BackThe magic moment
An 'experiment cookbook', a 14-step guide, can help budding entrepreneurs take the first step
PremiumBy Scott D. Anthony,
Harvard Business Review Press,
242 pages, `995.
NEW DELHI :
Scott D. Anthony says entrepreneurship can be turned into a science. In The First Mile: A Launch Manual For Getting Great Ideas Into The Market, he outlines ways in which start-ups should document, evaluate, test and adjust their ideas. Anthony also shares do-it-yourself exercises for entrepreneurs to avoid common pitfalls and reduce uncertainties. In one such exercise, for example, he suggests entrepreneurs develop their “experiment cookbook": a 14-step guide that includes conducting desk research to learn where customers are spending their time and money, building a detailed financial model, and conducting an operational pilot.
What is the “first mile" in the life cycle of a business?
The first mile is that magic moment when an innovator moves from a plan on paper to reality. It can be an exhilarating moment, but it is treacherous terrain littered with roadblocks and potholes.
What is the most elementary mistake most entrepreneurs make?
Entrepreneurs too often default to one of two extremes. Sometimes they suffer from paralysis by analysis, seeking to make their plan perfect before they start to execute. There’s no such thing as a perfect plan, so this effort is wasted. The other extreme that needs to be avoided is doing without thinking. Here innovators can waste a lot of time and money learning what the world already knows.
The simplest way around this is to strike a balance between being thorough and having a bias to action. Make sure you have a clear view of the market need you are assessing, how you will address it, and how your approach will make money. Identify the most critical uncertainties, and find ways to design and execute experiments to learn about them.
An idea that might work for entrepreneurs in the first-mile stage of business in India?
India is an amazing place, with tremendous opportunities for entrepreneurs. It is not an easy market, however. When we were helping Medtronic (a US-headquartered medical technology company) develop the “healthy heart for all" model in India, one thing that became very clear to me is how important it is to be very disciplined about testing. We didn’t test the entire model, combining direct-to-consumer campaigns to raise awareness of heart disease, distributed diagnostic camps to identify at-risk patients, and a loan programme for pacemakers at once—rather, we tried to test individual components discretely so we could learn in a focused way. If you try to do too much, you will be so busy fighting fires that you will never learn.
Can entrepreneurship be turned into a science?
Without a doubt. Science is all about managing uncertainty. So, good entrepreneurs follow the scientific method. They form a hypothesis. There is an objective behind the test they plan to run. They predict what will happen. And they execute in a way that allows them to measure their prediction. You never know when you are innovating but you should have hope.
How should they manage the evolution of the business idea?
Many times a start-up changes in ways that it is fundamentally a different company. Take our company (Innosight). Today we are a management consulting and investment company, but our first strategy was software. You see this with almost every successful venture. The guidance I provide to people is to not fall in love with your first idea, because it is going to change, often in major ways. Ideally you have passion for your mission—in our case, helping innovators address the dilemmas of growth—that sustains you through early struggles but a willingness to flex the specifics based on the reality of the market.
What is the experiment cookbook?
The cookbook is a set of experiments designed to help innovators address the big uncertainties behind their idea. It can help start-ups by maximizing the efficiency and effectiveness of their learning. The key use is first zeroing in on the most critical uncertainties in your idea. Is it the reality of the market need, the feasibility of your specific idea, or the viability of your economic model? Once you focus in on the big unknown, you pick the right experiment that builds your confidence, and go and execute it.
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