U+ is a leading venture-building studio with a remarkable track record of developing successful businesses. Over the past 14 years, we have helped more than 100 companies launch innovative digital products across a wide array of markets and verticals, creating over $1 billion in value along the way.
Aspiring innovators often ask us how to ideate, build, launch, and iterate on products that customers really love. Though each new venture poses a unique set of challenges, the outcomes our clients want usually remain the same across the board: customer adoption, profitability, and a more diversified product portfolio. In response, we’ve developed an all-embracing methodology based on industry-agnostic best practices. In this article, we condense over a decade of organizational wisdom into three short lessons for innovators looking to launch the next big thing.
- Start with the problem, not the solution.
U+ takes a problem-first approach to innovation. We don’t begin by brainstorming ideas, but by rigorously assessing our target market for signs of untapped potential. The strongest foundation for a new corporate venture team is a shared, data-driven understanding of the market. Technological tinkering comes later.
Without a robust understanding of the problem they want to tackle, innovators can find themselves at odds with widespread consumer sentiment, incapable of pivoting when the need arises, and ultimately stuck in a very expensive dead-end.
Of course, common wisdom often says otherwise. Mark Zuckerberg may not have been concerned about prevailing market conditions as he cobbled together an early version of Facebook from his Harvard dorm room, but this is the (particularly well-publicized) exception that proves the rule.
In reality, almost every invention that achieves mass adoption begins with somebody uncovering a previously unmet or unnoticed market demand. According to recent research, 35 percent of funded startups fail because they can’t meet a legitimate market need. Without a robust understanding of the problem they want to tackle, innovators can find themselves at odds with widespread consumer sentiment, incapable of pivoting when the need arises, and ultimately stuck in a very expensive dead-end.
Returning to Zuckerberg, it wasn’t the technology itself that attracted Facebook’s early users; it was their desire to connect and share with friends.
- Leave your assumptions at the door.
U+ is a learning organization at heart. We strive to be learn-it-alls, not know-it-alls. We bring a scientific mindset to product-building by relentlessly asking questions, and changing course if the answers to those questions compel us to. Above all, we avoid letting unfounded assumptions creep into our decision-making process.
A simple insight explains our company-wide aversion to assumptions. A new product only counts as a genuine innovation if people actually use it and pay for it. Buyers and markets, not sellers and marketers, are the ones who decide the real value of your business.
Ideally, innovators should draw a clear line between the learning and execution stages of a product’s lifecycle. Only after you have defined and market-validated your product, and replaced your assumptions with data-backed hypotheses, is it time to build.
- Think business before technology.
Much of the innovation activity we do at U+ is geared towards discovering new business models. Given today’s economic conditions, most organizations cannot afford to be complacent regarding their position in the market. The best way to avoid stagnation and irrelevance is to take limited risks on new business lines with plenty of potential upside. The goal, almost always, is to expand the company’s periphery into lucrative new areas while protecting the core from volatility.
No business comes with a guarantee of profitability, but by validating your product early and welcoming feedback from customers, you can hugely increase your odds.
This is one reason why market development matters even more than product development. In our experience, the most successful products sit at the center of a broader business strategy that prioritizes making a profit from day one. Of course, no business comes with a guarantee of profitability, but by validating your product early and welcoming feedback from customers, you can hugely increase your odds. How users interact with your prototypes and MVPs, as well as other products in the same category, will indicate what your revenue model should look like.
There are many great products that never grow legs because they are based on a fundamentally flawed business model. To avoid this, you should view products and businesses as two sides of the same coin. A product offering without a sound business model behind it may be clever, stylish, and useful. But if it can’t capture value and create a sustainable revenue stream, it’s not really an innovation in the first place.
To find out how U+ can help you bring your next digital venture to market, reach out to us.
Sean Sheppard is Managing Partner at U+, a digital venture-building firm that offers a variety of solutions for corporate clients. U+ is one of InnoLead’s strategic partners.