The one-sentence summary
The first mile of any innovation is fraught, but it can be successfully navigated by following a diligent process.
- This is a launch manual for getting great ideas into the market.
- The first mile is where an idea moves from an idea on paper to existing in a market. This stage is the one most commonly afflicted with failure. It’s where danger lurks.
- Less than 1% of ideas launched by big companies end up working.
- The ideas aren’t the problem – it’s the process. The author proposes one called DEFT:
Document: write down the answer to these questions: is there a need, can we deliver, do the numbers work, and does it matter?
Evaluate: multiple perspectives, and what the unknowns are.
Focus: work out the deal killers and path dependencies (uncertainties that affect subsequent strategic choices).
Test: learn and adjust, use small teams, design tests carefully, savour surprises.
- Fill out the 4P model: population, purchase frequency, price per transaction, penetration. This piece of maths gives a feel for likely success.
- Our confidence in new projects is usually overstated because we overstate our ability to control events and our confidence in assessing outcomes with wide ranges. Meanwhile we underestimate risks and ignore black swan events (rare but with high impact).
WHAT’S GOOD ABOUT IT
- Long-winded and time-consuming business plans are a waste of time. Instead, innovators should spend just enough time capturing the essence of their idea so they can easily share it with others.
- The spreadsheet dance is also a waste of time. This is when the innovation team draws up a revenue projection for the new venture, only to be told to increase the numbers. The minimum acceptable answer needs careful scrutiny. And many innovations are impossible to forecast.
- “All models are wrong, but some models are useful.” George Box
- Fool’s gold white space is an apparent gap in the market, but it’s a failure masquerading as a viable opportunity.
- The most common traps in innovation are making a wrong turn (lured by fool’s gold white space), running out of cash (usually caused by the planning fallacy – assuming things will happen faster than they do), picking leaders who lack empathy with the target market, and seeking to increase the scale of a business that isn’t yet ready.
- Good innovators need exceptional detail orientation, to be comfortable with micro course corrections, and an eye for the unexpected.
WHAT YOU HAVE TO WATCH
- Not much. It’s a well-informed handbook.