It's Pronounced Chookshaw

The semi-professional blog of Albert Ciuksza Jr.

Category: Innovation

Validation

Startup confession: I hate validation with a passion. Not the process of it (whatever that process is, anyway), but the expectations that have been placed on it.

Validation is supposed to determine whether an idea is worth commercializing. The theory is that the innovator goes through a series of processes that lead to a black-and-white answer: either yes, this opportunity will obviously make me a zillionaire; or no, this opportunity should die on the vine. Validation becomes the insurance policy against failure and, with failure being a fate worse than death in many innovation circles, it’s be-all, end-all.

Let me be clear: no one ever, ever, ever does this.* Why else do you think that 90% of startups fail?

The problem is that we’re mostly wired to pursue the new and shiny, to say yes rather than no. Consciously or unconsciously, instead of validating the idea (i.e. empirically determining whether to move to the next step using a rigorous, data-oriented methodology), we try to rationalize all of the reasons to move forward. While we usually need about six positive messages to make up for one negative one, in our “validation” process, we tend to focus on all the data that we’ve got that says that we should keep pushing forward with commercialization.

There are plenty of articles about how best to validate (caution: whatever validation is, it is not a five-minute process), so I won’t duplicate the efforts of the many who are trying to sell you some sort of secret sauce. However, there are four big things that tend to be make-or-break when deciding to pursue a new idea. They are:

  • Degree of Differentiation – Your idea needs to be different enough to compete against other solutions while being tough to duplicate (technically or legally).
  • Market Size – The business needs to pursue a market big enough to meet your goals, whether that’s just to put food on your table or to make enough return to attract investment
  • Resources – You need the time to pursue it, a team that can compliment your strengths, and the financial resources to fill in the gaps, all from the first flick of the light bulb to the moment you put out the “for sale” sign.
  • Marketing 4Ps – Product, place, price, and promotion; they all need to work together to make the awareness-interest-decision-action cycle as short as humanly possible.

There’s other stuff, of course, but these are the big four. If you can rationalize this publicly with your right hand on a stack of enter-your-sacred-text-here, then you’ve done great work. This is what most people want when they want validation. They want some data, some third-party information that shows that you’re not a mad scientist.

For extra credit, I recommend one more step — the project premortem. The idea is simple; instead of waiting for things to get to their logical conclusion before doing an analysis of what went wrong, have a session with you/your team to talk about all of the reasons the project will fail miserably. When this is the goal of the discussion, everyone is open to talking through the potential pitfalls that they might otherwise be uncomfortable expressing in the face of the blinding optimism that comes with launching a new venture. It’s a fantastic exercise.

*This isn’t technically true, of course. Like how some people rotate their tires after every 3,000 miles or balance their checkbook every month instead of checking the balance online, it happens, but not often enough to discuss.

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Blue Shirt Guy = Creep

Blue Shirt Guy = Creep

Step one: Go to www.breakupnotifier.com

Step two: Log in with Facebook

Step three: Choose the friends-who-aren’t-really-friends-but-more-like-people-you-want-to-date-at-some-point-in-the-future-if-they-would-just-dump-their-loser-significant-other

Step four: Get an email when those friends’ relationship status changes

Step five: Listen to the video below, which accurately characterizes the person you’ve shown yourself to be…

httpv://www.youtube.com/watch?v=jzjUjNPYzLg

Budweiser = Innovation? You’re Kidding, Right?

bud

Does this look like innovation to you?

The Business Insider published an article on February 11th entitled “What Budweiser Can Teach You About Innovation“. This was based on blog post from the Harvard Business Review entitled “Four Innovation Lessons from Anheuser-Busch“. Based upon a talk given by the global director of innovation at Anheuser-Busch Inbev, the two wrote about lessons that A-B can teach us about innovation. While the four bullet points were perfectly fine  (explain strategic objectives in simple terms, have defined types of innovation strategies, have a clear but robust innovation process and draw insight from non-obvious places), the suggestion that A-B is innovative in its product development is absolute bullshit.

A movie that was recently released called Beer Wars that exposed the battles fought in the beer industry (written, produced and directed by Anat Baron, former head of Mike’s Hard Lemonade), showing that A-B is both heavy-handed and rips off ideas from some of the true greats in beer (Dogfish Head, and Yuengling, for instance). In one scene, Sam, the owner of Dogfish Head, shows a bizarre and unsubstantiated cease and desist order from A-B for Dogfish’s use of “Punkin'” in the name of one of its brews. Since when did strong-arm litigation = innovation?

The following quote from the HBR article illustrates the ridiculousness of the contrast between the big brewers and those who are truly passionate about the craft:

Its strategic objectives are to increase SOB (share of beer) and SOT (share of throat). It can achieve these objectives by getting consumers to switch to its products, consume its products in new locations, or attract new consumers.

Wait, what? They have metrics like “share of throat”, a term that entertains my inner 12-year-old? They don’t simply look at ways to deliver better beer to the customer? No, they don’t. They make boring, bland beers and acquire brands that have strength in the market and a loyal following (see how they destroyed the Rolling Rock brand, a particular insult as a former resident of Latrobe, PA). That’s not innovation, that’s a recipe for market domination that is focused on shareholder value. As a business, it’s a fantastic strategy, but it should not be confused with innovation.

I’m a homebrewer and enjoy a lot of different types of beer. I’m a fan of microbrews and strange and innovative beers. I frequent local microbreweries (East End Brewing Company is a great example of innovation in beer-making) and enjoy great beer-focused Pittsburgh establishments such as Sharp Edge, Bocktown Beer & Grill and Fat Head’s. I’ve had some pretty amazing, innovative beers from brewers who are willing to take risks. A-B isn’t remotely on this list. It’s insulting to beer drinkers to suggest that A-B is innovative. It’s not innovative — it bullies its suppliers, spends amazing amounts of money keeping a regulatory system in place that does not benefit the customer and actually reduces innovation, and pursues a strategy whereby it steals innovative ideas from the market and pushes out the competition.

HBR, you’re better than this. You’re better than to swallow the propaganda of the largest brewing company in the world. Keep talking innovation, but find the right players. In beer parlance, A-B is all foam, no beer.