you who’ve ever worked at HP will note that I made no mention of multiple project cancellations and restarts, as well as a crew of waffling middle managers with bad shoes. But I digress.

If you’re prototyping things right, you’re cheating and stealing. Cheating, because you use things like Lego to better focus your energy on solving high-payoff issues instead of the mundane. Notice how the CubeSolver doesn’t use any custom parts – that would have been a waste when so many off the shelf Lego pieces are there for the taking. Stealing, because you’re borrowing forms and ideas from other designers. For example, there’s nothing innovative about the grabber mechanisms – they’re a pretty basic, tried-and-true design. No, all the design energy went into solving the “big idea” problems.

You can prototype with anything.

Iridium, Steve McQueen, and Venture Design

lemansIridium. It was the ill-fated venture which placed 66 (out of a planned 77) communication satellites into orbit before finding out that the value proposition was fundamentally flawed. Millions of dollars were lost along the way. Could this fate have been avoided?

I think so. Had the Iridium venture been staged using a prototype-driven, do-and-learn go to market philosophy, its deep flaws would have surfaced well before the big bucks were spent. Much to the dismay of their users, Iridium handsets didn’t work under bridges or inside buildings – a showstopper? Imagine if Iridium had run a prototype service just in Australia; they would have learned all the killer handset lessons in time to correct course before running aground, and for less money.

You can prototype anything. Before filming his epic movie Le Mans, Steve McQueen actually took an entire film crew to the French race a year early, shot an entire movie, and then threw most of the exposed stock away. Why? Because he knew that they best way to learn how to shoot a great movie at Le Mans was to first shoot a crappy movie there. His camera people gleaned deep insights into camera placements, mounts, and techniques which put them in good stead when it came time to shoot the real movie. And the value of the tacit knowledge transfer involved cannot be underestimated: rather than try to explain to new camera people what he wanted, McQueen could point to actual film clips and say, “This is good.”

Prototypes aren’t just for physical products. Even ventures can be prototyped.

Seeking variance

"Six Sigma does not create innovation.  Six Sigma is not a solution for new products or a break-through strategy." –  Jay Desai, GE Six Sigma expert

Six sigma doesn’t drive breakthrough innovation. New market innovation from divergence, while six sigma is all about convergence. 

Want to be innovative?  Fool around with a lot of ideas, quickly.  Only then should you employ six-sigma to drive variance out of the processes needed to bring something to market.

Venture Design

In his recent profile of Steve Jobs and the iPod revolution, the NYT‘s John Markoff makes the following point:

It has become apparent that the way Mr. Jobs designs products has changed fundamentally during his second tour of duty. In creating the iPod, the iTunes Macintosh and Windows software and the iTunes music store, Apple has not just designed products; it has also designed a business system.

I’m a firm believer that a good product design process — one that is user-centric, iterative, and prototype-driven — can also be used to design winning "business systems" like the iPod.  The point is to apply a "design" point of view across the activities of the entire venture, rather than just within the product development department.  By doing this, you’re much more likely to come up with a business offering which users actually want.

That pesky “S” Word

A great thought from Seth Godin on segmentation, differentiation and their relevance to the process of creating remarkable things.

In my experience, many marketers are so hung up on crafting intricate (and basically irrelevant) segmentation schemes and buying mailing lists that they don’t spend time thinking about how to make their offering so distinctive and valuable that users go out and spread the word on their own.

Teamwork & Creativity

One of the great disappointments of my post-MBA working life was being told that I would only be evaluated on projects where I was the sole "owner" of process and content.  In other words, if I had contributed to an initiative run by another person, well, that contribution would count for zip, zilch, nada. 

This flew in the face of everything I’ve ever learned about getting great stuff done.  And it baffled me.  I’d rather work with a group of people to do something really cool (and run the risk of losing the trail of authorship) than structure my approach to a problem in order to satisfy the needs of a backward performance evaluation process.

What’s that saying — "two heads are better than one"?  The architect Renzo Piano said it best:

Teamwork is when you throw out an idea, and it comes back at you, like a game of Ping-Pong — four can play it, or six, or eight, with the balls moving back and forth at such a speed that they are flying in both directions at once.  Everything gets mixed up.  When the project finally takes shape, you can no longer tell who put what into it.

In any endeavor which requires creative output, evaluating people as if they were social islands, capable of existing without interactions with other people, is not only silly, it fundamentally misses the opportunity to align incentives around the ultimate performance goal — doing remarkable things.

The Prince on Innovation

Am reading Larry Lessig’s delightful book The Future of Ideas.  In it he provides a nice quote from Machiavelli on the topic of innovative ideas and how they are treated by the environment around you:

Innovation make enemies of all those who prospered under the old regime, and only lukewarm support is forthcoming from those who would prosper under the new.  Their support is indifferent partly from fear and partly because they are generally incredulous, never really trusting new things unless they have tested them by experience.

This notion of limited capacity to accept the new really rings true for me — further proof that the organizational dynamics of the modern technology firms that I’ve worked in aren’t so far removed from the Italian political scene of 1513.